# PCL - Pancontinental Energy



## rub92me

Followers of the ARQ/EGO/EMR/FAR story on Valentines and Stokes Bay are probably familiar with PCL. The interesting thing about PCL is that throughout the Valentines drilling the shareprice hardly moved on very low volume. And with Stokes Bay drilling just started it got sold down to 0.055 in the last week trading on (relatively) high volume, and now back to 0.057 - the lowest prices we've seen for over a year. 
PCL should also release seismic results from their Kenya block soon (in fact it's overdue). With a 10% stake in Stokes Bay it appears to offer a good risk/reward play compared with the other players perhaps?


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## rub92me

Interesting day for PCL. Volume in the first 2 hours has exceeded highest daily volume in at least the last 12 months. Big buyers are met by equally big sellers at 6 cents. This stock is normally very tightly held, so I wonder what rocked the boat all of a sudden...


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## Trade wind

I too noticed the huge volume on PCL. I presume the jump was due to the quarterly activities report, specifically the Kenya seismics announcement? Is "Initial results supported the interpretations previously presented by Pancontinental" a good thing? Talk about understatement, and no hint of when the survey will be released. I don't know much about this company or hold, but maybe I should.


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## Aussie2Aussie

Major issue with these guys is that the GM just resigned/replaced after one year in the job. Announcement dated 7 November.


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## Trader Paul

Hi folks,

PCL ... up 31% today and no announcement, yet ... !~!

have a great day

  paul



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## Trader Paul

Hi folks,

PCL ..... up more than 30% today, on no apparent news ... !~!

Figure April 2008 should be a good month for PCL,
especially around 10042008 and 17042008 ... may
also be some minor news expected, around 24042008 ..... 

happy days

 paul



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## rub92me

The rise yesterday was caused by 1 trade for 100,000 shares. Still a lot of work to do before I would consider jumping on this.


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## nick2fish

*Re: PCL - Pan continental Oil & Gas*

Yeah, Risky one this one... Stokes testing coming up (surely they can't muck around for too much longer) 
Origin looking for a big player to help it fund 2 wells in the JV in offshore Kenya.(PCL 25%) 
Big structures identified, 3 bbo or 7tcf of gas if full. 
50/50 deal offshore Namibia with Key exploration in more elephant country. 
The question is funding of these and their European exploration prospects. Which brings us back to Stokes. 
That comes off pcl should benefit from a huge sp price re-rating. If it's a duster I suspect it will make it very difficult in the short term for PCl to achieve its goals without mass dilution of interests. 
What to do?????? Oh well as someone once said to me  
"Fortune favours the Brave"


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## jtb

Morning all,

Looks like last nights late announcement, concerning potential oil seeps, has got some pulses going this morning?


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## rub92me

After initial spike seems to stabilise now around 6 cents. PCL has fantastic prospects, however unlocking value from these will be a long process. I have a small holding in the 'I could lose it all or make a multibagger in 3-5 years' category of my portfolio


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## nick2fish

The deep water drill sites will pose challenges as well as being expensive. The positive for PCL is that energy heavyweight Origin seems to be activily searching for a farmin partner for this project. 60mil for two wells (PCL carried through) it will need to be another industry major. This sat oil seep map is a bait on a big hook and with the poo at the minutek a feeding frenzy may occur. Very good news for holders


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## YOUNG_TRADER

Massive targets though and being free carried by ORIGIN for a couple of wells is a huge bonus

Watching for now

p.s. any idea when/timeframe for wells?


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## jtb

YOUNG_TRADER said:


> p.s. any idea when/timeframe for wells?




Origin chasing farmin partners atm bro' so nothing firm yet.
Watching also, interested to see whether the latest ann' brings anyone out of the woodwork.

Much prefer PCL to FAR for this type of play myself. 

Cheers


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## rub92me

FAR announced on 18 june the planned timing for when Stokes Bay will recommence (in August). A bit strange that the other JV partners with a bigger stake (e.g. PCL, EMR) didn't even find this worth announcing to the market.


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## kyme

Origin still committed to Kenya by look,with 3D seizmic planeed for this year & possible drilling 2010. Prospects are massive multi billion barrel targets. Apparant active oil seeps in the area should help excite market pre drilling. Hopefully we'll see some progres soon on Malta prospects as well, long drawn out saga there, but I buy for long term so I'll continue to top up on any weakness.


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## bhutos

Starting to see some very nice movement here. Will be good to see something formalised after the 3D.. Still a while to go before we get to strap in for a drill but very happy with some of my accumulation earlier in the year.


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## SuperGlue

3D seismic completed. 

See company report.

Share price starting to move.

I do have a small parcel of shares in the compnay.


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## Small Timer

Good to see a small support building at this level.
It has been under pressure of late. 
Still hanging in there to see what the Kenya 3D's bring.

What do you guys think ?

I do have a small parcel of shares in the company and I'm holding them for now. 
Nothing ventured, nothing gained.

10/02/2010

Last Trade 0.032

Today's Change +0.001


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## CapnBirdseye

Small support is right.  You could halve or double the SP for 60k (a bit of a guess but not far off I'm sure).

Most ppl are waiting for the 3d results and an ann on the next move.  Maybe something at Banayas in the meantime?

Saying that there is more and more East African oil and gas coverage in the press atm.  Sure to stimulate some interest over time.


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## Small Timer

Looks like your right CapnBirdseye , the stock went for a bit of a spin today on very little turnover. 

Opened at 0:037 then taken for a ride down to 0:029 before coming back up a little. Still think that 0:035 ( or lower if you can get some ) is a good buy in level for this one.  

Fingers crossed for those 3D results:bier:
Should be less than 30 sleeps now before we know something I guess :sleeping:


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## Atlas79

Breakout!

Tomorrow the day of the siesmic announcment? Has been due any day now. There was a big flurry of buying in the last hour today. Someone wanted in & wanted it NOW...

Watch this one tomorrow...


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## Small Timer

You have to watch the volumes on a breakout. A small amount of shares can move this one but watch out for the players and if there is any follow through. 
We hope that it will come soon. In the mean time, buy on the lows and be carefull how many you sell on the highs. Don't get caught short when it does run. I love these penny stocks and yes I'm in for the long term as well.


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## Small Timer

What a difference a month makes - 4.2 now , has been up to  4.7 and still no news on the 3D. Hold in there , good things come to those who wait.


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## Small Timer

Getting worried now , already in June and still no word on the 3D results , could we see this stock slide back down to the 3 cent range ? Today holding at 4.2 but very low volumes of late.Has been as low as 4 cents in the past few days.I'm still holding in but don't know for how much longer


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## kyme

I think awaited 3d results carry more downside risk than up. Market already likes these elephant sized targets with active oil slicks. Bu if 3d results at all unclear  can see disappontment and possible selloff. The most we can expect from 3d is to confirm current perceptions so I can't see much upside there. PCL has huge upside though prespud and after PCL share of drill costs in place. (free carry was only on 3d ). Watching PCL closely but see no hurry here.


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## Miner

Please see attached the news of Force Majeure from PCL.
While investors are keenly waiting to see the 3 D result I think this force majeure will pour cold water on the burning fire.

I hate to see market reaction on Monday . Thankfully it is not heavily traded share and I do not hold it.

Please DYOR and take your own decision to buy, hold or sell


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## Small Timer

The news did come out from Flow Energy during the last trading day without much reaction to PanCon shares. if the PanCon share price does drop a bit over the next few trading days , it may be a good chance to pick up a few more. I still like the potential of the Origin/PanCon block next to the Flow Energy/PanCon one. I don't know if they will ever have the money to develop it , but they can still make a mint by farming it out to one of the big players. We are talking long term here , it is not going to happen Monday , or a month of Mondays from now , but it looks good enough to me. I will hang in for a bit longer. Would love to see those 3D results though. - Good Luck to all.:dunno:


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## Miner

Small Timer said:


> The news did come out from Flow Energy during the last trading day without much reaction to PanCon shares. if the PanCon share price does drop a bit over the next few trading days , it may be a good chance to pick up a few more. I still like the potential of the Origin/PanCon block next to the Flow Energy/PanCon one. I don't know if they will ever have the money to develop it , but they can still make a mint by farming it out to one of the big players. We are talking long term here , it is not going to happen Monday , or a month of Mondays from now , but it looks good enough to me. I will hang in for a bit longer. Would love to see those 3D results though. - Good Luck to all.:dunno:




good point small timer

My perspective is from short to medium term perspective. I was not at all looking for long term (again every one's span of horizon for short, medium and long is different) so there is no issue.

However Force Majeure clause is always dangerous sign. 

It allows an opportunity to hatch all the inefficiencies and delays under that situation and history suggests the outcome is often not a win win situation.

Probably Monday will give us the opportunity to buy some good amount for PCL. However I always wait to see the length of the string for Force Majeure clause's effetiveness. Definitely Monday rise or fall will not be my decision making day until the full picture of the effect of Kenya is known.

I am sure each one of us has definite strategy to deal this situation matching with own circumstances. So good luck all current and prospective holders.


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## Small Timer

Under pressure today. The stock has dropped down under the 4 cent level again. With no recent news from the company about Kenya , looks like that people are getting a bit worried. Lots of sellers and very thin on the buy side at the moment. At this time $0:039. Good luck all....


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## Small Timer

Well finally got some news from the Company , all be it with the Quarterly Cash Flow report and the Quarterly Activities Report , but still no action.

Stock started to look good in the morning with early trade jumping up to 0.04
cents and some volume (1,249,412 ) but then died. I guess the 1,000,000 share sell order that came in didn't build much confidence. 

Just have to sit back and wait. If it drops further, buy some more.


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## Small Timer

Looks like that there is some movement in the camp. 
It has been a long time between drinks but things are starting to look up.

Stock up 13.158 % today at 0.043 and hopefully more to come. 

Is there a Farm-Out, in the wind for Kenya ?
Or perhaps we will get some news on Stokes Bay within the week,
In any case, good to see some movements and higher volumes.

In for the long haul.


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## Small Timer

Extract from EGO's ASX Release:

TESTING OF STOKES BAY-1 RETENTION LEASE R1, CANNING BASIN, WESTERN AUSTRALIA COMMENCED TODAY FRIDAY 12 NOVEMBER 2010

Buru Energy Limited, the Operator of the Stokes Bay-1 Testing Programme within Retention Lease R1, has advised that the BJ Services Coiled Tubing Unit and the Nitrogen Unit was released on 9 November 2010 from the Yulleroo-2 Programme. Site and road works at Stokes Bay-1 have been completed. Mobilisation of the Coiled Tubing Unit, the Nitrogen package and other equipment was mobilised and is now successfully rigged up on the Stokes Bay-1 wellsite. 

The Stokes Bay-1 well Testing Programme consists of using a coiled tubing unit and a nitrogen lifting technique. This Testing Programme commenced today 12 November 2010. The pressure data obtained during the original drilling of the Stokes Bay-1 well and subsequently during various testing operations conducted by the joint venture can be interpreted in a number of ways, one of which is that the Nullara reservoir contains a gas column updip from the well with the potential for a substantial oil column underlying the gas column in the section intersected in the well.

For full report see ASX announcements.


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## Small Timer

After the Stokes Bay no show , looks like that the 4 cent barrier is becoming a hard nut to crack , although the trend still looks up. Need some good news soon. Anyone else out there still looking at this stock ?


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## Small Timer

It has taken a while, but stock up now 60% in the past two weeks. Took some profit but now free carry, love it.


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## Small Timer

Very good run in the past week. I took some profit at 9.6 cents but will buy more if it get under 8 cents again. This is going to be a big one. Drilling in Kenya to be announced soon, then watch out.


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## SuperGlue

Looks like PCL is running hot on the heels of more oil & gas discoveries in Tanzania by BG & its JV partners, 
had successful explorations in all four wells.......

Tullow Oil rose to the top of the index and moved 6.6% ahead as it announced it has made Kenya’s first oil discovery. 

Tanzania next to Kenya, PCL & JV partners, drilling sometime later this year.

http://www.asx.com.au/asxpdf/20120320/pdf/425472bwwkdk8s.pdf

http://www.marketwatch.com/story/bg...all-gains-2012-03-26?link=MW_home_latest_news


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## SuperGlue

East Africa the next big thing for oil & gas.

Another discovery:

Anadarko Petroleum Corp. (APC) and Cove Energy Plc (COV) will turn their attention to the northern waters of Mozambique after finding as much as 30 trillion cubic feet of gas off the coast of the East African nation to date. 

Looks like the Irish are getting into oil & gas after all these years of farming (hint hint ....choose between the sand or the green fields......) Only joking , no harm intended.

http://www.pancon.com.au/investor-centre/broker-reports/reports/260312.pdf
Analyst report by Irish broker

Please DYOR.


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## SuperGlue

PCL/Apache has secured drilling ship for Q3 2012.

http://www.asx.com.au/asxpdf/20120410/pdf/425j052y2gw408.pdf


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## SuperGlue

Broker report by Hatleys.

Speculative buy, target 33c.

http://www.pancon.com.au/investor-centre/broker-reports/reports/120412.pdf


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## Small Timer

Just got my Share Purchase Plan Offer in the mail. Max offer @ 17.5 cents A$15,000 for 85,714 shares. 

As stated before,already topped up with 97K shares on Friday for 17 cents.

It is a pitty that the only time we are permitted to join in an offer, the share price takes a dive. Now sitting at 16.5 cents, could we see it lower ? US market diving on Friday night. 

Don't get me wrong, I'm a long term holder (since 3.9 cent days) and will continue to do so even if we see it go lower. It is what it is. 

Easy to say when your free carry, but this one will boom again once the sellers dry up. Hold in there guys. Can't believe people are selling so close to spud.

SPPO Paperwork in the bin for now.


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## Small Timer

Africa Oil: Ngamia-1 Well Discovers Additional Oil in Kenya

05/07/2012 - 10:27

Africa Oil Corp. (TSX VENTURE: AOI)(OMX: AOI) ("Africa Oil" or the "Company") is pleased to provide the following update in respect of the previously announced oil discovery at the Ngamia-1 well on Block 10BB, Kenya. Africa Oil holds a 50% working interest in this block, which is operated by Tullow Oil plc ("Tullow") which holds the remaining 50% interest.

The Ngamia-1 exploration well in Kenya has now been deepened to a total depth of 1515 meters and has encountered in excess of 100 meters of net oil pay in multiple reservoir zones over a gross interval of 650 meters. Following the initial announcement on the 26th March 2012 that Ngamia-1 had encountered in excess of 20 meters of net oil pay, the well has now been deepened from 1041 meters to 1515 meters. A further four good quality, oil-bearing reservoir zones have been encountered. Due to deteriorating hole conditions, a sidetrack of the well was required to deepen the well. Moveable oil with an API greater than 30 degrees has been recovered to surface from six of these intervals. This oil has similar properties to the light waxy crude encountered in the upper reservoir zone.

The Ngamia-1 well will now be drilled to a depth of approximately 2,700 meters to explore for deeper potential including the Lokhone sandstone which was one of the primary objectives of this well. Plans are in place for at least two drill stem tests upon completion of drilling operations. The Weatherford 804 rig will then move to Block 13T where the Twiga-1 (formerly Mbango South) wildcat well will spud in the second half of 2012. A further rig is being sourced to drill the Block 10A Paipai prospect in the Cretaceous Anza Graben system.

Africa Oil President and CEO, Keith Hill, stated, "The total pay sand thickness in this well has far exceeded pre-drilling estimates and certainly has highly positive implications for numerous similar prospects on trend. Based on these results, we are working with our partner Tullow to source additional rigs and acquire additional seismic to accelerate the exploration campaign in this basin. Our goal in the near term will be to assess the size and extent of the potential of this newly discovered basin."

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http://www.businesspress24.com/pressrelease1111078.html


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## smalltimer

Tullow Says Kenya’s Oil Potential May Exceed Uganda
By Eduard Gismatullin - May 17, 2012 3:39 PM GMT+0800 

Tullow Oil Plc (TLW) Chief Executive Officer Aidan Heavey said Kenya’s oil potential may be greater than neighboring Uganda, where the company and its partners have found about 2.5 billion barrels of resources. 

“What surprised us in Kenya was that the first well had such a big section of oil,” Heavey said in London. Drilling at Tullow’s Ngamia-1 well revealed more than 100 meters (328 feet) of oil, more than double the amount at its other East African exploration wells, the company said earlier this month. 

Tullow, which has unlocked billions of barrels in frontier regions from Ghana to French Guiana, is seeking to replicate those finds in East Africa. While Kenya has no proven oil reserves, Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) found natural gas in its Anza Basin in 1976. Tullow is working with Total SA (FP) and Cnooc Ltd. (883) to develop oilfields over the border in Uganda, where it expects to start production as soon as this year. 

Ngamia-1’s column of oil is the largest oil-bearing section Tullow has found in a single well, Heavey said today. “It’s only one well in an area nearly the size of England,” he said. The London-based company has drilled the well, in Block 10BB, to 1,515 meters and plans to extend the depth to 2,700 meters. 

“We are pretty confident that we can move pretty fast in Kenya if we prove up the commercial amount of oil,” Heavey told reporters. “It’s a great start.” 

Separately, the CEO said that Tullow is in talks with “a few companies” about the possible sale of its assets in Pakistan and Bangladesh. 

http://www.bloomberg.com/news/2012-...oil-potential-may-exceed-uganda-correct-.html


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## smalltimer

Hartleys writes;

PANCONTINENTAL OIL AND GAS NL - More Legs Than a Millipede – Mbawa Imminent

Pancontinental Oil and Gas Limited (“Pancontinental”, “PCL”, “Company”) is on the threshold of drilling at the first of potentially four company making wells over the next 12 months. The Company will retain a 15% (largely free carried) working interest into the drilling of the giant 1 billion barrel potential Mbawa prospect, on the L8 permit offshore Kenya, scheduled for spud in early August. The upside potential for PCL from this well alone is in excess of 169cps. If we assume 20% chance of success, this results in a risked valuation of 34cps.

L10A / 10B – Two Wells H1 2013
Possibly less obvious, and overshadowed by the impending action at Mbawa, is the likely drilling at the BG operated L10A and L10B blocks. Exploration on these has been fast tracked, with drill ready prospects likely by late Q3 2012 and up to two wells possible in H1 2013. Existing 2D seismic and early processing of recent 3D suggests the presence of Mbawa sized analogue structures as well as other large leads in different plays.

The Company also has a 40% interest in Block L6 where 3D seismic is scheduled to commence shortly.
Mbawa South – Near Term Followup to Mbawa

Additionally, Apache has recently completed 3D seismic over the Mbawa South prospect, which anecdotally is of similar potential to Mbawa. We expect that any encouragement at Mbawa would result in near term drilling at Mbawa South. PCL’s farm-out agreement with Tullow would see them largely free carried (up to US$6m) at a 10% working interest in a second well on L8.

Namibia – Drilling by Others Nearby Plus Possible Deal Flow

We are also aware that HRT has contracted a drill ship for a 180 day drilling program offshore Namibia, which should commence in Q3/4 2012 and will include drilling in permits adjacent to PCL’s large, 85% owned, holding in the Walvis Basin. Peers in adjacent acreage have released independent estimates for prospective resources of many billions of barrels of oil. PCL’s acreage is the epicentre of interpreted localised oil seeps, identified by satellite imaging of surface slicks. A recent farm-in by BP to Serica Energy provides confidence that PCL could farm-out its acreage on similar terms, if it chooses to do so.

Once in a Decade Opportunity

PCL could have direct exposure to up to 4 wells offshore East Africa and indirect exposure to up to 2 wells offshore Namibia over the next 12 months. Whilst offshore Kenya has not been tested by drilling in recent times, the Lamu Basin is considered a “sister” basin to the Rovuma Basin where the discovery rate to the south, in Tanzania and Mozambique, has been a staggering 90% over the last 24 months (18 from 20 wells).

It is rare to see a junior exploration company with this much exposure to drilling in what are considered highly prospective basins on world class sized prospects. For investors that understand risk / reward, this is a once in a decade opportunity to get exposure to upside potential of ~$8 per share. The Company is fully funded for all foreseeable drilling activity, with ~$60m in cash.

In a success case, management and insider holdings in excess of 25% will guarantee that any takeover will not come cheaply. We rate Pancontinental as a Speculative Buy with a price target of 33cps.

HIGHLIGHTS

Pancontinental Oil and Gas NL is an ASX listed (PCL.AX) oil and gas explorer with a focus on offshore Africa. The Company has interests in 4 permits offshore Kenya and one large permit offshore Namibia, arguably two of the hottest oil and gas exploration areas globally.

PCL’s strategy has been to acquire early stage interests in areas that it believes are oil prone rather than gas prone. The assets offshore Kenya and Namibia both have a strong geological oil story, including the presence of oil slicks. Solid geological modelling of the depositional environment indicates oily source rocks that are buried at the right depth to be generating oil and excellent reservoir quality has been indicated by historic wells at both areas. When these ingredients are coupled with very large prospect sizes, it is only a matter of time before drilling occurs.

East Africa is in its third round of drilling in the last 2 years, with outstanding success – 18 successful wells from 20 attempts (14 of these are exploration wells). PCL’s billion barrel Mbawa prospect will be drilled in August this year and is on trend to the gas discoveries to the south; however, it will be the first prospect to be drilled that is specifically targeting oil.

Namibia has just entered its first round of drilling after a ~20 year hiatus with 4-6 wells planned over the next 12-18 months. Given global success rates are >20% using modern techniques, we would expect one of these wells to be a discovery, which would significantly re-rate all Namibian acreage. There is now very little acreage left offshore Namibia, so industry players wishing to gain exposure must deal with existing owners. We have seen several transactions over the last two years with the HRT takeover of UNX for ~US$700m as well as the recent farm-in by BP to Serica Energy (SQZ.LN). The transaction metrics indicate look through of roughly $1m per percentage point in each block (i.e. PCL’s 85% interest has a look through valuation of ~US$85m). 

Pancontinental is yet to acquire and reprocess existing seismic or to start acquisition of new seismic. We believe that part of the reason for this is the potential to farm-out these commitments on favourable terms to a highly regarded oil and gas international.

HRT has recently contracted a drill ship for a 180 day program that will include drilling in permits adjacent to PCL’s acreage, beginning in Q3/4 2012.

Read More at;
http://www.pancon.com.au/investor-centre/broker-reports/reports/010612.pdf


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## smalltimer

ANother update from DOlmen

Target at 0.30 which I would say is on the money

http://www.dolmenstockbrokers.ie/reports/Dolmen%20Daily%2013%20June%202012.pdf


Overnight, Pancontinental announced that it has started its 3D offshore seismic survey of Kifaru, in the L6 licence offshore Kenya. The company has a 40% interest in the licence, the remaining 60% being held by the current operator FAR. The data acquisition, which should be completed in early July 2012, will cover about 680 sq km and cost $13.67m (Pancontinental’s share is $5.5m). Licence area L6 off the Kenyan coast lies in the Lamu Basin and within the Tana River delta, north of the recent natural gas discoveries off the coasts of Mozambique and Tanzania. Current interest in Pancontinental centres round its first offshore Kenya well on the Mbawa Prospect in Block L8, which is being drilled by Apache Corporation in Q312. Pancontinental has a 15% stake in that prospect, in partnership with Apache (50%), Origin Energy (20%) and Tullow (15%). As such, today’s announcement is an incremental positive for the company, illustrating continued progress in a second target area, that is commencing slightly ahead of schedule (3D seismic had been pencilled in for Q312).

Also - Pancontinental's new Presentation can be found at;

http://www.pancon.com.au/investor-centre/company-presentations/reports/PCLPresentation1206.pdf

Good Luck all PCL long ter holders, good times are coming.


