Oilbarrel Newsletter 14th November 2012

Oilbarrel Weekly Roundup 8th - 14th November 2012 Weekly Review Oilbarrel.com’s 55th conference saw us move back to the venue where we held our first event back in 2004, the historic former Whitbread Brewery on Chiswell Street.  Eight years ago there were just 80 delegates; this week the room was packed to capacity with over 400 people registered for the event (so much so that the lunch time wine eventually ran dry, to much grumbling…)  The enthusiastic throng of executives and investors meant the first presenter of the day, Paul Welch, CEO of Chariot Oil & Gas, had the less than enviable task of addressing his company’s recent drillbit failures in Namibia in front of a room of very disappointed investors.  Welch, a former Shell and Pioneer Natural Resources executive, took it on the chin, admitting that Mother Nature had got one over the company this year.  He stressed, however, the many remaining attractions of the Chariot portfolio, which has now expanded to include acreage offshore Mauritania and Morocco (the AIM company is now the eighth largest acreage holder offshore West Africa). The company holds a huge swathe of acreage offshore Namibia, where this year it drilled the highly anticipated Tapir South and Kabeljou wells, events that sent the share price into a tail spin from which they have yet to recovery (they are currently at 26 pence, a fraction of the placing price of 250 pence in April 2012). “How are we doing? Well, at the moment we are two nil down and the crowd is getting a little restless at half time,” acknowledged Welch.  “But we have learned a lot from the first half.” Welch took the wells in reverse order, looking first at the Kabeljou-1 well on the giant Nimrod prospect inChariot’s Southern Area blocks, where it is partner by BP and Petrobras. This was a prospect that had looked so promising on the seismic, with very vivid bright spot over the entire 500 sq km structure but the reservoir quality was found to be of poorer quality than expected.  This data can now be calibrated with the seismic dataset to look for areas of thicker pay and better quality.  The company expects to complete this data-crunching by the end of Q1 2013. “The deepwater environment is unforgiving,” added Welch.  “Onshore in somewhere like West Texas this would be promising but it was never going to fly in these water depths.  In deep water, you need good quality reservoir and a lot of it to be commercial.” He dismissed investor concerns that the company’s partners, deepwater heavyweights Petrobras and BP, who shouldered the costs of this eye-wateringly expensive well, might exit the venture after this disappointment. Welch pointed out that when the well reached TD and was clearly a duster all the partners committed to collecting as much data as possible rather than cutting their losses and walking away.  The key test of whether he’s right, however, will come in August 2013 at the next renewal of the acreage. “That’s when everyone will put their cards on the table but from my perspective it looks like everyone is in for the long haul,” said Welch. The Tapir South well in the Northern Blocks, which Chariot drilled on a 100 per cent basis, found thick and very good quality reservoir in the Lower Cretaceous but the source rock was immature in this area. “If we were to come back in another 10,000 years it would be just right but we can’t wait that long,” quipped Welch, adding that the company hopes to spud its next well here in the second half of 2013 drawing on lessons from the wildcat. No wells have yet been drilled in the Central Area blocks as the 3,500 sq km of 3D seismic is still being processed. An updated CPR is due out next, with plans to open a data room in the first week of February 2012 to attract farm-in partners to spud a first well in the second half of the year. Water depths aren’t as expensive here so drilling costs won’t be as high and, said Welch, companies are already expressing an interest in the project.  “We expect it to be easily farm-out-able,” he said confidently. Whatever the geological lessons learned from the events of 2012, the commercial lessons have been just as important: over-reliance on one project, even one with the play diversity and scale of Chariot’s Namibian portfolio, can leave the share price dangerously exposed when wells fail to deliver.  