Proactiveinvestors Australia

Leni Gas and Oil plc (LGO) have brought together a strong management team, providing experience across evaluation, exploration, development and production of oil and gas assets. The Board has considerable experience in new business development and also in corporate management. The Directors broad collective credentials have enabled LGO to pursue its strategy of delivering growth through acquisition of proven reserves and enhancement of producing assets. The Company seeks to:

• Establish a portfolio of proven reserves and producing assets in low risk countries with significant development and enhancement potential
• Identify and acquire underexploited projects, and implement both proven and leading edge oilfield technologies to maximise exploitation
• Leverage the management’s extensive expertise in the oil and gas sector to convert acquisition opportunities to profitability across the entire portfolio

The Company’s primary strategic approach is to identify projects and businesses which contain a development premium which can be unlocked through a combination of financial, commercial and technical expertise.

LGO intends to execute this strategy by investing in a relatively small number of assets where it can apply its resources most effectively.

Since its incorporation in 2006, the Company has been fulfilling this strategy and has invested in a number of oil producing regions of the world. LGO has secured exploration areas in the US Gulf of Mexico, Spain and Trinidad. The Company has invested primarily in areas with a proven track record of production and where there is significant opportunity for further development and to maximize shareholder value.

TRINIDAD

Trinidad operation now comprise of four main assets, the Goudron Field IPSC, the Icacos Oilfield, the Moruga North leases and the Cedros Peninsular leases. The Gourdon Oilfield (LGO 100%) lies between the East Moruga and Beach Marcelle fields in south-eastern Trinidad and has direct access to the Petrotrin oil export pipeline to the Pointe-a-Pierre refinery in western Trinidad. The field was originally discovered by Trinidad Leaseholding Limited in 1927 and was largely developed in its current form by Texaco between 1956 and 1986, when ownership passed to Petrotrin and its predecessors. A field reactivation contract (Incremental Production Service Contract or IPSC) was signed in late 2009 and this contract acquired by LGO in October 2012. The Icacos Oilfield (LGO 50%) lies on the Cedros Peninsular in southwest Trinidad and is surrounded by a number of LGO’s 100% owned petroleum leases. The North Moruga leases (LGO 49%) are held in partnership with Advance Oil (Trinidad) Limited and contain the existing proven Moruga North Oilfield and a number of unexplored associated fault blocks in the central portion of the Southern Ranges.

Goudron Field (anticipated 100% LGO, operator) 

The transfer of the Goudron IPSC was completed in October 2012 and production enhancement activity commenced immediately. LGO also published the results of an independent reserves evaluation of the field commissioned from Challenge Energy Limited in London.

• The concession covers a total of 2,875 acres (11.4 sq km)
• The existing producing zones have reserves of proven and probable reserves of 7.2 mmbbls and estimated 3P reserve of 30 mmbbls
• The current production comes from a relatively small number of active wells out of a total of about 100 still thought to be available
• Production potential has been estimated to be in the range 1,000 to 4,000 bopd
• Additional undeveloped reservoirs in the Gros Morne (Upper Cruse) and Lower Cruse formations provide considerable opportunities for future reserves growth

Since the start of operations in 2012 LGO has more than doubled production and anticipates continuing to increase daily production as additional wells are reactivated and wells are enhanced through work-overs and improved equipment. It is anticipated that the first new field development wells will be drilled in the second half of 2013.

A water-flood project has the potential to recover up to 60 mmbbls of incremental oil from the existing field and since much of the concession is underexplored there is thought to be significant potential for additional exploration opportunities. These projects will be considered once primary production from the field has been substantially increased and the production infrastructure upgraded.

Icacos Field, (LGO 50%)

Located in the extreme southwest of the island the Icacos field is operated by the Territorial Services Group (a subsidiary of Touchstone Exploration Inc).

1,960 acres, onshore producing since 1960’s

No available seismic

Recent exploration is limited to shallow horizons

Gross average 2012 production of about 32 bopd

Additional development potential and possible deeper targets

LGO also holds a number of new 100% LGO owned private petroleum leases acquired in 2011 and 2012 covering some 1,752 acres of prospective, underexplored, lands around the Icacos Field. A Private Petroleum Licence has been applied for and it is hoped that exploration studies can commence in 2013.

Moruga North, (LGO 49%, operator)

LGO has signed a farm-in agreement with Advance Oil Company (Trinidad) Limited to participate in future production and exploration drilling in leases in the Moruga North area of the Southern Basin of Trinidad. The North Moruga leases are a combination of private and Petrotrin farm-out leases totaling 1,223 acres. Two existing production wells will be reactivated as soon as practical and are expected to produce up to 120 bopd (gross) once the necessary work-overs have been carried out. The farm-in agreement also envisages the drilling of between three and ten new wells in the leases, with the first well anticipated to be drilled in 2013.

Trinidad Growth Potential

The onshore oilfields of southern Trinidad perfectly fit LGO’s strategy of acquiring and redeveloping fields with unexploited reserves. Using new technology and making investments in work-overs, new facilities and infill wells LGO expects to substantially increase the production from its acreage in Trinidad in the next few years. Additional opportunities exist to add further assets and there is untapped exploration potential associated with each of LGO’s fields.