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## smalltimer

Lets hope that PCL can find a little Oil amongst all this Gas. Getting ready to Drill and ready to join the Party......

Oil and Gas are the new African queens

By Emily Gosden
5:27PM BST 01 Jul 2012

When Royal Dutch Shell proposed a 195p-a-share, £992m offer for Mozambique-focused oil and gas explorer Cove Energy in February, many in the City regarded it as a “full” offer. 

“The valuation looks stretched,” wrote one analyst. “The proposed offer is unlikely to face a challenge,” said another. More than four months on, Thailand’s PTT now leads a bidding war with a 240p-a-share agreed bid. 

The City now expects Shell – which has so far raised its offer to 220p – to come back and at least match PTT, potentially even upping its bid to above 300p. Cove’s prized asset is its 8.5pc stake in the Rovuma 1 block off the Mozambique coast, where giant gas reserves have been discovered. 

-----------------------------------
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9368387/Oil- and-gas-are-the-new-African-queens.html


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## smalltimer

New from Apache, Apache at a Glance, regarding the offshore Kenya operations at Block L8 / Mbawa (partnered with PCL of course).

It's probably easier on the eyes if you read the PDF file, here's the link:
http://news.apachecorp.com/go/doc/3523/1499855/

But for those of you that don't have access to a PDF reader at the moment I have copy/pasted the text:

APACHE AT A GLANCE

Apache’s oil and natural gas operations reach from the United States to Canada, Egypt’s Western desert, the North Sea, Australia and Argentina. 
Our global exploration program is seeking new resources in promising new areas such as offshore Kenya. 

Established in 1954, Apache 
Corporation has grown to 
become one of the world’s 
leading independent oil 
and gas exploration and 
production companies with 
US$52 billion in total assets 
as of year-end 2011. 

Apache Kenya Ltd, a subsidiary of Apache 
Corporation, plans to drill an exploratory 
well in Block L8 offshore Kenya in the 
Indian Ocean beginning in the third quarter 
of 2012. Block L8 is located about 70 
kilometres offshore, east of Kilifi and 
Malindi. 

Apache’s growth is the work of a diverse 
team of committed people who share 
values of integrity, hard work and respect 
for others. The company provides its 
employees with the latest technology and 
empowers them to make the decisions to 
fuel its growth. Apache stretches the limits 
of what’s possible through determination, 
adaptability, discipline, a sense of urgency 
and a long-term perspective.

With operations in the United States, 
Canada, the North Sea, Egypt, Australia 
and Argentina as well as exploration 
activities in other nations, Apache’s 
critical mass of exploration acreage, 
cash-generating production and financial 
flexibility enables the company to explore 
for new resources, acquire properties with 
upside potential and enhance production 
from mature fields with new investment 
and more efficient operations.

APACHE’S PLANS IN KENYA

Apache is exploring for world-class oil resources in the emerging 
area of East Africa.

Exploring for oil in deep water thousands of meters below the Indian Ocean is an exciting but risky business involving the efforts of many trained professionals – geologists, geophysicists and engineers – who work closely with Kenyan Ministry officials, the National Oil Corporation and local consultants. Apache employs advanced technologies to identify prospects with the greatest chance of success, including 3dseismic surveys that provide images of the subsurface. After the well location is confirmed, a modern deep-water drill ship moves into position for drilling operations that may last two months or more. If the well is successful and oil is discovered, additional wells will be drilled to locate enough resource to make the project economically attractive to the oil companies and the government. A successful project may take six to 10 years from drilling the first well to the first oil produced and sold. 

WHERE IS THE WELL LOCATED?

Apache will be drilling in the northeastern corner of Block L8, about 70 km east of Malindi within Kenya’s exclusive economic zone (EEZ). The drilling vessel will not disturb fish or fishing vessels in areas of the Indian Ocean where fishing is normally undertaken. The drilling operation will also not disturb tourism operations or any other commercial operations along the Kenyan coast. 

WILL THE AREA BE CORDONED OFF IF OIL IS FOUND?

The area will not be cordoned off. The immediate area around the drilling ship will be isolated during the drilling operation. 

WHAT WILL HAPPEN IF OIL IS NOT FOUND?

If the well is not successful, it will be plugged with cement in accordance with internationally accepted procedures to ensure no underground fluids are released to the environment.

POTENTIAL ECONOMIC BENEFITS

Oil exploration and development is a partnership that offers economic opportunities for Kenya. 

The benefits of successful oil exploration may be seen by the Kenyan people in many different forms:

* The Government will earn revenues from sale of oil that can be used for the nation’s development.

* Infrastructure such as roads and ports may be improved as a result of petroleum operations during development and production. This also will benefit the local communities.

* Opportunities to supply materials and services to oil development projects may result in employment for local residents. These opportunities will depend on the ability of Kenyans to develop the necessary capabilities and standards. Fishermen may benefit through improved markets for their products.

* Oil companies’ corporate social responsibility programs generally are focused in communities in the vicinity of operations.

The Government will decide how revenues from oil production will be used. The Government may decide to allocate some funds for the development of social infrastructure – schools, hospitals and other needed projects – in areas where oil and gas are found. 

ENVIRONMENTAL STEWARDSHIP

Kenya’s National Environment Management Authority (NEMA) reviewed and approved an Environmental Impact Assessment report submitted by Apache Kenya Ltd with the assistance of ESF Consultants of Kenya, an environmental consulting firm. The report details Apache’s comprehensive waste management and oil spill contingency plans. All wastes created during the drilling project will be disposed of appropriately to ensure no harm to fisheries, tourist sites and the environment. Apache and its contractors are adequately prepared for possible oil spills using internationally approved procedures. 

Apache is working closely with the Ministry of Fisheries development, the Kenya Maritime Authority, the Kenya Wildlife Service, the National Oil Spill response committee and other organizations to ensure the drilling operation is conducted safely and efficiently. 

HOW CAN WE STAY INFORMED?

While drilling is under way, the most efficient methods will be used to communicate with communities in case of emergency or other necessary announcements. When drilling ends, Apache and its partners will announce the results of the operation.

CULTURE OF RESPONSIBILITY

Apache is committed to operating in a safe and environmentally responsible manner and building enduring relationships with the communities where it operates.

Apache has a successful track record of operating in sensitive marine environments like the Gulf of Mexico, Alaska, the North Sea and the Indian Ocean off Western Australia.

* Apache has undertaken seismic, drilling and production operations – including deployment of a floating production, storage and offtake vessel – in waters adjacent to the Ningaloo reef World Heritage Site in the Indian Ocean off the Australian coast.

* As one of the industry’s most active explorers, Apache has substantial experience conducting 3-dseismic operations in ways that minimize the impact on marine environments. Apache recently completed a 3dsurvey on block L8 in Kenya without incident or impact on the environment.

* Apache’s technical staff has taken important roles in development of oil spill containment systems in the Gulf of Mexico, the North Sea and the Indian Ocean. These systems provide well containment equipment and technology with the goal of being prepared to respond to well control incidents in deepwater drilling operations.

Around the world, Apache employees are empowered to ensure a safe workplace and environmentally responsible operations. 

IN THE COMMUNITY

Apache’s corporate social responsibility programs place emphasis on education. An example is found in Egypt. Springboard ”” Educating the Future, a U.S.-based nonprofit organization established by Apache, collaborated with Egypt’s National Council for Childhood and Motherhood (NCCM) and the Sawiris Foundation for Social development to build 201 schools for young girls in poor rural villages in Egypt. 

Community schools are powerful catalysts for change in the rural villages. There is no tool for development more effective than the education of girls and women. No other 
policy is as likely to raise economic productivity, lower infant and maternal mortality, improve nutrition, promote health and increase the chances of education of the next generation.


---------------------------------
http://news.apachecorp.com/go/doc/3523/1499855/


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## smalltimer

Pancontinental Oil and Gas raises additional A$4.43M to help fund Kenya and Namibia exploration
Tuesday, July 31, 2012 by Bevis Yeo

Pancontinental Oil & Gas (ASX: PCL) has raised A$4.43 million for its Kenyan and Namibian oil and gas exploration after placing shortfall shares from its share purchase plan that closed in May.
It completes the original A$50 million placement, consisting of a A$45 million share placement to institutional investors and the A$5 million share purchase plan.
Proceeds from the shortfall placement will be used to help fund drilling of the Mbawa well in Block L8, offshore Kenya; shoot seismic over L8 and L6 as well as EL 0037 in Namibia; and ongoing exploration in Blocks L10A and L10B in Kenya.

The placement of 25.3 million shares priced at A$0.175 each was made to sophisticated investors as well as international and domestic institutional clients of Hartleys Limited.

Mbawa drilling

Pancontinental has a 15% stake in L8 where operator Apache Corporation (NYSE:APA) is drilling in August the highly prospective Mbawa prospect that targets up to 700 million barrels of oil.

While Tullow Oil (LON: TLW) had agreed to free carry Pancontinental up to US$9 million (A$8.7 million) for drilling of Mbawa under its farm-in to the block, other exploration expenditure and higher cost estimates will require Pancontinental to contribute to the well cost.

The prospect, which Pancontinental sees as a major oil play rather than a gas play, is estimated to have a maximum potential of 4.9 billion barrels of oil in place at the main Tertiary/Cretaceous level

http://www.proactiveinvestors.com.a...fund-kenya-and-namibia-exploration-31858.html


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## smalltimer

Pancontinental Oil and Gas NL (“Pancontinental”, “PCL”, “Company”) is mere weeks away from spud at its billion barrel potential Mbawa prospect, offshore Kenya. Ophir Energy Plc (“Ophir”) announced yesterday another in a long string of discoveries, offshore Tanzania. The Deep Sea Metro 1 drillship, used to drill Ophir’s well, will now move to neighbouring Kenya to drill Mbawa on Block L8. We estimate a spud date in mid August.

Drilling of Mbawa will be operated by Apache Energy Corporation (“Apache”) and is the first well drilled offshore Kenya with the aid of 3D seismic. PCL’s joint venture partners, Tullow and Apache, have both confirmed the prospectivity of Mbawa. Seismic interpretation has revealed direct hydrocarbon indicators and dual flat spots that may indicate gas over oil over water. Surface slicks coincident with the edges of the mapped structure and oil shows in historic wells also provide evidence of oil in the basin. Pancontinental is largely free carried for its 15% interest in the well.

Mbawa Re-Cap - >$1 per Share for PCL

Mbawa is located in 860m of water and will be drilled to a total depth of 3,250m. The primary target is located at the Tertiary / Cretaceous level (the same horizon as the recent Ophir discovery) with the main secondary target in deeper Jurassic horizons. The well should take 45-60 days to drill. Logging While Drilling will determine which horizons are considered prospective and these will be subject to a comprehensive logging suite. The well will not be flow tested and will be plugged and abandoned as per standard exploration practice. In the event of discovery, subsequent wells will undertake flow testing; however, rock properties and flow potential will be indicated on the logs from the upcoming well.

There is substantial follow-up potential to Mbawa, as well as other play types, so any indications of hydrocarbons would likely result in additional drilling on the permit. PCL is also free-carried (capped at $6m) in a second optional well that would reduce its percentage stake in the permit from 15% to 10%.

And Then?

In addition to the followup potential at L8, PCL has a 15% interest in blocks L10A and L10B, where operator, BG, is aggressively moving towards possible drilling in H1 2013. We believe that the Mbawa outcome is largely independent of BG’s desire to drill on these permits, where early processing and interpretation of recent 3D seismic has shown very promising results. PCL has a 40% interest in Block L6, adjacent to L8 and with the same source kitchen. 3D seismic was recently acquired over the most promising prospects and we expect further news on potential towards the end of the end of the year, ahead of farm-out in H1 2013.

PCL also has an 85% working interest in a large permit offshore Namibia, in the Walvis Basin. Drilling is scheduled in nearby permits for mid 2013. It is likely that a farm-out will occur over the next few months.

Huge Upside – Multiple Wells

We estimate in excess of $6 per share in upside potential from PCL’s offshore Kenya permits. Drilling at Mbawa is imminent, additional followup drilling in L8 as well as L10A/B is likely in H1 2013. Activity by others offshore Namibia could also result in a large re-rating. Given the phenomenal recent East Africa success and the multiple drilling catalysts, we recommend exposure to PCL with a Speculative Buy recommendation and a price target of 34cps.


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## smalltimer

US firm joins hunt for oil in Kenyan coast

By SANDRA CHAO and MARK AGUTU
Posted Wednesday, August 8 2012 at 22:30


An American company has started the search for oil off the Kenyan Coast, barely four months after Tullow Oil struck huge reservoirs in Turkana County.

Apache Corporation will start drilling in the Lamu basin in a week at a block known as Mbawa 1, 70 kilometres off the shoreline.

The company’s public and international affairs manager, Mr John Roper, told the Daily Nation the project would start between August 10 and 15.

“The well, called the Mbawa 1, is targeting what we hope is a large oil reservoir. The Mbawa well will take about two months to drill to its planned depth of 3,200 metres. The main challenge we face in drilling this well is the same as whenever we drill an exploratory well ”” we won’t know for sure what we have got until we’re finished,” he said.

Mr Roper said they had contracted Deepsea Metro 1, a ship owned by Odfjell Drilling Company of Bermuda, to sink the well.

He said the block was picked because it is identical with the ones on the northern shores of Madagascar where the company found more than 30 billion barrels of oil.

“If you move Madagascar over to Kenya (as if they are puzzle pieces), you’ll see its northern and western coasts fit very nicely into the coast of Kenya, where it actually originated prior to the major plate breakup that happened about 150 million years ago. 

“Along Madagascar’s northern shore there’s about 30 billion barrels of oil in place. If you do plate reconstructions, what you find is it fits very nicely with our block position in the Lamu basin. The oil found in Madagascar comes from Jurassic source rock and we believe this same source could be in the area where we are planning to drill off of the coast of Kenya,” Mr Roper said.

He said they were discussing with government, business leaders and community representatives plans for the exploration. 

The group has assured fishermen that they will not be displaced by the oil hunt.

Project cleared

The project has already been cleared by the National Environmental Management Authority.

On Wednesday, The New York Times described Apache as an independent energy company, which explores for, develops, and produces natural gas, crude oil, and natural gas liquids. 

“As of December 31, 2011, Apache had exploration and production interests in six countries: the United States, Canada, Egypt, Australia, offshore the United Kingdom in the North Sea, and Argentina,” it said. 

This is not the first time multinationals are digging up the seabed for oil. In 2008, Woodside Energy wound up activities in Lamu after drilling a dry well the previous year. 

The company sunk a 4,887-metre well only to find sandstones and fresh water. 

In 2007, China National Offshore Oil Corporation surrendered four blocks in order to carry out a seismic survey to map out oil potential deposits.

Tullow is currently exploring whether the Turkana reservoirs are commercially viable. 

--------------------------------------------
http://www.nation.co.ke/News/US+fir...n+coast/-/1056/1474636/-/gerd39z/-/index.html


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## smalltimer

PCL Holders - Good luck - Hang onto your Hats - Here we go...

Kenya’s deepwater debut heralds east Africa’s first oil

Posted on July 12, 2012 at 6:19 am by Bloomberg in Africa, Offshore, Oil

Apache Corp. (APA) will drill Kenya’s first deepwater oil well next month, a prospect that could add a $70 billion crude find to the record natural-gas discoveries along East Africa’s coast.

Apache and partners including Tullow Oil Plc (TLW) said the Mbawa well is likely to strike oil based on seismic data and slicks seen on the Indian Ocean’s surface. The drilling is targeting as much as 700 million barrels, a resource valued at twice Kenya’s annual economic output at today’s oil prices. With a 50 percent a stake in the well, a strike could add more than 10 percent to Houston-based Apache’s reserves.

“What we are looking at in this well is to see if we can actually change the paradigm” in what’s been a gas-prone area, Tullow Chief Financial Officer Ian Springett said in a phone interview. “It’s a high-risk, high-upside well.”

East Africa has become one of the world’s most active exploration areas since Anadarko Petroleum Corp. (APC) made the decade’s biggest gas discovery off Mozambique. An oil find would be a boon for Kenya as the commodity is easier to sell than the gas found in neighboring Tanzania and Mozambique, which will require spending at least $50 billion on export plants. The Lamu basin, where Mbawa is sited, may hold as much as 5 billion barrels, according to one of the well’s partners.

The Mbawa seismic study indicates the possible presence of gas and crude, Bob Brackett, an oil analyst with Sanford C. Bernstein & Co., wrote in a May report. “Another indicator of oil ”” sea surface oil slicks that have been collected” in the area, he said.

Africa Explorers

Explorers in East Africa including Anadarko, Statoil ASA (STL), Eni SpA (ENI) and BG Group Plc (BG/) have discovered more than 100 trillion cubic feet of gas, enough to meet U.S. demand for more than four years.

The interest in East Africa can be seen in the bidding war for Anadarko’s London-listed partner Cove Energy Plc (COV) between Royal Dutch Shell Plc (RDSA) and PTT Exploration & Production Pcl (PTTEP), putting Europe’s largest oil company against Thailand’s state energy producer. The battle has more than doubled Cove’s share price this year.

“Exploration of East Africa is at a very, very early stage, and yet success so far has been very significant,” Andrew Whittock, a London-based analyst at Liberum Capital Ltd., said by phone. “Most industry is following behind and trying to establish positions.”

Apache, the second-largest U.S. independent oil and natural-gas producer by market value, will operate the Mbawa well in the L8 Block. The Deepsea Metro 1 rig will take about two months to drill to the 3,250-meter (10,663-foot) target depth at a cost of more than $60 million. The partners may follow up with the Tai well, which could hold 500 million barrels of oil resources, according to Apache.

‘Looks Attractive’

“There are no wells in our block so we can’t say definitively that the crude is there,” John Bedingfield, a vice president for exploration at Apache, told investors in June. “From a prospect perspective, we think it looks fairly attractive.”

John Roper, an Apache spokesman, declined to comment on Kenya beyond the company’s statements at its June investor conference.

The Lamu basin geology is similar to areas in Madagascar, the island that was joined to East Africa before splitting apart about 145 million years ago. Since the 1970s, Royal Dutch Shell Plc, Chevron Corp. (CVX) and Eni along with other companies have drilled in Madagascar, which holds 24 billion barrels of heavy oil resources, according to Afren Plc. (AFR) Only about a dozen wells were drilled off the island.

Pulled Apart

“Historically Madagascar was attached to Kenya and during the rifting it pulled apart,” said Frank Patterson, a vice president on exploration at Anadarko. “We also have seen data in Mozambique that indicates there is potential for oil source rock in there too. We are still high on oil in East Africa, but it’s got to be in the right setting.”

Tullow Oil, which holds the most exploration licenses in Africa of any U.K.-based explorers, has opened four frontier oil and gas provinces in French Guiana, Ghana, Uganda and Kenya, with more than 4 billion barrels since 2007. 

Using continental drift theory worked when it found crude in French Guiana, which split from West Africa, an oil-producing region, millions of years ago. In March it discovered crude at on onshore well in Kenya.

Two years ago, Anadarko said it discovered East Africa’s first deep-water oil with its Ironclad well in the Rovuma Basin off Mozambique. In February, Statoil and Exxon followed up with the Zafarani well off Tanzania, which opened an older reservoir with crude potential. Both wells need more testing to prove petroleum resources.

Cheaper to Produce

“We are still trying to understand what Ironclad means,” Patterson said. “We have some theories and we are going to drill some wells in the southern part of our block later this year.”

Eni and Total SA have secured the latest four exploration licenses off Kenya, according to the companies. Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil producer, in 2006 drilled the deepest Kenyan offshore well as of 2011, which failed to find oil or gas.

Most oil companies prefer to find crude oil reserves rather than natural gas because it’s cheaper to produce and supply to customers. Crude can be loaded on a tanker and shipped worldwide from remote fields, while gas has to be chilled and liquefied before shipping, what requires higher investment in LNG plants.

“Oil is simpler story,” said Al Stanton, managing director for oil and gas research at RBC Capital Markets. “ Gas is still playing some sort of second figure to oil.”


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## smalltimer

Friday, August 10th, 2012 4:43pm IST

Apache to start drilling offshore well in Kenya

NAIROBI Aug 10 (Reuters) – U.S. explorer Apache Corp. plans to drill an offshore well off the Kenyan coast  soon, company executives said, expanding the search for oil in the east African country that struck oil onshore in March.

East Africa and the Horn of the continent have become hot spots for oil and gas exploration in recent years, spurred by
new finds in countries including Kenya, Uganda, Tanzania and Mozambique.

However, oil companies have yet to make finds offshore.

Apache will drill in an area known as the Mbawa prospect on Block L8 in the Indian Ocean.

“Spudding is imminent,” Barry Rushworth, CEO of Pancontinental Oil and Gas, one of Apache’s partners with a stake in the block, said in an email to Reuters.

Apache, the operator in the block, is partnered by British firm Tullow Oil, which made Kenya’s onshore discovery this March, and Australian firms Origin Energy and Pancontinental.

Tullow has placed the odds of the well’s success at 15 percent, while Pancontinental has estimated the well could contain as much as 4.9 billion barrels of oil.

In 2007, Australia’s Woodside Petroleum drilled Kenya’s last offshore well at a cost of nearly $100 million, but found no oil deposits and paid the government to exit from a contract that had required the firm to drill a second well.

Apache said in July it had taken special precaution to ensure the operation goes smoothly. It has enlisted the Kenyan
 Navy to protect the drillship from pirates who have been hijacking ships in the Indian Ocean for ransom.

The well is expected to take 60 days to complete and reach 3,250 metres below the sea in water depth of 860 metres.

“The main concern that we have with regard to security is the potential for piracy, and with that regard, we have partnered with the navy,” said Tim Gilblom, managing director of Apache Kenya.


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## smalltimer

*PCL - We are Drilling - Pancontinental Oil & Gas*

Apache Starts Searching for Oil Offshore Kenya

Posted on Aug 13th, 2012 with tags Apache, Deepsea Metro 1, Mbawa, News, Offshore Kenya, Oil, Searching, starts .

Apache Corporation has, on behalf of the L-8 consortium, spudded Mbawa exploration well offshore Kenya. 

The Mbawa 1 exploration well spudded at 6:00 hours local time on 10 August 2012.

Mbawa 1 is located in the Mbawa Prospect in offshore Kenya. The modern drillship Deepsea Metro 1 is expected to take about 60 days for this drilling operation, which will reach a total depth of 3,250m subsea in a water depth of 864m.

The well is expected to take some 45 to 60 days to complete to a planned total depth of 3,250m subsea in water depth of 860m.

While offshore East Africa has the potential to become one of the world’s foremost LNG producing regions, it has been predicted that in the northern part of the East African margin offshore Kenya will prove to be oil-prone rather than gas-prone.

Pancontinental, which owns a 15% stake in the joint venture, estimates that the Mbawa Prospect has potential to contain more than 4.9 Billion Barrels of oil.


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## smalltimer

*Oil search at the Indian Ocean gets underway*

Oil search at the Indian Ocean gets underway
Tuesday, 14 August 2012 00:05 BY SOLOMON KIRIMI 

US oil and gas explorers Apache Corporation estimates that within the next 60 days, it will have drilled the targeted 3,250 metres depth at the exploratory well at Mbawa1 Prospect in the offshore block L8 well within Lamu basin. Apache has already drilled 1519 metres below the drill floor since the exercise started on 10th August 2012. The exercise and now the actual drilling is on hold as the company carries out more preparations for safe drilling known as casing.