Chariot has taken swift action on this, adding exciting new projects in Mauritania and Morocco. Click Here to read more of the Conference Report 1   56th Oilbarrel Conference Tuesday 11th December 2012 Sponsored By: Tuesday 11th December 2012 ***NEW VENUE*** The Brewery Chiswell Street London EC1Y 4SD (Nearest stations are Moorgate and Liverpool Street) Presenting Companies will be annoucned shortly. Click Here to Register or contact support@oilbarrel.com Latest News Features: November 14, 2012 Conference Report 1: Back at The Brewery With Record Numbers To Hear Presentations From Chariot Oil & Gas, President Energy and Bridge Energy Oilbarrel.com’s 55th conference saw us move back to the venue where we held our first event back in 2004, the historic former Whitbread Brewery on Chiswell Street.  Eight years ago there were just 80 delegates; this week the room was packed to capacity with over 400 people registered for the event (so much so that the lunch time wine eventually ran dry, to much grumbling…)  Full story... News: November 13, 2012 San Leon Agrees £61 Million All-Paper Purchase Of Struggling Aurelian Oil & Gas To Create Leading Upstream Player In Poland After a run of disappointing wells in 2011, Aurelian Oil & Gas initiated a strategic review of options, a process that in these tough times has become corporate code for putting the company up for sale.  When this process got underway in February 2012, the AIM-quoted company wasn’t short of cash, with €63 million in the bank – and it still has €51 million (£40.8 million), largely underpinning its £54 million market cap - but it had become increasingly clear that the flagship project, the Siekierki tight gas field in Poland, was going to be far more challenging and expensive to commercialise than first thought. Full story... News: November 13, 2012 Petroceltic International Adds To Its Egypt Portfolio As It Plans 10 Wells Over The Next 12 Months Petroceltic International has expanded its portfolio in Egypt, the traditional powerbase of its recent merger partner Melrose Resources. The newly enlarged Petroceltic has been awarded Block 12 “El Qa'a Plain” in the recent Egyptian bid round, which closed in March, alongside operator Dana Petroleum and Beach Petroleum. The block covers 1,824 sq km in the southern part of the Sinai Peninsula, east of the prolific Gulf of Suez, with the initial four year exploration period committing the partners to 450 sq km 3D seismic survey and one exploration well. Petroceltic chief executive Brian O'Cathain said the new block lay in an underexplored area where the partners have already identified a number of potential oil prospective structures Full story... News: November 12, 2012 Egdon Resources Intends To Focus On Fewer Assets In Three Core Areas Following Production Problems And A Strategic Review What kind of comment can you make about AIM listed Egdon Resources’ final results report for the year ended July 31 2012. For a start you can say that, pretty admirably, Philip Stephens in his Chairman’s statement makes no attempt to pull his punches. He wades straight in saying: Full story... News: November 12, 2012 Green Dragon Gas Accelerates Work Rate Over Final Months Of 2012 As it Predicts Full Year Production Of 2.5 BCF Green Dragon Gas was one of the first movers in China’s unconventional gas business, picking some prime coal bed methane acreage back in the late 1990s.  It hasn’t been the easiest journey to commercialise this multi-TCF CBM resource – the faulted brittle anthracite coals have proved difficult to produce – but the AIM-quoted company finally appears to be hitting its stride Full story... Market Overview: November 09, 2012 Oil Prices Buoyed By Good US Production Figures Despite Lack Of Clarity On US Energy Policy From Obama The American election dominated the headlines all week and while no detailed plans were unveiled on energy policy and the shift from foreign oil dependency, US production figures are trending higher. The state of the global economy continues to be the biggest challenge for oil producers and figures from the Eurozone were not encouraging. In early trading on Friday, Brent crude was priced above US$107 with WTI around US$85 a barrel. Full story... News: November 08, 2012 Fastnet Oil & Gas Pleases Investors With Prospect Of Near-Term Drilling Onshore Morocco AIM newcomer Fastnet Oil & Gas is building a reputation as a frontier explorer, with its portfolio skewed towards emerging plays offshore Ireland and Morocco.  