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Proactive weekly oil and gas news - Magnolia Petroleum PLC, Tethys Petroleum plc and more

Published: 18:09 06 Aug 2016 AEST

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A fairly busy week in the small cap oil sector.

US onhore specialist Magnolia Petroleum PLC (LON:MAGP) updated on a quarter which has seen it continue efforts to reshape the business in a tough sector.

The junior exited 21 wells during the three months to June 30, though targeted investments will shortly see new productive wells coming online. The divested wells were described as being “uneconomic with little or no value”.

It is a participant in a new ten well programme in the prolific South-Central Oklahoma oil province, and these are said to all be lower risk wells on licences that are held by production.

At the end of June, Magnolia had stakes in some 146 wells.

On the day before the above statement, the group revealed it had raised £250,000 through a share placing to support its portfolio of assets in Oklahoma.

The oil and gas junior told investors the proceeds would fund current drilling commitments on its acreage which hosts proven hydrocarbon formations, such as the Woodford and Mississippi Lime.

Rita Whittington, Magnolia chief operating officer, said: “We continue to be encouraged by the number of wells currently drilling and/or completing on our leases, and the funds raised will enable Magnolia to maintain its participation in future drilling activity where it makes commercial sense to do so.

“Subject to the results, this new drilling activity fits with our strategy to improve our portfolio of wells, and in the process increase profitability at current oil prices

Elsewhere, Argentina and Colombia focused oiler Andes Energia PLC (LON:AEN) told investors it produced 3,310 boepd (barrels oil equivalent per day)  in June this year compared to 3,489 boepd the month before (May).

At its Argentinian licences - Chachahuen, Chanares Herrados, Puesto Pozo Cercado, Vega Grande, La Brea and El Manzano - the average production was 2,237 bpd net to Andes.

In Colombia, at Mana and Altair average production was 1,073 boepd (59% oil) net to Interoil, in which the firm holds a 26% interest.

Andes currently produces around 3,300 boepd in Argentina and Colombia from six conventional fields in Argentina and two in Colombia, where positive cash flows have been generated.

Meanwhile, Northcote Energy Ltd (LON:NCT) told investors has now changed its name to Mayan Energy Limited, to reflect a commitment to widening the company’s exposure in Mexico.

Earlier this week the company announced that its Mexican venture had signed a deal with PEMEX, the national oil company, to provide services.

A letter of intent envisages the AIM quoted group’s 51% joint venture Mayan Drilling Fluids (MDF) providing a range of waste remediation services via its facility in Comalcalco, Mexico.

Northcote, based on the group’s knowledge of comparable operations in Texas, expects the proposed project to generate significant revenue.

Meanwhile, oil and gas explorer Aminex plc (LON:AEX) has raised a further £1.3mln through the placing of shares not taken up in its recent open offer.

The offer was part of £19.5mln funding package that saw Oman based group Zabair come in as a cornerstone investor.

Existing shareholders took up 49.7% of the £2.6mln open offer with the rump now placed at the same price of 1.3p per share.

Aminex will use the money to fund the Ntorya-2 appraisal and Ntorya-3 exploration wells in Tanzania.

In boardrroom news, IGas Energy Plc (LON IGAS) told investors it had appointed Mike McTighe as the company’s new non-executive deputy chairman.

It comes as Robin Pinchbeck is stepping down from his position as independent Non-executive Director, a position he held for four years..

Tethys Petroleum Limited (TSE:TPL, LON:TPL), meanwhile, has announced the appointment of Kenneth May as the group’s new interim chief executive.

May is expected to hold the position though the group’s transitional period, whilst it has continues to have a three-person board of directores.

Once the group has established a board with five directors it is expected that they will together seek a new chief executive.

May takes over from Julian Hammond, who is leaving the company after nine years – he has been chief executive since 2012.

Finally, Europa Oil & Gas (Holdings) Plc (LON:EOG) has extended the first exploration phase for some of its key licences off Ireland’s west coast.

Phase one of Frontier Exploration Licences 2/13 and 3/13 has been extended by a year, and now ends on July 4, 2017.

The exploration company told investors that extension allows it to mature existing prospects and perform detailed mapping of all potential prospective levels on both licences, whilst at the same time seek partners for the next phase of work.

Europa has already outlined prospects containing some 1.5bn barrels of oil equivalent in these exploration areas. Meanwhile, recently added Licensing Option 16/2, which adjoins FEL 3/13, is seen to host prospects with around 900mln barrels of resource potential.

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