The drillship, Deepsea Metro 1, is working from 864 metres water depth above the drilling floor. L8 block Mbawa well is a joint venture between Apache Kenya with 50 per cent share which is also the operator, while Origin of Australia owns 20 per cent, Tullow oil, the British based company that struck potentially major oil find in Turkana owns 15 per cent. Pancontinental Oil & gas also from Australia holds 15 per cent. “We are pleased that the L8 joint venture has commenced drilling Mbawa which is the first of a number of prospects that we have in our Kenyan projects,” Pancontinetal’s chief executive Barry Rushworth said in an announcement to the Australian Securities Exchange.

“The economics of oil developments are far better than those of gas with potential for much earlier cash flow and much lower costs”. Pancontinental will initially retain a 15 per cent interest in L8, from which Tullow will have an option to earn a further 5 per cent by funding Pancontinental's share of any second well to a maximum of six million dollars.

Rushworth said they are in a very aggressive exploration programme that will include its other blocks in Kenyan, block L10A and L10B. The company has four blocks off the Kenyan coast covering 18,000 square kilometers with Mbawa1 as the first to be drilled. Mbawa Prospect has been described as a world-class potential for oil and gas with volumetric potential easily exceeding one billion barrels of oil.

Tullow has placed the odds of the well's success at 15 per cent, while Pancontinental has estimated the well could contain as much as 4.9 billion barrels of oil. The East African oil and gas exploration activities have increased dramatically in the last two years following discovery of huge gas deposits in Tanzania and Mozambique, oil in western Uganda and high prospects in Northern Kenya. Both Uganda and Kenyan oil finds were by Tullow oil, which so far has had success in its first attempts at drilling in the region.

http://www.the-star.co.ke/business/local/89517-oil-search-at-the-coast-get-underway-


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## smalltimer

24 August 2012 MBAWA DRILLING UPDATE

● First casing set at 1,503m
● Current drill depth is 2,005m

KENYA L8 MBAWA DRILLING

Pancontinental Oil & Gas NL (“Pancontinental”) is pleased to announce that the first casing string in the Mbawa well has been set at 1,503m RT (below the drill floor). Drilling has continued below the first casing and the depth of the well at 10:00 AEST was 2,005m RT. Operations are continuing according to the drilling plan.

The drillship Deepsea Metro 1 is expected to spend a total of about 60 days for well operations to reach a total depth of 3,250m subsea in a water depth of 864m, easily within the range of modern exploration and production techniques.

Additional information about Mbawa is available in previous reports issued by Pancontinental and available on the company’s website www.pancon.com.au


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## smalltimer

*Hopes high as two firms triple oil estimates for Kenya at key blocks*

Hopes high as two firms triple oil estimates for Kenya at key blocks.

Nairobi: Canadian oil exploration company Africa Oil Corporation has almost tripled its estimates of quantities of oil that that the blocks it is prospecting at contain, raising fresh hope that Kenya has commercially viable quantities. In a report released on Wednesday following its latest independent assessment by Gaffney Cline & Associates, the firm says the recent discovery of oil has resulted in a considerable increase in the geological chance of success assigned to numerous prospects and leads, most notably in Lokichar sub-basin in Turkana.

 The firm is prospecting at six oil blocks, accounting for about 12 per cent of Kenya's 47 oil blocks.

 "Gaffney Cline's independent assessment confirms the enormous resource potential for our East Africa onshore acreage. The investment to date in our exploration programme has yielded good results, showing a considerable increase in the prospective resources assigned to a growing number of leads and prospects," said Mr Keith Hill, Africa Oil's president and chief executive officer.

 The country is still waiting for an assessment of the oil found in Ngamia-1 well in March to know if it will become an oil producer.

 Africa Oil Corporation and UK Company Tullow Oil Plc jointly own the well.

 The firm says that according to recent studies, there is a possibility that Kenya could strike more oil than earlier anticipated.

 According to a research note by Citi, the company (Africa Oil) has increased its overall prospective resource base to 9.3 billion barrels, up from 3.7 billion barrels it had earlier estimated for its total blocks.

 In the new estimates, Block 10BA ”” which the company jointly operates with Tullow Oil ”” will contain the largest resource estimates, with a total 4.9 billion barrels, up from 1.1 billion barrels that were earlier estimated.

 "This highlights what is believed to be the sweet spot in the tertiary rift play through Kenya and Ethiopia and is likely to be targeted in 2013," read the Citi research note.

 Although drilling activity at the Ngamia-1 well was suspended mid this year as a result of an encounter with an unexpected geological formation, the assessment predicts that the well could contain 188 million barrels of oil.

 But further appraisal activity will be required to establish the full potential of the discovery.

 The announcement comes days after the company, together with Tullow Oil, commenced drilling of its second well at Twiga South-1, located 22km north of Ngamia-1. Plans are underway to move a second rig from Mombasa to the northern part of the country to commence drilling at Paipai by September.

http://www.nation.co.ke/business/news/-/1006/1485952/-/3d1s8bz/-/index.html


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## BESBS Player

Hi Smalltimer,

I'm interested in PCL's progress through FAR at present (the old nearology concept). Just as PCL dropped late in the week, so did FAR. I play the Buy Early Sell Before Spud (BESBS) game so find the FAR entry price quite appealing at present. If PCL hit the jackpot, I'll be happy as it will rub off a little on FAR and their future drilling prospects in Africa. If PCL is a duster, then I'll take this as a FAR buying opportunity. In this market, 12 month prospects (as BESBSs) have worked for me in the past. While I didn't have any PCL in my own name, I recently sold 2 parcels for relatives using the BESBS models. Managed to get out at 18c and both made well over 200% profit (50% CGT free as they'd held them for nearly 2 years) but this will pale into insignificance if PCL hit oil here!

All the best with PCL and hopefully you'll have a Hardmans success on your hands here.

Cheers,
BESBS


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## smalltimer

(Market did not like the report issued today, at one stage dropped to $0.099. Now up a bit at 11 cents but a far cry from yesterdays close at 16 cents and their all time high of 24 cents. Never mind, we are still in with a chance all be it a very slim one now).

Mbawa Well Drilling Continues Offshore Kenya
Posted on Sep 3rd, 2012

Pancontinental Oil & Gas NL has announced the Mbawa well, located in Block L8 offshore Kenya, has reached a depth of 2,553m RT (below the drill floor).

The Mbawa well operator, Apache Corporation, has advised Pancontinental that between the last casing set at 1997.53m RT and the current depth of 2553m RT elevated mud gas readings have been seen during some of the drilling. Wireline logs are being run before drilling proceeds further. The significance of the elevated gas readings will not be known until wireline logs have been run and an evaluation has been made.

Operations are continuing according to the drilling plan. The secondary exploration target is deeper than the current drill depth and it is anticipated that this will be penetrated once the current wireline logs have been run and drilling has recommenced. The planned Total Depth of the well is 3,275m.

The drillship Deepsea Metro 1, operated by Apache, is expected to spend a total of about 60 days for well operations.

Pancontinental, which owns a 15% stake in the joint venture, estimates that the Mbawa Prospect has potential to contain more than 4.9 Billion Barrels of oil.


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## smalltimer

Pancontinental requests trading halt ahead of Mbawa well announcement
06 Sep 2012

Pancontinental Oil & Gas has requested a trading halt ahead of an announcement regarding its Mbawa well being drilled offshore Kenya. Pancontinental has requested the trading halt remains in place until the earlier of commencement of trading on September 10 or Pancontinental making an announcement to the market concerning the Mbawa well.

On September 3, Pancontinental issued the following update regarding the Apache-operated Mbawa well being drilled in Kenya offshore Block L8.


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## smalltimer

*Is it there? Good luck guys - PCL - Pancontinental Oil & Gas*

Hang on to your hats guys, rumors have it that PCL(Apache) have struck
the black stuff in Kenya.
********************************
Possible oil find at Mbawa well 
Posted Saturday, September 8 2012 at 16:27

In Summary

The company is set to make a major announcement on the status of the Mbawa well in the coming days, an expectation which made it request the stock exchange to halt trading its shares until September 10. 
Pancontinental owns 15 per cent of block L8 in Kenya, and its joint venture partners are Apache (50 per cent), Origin Energy (20 per cent) and Tullow Oil (15 per cent). 

Earlier last week, Pancontinental said elevated mud gas readings had been seen during drilling of Mbawa, which shows that the well could contain hydrocarbon reserves. 
Mbawa is estimated to contain a mean resource value of 200 million-300 million barrels, according to Apache.

Optimism is growing that a significant oil discovery could be in the offing in Kenya’s Mbawa well off the Indian Ocean coast after Australia’s Pancontinental Oil & Gas requested a trading halt at the Australian Securities Exchange. 

The company is set to make a major announcement on the status of the Mbawa well in the coming days, an expectation which made it request the stock exchange to halt trading its shares until September 10. 

Pancontinental owns 15 per cent of block L8 in Kenya, and its joint venture partners are Apache (50 per cent), Origin Energy (20 per cent) and Tullow Oil (15 per cent). 

Earlier last week, Pancontinental said elevated mud gas readings had been seen during drilling of Mbawa, which shows that the well could contain hydrocarbon reserves. 

Mbawa is estimated to contain a mean resource value of 200 million-300 million barrels, according to Apache.

Analysts have said an oil discovery at Mbawa would substantially increase the attractiveness of the Kenyan coast to explorers and investors, which has witnessed a surge in oil and gas exploration activity since Tullow struck oil in the northern Turkana region in March.

Tullow oil is expected to drill three more wells in Kenya this year. Analysts at Jefferies research group say the firm will drill Twiga South and North wells this quarter while it is expected to drill the Paipai well in the fourth quarter of the year. 

Another Australian company, Woodside Petroleum spent $100 million in 2007 to drill Kenya’s first offshore well on the L5 block situated in the Lamu basin but the well turned out to be dry. 

Mbawa sits in the Lamu Basin which extends offshore Kenya, and has generated considerable interest particularly after successive gas discoveries to off the coast of Tanzania and Mozambique which share the same geological characteristic with the Kenyan coast. 

However, despite the gas discoveries in the two countries, the oil exploration firms believe the Kenyan coast could yield oil. 

“While other locations are proving to be ‘gas prone’ along the East African margin, Pancontinental believes there is an extensive oil prone ‘sweet spot’ offshore Kenya,” the company said in a statement last month.


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## CapnBirdseye

Hey ST.  My thoughts are that that article is based upon nothing more than last weeks announcement and old information.  

Saying that, I'm still hoping for something positive tomorrow......  I'm just not too hopeful at this stage.


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## Miner

CapnBirdseye said:


> Hey ST.  My thoughts are that that article is based upon nothing more than last weeks announcement and old information.
> 
> Saying that, I'm still hoping for something positive tomorrow......  I'm just not too hopeful at this stage.




Me too hoping something positive but not too big.
It is primarily Origin or Apache (US) did not ask for a trading halt. Their share prices did not jump either.
PCL's MC is rather too low and yes, could make a storm in the tea cup.
Another 8 hours will tell us the story . Any lotto ticket is worth the jackpot until the wheel is spun


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## Anmar

Miner said:


> Me too hoping something positive but not too big.
> It is primarily Origin or Apache (US) did not ask for a trading halt. Their share prices did not jump either.
> PCL's MC is rather too low and yes, could make a storm in the tea cup.
> Another 8 hours will tell us the story . Any lotto ticket is worth the jackpot until the wheel is spun




SYDNEY--A joint venture led by Apache Corp. (APA) has discovered natural gas off the coast of Kenya, boosting hopes the East African nation could have commercial reserves after big finds in nearby Mozambique and Tanzania.

Smaller joint venture partner Pancontinental Oil & Gas NL (PCL.AU) said the Mbawa-1 exploration well hit a net gas column of about 52 meters. The well has only been drilled to a depth of 2,553 meters below the ocean floor and drilling will continue to a planned total depth of 3,275 meters. A secondary exploration target lies above the planned total depth, Pancontinental said.

Apache operates and owns 50% of the joint venture while Australia's Origin Energy Ltd. (ORG.AU) owns 20%, Pancontinental owns 15% and Tullow Oil PLC (TLW.LN) owns 15%.

Wood Mackenzie estimates that 100 trillion cubic feet of natural gas has been discovered in Mozambique and Tanzania to date, ranking the region as one of the most prolific conventional gas plays in the world.

The energy consultancy says there could be enough gas offshore Mozambique and Tanzania alone to support up to 16 liquefied natural gas, or LNG, production units.


----------



## Tendril

Anmar said:


> SYDNEY--A joint venture led by Apache Corp. (APA) has discovered natural gas off the coast of Kenya, boosting hopes the East African nation could have commercial reserves after big finds in nearby Mozambique and Tanzania.
> 
> Smaller joint venture partner Pancontinental Oil & Gas NL (PCL.AU) said the Mbawa-1 exploration well hit a net gas column of about 52 meters. The well has only been drilled to a depth of 2,553 meters below the ocean floor and drilling will continue to a planned total depth of 3,275 meters. A secondary exploration target lies above the planned total depth, Pancontinental said.
> 
> Apache operates and owns 50% of the joint venture while Australia's Origin Energy Ltd. (ORG.AU) owns 20%, Pancontinental owns 15% and Tullow Oil PLC (TLW.LN) owns 15%.
> 
> Wood Mackenzie estimates that 100 trillion cubic feet of natural gas has been discovered in Mozambique and Tanzania to date, ranking the region as one of the most prolific conventional gas plays in the world.
> 
> The energy consultancy says there could be enough gas offshore Mozambique and Tanzania alone to support up to 16 liquefied natural gas, or LNG, production units.




Big jump already today based on this announcement, already 30 million shares traded in the first hour. Up 47% from Friday's close. Looks like a very nice win for those on board.


----------



## Miner

Tendril said:


> Big jump already today based on this announcement, already 30 million shares traded in the first hour. Up 47% from Friday's close. Looks like a very nice win for those on board.






Anmar said:


> SYDNEY--A joint venture led by Apache Corp. (APA) has discovered natural gas off the coast of Kenya, boosting hopes the East African nation could have commercial reserves after big finds in nearby Mozambique and Tanzania.
> 
> Smaller joint venture partner Pancontinental Oil & Gas NL (PCL.AU) said the Mbawa-1 exploration well hit a net gas column of about 52 meters. The well has only been drilled to a depth of 2,553 meters below the ocean floor and drilling will continue to a planned total depth of 3,275 meters. A secondary exploration target lies above the planned total depth, Pancontinental said.
> 
> Apache operates and owns 50% of the joint venture while Australia's Origin Energy Ltd. (ORG.AU) owns 20%, Pancontinental owns 15% and Tullow Oil PLC (TLW.LN) owns 15%.
> 
> Wood Mackenzie estimates that 100 trillion cubic feet of natural gas has been discovered in Mozambique and Tanzania to date, ranking the region as one of the most prolific conventional gas plays in the world.
> 
> The energy consultancy says there could be enough gas offshore Mozambique and Tanzania alone to support up to 16 liquefied natural gas, or LNG, production units.




ya ya ya 
How can I ignore the price shot up by 67% from Friday's closing price (actually it went upto 19 cents some times too) and PCL MD says - the result is not yet full . 
I am now debating whether to unload it or to keep ?
The volume of transaction is so high suggest a correction. I am really confused - to become greedy or to book the profit 

But where is Small Timers ? You have been very positive with constant good news posting and after the announcement of PCL - did not see your posting (I would be bragging if it was I in your place). May be you are counting the big bucks and busy with the outcome already delivered


----------



## smalltimer

Great day guys, 

Yes have been busy buying and selling today and no time to post but its great when a plan comes together.

As for holding or selling, with the volumes so high, yes I did take some profit but still hold enough to be interested, very interested.

Great new guys and yes the rewards do come to those that hold - sometimes.

Story is not over yet, a few good pay-days to come yet.


----------



## Anmar

smalltimer said:


> Great day guys,
> 
> Yes have been busy buying and selling today and no time to post but its great when a plan comes together.
> 
> As for holding or selling, with the volumes so high, yes I did take some profit but still hold enough to be interested, very interested.
> 
> Great new guys and yes the rewards do come to those that hold - sometimes.
> 
> Story is not over yet, a few good pay-days to come yet.




-----------------------------------------------------------------

Sept 10th PCL finished the day up 91.3% to $0.220


----------



## CapnBirdseye

Now on to the secondary target.  Watch this space, we may hit the black stuff yet.  Exciting days ahead.

Actually managed a little top up this morning too.  Happy days.


----------



## Anmar

CapnBirdseye said:


> Now on to the secondary target.  Watch this space, we may hit the black stuff yet.  Exciting days ahead.
> 
> Actually managed a little top up this morning too.  Happy days.




------------------------
Hartley Release:

Pancontinental Oil and Gas Limited (“Pancontinental”, “PCL”, “Company”) has announced first up drilling success at its 15% owned L8 block offshore Kenya. The Company has encountered 50m of net pay in gas charged sands at the primary target in the Mbawa prospect, operated by Apache.
The result is very significant as it opens up a new hydrocarbon province offshore Kenya and additional success is now highly likely. The secondary target in this well has been de-risked by this result and should be encountered any day. The possibility of oil in this zone has not been ruled out; however, the gas case now seems more likely.
Whilst many of the parameters required to make an estimate on recoverable volume have not been disclosed, we can infer and make assumptions based around pre-drill estimates and also the nature of the discoveries to the south. These are detailed on page 3. The upshot is a range of 2-5 trillion cubic feet of recoverable gas, with a mid case of 3.5 trillion cubic feet of gas (Hartleys estimates). We assume PCL’s interest will reduce to 10% (Tullow will free carry PCL in a second well), which results in value of 23cps for this horizon alone.
We have upgraded PCL from a Speculative Buy to a Buy and increased our valuation from 30cps to 85cps. Our price target is 51cps.


----------



## Miner

Anmar said:


> ------------------------
> Hartley Release:
> 
> Pancontinental Oil and Gas Limited (“Pancontinental”, “PCL”, “Company”) has announced first up drilling success at its 15% owned L8 block offshore Kenya. The Company has encountered 50m of net pay in gas charged sands at the primary target in the Mbawa prospect, operated by Apache.
> The result is very significant as it opens up a new hydrocarbon province offshore Kenya and additional success is now highly likely. The secondary target in this well has been de-risked by this result and should be encountered any day. The possibility of oil in this zone has not been ruled out; however, the gas case now seems more likely.
> Whilst many of the parameters required to make an estimate on recoverable volume have not been disclosed, we can infer and make assumptions based around pre-drill estimates and also the nature of the discoveries to the south. These are detailed on page 3. The upshot is a range of 2-5 trillion cubic feet of recoverable gas, with a mid case of 3.5 trillion cubic feet of gas (Hartleys estimates). We assume PCL’s interest will reduce to 10% (Tullow will free carry PCL in a second well), which results in value of 23cps for this horizon alone.
> We have upgraded PCL from a Speculative Buy to a Buy and increased our valuation from 30cps to 85cps. Our price target is 51cps.




Have you seen Diggers and Dealers note posted last night after the market price for PCL  shot up 91 %. Alex has just woke up after many failed speculations, to take the credit from PCL.  He must be reading this forum and then 'adopting' to the views and references. Any way all are positive including me. My question remains, why Origin price did not react ? Is there an opportunity to look into Origin ?


----------



## BESBS Player

Great to see PCL really having a positive impact for Miner, Anwar and all the other holders. Well deserved guys for holding through...

While I'm enjoying some positive externality benefit via FAR, this type of success really gets the smaller end of the market buzzing and gets those pre-spud $$$ flowing.

Here's hoping for the next PCL announcement to be a gusher!!!


----------



## mr. jeff

BESBS Player said:


> Great to see PCL really having a positive impact for Miner, Anwar and all the other holders. Well deserved guys for holding through...
> 
> While I'm enjoying some positive externality benefit via FAR, this type of success really gets the smaller end of the market buzzing and gets those pre-spud $$$ flowing.
> 
> Here's hoping for the next PCL announcement to be a gusher!!!




News out, reached depth, no oil. At least they found a decent gas intersection though. 40% in 2 days not bad !


----------



## smalltimer

What a ride. 

Last week at 17 cents , then down to 11 cents , then up to 25 cents , now back to 12 cents.

That's the Oil Game and that is the Stock Market. Lost a house this morning, but hey, we will hold and ride this one again. They may have a Gas Field on their hands to sell and lots of big boys out there looking for possible assets.

It's just a game. Hang in there guys.


----------



## smalltimer

COPY OF REPORT TO ASX Today.

ASX Companies Announcement Office
12 September 2012, KENYA L8 - MBAWA DRILLING UPDATE

Pancontinental Oil & Gas NL (“Pancontinental”) announces that the Mbawa-1 exploration well in the L8 licence area offshore Kenya has reached a final total depth of 3,151 metres below the drill floor.

As announced, the Mbawa-1 well encountered approximately 52 metres (~170 feet) of net gas pay in porous Cretaceous sandstones in the primary target. At the level of the deeper secondary target the well did not contain hydrocarbons at this location. Pancontinental will provide more information on the potential of the deeper play in due course.

The operator is currently running wireline logs. On conclusion of this work the well will be plugged as originally planned, and as is usual for an exploration well of this kind.

Pancontinental is very pleased with outcome of the Mbawa-1 exploration well, which has made a substantive hydrocarbon discovery. 

Barry Rushworth, CEO and Director of Pancontinental said:

“We are delighted to have made a significant discovery with this first exploration well. We are also delighted to be the first to prove the existence of a working hydrocarbon system offshore Kenya.

The Kenya L8 Joint Venture partners will now analyse the well data and determine an exploration plan for the next phase of exploration activities. Mbawa-1, our first exploration well, has unlocked the door to the oil and gas potential offshore Kenya, and Pancontinental has secured a major position in our four project areas”.

Pancontinental looks forward to providing more information on the Mbawa-1 exploration well results when the well data has been more extensively analysed and correlated. Additional information about Mbawa is available in previous reports issued by Pancontinental and available on the company’s ; 

website www.pancon.com.au

The Kenya L8 Joint Venture consortium consists of-

Apache Corporation (Operator) 50%
Origin Energy Limited 20%
Pancontinental Oil & Gas NL 15%*
Tullow Kenya B.V. 15%

* Pancontinental’s 15% interest is “free-carried” through Mbawa drilling by Tullow Oil plc up to a “cap” of US$ 9 million (as reduced by other exploration expenditure). After the first earning phase Tullow has an option to earn a further 5% by providing funding on Pancontinental’s behalf to a cap of US$ 6 million in any second well.

Yours sincerely for and on behalf of Pancontinental Oil & Gas NL
Barry Rushworth, CEO and Director


----------



## Miner

PCL offered a perfect case study for some rag to riches and riches to rag in 48 hours .
But looks like it will be another few weeks to see more dramas to happen.
I am wondering where is the researcher from Hartley Newletter and  Diggers and Dealers on the meterioc rise and falls. Lots of eggs on their faces if they claimed to have predicted these .


----------



## AussieBoy

All I can say is thank God that I got out late yesterday afternoon at .245.  I was very tempted to stay in overnight and although I may've only got a paltry $100 profit from it, it is much better than losing what would've been approx. $1200 today.  Guess this experience has alerted me to just how volatile the market can be


----------



## BESBS Player

Miner said:


> PCL offered a perfect case study for some rag to riches and riches to rag in 48 hours .
> But looks like it will be another few weeks to see more dramas to happen.
> I am wondering where is the researcher from Hartley Newletter and  Diggers and Dealers on the meterioc rise and falls. Lots of eggs on their faces if they claimed to have predicted these .




Hi Miner,

Sorry to see today's outcome for all PCL holders. 
Nonetheless, your comment above is a great lesson for traders who wish to play this game and survive for decades. Entry before the pre-spud run (ie. the 'Buy Early' part of the BESBS) and then, at a minimum becoming free-carried as the drill approaches, takes away the risk to capital and allows one to continue trading/speculating. If one does choose to hold through a drill, what is the follow-up activity to recover the SP? 
In my case, I entered FAR at the pre-spud and was happy to watch any 'external' impacts of this drill upon it as it has AP's drill at the end of the year plus activitiy in 2013. 

