It has been another busy morning for oil and gas companies with North Sea explorer Xcite Energy (LON:XEL) announcing the spudding of the 9/3b-7 well on the Bentley field and Dragon Oil (LON:DGO) reporting test results from the Dzheitune (Lam) C/167 development well offshore Turkmenistan.
Dragon said the well combined rate of initial production from the well reached 3,396 barrels of oil per day and that the drilling rig has now skidded to the next slot and spudded the Dzheitune (Lam) C/170 well.
“The drilling results together with logs and pressure tests indicate that the prolific oil bearing sands in the reservoirs under the Dzheitune (Lam) 28 platform extend to the west towards the Dzheitune (Lam) C platform location,” said chief executive of Dragon Oil Abdul Jaleel Al Khalifa.
“The findings from this well further prove our understanding of the Dzheitune (Lam) West area.”
President told the markets that the DP-1001 well, at the Dos Puntitas field on the Puesto Guardian concession has now reached the top of the target reservoir and it has decided to obtain core samples.
The company said the data will be valuable to its understanding of the field, given the extensive production and fraccing work during 2012.
The coring has extended the anticipated drilling timetable.
Meanwhile, Trap Oil has agreed to acquire a 15 percent working interest in the Athena oil field from Dyas UK, subject to the Department of Energy and Climate Change approvals for £34.5 million. The effective acquisition cost for Trap is around US$21 per barrel.
Management estimate gross unaudited recoverable reserves from the core Athena development area to be around 14.3 million barrels with upside in the core area and further to the north. First production is expected in the second quarter of 2012.
Trap said this unaudited management estimate is significantly lower than estimates published by third parties for this asset.
Staying in oil and gas, Argos Resources (LON:ARG) released its 2011 figures today. The company highlighted the technical work undertaken on its Licence PL001 licence in the North Falkland basin including the acquisition of 3D seismic data over the entire area and open acreage to the north of the licence.
Argos now has access to 4,500 square kilometres of high quality 3D seismic data covering most of the northern half of the North Falkland basin.
Of 22 stratigraphic prospects, several bear close analogies to the Sea Lion discovery, said Argos, while the six structural prospects evident on the original 2D data have been confirmed by 3D data as robust closures.
The best estimate of unrisked prospective recoverable resource has been increased to 2.1 billion barrels, and to 7.3 billion barrels in the high case.
Argos added that its current cash position is sufficient for its ongoing overheads.
Moving to miners, Vane Minerals (LON:VML) reported that an attempt to re-drill the third hole at the McGhee Peak acreage, which demonstrated a mineralised porphyry system, was unable to reach the desired depth due to poor ground conditions.
“Although it is frustrating not to have completed the third hole at McGhee Peak to target depth, our analysis of the drilling to date has given us sufficient confidence to commit to diamond drilling there,” said chief executive of Vane David Newton.
“The rotary drilling has already discovered two mineralised targets within a clearly identified porphyry system relatively inexpensively.”
Elsewhere in the sector, coal miner Beacon Hill Resources (LON:BHR) has entered into a strategic marketing partnership with Vitol Coal S.A., part of the Vitol Group, the world’s largest energy trading company.
Under the terms of the agreement, Vitol will act as agent to market export coal produced by Beacon Hill's Minas Moatize mine. The Vitol Group trades worldwide in excess of 25 million tonnes of coking and thermal coal and had turnover of US$297 billion in 2011.
Beacon Hill will continue to market and sell export coal to Global Coke, which will be offered yp to 600,000 tonnes of coking coal per annum for the life of Minas Moatize.
“Importantly, this milestone relationship provides Beacon Hill with an optimum route to market for our coal products, as well as enabling us to meet our existing commitments under our off-take agreement with Global Coke,” said chairman of Beacon Hill Justin Lewis.
In the meantime, gold producer Vatukoula Gold Mines (LON:VGM) managed to increase its gold output to 14,315 ounces in the second quarter from 11,442 for the second quarter ending February 2011.
For the six months gold production was 29,999 ounces, remaining steady as compared to 2011 and on track to achieve our forecast of 65,000 ounces for the year.
The increase in production has resulted in a mine profit of £0.9 million compared to a loss of £2 million in the same period last year. Profit for the six months was £2.3 million, up from £2.2 million a year earlier.
The company is confident of this year’s forecast production of 65,000 ounces gold and its future gold target of 100,000 ounces.
Fellow gold miner Archipelago Resources (LON:AR.) has appointed Colin Sutherland as chief financial officer, who has most recently served in the same position at Timmins Gold Corporation.
“Colin joins Archipelago at an exciting time in the Company's evolution, as we continue to pursue growth opportunities,” said managing director and chief executive Marcus Engelbrecht.
“His strong credentials add to the breadth of experience of our executive team, ensuring the Company is well placed to achieve its strategic objectives.”
Botswana Diamonds (LON:BOD) also had news to report this morning, sayings sampling operations have kicked off on its Mobilong licence in the Cameroon.
Two 100-150 tonne samples are being gathered from areas of potentially diamond-bearing conglomerate identified in earlier exploration with results expected in the second quarter of the year.
In Zimbabwe, a small bulk sample is ongoing on diamond claims in the Masvingo area. The purpose of the work on the claims is to confirm the presence of kimberlites and to determine if they are diamondiferous.
In other news, alternative energy company Wildhorse Energy (LON:WHE) announced that an independent engineer's review of its flagship Mecsek Hills underground coal gasification (UCG) project has now concluded. The review confirmed that the engineering design forms a satisfactory basis of design for the bankable feasibility study (BFS).
The conclusions of the report, said Wildhorse, further underpin its confidence in the UCG potential of the project ahead of its PFS publication expected by the end of the current quarter.
Finally, iodine explorer and producer Iofina (LON:IOF) released an update ahead of its 2011 results, which will be released in the second quarter. The group said it was encouraged by forward-looking cash flow generation and current iodine prices, which are expected to remain robust throughout the year.
“Iofina's strong reputation and presence in the market is now well-established,” said chief executive and president of Iofina Lance Baller.
“With its geological model, robust technology and current customers, the Group is well positioned for a strong 2012 and beyond.”