This strategy plays well to the investor base, many of whom piled into the June IPO because Fastnet’s management includes the team behind AIM star Cove Energy, which in less than three years transformed from exploration start-up to £1.2 billion must-have acquisition on the back of giant gas discoveries in East Africa. Full story... News: November 08, 2012 Enegi Oil Makes North Sea Debut To Test Potential Of Low Cost Buoy Technology  Change is afoot at Enegi Oil, the AIM-quoted company that has spent the last five years battling to bring its Garden Hill South (GHS) field on the neglected west coast of Newfoundland onstream.  While its Canadian venture continues to inch ahead – the recent appointment of a new COO, ex-BP executive Derek Cochrane, was a signal of the company’s intent to finally get to grips with this complex project –investors are welcoming steps to diversify a portfolio that until recently was dominated by the fortunes of Garden Hill South. Full story... Press releases November 14, 2012 - Tangiers Petroleum Ltd Issue of Equity November 14, 2012 - Serica Energy plc Q3 2012 Results  November 14, 2012 - Sound Oil PLC Re-opening of D150 and D148 Permit... November 14, 2012 - Victoria Oil & Gas Gas Market Study on Logbaba November 14, 2012 - Fastnet Oil & Gas Directorate Changes November 14, 2012 - Fastnet Oil & Gas Award of licensing option in the North... November 14, 2012 - Frontera Resources Director Purchases Shares  November 14, 2012 - Fastnet Oil & Gas Farm-in to the "Shanagarry" licensing option November 14, 2012 - Spitfire Oil Notice of AGM  November 14, 2012 - Antrim Energy Interim Financial Report - Third Quarter... November 14, 2012 - Tullow Oil plc Interim Management Statement  November 14, 2012 - Norwest Energy NL Investor Presentation November 14, 2012 - Neon Energy Ltd Investor Update November 13, 2012 - Petrel Energy Petrel completes Uruguay Investment as Big... November 13, 2012 - Gold Oil Plc Result of General Meeting November 13, 2012 - Afren Plc Antrim Announces FPSO Agreement for Fyne... November 13, 2012 - President Energy Operational Update November 13, 2012 - Global Energy Development Result of AGM November 12, 2012 - Ithaca Energy Inc Third Quarter 2012 Financial Results  November 12, 2012 - Magnolia Petroleum Issue of Equity to Raise £2.9million November 12, 2012 - Coastal Energy Co Q3 2012 Results  November 12, 2012 - Wentworth Resources Wentworth Resources Limited : Mnazi Bay to... November 12, 2012 - Providence Resources Drombeg Prospect Southern Porcupine Basin  November 12, 2012 - Genel Energy Acquisition of Remaining Miran Interest  November 12, 2012 - San Leon Energy Form 8 (OPD) Aurelian Oil & Gas  November 12, 2012 - San Leon Energy Form 8 (OPD) Aurelian Oil & Gas  November 09, 2012 - EnQuest Plc Interim Management Statement November 09, 2012 - Dragon Oil Drilling Update  November 09, 2012 - Leni Gas & Oil Plc Consideration received  November 09, 2012 - FX Energy Inc FX Energy Reports Third Quarter Results;... November 09, 2012 - Petroceltic International Award of Egyptian Licence November 09, 2012 - Sefton Resources California oil production  November 09, 2012 - Jupiter Energy Limited Result of AGM  November 09, 2012 - Heritage Oil Plc Completion of Acquisition in Nigeria  November 09, 2012 - Good Energy Good Energy selected as National Trust... November 09, 2012 - Xcite Energy Resources Limited Results for the Periods Ended 30 Sep November 08, 2012 - CBM Asia Development Corp CBM Asia and ExxonMobil Negotiate Possible... November 08, 2012 - Global Energy Development Engagement of financial advisor November 08, 2012 - Spitfire Oil PRELIMINARY RESULTS November 08, 2012 - Hardy Oil & Gas Plc Interim Management Statement  November 08, 2012 - New World Oil & Gas Drilling Update, Belize November 08, 2012 - Global Petroleum Director/PDMR Shareholding  November 08, 2012 - Gulf Keystone Petroleum Sheikh Adi-2 Exploration Well Discovery November 08, 2012 - Sound Oil PLC Nervesa EIA Approval November 08, 2012 - Green Dragon Gas Operations Update Don't forget to visit our other website

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