At least in PCL's case, the gas shows in the shallow depths does give hope for future success in the area. Lets hope that PCL can get back and drill again quickly as this would help the SP recover.

All the best to holders.


----------



## tech/a

A grounding in VSA would save a great deal of grief 
For most Fundi traders.


----------



## Trembling Hand

tech/a said:


> A grounding in VSA would save a great deal of grief
> For most Fundi traders.




To be fair you would more likely to be tightening stops after that 11th Sep bar rather than closing?

Thats if somehow you managed to hang on before then.


----------



## tech/a

Trembling Hand said:


> To be fair you would more likely to be tightening stops after that 11th Sep bar rather than closing?
> 
> Thats if somehow you managed to hang on before then.




To be even fairer I doubt a techie would have been on that move.

The point I was making wasnt about T/A V F/A but an observation that quite a few had been sitting in this (Some still are sitting in it ) and basically watched a 100% increase in price then a 100% decrease.

Supply governs price *NOT DEMAND*---contrary to 99% of the trading populations belief.
Tightening of a stop would have been of no value as it gapped 10c on open (80%)
taking some profit on Sept 10 would have helped but BUYING on 9/or10th was sucidal. Infact many equityies which display similar price moves fleece many more pockets than fill them!

Those that are holding (still) are *not reading participants *in the equity they are *HOPING.*---hoping others see the positives they extrapolate from announcements or released info on developements or 
product and buy buy buy.--The question to ask is why are they Selling selling selling???

There is no place for hope in trading although I see a lot of it!


----------



## mr. jeff

This is how it went for me. Doesn't happen that often.

In my revised exiting strategy (read take money out earlier than ever) I jumped as soon as the move at lunch time on the 11th started wavering. In my mind for such a short term trade it wasn't worth risking profits to gain another 30% or so if there was a show before TD.

I post to learn and am not interested in proving anything or boosting/deflating egos; so for anyone that is going to ask, this is completely falsified !


----------



## tech/a

mr. jeff said:


> View attachment 48956
> 
> 
> This is how it went for me. Doesn't happen that often.
> 
> In my revised exiting strategy (read take money out earlier than ever) I jumped as soon as the move at lunch time on the 11th started wavering. In my mind for such a short term trade it wasn't worth risking profits to gain another 30% or so if there was a show before TD.
> 
> I post to learn and am not interested in proving anything or boosting/deflating egos; so for anyone that is going to ask, this is completely falsified !




Thats the way it should have been traded.
The trick is to be able to find the big gap early enough to 
take advantage of the massive demand swamping supply.

The sell is pretty lucky I doubt I would have been all out at that level.
Supply was definately increasing and demand couldnt close the bar at
the high.


----------



## smalltimer

Speculation from Dundee Capital Markets (a Canadian investment dealer) that PCL & FAR may now be takeover targets........

---------------------

Kenya gas find fuels increase in mergers, drilling activity
By Peterson Thiong’o - The EastAfrican
Posted Saturday, September 15 2012 at 12:55

In Summary

* Analysts, led by Australian consulting firm Hartleys, project that drilling activity will significantly increase in offshore Kenya with up to 10 wells expected in 2013. 

* Dundee Capital Markets, a Canadian investment dealer, says with the increased activity, relatively smaller explorers with material acreage position in offshore Kenya are becoming targets for big companies in what could usher in fresh rounds of mergers and acquisitions in the lucrative oil exploration business.

* East Africa has been a hotbed of acquisition activity of late and with the remarkable success of the gas exploration programme in offshore Tanzania and Mozambique, the industry’s interest in the region stands at an all-time high.

* This interest, analysts and oil executives said, explains why every block in offshore Kenya has now been licensed. 

Kenya’s offshore discovery of gas has shaken off some of the risks associated with the costly hydrocarbon exploration, raising hopes that firms will drill more wells in the country.

Analysts, led by Australian consulting firm Hartleys, project that drilling activity will significantly increase in offshore Kenya with up to 10 wells expected in 2013. 

Dundee Capital Markets, a Canadian investment dealer, says with the increased activity, relatively smaller explorers with material acreage position in offshore Kenya are becoming targets for big companies in what could usher in fresh rounds of mergers and acquisitions in the lucrative oil exploration business.

Last week, US-based oil and gas explorer, Apache, said it had struck 50 metres of net gas pay in Block L8, operated jointly with Origin Oil and Gas, which owns 20 per cent of the block, while Tullow and Pancontinental own 15 per cent each.

Dundee said in a research note released immediately after the announcement that the exploration milestone had only made Pancontinental more attractive to big-monied explorers.

Natural acquisition

“Should the upcoming exploration campaign meet with success, we believe Pancontinental would stand out as a natural acquisition target,” said Dundee, adding that nearly all small to mid-cap companies with a material acreage position within the region have now been acquired.

Dundee said that Pancontinental stands as one of only two remaining small-cap companies with a material acreage in offshore Kenya, the other being Australian compatriot FAR Ltd.

“The success at Mbawa, whilst not fully quantified, will most likely signify the beginning of a new wave of discoveries in offshore Kenya. If even a portion of the potential of existing leads and prospects is converted into discovery then there will be a repeat of what has already transpired in Tanzania and Mozambique,” said Hartley in a research note.

East Africa has been a hotbed of acquisition activity of late and with the remarkable success of the gas exploration programme in offshore Tanzania and Mozambique, the industry’s interest in the region stands at an all-time high.

This interest, analysts and oil executives said, explains why every block in offshore Kenya has now been licensed. 

While Kenya’s Energy Minister Kiraitu Murungi was pessimistic about the Mbawa find being sufficient in isolation to be commercial he said more drilling could realise Kenya’s long-held dream of finding gas. 

As East Africa transforms into a hotspot for oil, gas and mineral exploration, the region has in the past three years attracted multimillion dollars in foreign investments into Uganda, Tanzania, Kenya and Mozambique.

As the prospects brighten, the huge flow of foreign investment into the oil and gas sector is expected to start creating additional demand for the importation of heavy machinery needed to develop drilling sites and pipelines.

The new gas find has reduced the risks involved in oil exploration in Kenya, which due to its poor history has always attracted a lower estimate of success. Tullow for example, placed only a 15 per cent chance of success in the Mbawa well.

The increased success ratings and the proven existence of hydrocarbon are likely to increase the valuation of oil and gas blocks in Kenya, especially given that the country has leased all its 46 blocks.

“Pancontinental is now firmly in the sights of super majors and national oil companies looking to secure energy in what is now the new hydrocarbon province. As with Cove Oil, bids may not come until more gas is discovered,” said Hartleys.

Pancontinental has interests in four oil blocks in offshore Kenya.

Though Kenya, Tanzania and Mozambique’s coast lines share the same geological formations, oil exploration firms have tended to tread cautiously as there has been no previous hydrocarbon find in offshore Kenya ”” a factor that is now likely to change in view of the recent find.

“The gas discovery is very promising and is the first ever substantial hydrocarbon discovery in offshore Kenya. We are delighted to prove that there is a working hydrocarbon system off-shore. Further work continues to evaluate the size of the discovery,” said Barry Rushworth, Pancontinental Oil chief executive officer.

In 2007, Woodside petroleum drilled the last offshore well in Kenya at a cost of $100 million, which later turned out to be dry. Before that an offshore well had been sunk in 1985, underlying the risks associated with oil and gas exploration in the country.

Kenya has sunk six offshore wells in total since independence. This, compared with Tanzania and Mozambique, which over the past two years, have made 24 discoveries from the 27 wells and which between them have discovered around 100 trillion cubic feet of natural gas.

Resource estimates

The increased resource estimates by oil and gas companies operating in the region will also play a part in increasing the cost of any gas or oil acquisition or merger. 

Ophir, for example, has increased its estimates for gas contained in its Mzia Block 1 in offshore Tanzania from between two and six trillion cubic feet to between four and nine trillion cubic feet.

An independent assessment by Gaffney Cline’s increased estimates of oil contained in blocks owned by Africa Oil Corp by three times based on increased chances of oil finds following an oil discovery by Tullow at its Ngamia well.

The recent find will be a big boost to Tanzania, which unlike Kenya, has not leased all it blocks. The country plans to invite bids for nine offshore gas and oil blocks from exploration firms starting this November.

----------------------------
http://www.theeastafrican.co.ke/business/K...hq/-/index.html


----------



## smalltimer

A couple of U-Tube news clips;

http://www.youtube.com/watch?v=fzp826u5gOw

http://www.youtube.com/watch?v=lSudY7rXDFI&feature=related

It was nice while it lasted...we live to find another day..


----------



## smalltimer

The blocks mentioned in this article relevant to PCL :

Block L9 is situated in between PCL's blocks L8 & L10A.
Block L15 is right next to Block L6 (PCL 40%).

************************************

Oil firms raising capital for drilling in East Africa
By KENNEDY SENELWA
Monday, September 24  2012 at  10:03

http://www.africareview.com/Busines...frica/-/979184/1515668/-/155gfm5/-/index.html

International firms exploring for oil in East Africa are bringing in new partners and raising more capital.

Ophir Energy has started the process of identifying a partner to drill oil and gas wells along the coast of East Africa, while Vanoil Energy plans to raise at least $30 million to fund exploration in Kenya.

Listed on the London Stock Exchange, Ophir aims to have a strategic partner ahead of its 2013 drilling programme in offshore exploration areas L9 and L15 in Kenya, and deep sea acreages 1, 3, 4, 7 and East Pande in Tanzania.

Chief executive officer Nick Cooper said details of the 2012- 2013 drilling plan will be provided on October 23.

In the past three years, East Africa has attracted millions of dollars in foreign investments for oil, gas and mineral exploration. As the prospects brighten, explorers are seeking finances to import drilling machinery.

“Ophir continues to invest in the rest of its East African portfolio where seven seismic data sets are being acquired this year to de-risk exploration areas L9, L15, 7 and East Pande,” Mr Cooper said.

A three-dimensional seismic survey will be carried out to map potential oil and gas depots in acreages L9 and L15 in Kenya, and 7 in Tanzania.

The survey is a method of exploration geophysics that uses the principles of seismology to estimate the properties of the Earth’s subsurface from reflected seismic waves. It is used by geologists and geophysicists to map and interpret potential petroleum reservoirs.

The firm is interpreting a recently acquired 3D survey in East Pande exploration areas.

Ophir’s management estimates that natural gas resources discovered in acreages 1, 3 and 4 in Tanzania of 380 to 600 billion cubic metres meet the threshold for natural gas development.

Well drilling

Vanoil Energy plans to spend $4 million to $4.5 million, out of $30 million raised this year, to complete 100 square kilometres of 3D seismic survey in exploration area 3A and 3B in north eastern Kenya.

The Canadian firm will spend the rest of the money to drill two wells in acreage 3A and 3B covering 24,682 square kilometres. Vanoil is preparing to sink the first well in the first quarter of 2013 to a depth of 3,500 to 4,000 metres.


“The combined unrisked potential in place of top leads (features of interest that provide basic evidence of hydrocarbon potential) totals approximately 3.6 billion of oil equivalent. The leads are similar in size, depth and nature to those drilled in the Melut basins of South Sudan,” said Vanoil’s presentation.

In June, the company announced that it had received a seven month extension on its production sharing contract from Kenya’s Ministry of Energy. The extension is from September 30 to April 30, 2013.

It also provides enough time for the firm’s consultants to audit available drill rigs, and complete site preparation and material mobilisation prior to well drilling in January 2013.

In October, ERHC Energy Inc will seek shareholders’ consent to increase its shares from 950 million to 3 billion to finance exploration in 11A acreage covering 11,950 square kilometres in north western Kenya.


ERHC’s chief executive officer Peter Ntephe, said the firm is building on past successes to grow its exploration acreages and build shareholder value.

“Competition for exploration acreages in Kenya is currently high, and ERHC has been awarded the rights to explore one of the highly prospective areas,” he said.

To increase capital availability and financial flexibility, the board of directors in August approved a resolution to increase the number of shares. ERHC will likely issue equity to shareholders to raise the funds for its exploration programmes.

The firm’s portfolio of oil and gas assets includes deep water interests in the Gulf of Guinea and onshore in Chad. ERHC’s 11A acreage is in the vicinity of exploration area 10BB where oil was discovered in Ngamia-1 well recently.

http://www.africareview.com/Busines...frica/-/979184/1515668/-/155gfm5/-/index.html


----------



## smalltimer

The Results of the PCL's General Meeting - 27th. Sep 2012 

http://www.pancon.com.au/investor-centre/asx/2012/reports/270912a.pdf

Also the Full Year Statutory Accounts  - 27th. Sep 2012 

http://www.pancon.com.au/investor-centre/asx/2012/reports/270912.pdf

Share price still taking a hit, to be expected I guess. Didn't think I would see 10 cents , but who knows, maybe even lower from here until we get some good news. Still holding in there with a bit of selling down and buying back. Not going to increase account value but may add a few shares to the total.


----------



## smalltimer

Not PCL, but still in kenya :-

Kenya’s Pai Pai the Well to Watch
http://www.petroleumafrica.com/en/newsarticle.php?NewsID=14325

Date: Friday, September 28, 2012

Investec Securities, the specialist brokerage and bank, has deemed Africa Oil, Afren plc, and Tullow Oil’s Pai Pai well in Kenya as the well to watch. The well is set to spud shortly with results possible as soon as the end of October.

Pai Pai is on a separate geological play (Cretaceous) to the partners’ Ngamia discovery on Block 10A. Investec said the well is “high risk” with a 10% chance of success. It also noted that the well has limited “follow-on” potential which contrasts significantly with Ngamia. The well will test a Cretaceous rift system with analogues to South Sudan’s oil fields. The primary geological risk appears to be trap integrity, with three dry holes (Bellatrix-1, Sirius-1 & Chalbi-3) drilled by Amoco in the late 1980s encountering sequences of sandstones with oil and/or gas shows. In 2011, 1,500 sq km of 2D seismic was acquired which has been used to map a  around 80 sq km lower Cretaceous sandstone anticlinal trap.

On the size of the prospect Investec cited Africa Oil’s recent competent person's report (CPR) saying it carries the prospect at 121 million barrels and estimates the block’s entire prospectivity at 588 million barrels. Tullow’s internal estimate on Pai Pai is 115 million barrels with a P10 of 315 million barrels. Investec estimate the unrisked impact of success at Pai Pai to Africa Oil and Tullow at SEK5.02 and 19p respectively.

The follow-on potential is however not as expansive as Ngamia, with the well only providing a direct read-through to the PaiPai North lead. The other prospects on the block (Sirius and Bellatrix) seals appear to be reliant on bounding faults rather than a four-way dip closure at Pai Pai. Investec went on to say that despite this, “a commercial discovery would broaden the geological play in Kenya, opening up the Cretaceous prospectivity and supporting other South Sudanese analogues. The outcome of the well should also impact the decision of the partnership whether to mobilize additional rigs to the region and potentially influence undecided pipeline routes if a discovery ultimately proved t be commercial.”


----------



## smalltimer

Our Rig is back at work, but all be it, not for us....not yet anyway.

Posted on Sep 28th, 2012. 
http://www.offshoreenergytoday.com/...ce-resumption-of-tanzanian-drilling-campaign/

Ophir, BG Group Announce Resumption of Tanzanian Drilling Campaign





Ophir Energy plc  announces the resumption of the Tanzanian drilling campaign to be executed with BG Group, its partner in this Joint Venture. The multi-well programme commences with appraisal and satellite exploration around the Jodari Field in Block 1 offshore Tanzania.

The first three wells in this campaign will be Jodari South-1, Jodari North-1 and a re-entry into Jodari-1. The current drilling programme will focus on further defining the resource potential of the Jodari discovery. This will further serve to confirm its role as an anchor asset for the Tanzanian LNG development. On 26th March 2012 the Jodari-1 discovery well proved 4.5 TCF of gas in place in the Lower Tertiary intraslope channel play. To date the Ophir-BG Joint Venture has discovered 13.5 – 21 TCF of gas-in-place across Blocks 1, 3 and 4 offshore Tanzania.

The Deep Sea Metro 1 has now returned to Block 1 and will drill the top-hole section of Jodari North-1 before moving to drill Jodari South-1 and a side track from Jodari South into the main Jodari field. The rig will then return to complete Jodari North-1. A Drill Stem Test (DST) will be performed in Q1 2013.

Jodari North-1 is located 40km NE of the port of Mtwara and is approximately 6km NNW of the Jodari-1 well location. Jodari South-1 is located approximately 35km NE of Mtwara and is approximately 3.5km SW of the Jodari-1 well location. Combined, these three wells will confirm reservoir parameters across the Oligocene aged main reservoir of the Jodari complex. In addition, fluid samples will be collected and the dynamic reservoir properties will be tested through a DST in Jodari-1. This information will aid LNG development planning. Ophir holds 40% of Blocks 1, 3 and 4; the BG Group operates with 60%.

Nick Cooper, CEO of Ophir, said:

“The next phase of drilling is required to confirm the role of the Jodari field as an anchor asset to support Tanzania’s first multi-train LNG development. To date the Ophir-BG Joint Venture has discovered 13.5 – 21 TCF of gas-in-place across Blocks 1, 3 and 4 and we are looking forward to receiving further insight into the full scope of resources on these blocks.

After these next three wells we will return to drilling high impact exploration prospects, both on the significant prospect inventory on the established intraslope play and, potentially, also on the recently identified Basin Floor Fan play.”


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## smalltimer

*Is it time to Buy again ? Or hang out a bit longer ?*
What do you say guys ?
Closed at 9.5 cents tonight - Tuesday 2nd. October.


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## mr. jeff

I would be interested in knowing their cash position for the next drill campaign and further, their planned dates before committing. 

At this stage they say 2013 and that means there is room to use that money elsewhere first. 

Worth keeping up to date with though, they certainly have the right areas to drill. Barring fresh interest for some unknown reason, I would expect to see consolidation between 8 and 12 cents for a time.


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## smalltimer

*Now that was an interesting trading day !*

Opened at 9.4 cents
Volume of 18,362,079 shares traded
Hit a high of 11.5 cents (up 20%+)
Closed at 11 cents (up 15%+)

All on NO news ?

The big boys and their games. 
What's on tomorrow? Can't wait...


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## smalltimer

http://seekingalpha.com/article/903431-apache-buy-now-for-strong-growth-into-2013?source=yahoo

*Or Maybe this;*

Apache: Buy Now For Strong Growth Into 2013 
October 3, 2012 by: Mel Daris

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Only days after Apache's (APA) announcement of a minor natural gas find off the shores of Kenya raised hopes for the underexplored region, Kenya's Energy Minister Kiraitu Murungi indicated that the deposit was not commercially viable. However, Apache intends to continue drilling exploration wells to probe the hydrocarbon layers believed to be hidden in deepwater Kenya. The natural gas deposit is the first hydrocarbon deposit ever found in Kenya, and could yield the data needed for Apache and its partners to make a profitable strike. Apache appears certain a strike of this magnitude is in order, as it estimates its Kenya prospects to hold 4.4 billion barrels net - if it can only find them.

Apache is surely hoping for a multi-trillion cubic feet find on the scale of Anadarko Petroleum's (APC) and Enersis' (ENI) finds in nearby Mozambique earlier this year. Such a find in an area with easy access to the booming Asian energy markets could propel Apache forward and compliment its other projects, notably those in Australia, meant to help fuel Asian energy needs.

Its international portfolio is a major driver of Apache's growth. Although only accounting for 27% of second quarter 2012 production, international liquids comprised a full 49% of second quarter revenue. Much of this derives from Apache's activities in the North Sea, where it is seeing success where others failed. Its success on the Forties field is particularly notable as the field continues to deliver returns far above the most optimistic predictions at the time Apache acquired it. Apache clearly believes that it can continue to drive production further in this area, since its estimates keep the North Sea contributing 8% of its total production between 2011 and 2016.

As another sign of its bullish North Sea position, Apache is currently undertaking the first field-wide survey of the Beryl in the last fifteen years, using 3D seismic applications. With the exception of the Skene field, which is condensate, all of Apache's North Sea opportunities are in oil fields. Although in the third quarter of this year production will see a slight decline due to scheduled maintenance, after its full production comes back online it expects to see an additional upside of 19 net mboe per day, for a total capacity of 90 mboe per day. This is nearly twice as much as its production from the US Central Region, which Apache considers its Canyon Wash and Anadarko Basin plays, which it reported at about 54 mboe per day for the second quarter of 2012.

Onshore US Is Also On a Growth Track

Apache is steadily expanding its US onshore holdings. Apache is operating more US onshore rigs than any other competitor save one, and is maintaining a heavy focus on Permian oil. Over the last two years, Apache doubled its net acreage in the play, which enabled it to produce 104.5 mboe per day net in the second quarter, a year over year production increase of 14%. A large part of that increase is due to its increase in rigs, of which it currently has 34 operating on the play. Even this aggressive approach will not exhaust Apache's drilling inventory soon, since it already identified 35,000 potential drilling locations.

One major differentiator between Apache and some of its competitors, like EOG Resources (EOG), is that Apache is not significantly changing its oil/gas mix in the Permian. While others are pulling out all of the stops to transition more heavily into oil, Apache's Permian production remains steadily mixed at about 25% natural gas and 76% liquids. However, Apache is not following the same strategy across the US; realizing the importance of domestically produced oil to its balance sheet, Apache is beginning to drill in the Williston Basin, where it estimates it has 1 billion barrels equivalent of recoverable resources, and the Mississippian Lime, where it estimates it has 2 billion barrels equivalent of recoverable resources.

Although on both of these plays Apache is starting with just three wells, I expect it will ramp up its program on the Mississippian quickly. With a low cost to entry and multiple formations targeted, beginning with the Mississippian Lime and edging down to the Upper Pennsylvania, Apache estimates it has 7,200 drilling locations across its 580,000 net acres on the play. Here as elsewhere Apache is following a contrarian path; as SandRidge Energy (SD) and other play leaders focus on the southern and eastern reaches of the Mississippian, Apache is building its position in the central and northern reaches.

One of its areas of concentration is Rawlins County, where the Cahoj Field is located; on the edge of the Central Kansas uplift, this area was well explored with conventional drilling and is only beginning to be explored by unconventional producers like Apache. Apache is equipped for production from the two shale layers known to occur throughout the Cahoj field, one overlaying the upper carbonate and one between the upper carbonate and lower carbonate zones. While the risks of punching a dry hole in this area is greater than in the southern reaches of the state where other operators are focusing, the lower costs of land acquisition and relatively known deposition of the formation will help Apache overcome such risks, and could lead to higher margins for the firm.

Outlook

Apache is currently trading around $87 per share, giving it a price to book of 1.2 and a forward price to earnings of 8.0. These are attractive metrics for Apache, and indicate a discount to its peers. Anadarko is trading around $71 per share with a price to book of 1.8 and a forward price to earnings of 17.8, while EOG is trading around $114 per share at a price to book of 2.3 and a forward price to earnings of 18.1. ENI is trading around $17 per share with a price to book of 1.4 and a forward price to earnings of 13.4. Finally, SandRidge is trading around $7 per share, with a price to book of 1.2 and a forward price to earnings of 16.2.

I think Apache's discount reflects investor concerns over its aggressive growth plan, but these concerns are misplaced. Apache's focus on maintaining one of the lowest debt levels in the industry means that it finances most of its operations from cash flow, and maintains one of the lowest debt to equity levels in its peer group. Apache is also well balanced enough that any shift in a regional market can be countered with activities in another area. At the foot of a stellar growth curve, Apache is very attractive at current prices.


