On Thursday morning, Falkland oil stocks were on the march as Premier Oil () became the latest company to venture into the South Atlantic.
It has agreed a major tie-up with Rockhopper Exploration () that will see the British oil firm take a 60 per cent stake in the Sea Lion oil field development. In return Premier is committing just shy of US$1 billion.
Premier will become the operator and take control of the project.
Initially Rockhopper will receive US$231 million in cash. Subsequently Premier will take on US$722 million of Rockhopper?s share of the development costs and it will cover US$48 million of its exploration costs.
The deal has been described as ?transformational? and by providing development funding analysts say it will overcome one of the main hurdles facing the Sea Lion project.
Premier Oil separately reported a ?strong? performance in its current operations, where annual production is currently expected to average 60,000 barrels per day. It says it is still on track for its medium-term goal of producing 100,000 barrels a day from its existing projects.
In other news in the oil and gas sector, Leni Gas & Oil () chief executive Neil Ritson said the group was ?entirely satisfied? with the workover programme on the Goudron Field, in south-eastern Trinidad.
Five wells have now been cleaned, repaired and returned to pumping operations with company confident they will achieve their average production potential of 10 barrels a day.
A total of US$50,000 was spent and the programme was completed in just 35 days. ?
The workover rig has now been temporarily demobilised while the transfer of the incremental production service contract is completed, Leni said.
This has now received Trinidad & Tobago Ministry of Energy and Energy Affairs approval and final arrangements are now underway to complete the handover.
Once this happens Leni will pay the outstanding money it owes to Cameron Oil & Gas and Sorgenia International. This will be financed from the proceeds of the sale of the company?s Spanish assets.
It is then planned to re-start the workover programme and seek permission for new infill wells on the property.
US focused companies Magnolia Petroleum () and Caza Oil & Gas () also had news to report to investors this week.
Magnolia has raised ?565,000 via a placing just below the market price and has agreed an equity facility with Darwin Strategic Ltd which will allow the drawdown of ?10 million over three years.
The oil and gas exploration and production company issued 23,529,411 new shares to Henderson Global Investors and 3,058,824 shares to directors, an employee and an adviser at a price of 2.125 pence. ?
The group was trading at 2.18 pence just before it released the funding news.
As part of the placing, Henderson will receive 12 million warrants with an exercise price of 2.75 pence?
In addition, Magnolia has signed Heads of Terms with Darwin Strategic for a ?10 million equity financing facility (EFF). ? Darwin is controlled by Henderson Global Investors' Alphagen Volantis fund.?
Magnolia will provide further details regarding the EFF once the parties have reached a final agreement, expected to be no later than July 20.
Caza has sold its San Jacinto property in Texas for US$6.1 million.
The property, which includes the Caza Elkins 3401 and 3402 wells, was sold at auction.?
Caza said it was pleased with the price, with the proceeds to be used to build up its presence in the Bone Spring play in southeast New Mexico.
Latest drilling on its existing assets at Bone Spring, which is in Lea and Eddy Counties, New Mexico, was also successful the company said.
?The Bradley ?29? Fed Com No. 3H horizontal well reached total measured depth of approximately 12,690 feet in early June 2012,was successfully fracture stimulated in the 2nd Bone Spring sand on June 14th and is currently flowing back hydrocarbons and frac fluids at a gross rate of approximately 900 barrels (bbls) per day. ?
Caza added the well has averaged 361 bbls of oil and 524 thousand cubic feet of natural gas (Mcfg) per day over the past seven days or 449 bbls of oil equivalent (Boe). ?
The peak rate day to date was 399 bbls of oil and 521 Mcfg, which equals 486 Boe, and 488 bbls of fluid.
Matra Petroleum (), which operates in Russia, has commissioned a seismic survey on its wholly owned Sokolovskoe oil field in Russia.?
The survey, which is set to kick off on August 1 and take two months to complete, will include 100 kilometres of 2D seismic and 60 square kilometres (sq km) of 3D seismic.
Preliminary results are expected by the end of the current year and final results should be available in the first quarter of 2013.
The survey will evaluate the prospectivity of the Sokolovskoe field ahead of any further financial commitment to the project by the company.
