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Market: ASX
Sector: Oil and Gas Exploration and Production
Epic: .EXR
News: Latest news
Web Site: Elixir Petroleum
Other Articles: 02-02-201024-11-200906-10-2009

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Elixir Petroleum

Elixir Petroleum

Elixir Petroleum is an international exploration and production company listed on the Australian Stock Exchange (ASX:EXR). Elixir holds interests in producing gas and condensate fields located in the Gulf of Mexico and has extensive interests in exploration and appraisal licences in the UK North Sea. Elixir has recently acquired interests in two producing fields in the Gulf of Mexico which provide the group with cashflow from sales of gas and condensate. The company is focused on increasing its presence on the shallow water shelf of the Gulf of Mexico and continues to examine new projects in which to participate. Such projects typically display discovered reserves, nearby infrastructure and short cycle times to first production and cashflow.

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Monday, February 08, 2010

Elixir Petroleum acquires significant exploration acreage in France

by Proactive Investors company news image

International oil and gas exploration and production company Elixir Petroleum (ASX: EXR) has expanded its European portfolio with the acquisition of the large Moselle Permit located in the East Paris Basin, onshore North-eastern France.

The Permit is prospective for a number of different play types including conventional gas, unconventional gas and coal bed methane.

Elixir Managing Director Andrew Ross said after a lengthy period of evaluation of opportunities in this area, the company was delighted to have been able to enter into an agreement for the acquisition of the Moselle Permit in North-eastern France.

"The acquisition represents a significant expansion of our European exploration strategy and sees our first entry onshore into Western Continental Europe," Mr Ross said.

“This opportunity is particularly attractive given the stable political environment, established and growing gas market, excellent fiscal regime and the fact that the Moselle permit is prospective for a number of different play types, including shale gas.”

Elixir last traded on the Australian Stock Exchange for 4c.

In the United States, advances in drilling and hydraulic fracturing techniques have opened huge reserves of unconventional gas that now mean the country is virtually self-reliant in terms of its gas-supply needs. A 2007 study from the National Petroleum Council, an advisory body to the US Department of Energy, estimated that the European continent could hold up to 549 trillion cubic feet of shale gas, 431 Tcf of tight gas and 275 Tcf of CBM.

For a continent whose hydrocarbon production peak is thought to have passed, these resources present an enticing prospect in the continuing effort on the part of European nations to secure energy independence.

Shale gas, which is considered the most promising hydrocarbon resource in Europe, is drawing significant investment into the continent. The last 18 months have seen ExxonMobil, ConocoPhillips, Shell, OMV and other large producers acquire significant land positions across the EU. A number of independent oil and gas companies, including Elixir, have joined the pursuit.

The Moselle Permit is 5,360 km2 in area or approximately 1.32 million acres, making it the largest single exploration block onshore France. The Permit was awarded in January 2009 to East Paris Petroleum Development for an initial five year term. EPPDL is required to spend €3 million on exploration activities within the Permit during the initial term, of which a proportion has already been expended by EPPDL during 2009.

Elixir has agreed to acquire the entire issued share capital of EPPDL, the 100% interest holder and operator of the Moselle Permit. The consideration payable to the vendor on the completion of the acquisition includes a cash payment and an advisory services arrangement totalling US$1 million, and will be met from Elixir’s existing funds.

The vendor is also to be granted an overriding royalty interest on any future production. Additionally, if a well is spudded on the Permit within the initial term, or part of the Permit is sold to a third party during the initial term, a further similar cash payment will be made to the vendor of EPPDL.

It is Elixir’s intention to apply its experience in the identification, evaluation and presentation of new exploration opportunities for farmout, particularly for exploration and appraisal drilling, to the exciting potential of the Moselle Block.

Mr Ross said that shale gas plays were now firmly established as one of the most exciting sectors globally for the oil and gas industry, largely as a result of the continuing success of these types of plays onshore in the USA where members of Elixir’s team and its largest shareholder have relevant experience.

“In the past year a large number of oil and gas companies, including the majors, have entered the search for unconventional hydrocarbons in Western Europe," he said.

"The ability to find, produce and deliver gas within one of the largest energy markets in the world holds great appeal and represents a significant opportunity for Elixir, and one that has the potential to deliver considerable value to shareholders over the medium to longer term.”

Elixir also holds interests in producing gas and condensate fields located in the Gulf of Mexico and has extensive interests in exploration and appraisal licences in the UK North Sea.

 

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