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## smalltimer

*Is there any oil offshore East Africa?
Friday, October 05, 2012 *

Huge amounts of gas have been discovered offshore East Africa, mainly in Mozambique, then Tanzania; and this month there was a modest gas discovery offshore Kenya.

We will wait to see if and when this gas can be moved economically to market, given the plentiful amounts of gas being found globally and the potential for shale gas to be exported as LNG from the USA.

Imminent high value is more likely to result from the discovery of commercial volumes of oil offshore - but where?

This article updates an earlier one in Geoexpro.

Needless to say, the emergence of East Africa as a petroleum province has been spotted by the media, especially the UK press where a headline such as 'Improved technology helps to oil the wheels for East Africa' (The Times, 7th January 2012) is but one of many.

As a recent Finding Petroleum Forum revealed, it is certainly true that improved technology has had an impact, whether satellite imagery, aero-magnetics, gravity gradiometry or plate tectonic modelling, but where the oil is - and whether the gas that has been discovered is commercial - requires more careful thought.

I am grateful to Alastair Bee at Richmond Energy Partners, Chris Matchette-Downes at MDOil and Oswald Clint & Robert West at Bernstein Research for helping me summarise the current status.

If we go back let's say 10 years, East Africa was completely disregarded by petroleum explorers. Only a handful of wells had been drilled and there wasn't very much data but source rocks were generally believed to be absent or poor; the prevailing view was that there would only be small amounts of gas, if anything.

Actually, this was based on 'Myths, Myopia, Misinformation' as pointed out by Chris Matchette-Downes in 2005(1). In particular, he identified evidence for contiguous source rocks, for example in the Early and Mid-Jurassic, which could be in the oil window offshore. And of course, persistent seeps were known both offshore and in the lakes of the East African Rift System.

Since 2008, there has been significantly more exploration activity and whilst new well results are being announced all the time, the essence is still the same:

Oil has been discovered onshore in the Albertine Graben of Uganda (and very recently in Kenya) - see the Finding Petroleum presentation by Shane Cowley of Tullow Oil.

Large amounts of gas have been discovered offshore - in both Mocambique and Tanzania - but no oil as yet.

The gas volumes discovered in both Mocambique and Tanzania are significant and as a distant observer one's immediate response is to think that they are both candidates for LNG schemes. However, as Monica Enfield of Energy Intelligence pointed out in her Finding Petroleum presentation, this perspective ignores the focus both host governments will have on domestic issues such as creating a local market and providing employment in the relatively short term.

As Bernstein Research has noted, a combination of successes - for example shale gas onshore in the USA, conventional gas in the Eastern Mediterranean and on the NW Shelf of Australia - have led to there being a large number of global LNG opportunities, for gas to move to either Europe or SE Asia, which may mean that somewhat more costly East African LNG will have to wait its turn in the queue. Whilst the Majors may be content to 'bank' gas for the longer term, ready for the day the price rises and it is needed, as pointed out above this may not at all be in line with the hopes and expectations of the governments of Tanzania and Mocambique.

The attraction of offshore oil would be that the global price is probably going to remain high and that a discovery of a few hundred million barrels can be developed fairly rapidly with an FPSO and shuttle tankerage (indeed many tankers pass this way as they go around the Cape of Good Hope!).

So where might there be oil offshore?

Explorers now have vast amounts of data - from satellites, airborne surveys, field geologists, seabed cores, national repositories, the huge number of wells drilled (over 200,000 'wild cats' alone since 1965), publications - to sift through to identify basins and plays which might work or, in the question I have just posed, might work in a particular way.

The ability of explorers to spot the next big play depends on their ability to deal with this veritable Niagara Falls of data, to solve what some have referred to as the 'Big Data' problem - or opportunity, perhaps?

Deploying a deep understanding of plate tectonics and chrono-stratigraphy - understanding what gets deposited where and when - is the key process by which this is achieved, whereby opportunity is accessed.

What has been proposed so far offshore is that the youngest source rock is an Early/Mid-Jurassic marine shale and so one model is that this may have been buried under more sediment than previously anticipated and is now in the gas window. However, this source rock has not been sampled and an alternative explanation is that the gas derives from an area of this source rock that has had high terrigenous input and so is gas prone.


http://www.oilvoice.com/n/Is_there_...rica/e4157ae92ae5.aspx?ovs=side#ixzz28w7Ytx9k


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## smalltimer

*ASX Companies Announcement Office

11 October 2012 

KENYA L8 - MBAWA DISCOVERY PRELIMINARY UPDATE *

· Natural gas discovery - first ever hydrocarbon discovery offshore Kenya 
· Gas recovered from the discovery zone is interpreted to be thermogenic and derived from a possible Type II mixed gas / oil source rock 
· Traces of dull fluorescence remain to be analysed and interpreted 
· Mbawa 1 drilled ahead of schedule and left in a condition allowing re-entry at a later date 
· Analysis of samples and data from drilling is ongoing 
· The forward work programme is being considered in the light of the Mbawa results 

Pancontinental Oil & Gas NL (“Pancontinental”) ispleased to provide a summary of the interim results from the Mbawa 1 discovery well drilled offshore Kenya. The extensive collection of data and samples from the well is undergoing detailed analysis and this will continue into 2013. The volumetric parameters and commercial aspects of the discovery have yet to be definitively ascertained. 

The Mbawa Prospect is one of various prospects in the L8 licence area and the first to be drilled out of numerous prospects and leads in Pancontinental’s four licence areas offshore Kenya. 

*Mbawa 1 Well - Operations*

The Mbawa 1 exploration well was spudded by the drillship Deepsea Metro 1 on 10 August 2012 and drilled to a TD of 3,150m MD. This is the first well on the large Mbawa Prospect in area L8 offshore Kenya (Apache Corporation 50%, Origin Energy 20%, Pancontinental 15%, Tullow Oil 15%). The well was plugged and abandoned according to the drilling programme and has been left in a state that allows re-entry. 

Operator Apache Corporation (“Apache”) completed well operations in 47 days, being 13 days ahead of schedule. 

*Interim Results & Preliminary Interpretation *

Preliminary interpretation of the Mbawa 1 results has been given tothe L8 joint venture by the operator Apache. 

Mbawa 1 tested a faulted four- way dip closure at the southern end of the larger north-south trending four-way closed sub-regional Mbawa Prospect of 160 sq km(40,000 acre). The primary target was the Upper Cretaceous turbidite sandstone interval. Secondary objectives were Eocene and Middle Cretaceous turbidite reservoirs. 

At the primary target level, 51.8 net metres (~170 feet) of natural gas pay were encountered in three zones of Upper Cretaceous channel and turbidite sandstones. Porosities were very favourable at an average ofapproximately 24%. The discovery was on a single localised structural culmination on the southern extremity of the overall Mbawa Prospect and the potential of the remainder of the structure remains to be assessed in the light of the Mbawa results. 

The well was designed to optimallytest the shallower Upper Cretaceous discovery target, however it was not possible toalso optimally test the deeper secondary Middle Cretaceous target. The deeper target remains to be properly tested and Pancontinental believes that this, as well as other prospects of this play type, and the Mbawa discovery play type itself still hold considerable potential in the Mbawa vicinity, elsewhere in the L8 area, and regionally. 

Fluid samples, pressure measurements, electronic logs and sidewalls cores were taken while drilling and these continue to be analysed and interpreted. 

The significance of traces of dull fluorescence seen while drilling will be further interpreted once samples have been fully analysed. 

Gas recovered from the discovery zone is interpreted to be thermogenic and derived from a possible Type II mixed gas / oil source rock. The extent and age of this source rock is subject to further analysis. Pancontinental believes that this very encouraging finding means that the potential for oil discoveries remains open and there may also be further extensive hydrocarbon resources both locally and regionally. 

*What Has Been Achieved *

The Mbawa 1 discovery well has: 

·Proven a working hydrocarbon system offshore Kenya in the Cretaceous; this has opened a new hydrocarbon region offshore East Africa. 
·Made an important gas discovery. The volume of gas discovered and the follow-up potential remain to be determined by ongoing work. 
·Provided evidence supporting a thermogenic origin of the gas from an interpreted mature Type II (gas / oil) source. Traces of fluorescence was seen, and the importance of this remains to be determined. 
·Reversed the earlier perception created by the results of the Pombo 1 well drilled by Woodside Energy in 2007 that there was no source rock offshore Kenya.
·In Pancontinental’s opinion, upgraded major regional play types for further exploration and highlighted the potential of all of Pancontinental’s Kenyan acreage. 

*Size and Potential Commerciality of the Mbawa 1 Gas Discovery *

Volumetric estimates of the Mbawa discovery remain within a considerable range and are subject to ongoing evaluation. 

The size of the gas discovery onthe southern culmination of the Mbawa structure continues to be evaluated, as well as the follow - up potential in other culminations on the Mbawa structure and the potential in nearby structures. The commercial potential (if any) of the overall structure at the discovery depth also continues to be evaluated. 

Commerciality is rarely defined from the outcome ofone discovery well in isolation in a frontier basin. Revised technical studies and, if warranted, further drilling andappraisal work are required to define a resource and to determine the commercial potential (if any) of that resource with confidence. 

*L8 - Forward Exploration Programme *

The large amount of technical data gathered during Mbawa drilling is now being processed and assessed. It will be integrated into previous exploration models. 

Although no firm decision to drill a second well has yet been made, the Mbawa 3D seismic survey and the more recent Nanaa 3D surveyareas are currently the prime areas of consideration. 

The Tai Prospect is one of the main prospects under consideration. The Tai Sands of interpreted Middle Cretaceous age are deeper than the sands at the discovery level in Mbawa 1 and are considered to potentially be in a separate petroleum system. 

*The Bigger Picture Offshore Kenya* 

The Mbawa Prospect is one of a number of prospects at differentgeological levels in the L8 area and the first to be drilled out of numerous prospects and leads in Pancontinental’s four licence areas offshore Kenya. 

The Mbawa gas discovery establishes the existence of a working hydrocarbon system offshore Kenya. The source material of the gas is interpreted to be a thermally mature mixed gas and oil-prone source and this means that oil may also have been generated at some time from the same source rock. With the Mbawa 1 gas discovery and the proving of a working hydrocarbon system, Pancontinental believes that the next 12-18 months will be a defining period of oil and gas exploration offshore Kenya. 

Pancontinental has participated in four 3D surveys offshore Kenyan and these have generated numerous Prospects and Leads. Another 3D surveyis planned in the L10 Blocks in November 2012. 

Pancontinental is well funded for exposure to up to4 offshore Kenya wells directly (1 well depends on the completion of farmout in Block L6)and up to 4 wells offshore Kenya indirectly (wells by other companies) over the coming 12-18 months.

The above timetable is indicative only. More accurate timing of activities will be determined when government approvals, availability of rigsand seismic vessels are confirmed (where necessary). Regional activity has been estimated using company announcements and is not intended to provide a comprehensive review of all regional activity. 

*Mr Barry Rushworth, CEO and Director of Pancontinental commented:*

“The Mbawa discovery is a great start to our Kenya drilling and we are extremely pleased to have made the historic first-ever discovery offshore Kenya. The opportunity to discover oil has by no means been dispelled by finding gas at Mbawa. Trace fluorescence seen in Mbawa may be a significant clue and it is being closely examined. 

Much work has commenced on evaluating the Mbawa discovery and determining what it means for future exploration. We believethat we have only just seen the beginning of the first wave of discoveries offshore Kenya. 

We are in an exciting stage for oil and gas exploration in Kenya, particularlyconsidering that we are operating in East Africa where success rates are as high as 80%. The string of world class discoveries further south offshore Mozambique and Tanzania started ina similar way to our first Kenyan discovery and we have good reason to be extremely enthusiastic aboutthe future here.

As in virtually all frontier areas, the first discovery paves the way for much better informed, and often more successful, future exploration. We see Mbawa, the numerous other prospects and the diversity of play types as a multi-layered series of opportunities in both L8 and our three other Kenyan areas and we are confident these will grow and mature as exploration continues. 

Oil remains our prime focus offshore Kenya and this has not been diminished by discovering gas in Mbawa. 

Pancontinental holds a unique position in two of the newest oil and gas frontiers globally [Kenya and Namibia], where both regions are on the cusp of game-changing drilling programmes. With approximately $40 million in cash Pancontinental is well positioned for an exciting 12-18 months ahead”.

See Pancontinental's website for more details;

http://www.pancon.com.au/


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## smalltimer

http://www.dolmenstockbrokers.ie/reports/Dolmen Daily 11 Oct 2012.pdf

*Dolmen Daily Reports
11 Oct 2012*

*Pancontinental – Spec Buy
Previous Close AUD $0.105
Target Under Review*

Overnight, Pancontinental issued a preliminary update of data analysis by operator Apache from the Mbawa-1 prospect in Block L8, offshore Kenya. 

The company re-affirmed that the programme had established the existence of a working hydrocarbon system, the first ever offshore Kenya. The gas (51.8 net metres of pay in three zones of very favourable porosity) is interpreted to be thermogenic and derived from a possible Type II mixed gas / oil source rock. 

As such, “the potential for oil discoveries remains open”. The well tested the shallower prospects but it has not been possible to test the deeper secondary target, which could hold “considerable potential”. Management notes the significance of traces of fluorescence seen while drilling will be further interpreted once samples have been fully analysed. 

No firm decision to drill a second well has yet been made, with interpretation of Mbawa and Nanaa 3D surveys currently the main focus. One prospect under consideration is the Tai Prospect, which is in middle Cretaceous sands deeper that Mbawa-1, which could potentially be a separate petroleum system. 

This update shows that despite the “disappointment” of the gas discovery at Mbawa-1, analysis is on-going and providing data for potential future exploration activity either at Mbawa-1 or other prospects within the block. 

Management notes the company is well funded for exposure to up to four offshore Kenya wells directly and four indirectly.


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## smalltimer

http://www.whatinvestment.co.uk/tra...oil-companies-blazing-a-trail-in-africa.thtml


*Small oil companies ‘blazing a trail in Africa’*
Rob St George, 17 October 2012

Specialist oil producers operating in east Africa can look ahead to a strong year, according to Artemis Investment Management.

The firm argues that the combination of improved technology and greater political stability is set to deliver the next oil boom in the region.

‘Africa is blowing the socks off everyone,’ comments Richard Hulf, a fund manager at Artemis, ‘and small oil companies are blazing a trail in Africa.’

His confidence is premised on what he calls a ‘basin investing approach’. Tectonic theory suggests that oil should be found in sub-Saharan Africa as abundantly as it is off Brazil’s coast, given that Africa was once joined to South America.

Hulf recognises that Shell did explore unsuccessfully in east Africa 20 years ago, but he reckons new techniques such as high-resolution seismic imaging permit deeper and more accurate drilling.

Politics in the region is also now more amenable to oil companies, he adds. He points to Mauritania, which has suffered two coups since 2005. After the second, Hulf says, investors realised that ‘oil is still being produced’.

But he is most bullish on the outlook for the east coast, particularly Kenya. Importantly, this side of Africa is ‘better positioned to export to Asia Pacific’.

He tips Toronto-listed Africa Oil (TSXV:AOI) in particular; the company’s share price has risen tenfold in the past year after working with Tullow Oil (LON:TLW) across the area.

On the west coast, Hulf has high hopes for Namibia, where Chariot Oil & Gas (LON:CHAR) is exploring. He mentions that acquisitions of such firms by Chinese conglomerates offer ‘very important exits’ for investors too.

More broadly, Hulf sees a bright future for the oil sector. He characterises the long-term supply and demand balance as ‘fairly tight’. On the demand side, for example, he observes that in the US there are 700 cars per 1,000 people; the figure is only 30 in China, affording considerable room for growth.

He further favours oil over gas, with the latter market depressed by plentiful supplies of shale gas in the US. ‘Shale gas is a victim of its own success,’ he remarks, ‘as gas prices have gone through the floor.’

On the oil price, Hulf is sanguine. ‘Companies with proven and growing production are the only real way to invest in energy; we are not trying to be clever about the oil price.’


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## smalltimer

*64 Recent Oil and Gas Discoveries Show Continent’s Potential says New Report*
*
18 Oct, 2012 19:17 CET* 

A series of hydrocarbon discoveries across Eastern Africa has established the region as one of the key emerging areas for fossil fuel development in the world

ReportBuyer.com the leading website for market research reports has added a new study Emerging Oil & Gas Exploration Markets in Africa, 2012 - Industry Analysis, Latest Developments and Competitive Landscape which says that 64 oil and gas discoveries have been made in the continent’s emerging markets over the last five years, the majority of which were made in the East African nations of Uganda, Mozambique and Tanzania.

At present, Tullow Oil Plc and Total S.A are the leading companies in exploration and production (E&P) in the emerging markets of Africa. UK based Tullow Oil is estimated to have the largest number of exploration blocks in Africa, with 20. The company plans to make Uganda one of the top 50 oil producing countries in the world by investing $10 billion for the development of assets there and has already made 15 oil discoveries.

Total S.A, on the other hand, is the continent’s hydrocarbon leader in terms of net production and operates in nations including Kenya, Uganda and the Republic of the Congo – the latter producing 123 thousand barrels of oil equivalent per day (Mboe/d) in 2011 alone.

The 82 page report notes that despite the realization of Africa’s growing oil and gas wealth, political and economic uncertainties continue to mar the development of Africa’s huge oil and gas wealth progress. Shifting price policies, taxation changes and threats of vandalism by rebel groups are among the major concerns for international oil companies and have even seen Malaysia’s Petroliam Nasional Berhad (Petronas) farm out exploration blocks in Ethiopia to a local company.

http://www.cisionwire.com/reportbuy...ontinent-s-potential-says-new-report,c9321159


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## smalltimer

*With the Gas discovery on PCL’s Offshore Well in Kenya declared uneconomical* on its own at this stage, other discoveries in the area may change all that. 

A Subsea Completion and Gas pipeline to other facilities in the area can be relatively inexpensive as compared to going it alone and building onshore facilities. Suddenly, the discovery may turn into potential. Also the world is now about to enter a new phase in Gas recovery, the “FLNG”. Floating Liquefied Natural Gas Facilities. These floating barges will do for gas what FPSO’s did for marginal Oil Fields the world over. 

Fear not, there will be plenty of interest yet in PCL’s Blocks in the years ahead.

Good luck all PCL holders………………smalltimer……
………………………………………………………………………

http://www.rigzone.com/news/article.asp?hpf=1&a_id=121469

LONDON - Royal Dutch Shell PLC is still interested in entering Mozambique despite losing out on a deal earlier this year that would have given the oil major access to East Africa's huge gas reserves, Shell's exploration chief, Andy Brown, said in an interview.

Large natural gas discoveries off the coasts of Mozambique, Tanzania *and Kenya *have transformed East Africa into one of the world's most promising energy provinces, potentially challenging Qatar and Australia for key gas export markets in Asia.

The gas finds have already led to jostling between companies eager to get access to the region, where they would join Houston oil company Anadarko Petroleum Corp. and Italy's Eni SpA, both of which have already made significant discoveries.

"East Africa is going to be a big province for LNG. We think they still need a company that can develop LNG and the associated shipping and marketing," said Mr. Brown, referring to an exportable form of natural gas, which is supercooled into a liquid form that can be shipped around the world.

"So we're still interested in Mozambique," he said, but declined to elaborate further.

His comments come amid renewed speculation about Eni's future plans for its own 70% stake in an offshore block in Mozambique. While early indications suggest the license area could hold up to 70 trillion cubic feet of natural gas, analysts have suggested that the Italian major could seek to sell some of its share.

Eni, which lacks the kind of LNG track record boasted by Shell, Total SA or BG Group PLC, has also hinted that it would be open to potential joint ventures in this area.
"Shell could be a wonderful partner," said Claudio Descalzi, Eni's head of exploration and production. However, Mr. Descalzi, who was speaking in London last week, stressed that his company hadn't yet had formal talks with any other firms.

The Anglo-Dutch giant, which this year produced more gas than oil, is the world's biggest shipper of LNG and has extensive experience in developing the giant cooling systems needed to manufacture the fuel. *It is also developing Prelude, the world's first vessel that will produce LNG aboard, known as floating LNG*. It announced this week that major construction on the Prelude facility had begun.


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## smalltimer

*KK Security changes face with oil deals*

KK Security is seeking a piece of Kenya’s oil exploration business by offering specialised services to mining companies on remote sites in a bid to diversify its income streams.

The services include offshore security, accommodation, and logistics as well as training and leasing specialised workers on oil drilling and extraction.

The regional security company inked partnership deals with international firms including Kiron Global to train its mining staff, Unity Resources for offshore security and Allterrain Services (remote accommodation and logistics) to give it a foothold in eastern Africa oil and gas market.

The company is targeting foreign interest in petroleum blocks that has surged since British explorer Tullow Oil announced Kenya’s first oil discovery in March.

The find is one in a series of major oil and gas discoveries in East Africa that have made the region more attractive to explorers.

Most of these blocks are located in remote areas and KK Security is looking to offer the services that also include waste management and laundry besides providing safety training, protection of executives and guarding exploration installations.

“We are looking at the oil and gas market as the next frontier for growth for KK Security since it is going to be huge,” said Adam Miller, commercial director at KK Security. 

“This will help transform the company by cutting the share of revenues from guarding services to 30 per cent from the current 60 in three years. I was recruited to execute this target,” added Mr Miller who joined KK in June after serving as regional managing director of rival company G4S East Africa.

Kenya has five unlicensed blocks remaining of 46 oil and gas exploration sites as major energy companies race to sign exploration deals. These firms include France’s Total, Italy’s Eni and US majors Anadarko and Apache.

Smaller players such as Cove, Origin Oil, Pancontinental and Lion Energy, who had dominated Kenya’s prospecting scene for years, have been quietly exiting in recognition of the change in the balance of power in favour of big players who have started drilling. 

The establishment of local bases by the foreign firms is boosting the outlook of service providers eyeing the oil and mineral sectors like KK Security, that will compete with companies like Lonrho owned Afex, which also offers oil firms accommodation and logistic services.

But the oil giants face a shortage of specialised staff in the fields of drilling and extraction, a gap that KK Security seeks bridge in partnership with US based Kiron Global Strategies.

It also plans to offer training in the oil sector tailored for engineers, technicians and artisans and employ the experts to provide specialised services to the oil and gas exploration companies.

Currently, many of the experts involved in the exploration activities are being shipped in from abroad because of a lack of the necessary skilled manpower locally.

“Security accounts for about 10 per cent of offshore drilling cost and this presents a huge market for us,” said Mr Miller, adding that the firm would tap this market in partnership with Unity Resources to offer maritime security. 
gfayo@ke.nationmedia.com

http://www.businessdailyafrica.com/...deals+/-/539550/1538510/-/u41ig1/-/index.html


----------



## smalltimer

*Pancontinental Oil & Gas and Apache still assessing Kenyan gas discovery
Thursday, October 11, 2012 by Bevis Yeo*

Pancontinental Oil & Gas (ASX: PCL) and the L8 joint venture led by Apache Corporation (NYSE: APA) are carrying out detailed analysis of the results from the Mbawa-1 gas discovery well offshore Kenya.

While the country’s Energy Minister Kiraitu Murungi had previously said the find was encouraging but not commercial, the company raised a ray of hope with its note that volumetric parameters and commercial aspects of the discovery had yet to be ascertained.

Studies are being carried out to determine the size of the discovery and its commercial potential as well as follow-up potential in other culminations on the Mbawa structure.

Mbawa-1 had intersected 51.8 metres of natural gas pay in three zones of Upper Cretaceous channel and turbidite sandstones. 

Porosities were very favourable at an average of approximately 24%.
The discovery was on a single localised structural culmination on the southern extremity of the overall Mbawa Prospect and the potential of the remainder of the structure remains to be assessed in the light of the Mbawa results.