SPAIN

The Ayoluengo acreage has a long history of oil production, going back to the 1960s. A total of 54 wells were drilling within the field boundary north of Burgos, targeting reserves in Purbeck aged sandstone formations at between 900 and 1400 metres below surface. Peak production of was 5,900 bopd was achieved in 1969 however by the late 1980s production had fallen to 2,500 barrels of oil per day. Since that time a lack of investment has seen production levels decrease dramatically. Leni Gas & Oil (LGO) plans to invest in an enhanced oil recovery (EOR) project that has the potential to return the field to its 1980’s levels of production within the next 5 years.

When LGO’s Spanish subsidiary, CPS, took over full operations of the field at the end of 2007, no proven enhanced oil recovery methods had been used to energise the field (despite some successful trials) and no modern geological assessment had been conducted to identify enhancement opportunities. Having undertaken this assessment CPS have already identified a variety of proven recovery methods and scheduled an exploitation plan to prioritise developments to increase production to the 1980s levels.

CPS now operates the acreage as a fully self-sustainable production facility. Water produced on site is re-injected, gas generated from the site is either used directly for the oil heater and pump motors, or converted to electricity and used to run every aspect of the field (from the pumping systems to the office computers). The production facility enables the oil to be treated (removal of water) and safely stored before being transported to various industrial consumers in Northern Spain. Operating in this way ensures we can maximise oil production, whilst maintaining an awareness and safeguarding the environment.

 

Ayoluengo Oilfield (100% LGO)

 

• Largest Spanish onshore oilfield
• Low sulphur crude, 37 degree API
• Total production 17 mmbbls, peak in 1969
• Remaining oil in place 104 mmbbls (P50)
• Original facilities handling 10,000 bopd
• Early 2011 average production 125 bopd
• Phase 1 well enhancement completed in June 2011
• Facilities upgrade planning underway
• Future potential in EOR and deeper targets
• Current production of approx 225 bopd
• Oil sold a fuel oil to industrial users
• Major EOR program to increase recovery to ~30%
• Oil sales agreement with BP to handle higher output

 

The field lies in a National Park and extensive remediation has been undertaken by LGO to remove oil contamination accumulated on some well sites during the field's history. New concrete pads and bunded storage tanks have been installed and will ensure no future soil contamination can occur.

 

Adjacent Exploration Acreage (100% LGO)

 

• Combined acreage of 556 sq.kms with several undeveloped oil and gas discoveries
• Contingent and prospective resources of mean 13 mmboe
• Trial production operations has been undertaken at the Hontomin discovery where well H-2 has been recompleted and placed on long-term test
• A carbon dioxide storage project has been initiated with CIUDEN at Hontomin to test the viability of a CCS project in the Burgos area
• Studies have also considered potential uses for the small Tozo gas discovery within the LGO licence area
• A deeper proven reservoir in the Liassic below the productive Ayoluengo reservoir is being studied and appraisal drilling is planned
• The potential for unconventional shale gas reserves below LGO acreage is also under review as the Cantabrian Basin is a known area for the development of suitable shales at depth
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Ayoluengo Recoverable Reserves Estimation

 

A full field seismic and well re-interpretation identified recoverable reserves in four reservoir sands with 60% identified in the primary Ayoluengo (P90, P50, P10: 2.5, 4.0, 5.8 mmbo) and Sargentes sands (P90, P50, P10: 4.5, 5.4, 6.3 mmbo).

 

Mr David Lenigas, Executive Chairman, Age: 50

Mr. Lenigas holds a Bachelor of Applied Science Degree in Mining Engineering. Currently the Executive Chairman of Lonrho plc, Lonrho Mining plc and Lonzim plc. He is also a Director of CSS-Stellar plc, a Non Executive Director of Rare Earth Minerals plc and Vatukoula Gold Mines plc.

Previously Mr. Lenigas held the position of Chairman of Mediterranean Oil and Gas plc, which is producing gas and condensate in Italy and holds extensive oil and gas resources in Italy, Malta, Tunisia and France.

Mr. Neil Ritson, Chief Executive Officer, Age: 56

Mr. Ritson holds a Bachelors degree in Geophysics. He has worked in the energy sector of over 33 years, initially with BP plc, where he held the roles of International Chief Geophysicist, Head of Geoscience Research and Business Unit Leader for both Norway and Alaska Exploration. 

Subsequently Mr. Ritson managed the international operations of Burlington Resources Inc. and more recently he was CEO at Regal Petroleum plc before founding the Vanguard Energy Group where he was Chairman and CEO.

Mr. Steve Horton, Non Executive Director, Age: 58

Mr. Horton holds a Bachelor of Science degree in Mining Engineering and a Master of Science in Business Administration. Mr. Horton has 34 years experience working in the energy industry around the world, including 27 years with BP plc where he held several executive roles including worldwide Director of Drilling. 

He co-founded Silverstone Energy Limited in 2005, a North Sea focused exploration and production company, which grew from start-up through operated exploration and development to production within four years.

Information taken from Company website 09.05.2013