?The commissioning of this survey is an important step toward fully understanding the potential of the Sokolovskoe field,? said chief executive of Matra Maxim Barskiy.
?The results of the survey will allow us to accurately assess how best to allocate Matra's resources to maximise shareholder value.?
Elsewhere, North Sea explorer Xcite Energy (, CVE:XEL) reported that preliminary flow test operations on the Bentley oil field in the North Sea were ??progressing well?.
The pre-production flow test on the 9/03b-7 (B6) lateral well started on Monday, with Xcite adding that the shut-in period and pressure build-up test have now started.
This test is designed to obtain key information about the Bentley reservoir and the mobility of its fluids to aid the next stage of development at the field.
Following the build-up test, a 90-day flow test is expected to start which will be conducted at various flow rates to collect additional data.?
The well is planned to recover a minimum cumulative volume of 45,000 barrels of oil during the flow test period.
?The data will be used to update the Reserves Assessment Report and calibrate the existing reservoir model.
Fellow North Sea operating group Ithaca Energy (, TSE:IAE) has spudded the Hurricane appraisal well in Block 29/10b within the Greater Stella area.
The well programme is expected to take between 75 and 85 days to complete including a drill stem test.
The discovery well in the area, 29/10-4z, was drilled by Shell in 1995, encountering light oil in the Eocene Rogaland sands in the western lobe of the structure.
The appraisal well will be drilled in the base of the Tertiary section in the eastern lobe, aiming to confirm the volume of recoverable hydrocarbons.
The well is also expected to verify the distribution, quality and connectivity of the reservoir.
If the well is successful, the wellbore will be suspended for future re-entry and completion as a production well.
In the meantime, Ascent Resources () said it does not have to carry out acid stimulation at the Pen?szlek field after all.
This news comes after additional perforations were made to the PEN-105A well. Ascent said it has now increased the well?s perforations to 24 metres from 7 metres.?
Two additional perforations were made and both were successfully flow tested.
Also, as the new perforations were made deeper in the well, below previously defined gas-water contact, the result may lead to an upgrade in reserves.
"The PEN-105A well result was better than expected because of improved reservoir characteristics at the PEN-105A location as compared to the original PEN-105; now the increased thickness of the proven gas bearing reservoir has further improved the overall results,? said managing director Jeremy Eng.
Meanwhile, Sound Oil?s () has got a significant exploration project in the Jatayu prospect in Indonesia, says chief executive Gerry Orbell.
The company has a 20 per cent stake in the project, in the Citrum PSC. And this week it told investors that drill is ready to resume in the Jatayu-1 sidetrack well.
The sidetrack is located immediately above a gas bearing section and casing has now been installed successfully.
The section is believed to span 390 feet. And analysis of a previous sidetrack showed the interval provided extremely high mud log gas readings and approximately 600 psi overpressure.?
Sound says it will drill through the section and depending on logging results it will either carry on drilling or it stop and test the interval.
"The Jatayu prospect is proving a significant exploration project for Sound,? Orbell said.
?Already we have encountered a gross gas column comparable with some of the larger surrounding fields in a secondary objective above the main target zone.?
?The successful installation of the liner has isolated the problematic section which necessitated the previous sidetrack operations. ?The Jatayu well will be followed by exploration wells at Geulis and Cataka on the Citarum permit, all of which will be drilled by the same rig.?
Finally, Victoria Oil & Gas () said it has started continuous production operations at its 95 percent owned and operated Logbaba gas and condensate project.
The company?s gas pipeline in Douala, Cameroon?s largest city, was completed and commissioned last month, providing the group with access to more than 20 large industrial energy consumers.
VOG said this week that the first three customers are now taking delivery of gas in sufficient volume to allow the production facilities to operate 24 hours a day, delivering gas in full compliance with specification.?
These customers have a combined average daily demand of approximately 0.7 million standard cubic feet per day (mmscf/d).
It is assisting additional customers to convert their factories to take gas and remains on schedule to increase production to 8 mmscf/d by the end of the year.?
This will be driven by an increase in the number of customers and the installation of gas powered electrical generation units on customers' sites. The first units are expected to come on line in mid Q4 2012.
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