Pancontinental added the deeper secondary Middle Cretaceous target remains to be properly tested and this as well as other prospects of this play type could still hold considerable potential in the Mbawa vicinity, elsewhere in L8, and in the region.

It also noted the gas recovered from the discovery zone is interpreted to be thermogenic and indicated that the potential for oil discoveries remained open.

The large amount of technical data gathered during Mbawa drilling is now being processed and assessed. It will be integrated into previous exploration models.

Although no firm decision to drill a second well has yet been made, the Mbawa 3D seismic survey and the more recent Nanaa 3D survey areas are currently the prime areas of consideration.

One of the main prospects under consideration is the Tai Prospects where the target sands are interpreted to be deeper than the sands at Mbawa 1 and are considered to potentially be in a separate petroleum system.

Apache holds a 50% interest in the L8 permit while Pancontinental’s 15% interest is carried by Tullow Oil (LON: TLW) up to a maximum cap of US$9 million – reduced by other exploration expenditure.

Tullow, which has a 15% stake in L8 can earn a further 5% by providing funding on Pancontinental’s behalf to a cap of US$6 million in any second well. 

The remaining partner is Origin Energy (ASX: ORG) with 20%.

http://www.proactiveinvestors.com.a...ill-assessing-kenyan-gas-discovery-34392.html


----------



## Miner

AS PER MORNING DATA 
At 24/10/2012 *10:06 AM - PANCONT FPO [PCL] traded *at $0.090 falling to your low price trigger of $0.0900.

Security Code:   PCL
Last Price:      $0.090
Change:          $-0.002
Day High:        $0.090
Day Low:         $0.090
Volume:          924587


----------



## smalltimer

*Kenya moves to create new oil and gas tax rules 

By: Reuters
26th October 2012* 

Kenya will revamp its tax rules to benefit more from profits earned by foreign oil and gas exploration, Permanent Secretary of Energy Patrick Nyoike said on Thursday.

The east African nation has drawn petroleum exploration activity but has no capital gains tax rules and no laws that allow it to tax companies for transactions that take place outside its jurisdiction, even if they result in changes to shareholdings in Kenyan subsidiaries.

Inadequate regulations meant the country was missing out, Nyoike said.

"We don't have capital gains. That's a major, major problem for us," he told reporter on the sidelines of an oil and gas conference in Nairobi.

Nyoike said a bill the Kenyan Treasury proposed in early October that would tax mining and oil companies 10 percent to 20 percent of capital gains booked in transactions, such as mergers, was inadequate.

Licences for oil and gas blocks in Kenya have drastically increased in value in the past nine months after British explorer Tullow Oil announced it discovered the first oil in the country, which is being tested for commerciality.

Yet Nyoike said there were too many loopholes and the country could run into the same problems its neighbours have over tax matters.

To the west, Uganda - which has already established it has commercial quantities of oil - was unable to tax UK-based Heritage Oil after the company discovered oil in the country and then sold its exploration and production rights to Tullow Oil, booking $1.45-billion in profits.

The Ugandan government ultimately served Tullow a tax bill for $313-million over the matter and entered arbitration proceedings with Heritage in London.

"Take the Turkana case [where Tullow found oil] ... same as Uganda, if one of the partners in the consortium decides to exit, we would not have an arrangement of getting anything," Nyoike said.

He said Kenya needed to act fast, citing one deal he said was already slipping through the fingers of Kenyan tax collectors.

Irish firm Cove Energy announced earlier this year that Thai state oil company PTT Exploration would buy it. Cove has a licence for an exploration block offshore Kenya.

Kenya is also unable to tax the sale of a stake in an exploration licence by one company to a third party. However, Nyoike said the country would only seek to make tax rules to apply to companies that exit Kenya completely.

Kenya's petroleum rules were last updated in 1986. The tax measures are part of a broad overhaul of the rules governing the industry which the Ministry of Energy is trying to push through Parliament.

http://www.engineeringnews.co.za/article/kenya-says-to-create-new-oil-and-gas-tax-rules-2012-10-26


----------



## smalltimer

*Jitters as State plans to raid mining firms*

By Jevans Nyabiage 

The Government is coming up with a raft of measures to position itself to reap from the lucrative natural resources industry, in the wake of increased interest from exploration firms.

Kenya is hotly tipped to succeed its neighbours as the next big oil and gas exploration target. Much of its revenue is from tourism and agriculture, and is now eyeing the recent oil and gas discoveries, to wax lyrical about the emerging potential of the energy sector.

But the amendments to the 2012 Finance Bill that has tax implications, besides claiming a stake in the exploration project has brought uneasiness among multinational mining firms. Although the Government has made no secret of its intentions to acquire greater control of the mining sector, mining companies are seeing the move as changing goalpost that could discourage new investment.

Skeptic, however, reckon that the Government’s latest move came as a kneejerk reaction to mounting local pressure for greater control of its natural resources, which also follows similar moves in other African nations such as Tanzania and Uganda which have are reviewing their mining laws.

First casualty to the changing environment is the Australian miner Base Resources whose shares slumped 31 per cent on Monday on worries that Kenya may take over part of its key project under a new law requiring the state to own at least a 35 per cent stake in mining licenses.

The company said late last week that it was trying to line up talks with the Government to understand whether the rule would apply to its $275 million Kwale mineral sands project, which would be the country’s first large-scale mine.

Clarification 

It said the new regulation did not spell out whether it applied to existing mining leases, but it had legal advice the rule did not apply to the Kwale project, and if it did, it would be unconstitutional.

“Further, the Investment Agreement also provides that in the event of the Government taking action tantamount to expropriation or nationalization, Base is entitled to compensation for the full market value of all property thus taken,” the company said.

But what is not clear is whether the legislation review would impact on the renewed growing interest shown by top miners in Kenya’s undeveloped natural resource sector.

Tullow Oil, one of the industry’s most successful explorers, has already made substantial headway in the country as it looks to steal a march on its rivals. The FTSE 100 group first struck oil back in March, while further oil was discovered in early May at the half-owned Ngamia-1 well in the Lokichar Basin, in Turkana County. And what has followed since then is heightened interest from both local and multinationals seeking a piece of the sector, while those that hold licences for prospecting have used the opportunity to make a kill.

The news of the oil discovery resulted in companies listed in the New York and London stock exchanges such as Premier Oil and Apache Oil staking a claim in Kenya’s exploration business such as Cove Origin Oil, and Pan-Continental heightened their exploration work.

Negotiation 

Total of France is reported to be negotiating with the Government for Production Sharing Contract for one of the new blocks 1.22 Apache Corporation. Exxon Mobil and Anadarko Petroleum Corporation of the United States, Royal Dutch Shell, Statoil of Norway and Petronas of Brazil are among firms interested in exploring the new sites.

Tullow Oil and Ophir Energy have raised billions of shillings for exploration in the region. Ophir raised about Sh20 billion mid this year, which it said would be invested in the eastern Africa region.

Anadarko Petroleum Corporation, listed on the New York Stock Exchange (NYSE), revealed in regulatory filings that it plans to spend $120 million prospecting for oil and natural gas in the Lamu basin, where it operates offshore deep-water blocks. Australian firm Base Resources launched a share offer in order to raise Sh3.41 billion to finance operations at its titanium mine in Kwale.

Simba Energy continues to evaluate its earlier-stage asset and has already uncovered two potential targets for further exploration.

New policies 

With the raised profile of the country’s natural resource, the Government is worried that it might not be getting its rightful share of the bounty. It is coming up with new policies and tax measures.

It is introducing Capital Gains Tax (CGT) on the profit from the sale of property or shares of oil firms mining or mineral prospecting firms.

It also wants to increase license fees, change to bidding in the award of licenses, and also impose a requirement for firms to have a 35 per cent local ownership.

On October 4, while proposing amendments to the 2012 Finance Bill, Finance minister Njeru Githae inserted a new clause that seeks to introduce CGT to the sector.

“In my amendment, I am seeking to only restrict the Capital Gains Tax (for now) to mining companies and mineral prospecting companies because these firms recently got prospective licences on payment of a minimum of Sh3,000 or Sh10,000,” Githae said.

“When they discover oil, they sell their shares to other companies. When they do so, the Government does not get any revenue. We are also working on how we can extend the Capital Gains Tax but that study is not yet over.”

Oil findings 

Energy ministry permanent Secretary Patrick Nyoike also added his voice, “Take the Turkana case where Tullow found oil, same as Uganda, if one of the partners in the consortium decides to exit, we would not have an arrangement of getting anything.”

In the past, Kenya has witnessed some licence holders exit having made millions of shillings selling the licences to third parties.

In April, media reports indicated that a firm linked to a Cabinet minister sold oil block for $10 million (Sh850 million). In 2010, Turkana Drilling Company sold Block 10BB for $10 million to Africa Oil.  Acquiring blocks has been invaded by the well-connected. This opens up the debate on the manner and transparency of the system of granting exploration licences. 

 The Toronto Exchange-listed Centric Corporation of Canada was given a licence for Block 10BA, adjacent to Ngamia-1, where Tullow struck oil, in January 2010 and paid the Government $615,000. A year later, Centric Corporation sold its shares to another Toronto Stock Exchange company, Africa Oil Corporation, for a $60 million.

And two years ago, Platform Resources, another Toronto Stock Exchange listed company sold two licences in circumstances not too dissimilar to the case of Centric and Africa Oil. The company owned the licences for Block 12A and 13T in the Lake Turkana basin, having signed production-sharing agreements in September 2008. Despite having done no substantial work, the company sold the licence at an estimated $6 million.

Irish firm Cove Energy announced earlier this year that Thai state oil company PTT Exploration would buy it. Cove has a licence for an exploration block offshore Kenya.

The ministry has started cracking the whip on small-time explorers it blames for hoarding exploration acreages for speculative purposes.

By introducing the CGT on the sale of property or shares by oil and mineral companies, Kenya may be borrowing a leaf from Uganda where the Revenue Authority collected Sh34.5 billion following Tullow’s acquisition of Heritage’s stake in various petroleum blocks in that country.

“I guess it was inevitable that some form of CGT would be reintroduced. The fact that they have picked the natural resource industry is perhaps a learning from what has happened in Uganda,” said Nikhil Hira, Tax partner at Deloitte & Touche.

Hira says what the State is introducing is a tax that will charge gains on changes in ownership, assignment of rights, which are common in the sector.

It will also catch transactions that happen effectively outside Kenya but cover Kenyan assets.

“On the face of it, this is a good way to raise revenues but I feel the rates may be very high and could hinder development,” he added.

If the Finance Bill 2012 is passed, foreign and local investors who make gains on the sale of property or shares in respect of oil companies, mining or mineral prospecting companies will pay a final tax at the rate of 20 per cent and 10 per cent, respectively, on the gains.

But there is confusion, the minister did not define an‘oil company’ on whether he targets upstream or the requirement also includes downstream activities. The Income Tax Act only defines a “petroleum company” as corporate body that carries out, in addition to any other activities, operations under a petroleum agreement entered into under the Petroleum Act.

Eric Musau, Research Analyst at Standard Investment Bank says the decision is probably a fair one for non-listed companies, but details of implementation have not been disclosed.

“We do not know whether such a decision will also affect mid-stream to down-stream companies as the wording of the rules is a bit vague,” Musau said, “We are particularly concerned on the transfer of shares at the stock exchange which has thousands of shareholders in KenolKobil and Total Kenya. We think the intention is on upstream and prospecting companies rather than on trading entities, this should be made clear.”

Analysts and players believe the move is likely to strangle companies still in their infancy and discourage new investments.

Support 

 Aly Khan Satchu, Nairobi-based Investment analyst says the sector is nascent which has only recently popped its head over the radar.  “We need to encourage this sector and not strangle it at birth,” said Satchu, “My sense is that policy makers are making policy on the hoof and the now rapid fire announcements are increasingly giving the impression of shifting goal posts.” 

He says it is this lack of uniformity and inconsistency of announcements, which is sending alarm bells the world over.

 “Regulatory risk is now flashing Red. It behoves our policy makers to consider the consequences of their announcements otherwise what has been in the ground for nearly 50 years since Independence will remain in the ground for another 50 years,” Satchu added.

“There needs to be structure and discipline. I appreciate the Government has every right to seek to impose a tax regime in this important space. I think policy makers need to appreciate that there will be nothing to tax and just a Tsunami of Law suits if they continue in this irregular and on the hoof fashion.”

The Energy ministry has also introduced a requirement that forces all mining firms to have 35 percent local shareholding. 

Kenya’s mining sector is currently operating on the Mining Act of 1940 that has been revised only twice, in 1972 and in 1987 but without the inclusion of contemporary practices such as fair sharing of revenue.

The absence of comprehensive mining policy has left the country open to gross exploitation by foreign fortune hunters most of who have paid royalties at their own discretion.

The law will affect firms such as UK-listed GoldPlat, which was granted the first gold mining license in the country last year; China’s Fenxi Mining (coal); and Australia’s Base Resources, which will start extracting rutile, zircon, and ilmenite at Kenya’s first large-scale mine in Kwale next year.

Canada’s Pacific Wildcat is involved in rare earth and niobium prospecting, while London-listed African Barrick Gold is prospecting for gold in western Kenya.


http://www.standardmedia.co.ke/?art...a-Jitters-as-State-plans-to-raid-mining-firms


----------



## smalltimer

*Tullow strikes oil in second Northern Kenya operation *

*By Zeddy Sambu - Posted  Tuesday, October 30  2012 at  21:06*

British petroleum company Tullow has discovered additional oil deposits in northern Kenya, moving the country closer to having commercially exploitable reserves.

Sources with knowledge of Tullow Kenya’s operations said the Twiga 1 South well, where exploration began mid this year, has yielded more than 30 metres of net pay’ deposits, 10 metres more than the initial discovery at the pioneer Ngamia well.

Twiga well, which Tullow co-owns with Africa Oil at 50 per cent working interests each, is in Lokichar sub-basin onshore Block 13T in North Western Kenya.

Tullow Oil was expected to announce the fresh discovery before the end of this month, but was delayed by a mechanical fault on the drilling rig, according to its partner, Africa Oil.

“Africa Oil expects to announce drilling results from the Twiga South-1 well, currently being drilled in Block 13T, in early to mid-November,” the Canadian company said in a statement. 

‘‘Announcement of these results has been slightly delayed due primarily to minor mechanical issues on the drilling rig, which have now been addressed,” said a statement to investors by Keith Hill, president and CEO of the firm that is listed on the Toronto Ventures Exchange.
The Business Daily has, however, learnt that the UK explorer has discovered ‘data quality oil’ at a depth of 2,337 metres against full depth of 3,600 metres.

Super well
“Ngamia 1 was a super well at 100 metres of net pay and because the wells are close by, we should expect similar results,” said our source. “This is the first time that Tullow has struck oil at this depth.”  

The source described the latest discovery as encouraging news and good progress towards confirming commercial quantities of oil.  

“It should also improve market share values for the investors and enable them raise more cash to develop the wells,” our source said.

Tullow expects higher quantities of oil at Twiga than it discovered at Ngamia 1, according to sources within the company and at the Ministry of Energy. The extent and the quality of the reservoir is yet to be determined.

The firm initially struck 20 metres of net pay deposits at Ngamia 1 but that gradually rose to between 104 metres and 143 metres of net pay as drilling continued in Block 10BB near Lake Turkana. The discovery was made at a depth of 2,340 meters. 

Drilling at Twiga South-1 well, in Block 13T, is expected to continue to a total depth of 3,114 meters and targets the same structural layers and reservoirs as the Ngamia-1 oil well, which is located 23 kilometres to the south. 

“Twiga South-1 well, represents the next step in expanding the play northward into the Lockichar basin and proving up the ‘string of pearls’ concept along the main basin bounding fault,” Africa Oil said. Discovery of additional oil deposits is being seen as positive for Kenya even as the country awaits the official announcement next month.

“Drilling is ongoing at Twiga 1 but they have not issued a formal report to us ,” the Commissioner for Petroleum Martin Heya. Analysts described the discovery of 30 metres of net pay deposits as very significant for the Tertiary Rift but cautioned that it was prudent to wait for release of a proper report.  

“When time is right and they have logged the well, they will issue a proper report. Oil finds are usually reported when the well has been drilled and logged,” said one industry analyst. 

“They did not handle release of the Ngamia 1 well discovery properly. Perhaps they are being careful based on the negative publicity that came with it,” said an industry analyst.

Tullow’s manager for Kenya, Martin Mbogo, declined to respond to questions on the Twiga well.

The company’s spokesperson for Kenya, Anne Kabugi, was non-commital with the details but did not refute the information.

“We have not made anything public yet,” Ms Kabugi said on telephone. 

Tullow has operations on five blocks including 10A, 10BA, 10BB, 13T, 12A and 12B and is also a non-operated partner in off-shore block L8 where American oil exploration company Apache Corporation is the operator.  

Tullow was on September 29 expected to start exploration at the Paipai-1 well located in Block 10A where drilling is planned to a total depth of 4,112 meters even as it tests Cretaceous and Jurassic sandstone targets. 

Tullow Oil plc holds a 50 per cent working interest in the well while Africa Oil has a 30 per cent working interest in the Block.

Mr Heya said eight ultra-deep offshore blocks were gazetted by the minister for Energy in March, bringing to 23 the number of major explorers on Kenya’s 46 exploration blocks.

“We have never discovered gas off shore but we are making good progress. Apache is continuing with Mbawa,” said Mr Heya.

Another US firm, Anadarko, will in late November begin drilling for natural gas in two wells in Lamu.

Exploration activity is taking place in both on-shore and off-shore blocks located in Kenya’s four major basins – Anza, Lamu, Rift and Mandera with a view to discovering commercially viable deposits and reduce reliance on imported oil. 

Kenya imports 3.6 million tonnes of refined petroleum products annually. 

This is equivalent to a per capita consumption of 94.4 kilogrammes, which is still below the average for developing economies – a development that has been attributed to slow economic growth and over dependence on rain-fed agriculture

http://www.businessdailyafrica.com/...39550/1607508/-/item/0/-/ble3g2z/-/index.html


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## smalltimer

*EA overtakes West Africa as frontier for gas exploration 
Last updated on 2 Nov 02 2012 00:00 

By NJIRAINI MUCHIRA*
East Africa is set to become the next epicentre for global natural gas activities as discoveries indicate the region could be home to significant deposits.

A new report by Ernst & Young dubbed, ‘Natural gas in Africa – The frontiers of the Golden Age’ reveals that the future for African gas lies in the East Africa region, following massive offshore gas discoveries in countries like Tanzania and Mozambique.

Besides, the high interests by oil and gas multinationals that are jostling for exploration fields in other countries like Kenya, Uganda and South Sudan is a clear indication the region is the newest ‘new frontier’.

“The most dynamic recent developments in the African natural gas sector have been in East Africa. Ten years ago, East Africa was a “non-story” as far as oil and gas were concerned. No longer a non-story, the region is now seen as the new promised land or the next epicenter for global natural gas, the newest frontier,” says the just released report.

The report notes that with traditional natural gas regions on the continent like North Africa and West Africa assuming the tag of ‘old guards’ on the resource, global companies are looking for opportunities in the East Africa region where exploration activities are still in the infant stages.

So far, Tanzania and Mozambique lead the pack in natural gas discoveries. In Tanzania, total natural gas reserves have more than doubled from six billion cubic this year, following the discovery of the new deposits.

The country is already targeting to become a net natural gas exporter to in the region and the government has already awarded Danish firm COWI Consulting a contract to conduct a feasibility study into a major gas pipeline to Kenya. In Mozambique the proved natural gas reserves are estimated to be 127.4 billion cubic feet.

In Kenya, Australian firm Pancontinental Oil and Gas Ltd elicited excitement two months ago after it announced it had struck natural gas at L8 block along the Lamu Basin.

Commercially viable

The excitement was however short-lived after it emerged the deposits were not commercially viable. According to the report, East Africa has become a beehive of exploration activities with global gas companies’ pitching tent in several prospective blocks.

Besides Pancontinental Oil & Gas, the regional gas boom has attracted a long list of other players including ExxonMobil, Total, Royal Dutch Shell, Anadarko, BG Group, Statoil, Petrobras and Galp Energia, Tullow Oil, Ophir Energy, Dominion, Cove Energy, Premier Oil among others.

“Natural gas development holds tremendous opportunity for Africa. It can be a primary driver of economic growth and broader social development, as well as a major spur for local employment growth and infrastructure development,” observes Elias Pungong, Ernst & Young’s Oil & Gas Leader for Africa.

http://www.standardmedia.co.ke/m/story.php?articleID=2000069748


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## smalltimer

Friday was the first Up day in over a week of trading. 

The past week has seen another 10% decline in the share price 
which is now down about 70% since *that* announcement

I'm thinking it may be time to buy again...at least for a short 
term peak and turnaround........Hmm top-up

Date.......Last.........% Ch.........High......Low......Vol
02 Nov....0.082....+ 1.24%..0.082..........0.081...550,259
01 Nov....0.081....-3.57%....0.083..........0.081...1,715,879
31 Oct....0.084....-4.55%....0.087..........0.083....5,658,414
30 Oct....0.088.....-3.3%.....0.091..........0.088....2,086,426
29 Oct....0.091....-1.09%....0.092..........0.089....1,965,569
26 Oct....0.092.......0%.......0.093..........0.091....2,274,460

Regards : Smalltimer - Good luck all

**********************************************

*Time to buy Sub-Saharan oil explorers says Ambrian
Tuesday, October 30, 2012 by Philip Whiterow*

Volatile markets have made it a good time to build a portfolio of undervalued, high-risk frontier oil exploration stocks that could pay off handsomely longer term, according to broker Ambrian.

In particular, investors should be looking at sub-Saharan African explorers, where the potential for new petroleum discoveries is being underestimated by equity markets says the broker.

To back this up, the broker points out that USGS World Petroleum Assessment’s most recent estimate of Sub-Saharan Africa was 2.2 times larger (146Bln boe) than its 2000 Assessment. 

It was the largest increase among the eight main assessment regions in both absolute and percentage terms.

New technologies have also boosted access to areas deemed too risky just a decade ago, while political, regulatory, corruption and security issues have all eased.

In terms of undiscovered resource potential, Sub-Saharan Africa now rivals that of the Middle East and North Africa, North America and South America, but with better access to licences.

Ambrian adds that most explorers in the region suffer from a relatively heavy concentration of regional, geologic and/or political risk, which is why a portfolio is a better bet than single selection.

By order of market value but not other, the companies it says are buys are Ophir (LON:OPHR), African Petroleum, Pancontinental, Chariot Oil (LON:CHAR), Rialto Energy, FAR, Fastnet, WHL Energy and Tangiers Petroleum.

Two companies highlighted include Fastnet Oil and Gas (LON:FAST) that is exploring and appraising African and Celtic sea basins. Its current most valuable asset is its 18.75% interest in the Foum Assaka licence, offshore Morocco.

The Moroccan fiscal regime is the most favourable of the countries covered in the Sub-Saharan region, and Ambrian believes that the market does not fully understand just how favourable it is. 

It estimates that for a 400MMbbl oil field development the NAV/bbl is USS23/bbl, well above the rule-of-thumb US$10/bbl valuation that seems to be put on oil discoveries by the market.

Fastnet estimates that its work commitments to the end of 2013 are just £1.8m, excluding its share of the cost of a well in Morocco, while Kosmos (operator) and Fastnet will farm down their interests in Foum Assaka for carry on the first well.

Ambrian estimates that the current fair value of Fastnet’s share price is 33p, but on a success scenario could be worth 182p by end-2013 or just 9p if exploration is unsuccessful.

Tangiers Petroleum (LON:TPET, ASX:TPT) is also focused on Morocco with its Tarfaya licence. The main catalysts for the stock, which management has some control over, are the successful completion of its farm-in programmes this year. 

The company is currently conducting farm-in programmes for both Tarfaya in Morocco and its WA-442-P & NT/P81 licences in Australia.

Ambrian estimates the current fair value of Tangiers’ shares is A$1.10, which is 3 times above the market price. On a success scenario, Tangiers shares could go as high as A$8.64 by end-2013, with the failure scenario A$0.20.

http://www.proactiveinvestors.com.a...saharan-oil-explorers-says-ambrian-35178.html


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## smalltimer

Great start to the new week with volume picking up and what looks like an new 
up-trend in progress, let's hope the momentum keeps up for a bit of short term 
buy and sell.

Good luck all.


----------



## smalltimer

*Laws take a toll on oil, gas firms*
By AGGREY MUTAMBO, Special Correspondent

Posted  Saturday, November 10  2012 at  15:08

The lure of East Africa’s growing oil and gas industry could wane as political risks and tough taxation laws take their toll.

A report released last week in Johannesburg by consulting firm Ernst & Young warns that while there is significant natural gas potential in the region, countries where these resources are found have a poor risk rating.

The firm rated all countries on the continent that are either already producing natural gas or have the potential to start soon. East African states fared badly in the political, taxation, operations and security risk index.

The report ranked Kenya’s political risk as high for gas exploration or excavation companies. The government is unable to guarantee firms protection against attacks. 

East Africa has transformed into a hot spot for oil, gas and mineral exploration, and has in the past three years attracted multi-million dollars in foreign investments into Uganda, Tanzania, Kenya and Mozambique. 

The huge flow of foreign investments into the oil and gas sector is raising the need for the region’s governments to craft policies to keep existing explorers and also attract more. 

“East Africa is now seen as the ‘new promised land’ or the ‘next epicentre’ for global natural gas, (but) governments will of course have a critical role to play,” said the report dubbed in part Natural gas in Africa: The frontiers of the Golden Age.

“There is a need to develop a meaningful and practical master gas development plan, one that addresses the upstream tax and licensing models. This is besides making sure there is sufficient infrastructure for getting the product to the market,” said the report. 

Over the past one month, Kenya, Uganda and Tanzania have released new regulations as they sought to rethink policies in the oil, gas and minerals business in the wake of increased exploration and mining interest in the region.

Two weeks ago, Kenya issued a new mining law that requires foreign-owned mining companies to give up 35 per cent of their local operations to Kenyans. The law followed a set of new regulations that require a 20 per cent tax on sale of assets by prospecting firms in the oil and mining business, as the government sought to raise more funds to finance its growing expenditure needs. 

Two weeks ago, Uganda suspended the issuance of new mining licences following revelations that several were given out illegally. In Tanzania, firms are grappling with new mining regulations, which have raised the amount of revenue the companies should pay the government. The firms are now required to pay at least 0.3 per cent of their annual turnover, up from the previous ceiling of  $200,000. 

The rest of the region

Ernst & Young rates Rwanda, Sudan, Ethiopia and Somalia in the same group as Kenya because their political risk is also high. Uganda and Tanzania’s positions keep fluctuating, but they also have a poor rating when it comes to legislating laws for managing the sector and overall security for firms seeking to invest in the mining industry.  Uganda has natural gas reserves of about 14 billion cubic metres; Sudan 84 billion cubic metres; Tanzania and Somalia six cubic metres; Mozambique 126 billion cubic metres and Rwanda 56 billion cubic metres.

Italian firm ENI and US company Anadarko expect to start production in Mozambique by 2020, while BG Group hopes to start production in Tanzania in six years.

In Kenya, gas exploration continues with various multinationals still searching off the Kenyan coast. In September, British firm Tullow Oil Plc announced it had encountered about 53 metres of net gas in sandstones in Mbawa-1 it was jointly drilling with an Australian company, although the finding was later said to be commercially unviable.

http://www.theeastafrican.co.ke/bus...s+firms/-/2560/1616860/-/jrbsujz/-/index.html


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## smalltimer

*Pancontinental Oil & Gas to discuss African hydrocarbon opportunities at “Stars in 2012”
Tuesday, November 13, 2012 by Proactive Investors*

Pancontinental Oil & Gas will discuss its African oil and gas exploration, particularly its efforts offshore Kenya, with investors at "Stars in 2012" in Sydney. Also presenting is AusTex Oil, Titan Energy Services, Eastern Iron and Ezeatm.

Pancontinental Oil & Gas (ASX: PCL) will discuss its oil and gas exploration offshore Kenya and Namibia at the "Stars in 2012 Series" in Sydney on Wednesday 28th November 2012.

In Kenya, the company had participated in the Mbawa-1 gas discovery well in L8 that proved the existence of a working hydrocarbon system and is currently undergoing detailed analysis.

Volumetric parameters and commercial aspects of the discovery have yet to be ascertained and the analysis is expected to continue into 2013.

The joint venture, led Apache Corporation (NYSE:APA), is now considering the forward work program in light of the Mbawa results.

With about $39 million in cash, Pancontinental is well funded for up to 4 offshore Kenya wells directly and another 4 wells indirectly over the coming 12-18 months.

In L10A and L10B, the joint venture will carry out a 2,180 square kilometre 3 seismic survey over the western sector of the licence areas where operator BG has mapped a number of very large leads for further work and possible drilling.

Pancontinental is also carrying out detailed mapping to define the full extent of the structural and stratigraphic closures and potential oil-bearing traps at its Namibian exploration acreage.

THE EVENT

The One2One Forum brings you five exciting companies presenting.

The event is FREE, but registration IS A MUST.

DETAILS

The event will be held on Wednesday 28th November at the Radisson Blu Hotel, corner of Pitt and O'Connell Street, Sydney from 5.30pm.

The event will be followed by a wine and canapÃ© reception where you can interact with the presenting MDs & CEOs.

 LUCKY DOOR PRIZE: All attendees instantly go into the draw to win 1 of 3 lucky door prizes (including early prize) drawn on the night: a $100 Apple voucher (early bird prize), a $100 voucher for Radisson Blu Hotel, or a $100 Ticketek voucher.

FULL PRESENTER LIST

 Titan Energy Services (ASX: TTN) provides a range of energy services including drilling, camp hire and remote camp management, to the coal seam gas industry. Long term contracts have being reached with three of the four major coal seam gas developers for its drilling rigs.

Ezeatm (ASX: EZA) is the largest ASX-listed ATM deployer and is continuing along a rapid growth path, following preferred supplier agreements with Metcash and the DIB Group of companies.

Eastern Iron (ASX: EFE) is targeting iron ore on the infrastructure-rich, eastern seaboard, which is home to the bulk of Australia’s industrial capacity, population, workforce and markets.

AusTex Oil (ASX:AOK) produced 500 bpod oil Net Production in the last week of September, with gross sales for the qtr US$1.4m, up 33% on June qtr. The 2012 Vertical Well development program is delivering two new wells per month. AusTex has 2P Reserves of 5.9m BOE and a 2P 10% NPV est. of $288m.

Pancontinental Oil & Gas (ASX: PCL) holds petroleum exploration acreage in Kenya, a growing hotspot for the oil and gas industry as well as assets in Namibia, and Western Australia.

Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.

http://www.proactiveinvestors.com.a...bon-opportunities-at-stars-in-2012-35742.html


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## smalltimer

*Kenya seeks 25 pct stake in oil production ventures
Mon, Nov 12 2012*


* Kenya making bigger demands on oil and gas explorers

* Planned changes to bring more revenue to state-run oil company

By Kelly Gilblom

NAIROBI, Nov 14 (Reuters) - Kenya aims to take a bigger slice of the profits from its natural resources exploration boom by seeking a 25 percent stake in the production activities of oil and gas companies operating in the east African nation.

The proposal announced by Kenya's energy minister is one of many the government has put forward in the past month to increase the state's take from oil and gas resources, including new capital gains tax rules, a more competitive licensing process and higher fees for petroleum explorers.

At present most of Kenya's contracts with oil explorers give state-owned National Oil Corporation of Kenya (NOCK) a 10 percent stake in the production business once commercial quantities of oil or gas are found. This means that NOCK contributes 10 percent of production costs and receives 10 percent of profit.

However, the government now wants companies to give NOCK an initial 10 percent stake, increasing to 25 percent once production has started, Energy Minister Kiraitu Murungi told reporters on the sidelines of an east African oil and gas conference organised by Global Event Partners.

Rajesh Shah, an oil and gas expert and at PricewaterhouseCoopers, said it was unclear whether the rule would scare off potential producers because contracts are based on one-on-one negotiations with companies and the Ministry of Energy.

"It depends on how it's structured and how it's sorted out," Shah said. "I think people will get wary if it's getting something for nothing. If there's a fair share of whatever somebody has spent ... I think people will be pragmatic and see it as something reasonable."

Kenya's exploration boom has been fuelled further by gas discoveries in Tanzania and Mozambique and oil discoveries in Uganda.

British explorer Tullow Oil and Africa Oil found oil in the Ngamia-1 well on Block 10BB in March and discovered more a few months later.

In October, Tullow and Africa Oil encountered oil in a wildcat well known as Twiga-1 on onshore Block 13T, about 30km west of the Ngamia-1 well. The commercial viability of both finds has yet to be ascertained.

Tullow and Australia's Pancontinental Oil & Gas announced in September that their licence consortium's operator Apache Corp had found gas in the shallow offshore well Mbawa-1.

Experts predict that it will be at least five years before any petroleum can be produced, but in the meantime the government is using its new position as an established hydrocarbon province to squeeze better terms out of explorers wanting to drill and produce in Kenya.


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## smalltimer

http://www.upstreamonline.com/live/article1270218.ece

*Bill Lehane , News Wires 
16 November 2012 16:57 GMT .*

Kenya has reportedly refused to sanction Cove Energy's attempt to transfer its offshore licences to its new owner PTT Exploration & Production (PTTEP), because it wants to negotiate a cut of the deal that saw Cove sold. 

Thailand's PTTEP agreed in August to buy Cove Energy and its small stakes in seven licences offshore Kenya in a $1.9 billion acquisition.

"In Kenya, we are still dealing with Cove until the transfer has been approved," Martin Heya, Commissioner for Petroleum in Kenya, which has no capital gains tax laws, told Reuters.

Energy minister Kiraitu Murungi said he hoped to negotiate a “fair amount” in taxes related to the transfer of the licences.

His refusal to approve the transfer of the stakes means PTTEP will have no legal authority to yet take Cove Energy's place as an oil and gas exploration venture partner.

PTT declined to comment to the wire service, while Cove Energy officials were not available.

Cove Energy is still operating as a small, private company in its seven blocks, and meeting its obligations as a licence stakeholder to fund exploration activities.

Heya said PTTEP has asked the government for a licence approval similar to that which the company negotiated with Mozambique when it was acquiring Cove Energy's assets in that country.

Cove Energy said before it was acquired that it would be subject to corporate income taxes in Mozambique on capital gains there at a rate of a tax rate of 12.8%.


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## smalltimer

*Kenya starts review of its oil and gas laws*
By JOSHUA MASINDE jmasinde@nationmedia.com
Posted Monday, November 19 2012 at 22:00

A review of regulations in the oil and gas sector has left the government in a precarious position in its bid to attract investors.

Speaking last week during an East Africa Energy and Gas summit in Nairobi, Energy minister Kiraitu Murungi said Kenya is moving to amend the Petroleum Exploration Production Act to align it with the present situation in the wake of oil and gas discoveries.

Some of the suggested amendments would see the National Oil Corporation (NOC) get 25 per cent interest in foreign firms operating locally.

A seasoned industry analyst who did not wish to be quoted said this will not go down well in the industry.

The analyst said the government should involve relevant stakeholders to put in place proper regulations that can support the sector through fair revenue sharing agreements and just terms of reference for operators, the government, and local communities.

Currently, there are two laws covering mining and the oil and gas sectors. The 35 per cent local shareholding is covered under the Mining Act (of minerals like gold and coal). A 25 per cent local shareholding structure is covered under the Petroleum Exploration and Production Act.

The Ministry of Energy has also had run-ins with some oil explorers over the terms of operations with proposals, say, 35 per cent stake in foreign mining companies be allocated to local investors, while 25 per cent stake in foreign oil and gas companies operating in Kenya go to Nock.

Recently, Norwegian Oil exploration company, Statoil, quit, citing unreasonable terms of operations in Kenya.
“If local shareholders match that in terms of required funds, then I see no problem with it,” Tullow Oil Kenya chief executive officer Martin Mbogo said.

He said that even if it was on a 50-50 per cent basis and the local investor has the capacity to raise the funds to equal the shareholding, there is nothing wrong with that.

Analysts have, however, questioned the capacity of local shareholders in capitalisation to acquire stakes in foreign oil and gas companies operating here.

Recently, the minister blocked the transfer of shares valued at Sh3 billion by an unnamed oil exploration company to a third party until issues of fair revenue sharing are ironed out.

Given fairer terms

AfricaOil Corporation chief executive officer Keith Hill, however, said that oil and gas companies that came into the market much earlier should be given fairer terms compared to those that came in afterwards.

This is because of the huge initial risks associated with earlier uncertainties of whether the country had oil or gas deposits that could be commercially viable.

On the proposed reviews of the Petroleum Exploration Production Act, the commissioner for petroleum at the Energy Ministry, Mr Martin Heya, said the government has already received money from the World Bank to enlist the services of a consultant to help in the review of the Petroleum Act. The Act, put in place in 1986, has had no reviews since then. 

“We shall talk to all stakeholders to get everything right from the start,” said Mr Heya. 

The reviews will cover licensing procedures, revenue sharing agreements between oil companies, central and county governments, and the local communities

http://www.nation.co.ke/Features/sm...as-laws/-/1226/1623726/-/2krilpz/-/index.html


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## smalltimer

*The Huge Risk-Reward Scenario in East Africa*
*By Jen Alic | Tue, 27 November 2012*

Welcome to East Africa””home of a potential 28 billion barrels of recoverable oil, 440 trillion cubic feet of gas and 14 billion barrels of natural gas liquids.

Recent success by Africa Oil (AOI-TSX; AQIFF-PINK)””the stock went from $2-$11 in just two months in the spring of 2012 on just one drill hole””has made East Africa the most exciting exploration play in the world right now.

But that excitement is tempered with some political instability, social conflict and a lack of energy infrastructure.
Still, this vastly untapped region is the fast-rising favorite for Canadian juniors. The obvious question is: Why?

The potential prize is too big to ignore:

• 5 billion in proven reserves in the Sudans and major discoveries elsewhere, with only a fraction of the potential explored
• Enough gas has been discovered in Mozambique to supply half of Western Europe for nearly a decade and a half””still, the country has barely been explored. 
• Recent offshore discoveries of some 33 trillion cubic feet of gas put Tanzania on the map, and the risk here is relatively low. Tanzania has a natural gas processing plant on Songo Songo Island, with a 70 million cubic feet/day capacity. It is also planning an LNG terminal.
• Uganda discovered more than 2.5 billion barrels of oil in the last decade. This year alone, it discovered more than 1 billion barrels.

The risks fall into three categories:

1. A lack of infrastructure””pipelines, processing plants and refineries. You can make a big discovery, but how do you get it to market and monetize it?
2. Government greed.
3. Social/tribal tensions.

Sudan is a good example. Blessed with an abundant oil supplies, authorities recently announced that the country would double production in the next 2-3 years. However, it will miss its 2012 production target of 180,000 bpd due to social conflict.

Still, Canadian juniors like Calgary-based Emperor Oil (TSX-V: EM) and Statesman Resources Ltd (TSX-V:SRR) remain optimistic in Sudan.

Emperor Oil was a pioneer in Sudan, and recently signed an MOU to acquire 85% of a 50% interest in the 10,000 sq km concession Block 7 in Sudan. The other 50% is owned by the state’s National Oil Company, Sudapet.
“East Africa wants oil development,” says Emperor CEO Andrew McCarthy. “Infrastructure is an issue, though Sudan is in much better shape than most here.”

Infrastructure in this part of East Africa should improve in the coming years, with the big project being the $24.7 billion Lamu Port-South Sudan-Ethiopia Transit corridor (LAPSSET). LAPSSET includes a massive pipeline that would carry South Sudanese oil for refining in Ethiopia and Kenya and give the entire region another oil outlet.

Is it feasible? Yes, but capital is always difficult for this area, and McCarthy points out that the capacity of the Sudan-South Sudan pipeline could go to 1 million bopd at a fraction of the costs. The good news””competition creates lower costs for everyone.

McCarthy added that the new wealth being created by energy companies is a strong incentive for the different ethnic groups in East Africa to work together. He points to Sudan and South Sudan breaking apart peacefully, and any skirmishes after the fact have been stopped quickly once the oil””and hence the money””stopped flowing.
“Rather than fight over existing production they have chosen to expand their resource development so that there is a larger pie to share."

Infrastructure is also the issue farther south in East Africa. Major energy producers are eyeing 130 trillion cubic feet of gas in the Rovuma basin offshore Mozambique, discovered by Andarko (US) and Eni (Italy). The government estimates there may be another 150 trillion cubic feet left to discover. Shell, ExxonMobil and Chevron are eyeing this as well.

But for now, there is no way to bring extracted gas onshore, no facilities to liquefy it and no infrastructure for export.

We’re talking about $20 billion in investment to build the necessary infrastructure.
And ironically, the phenomenal success of the some of the pioneering juniors causes another problem: the governments start changing terms.

Several years ago East African countries were luring foreign oil companies onto their territory with desperately attractive deals. This trend is changing. Recent reserve discoveries have empowered these nations to ask for more.
There is pressure on juniors to foot the bill for ambitious infrastructure projects. East African states want the juniors to speed up their plans””drill more wells; build pipelines””get the money flowing! It can put the juniors with limited resources in a difficult spot.

But again, The Prize is big enough that several juniors have been able to attract major oil companies into their play.
For its next licensing round in oil and gas, Kenya is planning to switch to bidding for exploration blocks, rather than its usual one-on-one negotiations. While more transparent, which is good for business, this also reflects the new impatience. Kenya is also planning to rewrite its energy policy to reflect its greater negotiating power as a result of recent discoveries.

In Uganda, potential is vast and exploration just getting underway, but regulatory challenges are mounting.
Uganda wanted its oil and gas investors to pitch in for a massive refinery in the western area of Hoima. For investors, it was an unnecessary project with unnecessary expenses. Foreign oil companies would rather see Uganda’s oil refined elsewhere, more cheaply.

With new exploration technology (FTG, 3D seismic) being used on relatively virgin reservoirs, there’s a lot of potential for big new discoveries. But there are definitely challenges for energy producers looking to move into this are.

However, the Size of The Prize trumps all””the huge capital gains enjoyed by shareholders of Africa Oil, and before them Heritage Oil (HOC-TSX), attest to that.

Investors should be watching this area to see who’s next.
By. Jen Alic of Oilprice.com

http://oilprice.com/Geopolitics/Africa/The-Huge-Risk-Reward-Scenario-In-East-Africa.html


----------



## smalltimer

*African heads reconsider regulatory framework to encourage localisation *

*By Samantha Moolman
30th November 2012 *

A power shift in Africa’s oil and gas indus- tries is foreseen over the next 25 years and, currently, most African governments are encouraging investment in local refining capacity to increase the manufacture of oil and gas products, says pan-African advisory firm africapractice strategic advisory services head Tom Wilson.

“There is obviously a demand for petroleum products in Africa but, proportionately, a limited amount of petroleum has been refined in country,” he points out, adding that pressure is also mounting on international oil companies to increase the number of local nationals within their staff.

Wilson highlights that oil-dominated Gabon, which has taken a clear, aggressive stance on localisation, has proposed legislation that demands an adjustment to the policy on executive recruitment in Gabon to favour Gabonese nationals, stipulating a 10% cap on foreign oil-sector workers.

This happened within a year of the inception of the Gabonese National Oil Company, or SNPG, which also implemented a new petroleum industry code last year to increase the transparency of industry regulations and product-sharing laws.

“These types of reforms have also been about investing in local refining capacity to ensure that a certain amount of crude oil is sold on site to the African market,” says Wilson.

He believes that countries like Gabon want to prevent a situation like the one in Nigeria, where local refining capacity is limited. Until this year, the Nigerian government had to pay out large subsidies to lower the price of imported petroleum products, despite the country’s role as the largest petroleum producer in Africa.

Wilson says Uganda’s project strategy for Lake Albert is another example of developing local refining capacity with the intent to supply oil to the East African community.

He mentions, however, that Uganda’s strategy was undermined by independent oil and gas company Tullow Oil’s discovery of Kenya’s first oilfield early this year.

Wilson explains that Uganda had been bank- ing on the prospect of selling petroleum products to the large Kenyan market.

“Early signals from Tullow Oil’s discovery indicate that Kenya’s oil might be of a better quality than the crude oil in Lake Albert, which makes it a more attractive commercial proposition given its closer proximity to the Indian Ocean coast.”

Wilson explains that, with the successful discovery of oil in Lake Albert in 2008, Uganda was hopeful and optimistic that it could learn from the mistakes of more traditional African oil producers, like Nigeria and Angola.

“It was hoped that Uganda would implement a regulatory framework that would oversee the equitable, successful and ultimately sustainable development of its oil finds. However, as a result of political interference and bureaucratic blockage, Ugandan oil regulation has not been imple- mented quickly enough. Consequently, the projects have not advanced as swiftly as was hoped,” he says.

Currently, with initial signs of successful oil finds in northern Kenya and gas finds in Tanzania and Mozambique, Uganda’s oil industry is no longer the unique industry it was four years ago.

Meanwhile, Kenya Permanent Secretary of Energy Patrick Nyoike announced last month that the country would review its tax rules so that Kenya might benefit from profits earned by foreign gas-exploration companies, having realised the inadequacy of existing regulations.

Uganda was unable to tax UK-based Heritage Oil after the company discovered oil in the Lake Albert basin in 1997, only to sell its exploration rights to Tullow Oil in 2010, booking $1.45-billion in profits.

The Ugandan government then issued Tullow Oil with a tax bill for $313-million as recoverable security payable to the Ugandan Revenue Authority.

As a result, Tullow Oil is attempting to recover this sum from Heritage Oil under the terms of the two companies’ strategic partnership agreement. The case should be heard in London early next year.

Nyoike told the press last month that this was why Kenya needed to act fast in terms of implementing adequate legislation required to protect its assets.

*Despite Kenya’s proactive attitude, however, Wilson says the East African country may struggle to fast-track production, and has not yet stipulated a projected timeline for development.*

Meanwhile, Lake Albert oil is still commercially viable, as a result of oil prices that have risen exponentially over the last ten years.

“Smaller and poorer-quality products that were previously not seen as commercially viable are now suddenly showing great potential,” says Wilson.

“People have recognised that, while the deposits in the gulf are still lucrative and the grade of oil incredibly high, single-market dependency is quite fragile, hence the drive into Africa.”

Wilson adds, however, that international companies look at Africa as a source of hydro- carbons to meet fuel demand elsewhere in the world owing to a lack of sufficient demand in Africa.

Edited by: Tracy Hancock

http://www.miningweekly.com/article...ramework-to-encourage-localisation-2012-11-30


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## wilto

For the savy investor.
[video=youtube_share;x3OaYAG2g1c]http://youtu.be/x3OaYAG2g1c[/video]


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## tech/a

Two things
What is and how can you identify a savvy investor.

What makes this stock recognizable as one for a savvy investor?


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## wilto

DYOR


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## tech/a

As I thought --- rhetoric.

I find the savvy label is often used to 
To soften the not so savvy into a sence
Of well---- opportunity when little exists.

Take the RED capital raising at $2.12
Described by one pundit as for the savvy
Investor.

Now .96c --- savvy eh.
PCL  may well become an opportunity and
When it does you won't have to be savvy to
Recognize it.


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## wilto

I posted it for any body who might be interested in reading it, Not some smart **** comment.


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## tech/a

I didn't think " savvy " was that smart ****---

DYOR to a perfectly normal question 
Yeh that's smart ****.


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## Boggo

wilto said:


> DYOR






wilto said:


> I posted it for any body who might be interested in reading it, Not some smart **** comment.




Are you commenting on your own comment, is that the smart ar$e comment you are referring to ?


----------



## smalltimer

More Takeover bids for Eastern Africa
Vancouver’s Vanoil Energy Acquires Avana Petroleum for C$15M
Posted on: December 03, 2012

Vanoil Energy Ltd., a Vancouver-based developer of oil and gas properties in Africa, has acquired British firm Avana Petroleum Ltd. for approximately C$15 million. Vanoil is a portfolio company of Canadian private equity investor Pinetree Capital Corp., which focuses on natural resource sectors.

PRESS RELEASE

Vanoil Agrees Non-Binding Terms To Acquire Avana

Vancouver, British Columbia – November 26, 2012 – Vanoil Energy Ltd. (“Vanoil”) is pleased to announce that it has entered into a non-binding heads of terms to potentially acquire the entire issued and to be issued share capital of Avana Petroleum Limited (“Avana”) from its shareholders (the “Sellers”) on a cash-free debt-free basis (the “Acquisition”).

Highlights:

•Non-binding heads of terms agreed for the Acquisition in a cash-free-debt-free share transaction
•If completed, will deliver a 10% interest in Kenya offshore block L9 with its partners Ophir and FAR Limited and a 25% interest in Seychelles Areas A and B with its partner Afren plc
•Supports Vanoil’s vision of becoming an emerging leader in East African oil and gas exploration
•Brings geological and geopolitical diversification to the existing onshore Vanoil portfolio
•Increases, at completion, Vanoil’s net recoverable mean unrisked prospective resources from 927 million boe to well over two billion boe
•Accelerates Vanoil’s exploration program, with two 3D seismic surveys and at least four drilling events scheduled for 2013 alone

Avana is a privately held Isle of Man company which holds a 10% working interest in Kenya offshore block L9 with its partners Ophir Energy plc (“Ophir”) and FAR Limited. Block L9 is a 5065 km² block located off the coast of Mombasa in the southern waters of Kenya; a region in which all of the neighbouring acreage is held by Total, Anadarko, BG, Apache, PTT and their respective partners. Block L9 lies directly to the south of block L8, on which Apache discovered gas in the Mbawa prospect earlier this year. The results of a 560 km² 3D seismic survey conducted in Q2 2012 suggest that the analogous Mbawa South prospect extends across the border of block L8 into L9, and a second 1536 km² 3D seismic survey conducted by Ophir in Q3 2012 illuminated potential oil prospects in a separate fairway spanning the southern half of block L9 and notably the Simba Graben. Ophir management presentations in October 2012 note that the estimated gross recoverable mean unrisked prospective resources on block L9 are 2.7bbbl/11.8 TCF of natural gas and that drilling will commence in 2013.

Avana also holds a 25% working interest in Seychelles Areas A and B with its partner Afren plc (“Afren”). Areas A and B comprise in excess of 14,000 km² in total and are located on the Seychelles plateau and adjacent zones in the northern waters of the Seychelles in a region where Amoco previously drilled three wells with hydrocarbon shows. Avana and its partner have acquired 8,500km of 2D seismic in the Seychelles (in addition to over 4,000km acquired by other parties over the blocks) and an extensive new 3D seismic survey is scheduled to commence in early 2013. Multiple oil seeps have been observed on Areas A and B, and tar balls of natural origin are abundant throughout the region. In August 2012, Afren’s management noted that the estimated gross recoverable mean unrisked prospective resources on Areas A and B are 2.8 billion boe and that drilling is due to commence in Q4 2013.

It is proposed that the consideration due to the Sellers will be CAD$15,000,000 (approx), satisfied by the issue to the Sellers of common shares in Vanoil. Deferred consideration of up to US$4,000,000 (approx.) may become payable in future, subject to certain conditions being satisfied in connection with the discovery of hydrocarbon on Avana’s offshore blocks. The Acquisition remains subject to the satisfaction of a number of conditions, including agreeing the form of and entering into legally binding documentation, formal acceptance by the Sellers, satisfactory due diligence being carried out, as well as the parties obtaining all necessary corporate and regulatory approvals which may be required.

It is proposed that Sam Malin, CEO of Avana, join the board of Vanoil upon completion of the Acquisition.

The potential Acquisition supports Vanoil’s vision of becoming an emerging leader in East African oil exploration. The underlying acreage to be acquired through Avana represents a complementary addition to Vanoil’s existing portfolio, bringing geological and geopolitical diversification. The combined company will hold blocks in four separate basins, two onshore and two offshore, spanning four of the most prospective hydrocarbon systems in East Africa. At the completion of this transaction, Vanoil’s net recoverable mean unrisked prospective resources will more than double, rising from 927 million boe to well over 2 billion boe. An active exploration program across the portfolio will also yield regular news flow, with two 3D seismic surveys and at least four drilling events scheduled for 2013 alone.

Aaron D’Este commented, “The vision of Vanoil’s Board of Directors is to provide a compelling proposition for investors committed to oil exploration in East Africa. The potential acquisition of Avana represents a very positive step towards this goal. In a single transaction, Vanoil could double its net prospective resources, reduce risk through diversification, and gain a host of well-known joint venture partners with extensive experience across Africa. We are also delighted that Sam Malin has agreed to join the Board of Vanoil upon completion and pleased to note that the share-for-share nature of the deal preserves our cash position. Overall, we are confident that the acquisition of Avana will prove to be a transformational event for Vanoil and its shareholders.”

Sam Malin of Avana commented, “The bringing together of Avana and Vanoil will create a uniquely focused East African exploration company with a wealth of regional experience. The transaction, once complete, will also meet Avana’s objective of providing its shareholders with a listing on an internationally recognised stock exchange.”

About Vanoil Energy Ltd.

Based in Vancouver, Canada, Vanoil is an internationally diversified resource company that has a comprehensive portfolio of oil and gas assets in the African countries of Kenya and Rwanda. In Kenya, Blocks 3A and 3B were acquired in October 2007 through the signing of a Production Sharing Contract with the Government of the Republic of Kenya. Blocks 3A and 3B, which cover 24,912 square kilometers, are part of the vastly under-explored Cretaceous Central African Rift Basin System. The Company is preparing to drill in Q1 2013 its first exploration well on its Kenyan concession. Vanoil’s is also the holder of 1,631 square kilometers of an oil and gas exclusive licence in the East Kivu Graben in Rwanda at the southern extension of the Albertine Graben where Heritage and Tullow Oil made their historic discovery in neighbouring Uganda.

http://www.pehub.com/175473/vanoil-energy-acquires-avana-petroleum/


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## smalltimer

*Tullow Oil surrender blocks - Kenya**

Scramble for oil blocks looms as firms give up sites 
By ZEDDY SAMBU - Posted Wednesday, December 5 2012 at 21:54*

Kenya faces a scramble for oil exploration blocks as majors led by Tullow Oil surrender five, paving the way for new investors.

Under the production sharing contracts (PSCs), the exploration firm must cede 25 per cent of their licensed acreage should they fail to do work on blocks after two years if the site is onshore or three years for offshore one.

This rule has prompted Tullow Oil to surrender two blocks while Anadarko of US, Afren Plc of UK and Statoil give up a block each.

In recent months, East Africa has been a centre of oil and gas exploration after several big discoveries, including Kenya’s second ever oil find announced by British explorer Tullow Oil and Canadian venture partner Africa Oil last week.

Licensing of the deep water offshore blocks at the Kenya coast has also been enhanced by discoveries along the coastlines of Tanzania and Mozambique.

Now, Kenya plans to gazette and the auction the new blocks that are expected to be snapped by other oil majors as demand for oil blocks in East Africa increases.

“It is prestigious to own huge blocks but the idea was for the oil companies to cede areas they were not presently working on,” said commissioner for petroleum Martin Heya.

“We have sent the maps of the blocks to the Survey of Kenya for re mapping. We are reconstituting and will gazette them into new blocks,” said Mr Heya on telephone.

All of Kenya’s mapped blocks have been awarded. Some of the latest entrants include French oil major Total and Eni of Italy. 

Industry consultant Mwendia Nyaga said PSC laws stipulate that companies release one quarter of their acreage over an agreed time frame.

Surrender of the blocks comes at a time that the ministry is planning to switch to bidding rounds to license its oil exploration blocks, moving away from one-on-one negotiations with firms as interest increases following a recent oil discovery.

“Medium-sized companies are asking for these blocks. They should wait until we produce coordinates for the blocks,” said Mr Heya.

Tullow Oil could give up a quarter of its territory in block 10BB, where it made its March oil discovery, as well as a quarter of block 13T. Both are onshore. Anadarko will also surrender parts of its five offshore blocks.

Norwegian oil giant Statoil has suffered a blow after Kenya expelled it from exploring oil for flouting contract terms. The company was among the latest entrants in the Kenya oil search that had attracted more than 24 players by August after it was awarded block L26 in the deep offshore and had planned to start drilling in January.

The Ministry of Energy expects explorers to drill at least a dozen more wells in the next 12 months onshore and offshore. 

Kenya aims to take a bigger slice of the profits from its natural resources exploration boom by seeking a 25 per cent stake in the production activities of oil and gas companies operating in the country. 

The proposal is one of many the government has put forward in the past month to increase the state’s take from oil and gas resources, including new capital gains tax rules, a more competitive licensing process and higher fees for petroleum explorers.

At present, most of the contracts with oil explorers give state-owned National Oil Corporation of Kenya a 10 per cent stake in the production business once commercial quantities of oil or gas are found. This means that the parastatal contributes 10 per cent of production costs and receives 10 per cent of profit

http://www.businessdailyafrica.com/...sites-/-/539550/1637556/-/nhm7hr/-/index.html


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## smalltimer

*Majors court kingpin Eni on Mozambique gas bonanza *

By: Reuters
11th December 2012 

MILAN - A year after Eni announced the largest discovery in its exploration history, a giant gas find in Mozambique, rival oil companies are falling over each other to get a piece of the action.

"It was clear from the start it was a major discovery that changed the ball game," a source close to the Milan-based company told Reuters.

And the find is getting bigger by the day, drawing interest from some of the world's largest energy players, many of which are coming late to the party in the world's most prolific area for new discoveries.

"Eni is in early talks with a few large players like Shell and Exxon, and, interestingly, a few large LNG buyers that could cover production and help speed final investment decisions," a source familiar with the matter said.

The Maputo government says the Rovuma field, home to the prospects discovered by Eni and Houston-based Anadarko off Mozambique's northern coast, boasts an estimated 150-trillion cubic feet (tcf) of gas.

Energy consultancy Wood Mackenzie classifies it as one of the world's biggest three gas basins.

The giant gas fields have showcased a part of the world some are calling the new Middle East. The pickings are so rich that East Africa's "new frontier" is now expanding north past Tanzania to *Kenya*, Ethiopia and even war-ravaged Somalia.

But it's Mozambique that has captured the imagination. Its deep waters are already peppered with rigs, and shiny new liquefied natural gas (LNG) plants will soon dot the coast to feed gas-starved Asian markets.

Four of the five largest oil and gas discoveries in the world this year have been made off Mozambique, including three by Eni, according to Wood Mackenzie.

"We reckon Eni and Anadarko are sitting on 85 tcf of recoverable gas, enough for multiple LNG trains, and we're probably only at the half-way stage," says Martin Kelly, head of the consultant's Sub-Sahara Upstream Research team.

The two LNG trains scheduled to be built in a first phase will liquefy 10-million tons a year, enough to meet almost 10% of gas demand in Japan, one of the biggest Asian markets.

"There's going to be a lot of competition and jostling for position and Eni with its size and experience could be a kingpin," says Kelly.

WAKE-UP CALL

Most of the world's big energy players have been late in waking up to East Africa and are now faced with the choice of either splashing out on new concessions or buying into operations that gambled on big finds.

France's Total, a deepwater specialist, recently bought into a Rovuma venture led by Malaysia's Petronas, while Shell lost out to Thailand's PTT in a $1.9-billion bid for Cove Energy, a partner of Anadarko in Mozambique.

"I remember this used to be a counter-consensus exploration play until the big finds came in last year. Just goes to show you can have all the right skills and a big budget and still miss the train," Bernstein energy analyst Rob West said.

Eni, Africa's biggest foreign operator, has 70 percent of the Mamba field it operates with Galp Energia, Korea's KOGAS and Mozambique's state-owned ENH in the Rovuma basin.

The field lies close to the Prosperidade acreage operated by Anadarko and junior partner Cove.

Both operators insist they won't know how much gas they've got until appraisal is complete next year. But already they are gearing up to sell down stakes to fund big investment plans and limit country risk in one of the poorest parts of the world.

Eni, which sees a long-term need for 10-12 LNG trains, has slapped a ballpark number on investments of around $50 billion.

Anadarko, with no LNG credentials of its own, is looking to sell a third of its 36.5 percent stake, while Eni is expected to sell off at least 20 percent of its holding for cash or assets.

"One option Eni is playing with is the idea of creating two sub-blocks - selling a majority stake in one and keeping a majority in the other," a source close to the situation said.

Milan broker Mediobanca says that, based on the Cove deal, Eni's 70 percent stake in Mamba field is worth $17.2 billion.

CHINA SUPPLY CHAIN

Mozambique's remoteness and lack of infrastructure means heavy spending will be needed on roads, railways and ports even before the new and expensive LNG terminals are built to liquefy the first gas expected in 2018-2019.

Finding skilled workforce will also be a challenge.

"If I were Eni I'd be looking at the emerging national oil companies. The Chinese can provide a supply chain and help boost returns," Banco Santander oil analyst Jason Kenney said.

Former BP head Tony Haywood has said a key benefit of his group's teaming up with China's CNPC in Iraq was access to the Chinese supply chain. China can deliver just about anything cheaper than elsewhere and not just rigs.

Together with India, Beijing is targeting Africa for natural resources to fuel its economy, and bypassing the volatile Middle East for energy supplies is particularly appealing.

Yet one banana skin for Eni could be what in the industry is known as "unitisation".

A lot of the gas discovered is thought to be one enormous field straddling the prospects of Eni and Anadarko. Eni has said a third of its 75 tcf of gas is exclusively within its block, while the rest is in a communicating area.

What that means is the two will have to sit down with the Maputo government to decide who is in charge and agree a plan to bring the gas to shore and build LNG plants and infrastructure.

"The challenge is that all of these projects have a lot of participants, and just coordinating between the operators and the participants within one consortium is probably quite a challenge," said Anne Fruhauf, director for Africa energy at consulting firm Horizon Client Access.

Talks are already under way, and while Eni and Anadarko claim relations are good, some are concerned the spoils at stake could create trouble.

"I've heard that Eni wasn't keen on working with Anadarko at all," one industry source said.

Edited by: Reuters

http://www.engineeringnews.co.za/ar...gpin-eni-on-mozambique-gas-bonanza-2012-12-11


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## smalltimer

13/12/2012 Morning Note 

*Pancontinental (PCL) – Is it too Obvious?*

Sometimes we cannot see the forest for the trees. In the case of PCL, we believe that the market has focused too much on the detail (or lack thereof) in relation to the Mbawa discovery well drilled a few months ago. The available detail being a small gas discovery at one of several prospective horizons when the expectation was large oil. The bigger picture that has been missed, in our view, is:

• This is a first up discovery in virgin territory and the first ever discovery offshore Kenya

• Reservoir quality is excellent

• Type II kerogen source rock mature for generation of gas and oil. This means that oil has been generated in the system and now the Apache led joint venture is tasked with determining where it is

• The deeper horizon was not intersected meaning that prospectivity at this level remains

The upshot of all of this is that a worst case scenario will be discovery of significant quantities of gas offshore Kenya over the next two years, with an upside case that includes oil. Majors and internationally renowned explorers such as Apache, Tullow, BG and Anadarko all believe in the oil story based on interpretation of likely differences in maturity of the source rock offshore Kenya vs that offshore Tanzania and Mozambique where large gas discoveries have been made with stunning success in recent years.

Given that drilling is about to commence again offshore Kenya we would expect that once this news penetrates the market, the share price should start to appreciate. Anadarko has announced, via the Kenyan Ministry of Energy, that it will be drilling two wells in blocks adjacent to PCL’s interests offshore Kenya, commencing in December. BG and Apache also have plans to drill multiple wells in 2013, for which PCL will have direct exposure through its ownership in blocks L8, L10A and L10B. A farm-out of PCL’s L6 block could also provide a catalyst.

Additionally, HRT will be drilling a well in a permit adjacent to PCL’s acreage offshore Namibia, where analysis has detected a strong incidence of surface seeps. This will is scheduled for spud in February 2013. Recent drilling offshore Namibia has not yielded commercial results; however, this well will be the first in the Walvis Basin, where the source rock is thought to be in the oil window in present day.

It is also likely that we will see an independent certified update on prospective resources across all or part of the portfolio. This has been an effective value creator for many other junior explorers.

PCL has cash at bank of A$39m so is fully funded for the forward work program and with an Enterprise Value of A$55m, it is comparatively cheap to other explorers that do not have proof through drilling of an active petroleum system, seal and reservoir. Risk has been decreased (but is still present – this is exploration after all), the upside remains intact and the share price has declined. This, in our view, defines the opportunity.

We do not officially cover PCL so there is no recommendation or price target but we would be surprised if the share price did not double over the next few months on speculation alone. Given that we believe that additional discoveries are likely offshore Kenya, we also can see a strong likelihood of a sharply higher share price by this time next year.

Disclosure:* the analyst has a beneficial interest in the shares of PCL*

http://www.argonaut.com/news/morning-notes/844-13-12-2012-morning-note.html

"we also can see a strong likelihood of a sharply higher share price by this time next year"
*It would have to just to get back to the level of the last share placement level !!!!*


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## smalltimer

*THE EAST AFRICAN*

*Kenya unveils new oil and gas licensing rules *

*By KENNEDY SENELWA Special Correspondent
Posted  Saturday, December 15  2012 at  17:19*

Kenya has announced new rules that will sharply increase licensing fees and introduce tough penalties for non-adherence to exploration schedules.

The changes include higher royalties and taxes, and revocation of mining and exploration licences of companies that do not keep to their exploration schedules.

The Ministry of Energy hopes to introduce the regulations under the reviewed Petroleum Exploration and Production Act by mid 2013, ushering in licensing bid rounds to award oil and gas exploration areas to prospecting firms. 

Energy Permanent Secretary Patrick Nyoike said the ministry has already filed the rules on competitive bidding for gazetting and the first round will be held in June 2013 after the creation of new exploration areas.

Acreage will now be awarded to the highest bidder who offers the best terms to the government and agrees to pay requisite fees. This exercise will be carried out publicly, replacing the current system where exploration rights are issued on a first-come first-serve basis.

“The amount of money paid to the government as a one-off commitment fee per exploration area by a prospecting firm before signing of production sharing contracts (PSCs) will be raised from $300,000 to $1 million to discourage speculators,” said Mr Nyoike in an interview.

“Bank guarantees, annual training fees for civil servants involved in petroleum activities and terms for new PSCs will be reviewed upwards as Kenya is no longer a frontier exploration area,” said Mr Nyoike.

Joining ranks

By introducing competitive bidding, Kenya will join the ranks of countries like Tanzania that already have the system. Uganda plans to have a bidding process as well.

With Kenya becoming a hot spot for oil, gas and mineral exploration, the country has in the past three years attracted millions of dollars in foreign investments.

Kenya also wants all foreign mining companies to cede 35 per cent shares to local investors and institutions. The rule, expected to be effected by March 2013, has triggered opposition from executives in mining firms doing business in the country. 

It comes as Australian consulting firm Hartleys projects that drilling activity will significantly increase offshore Kenya, with up to 10 wells expected in 2013.

In September, US-based oil and gas explorer Apache said it had struck 50 metres of net gas pay in Block L8, operated jointly with Origin Oil and Gas, which owns 20 per cent of the block, while Tullow and Pancontinental own 15 per cent each. Tullow has also found oil in two wells in northern Kenya.

Oil executives attending the Economist’s East Africa Summit in Kigali on December 7 cited government unpredictability as the biggest threat to doing business in the region. 

They argued that uncertainty surrounded the issue of whether explorers would enjoy revenues in the event of commercial oil and gas production and what amounts governments would set aside for them.

“The biggest threat to business is governments changing the goal posts. In our game, everything is a risk. Tax regimes and laws are changing overnight. To us, this is as risky as drilling a dry well,” said Tim O’Hanlon, Tullow Oil’s vice president for African business. 

“Sanctity of contracts is the only fixed point in a moving world ”” if it changes after you have taken the risk, that’s the nightmare scenario. We are worried about windfall taxes and governments raiding the industry,” he added.

The government has also resolved to start imposing capital gains tax when licensed firms transfer rights and interests of a PSC for an exploration area to third parties for monetary gain. 

Already, Kenya has declined to approve the transfer of the oil and gas exploration interests of Cove Energy Plc to a Thai state-owned company over a tax dispute. 

The Ministry of Energy said the approval will only be granted after Cove pays Kenya tax on proceeds realised from sale of seven offshore exploration areas to Thailand’s PTT Exploration and Production Public Company Ltd (PTTEP).

Kenya is seeking at least Ksh3 billion ($35.7 million) in tax from Cove over the sale. PTTEP in August agreed to acquire Cove’s 15 per cent stake in five exploration areas. Cove was also to cede 25 per cent and 15 per cent interest in two more blocks. The deal was valued at $1.8 billion.

The ministry will also be harmonising the Petroleum Exploration and Production Act with sections relating to fees and charges payable to county councils by prospecting firms under the Local Government Act. 

Kenya plans to raise the royalties on gold and diamond mining from three to five, and 10 per cent respectively of the minerals’ gross value.

Some analysts said changes in mining and exploration laws as well as prolonged contract negotiations could scare away firms planning to invest in the oil and gas business in the region. “The biggest worry among businesses is whether the laws are going to be made in an orderly and systematic way.

The new 35 per cent ownership requirement in Kenya for example is impractical,” said John Ngumi, Standard Bank’s head of coverage and investment banking for East Africa. “Government unpredictability has become a big issue in East Africa,” he added.

Mr Nyoike said the Act will provide for sharing of revenues with counties, besides compensation and resettlement of property owners affected by the development of production facilities.

“The ministry is committed to fast tracking the review of relevant petroleum statutes to make them conform to industry best practices,” said Mr Nyoike.

What it means

With the proposed laws, the Ministry of Energy will require a 50 per cent bank guarantee upfront and a 50 per cent parent guarantee by major oil companies. Small firms will provide 100 per cent bank guarantee to ensure well drilling and other programmes are carried out on time.

Hydrocarbons Management Consultants, an industry consultancy, said small firms that fail to meet work obligations will forfeit the guarantees to the government, meaning in future the sector is likely to be dominated by financially well endowed majors.

“As the industry develops, small firms are really going to feel the squeeze of raising capital to comply with work requirements or surrender acreage for award to competitors,” said Robert Shisoka Hydrocarbons’ lead consultant.

Smaller explorers with material acreage positions offshore Kenya are increasingly becoming targets for big companies, pointing to the likelihood of a fresh round of mergers and acquisitions in the lucrative oil exploration business.

Kenya’s Ministry of Energy is currently developing natural gas terms, which BG Group is waiting for in order to drill an exploration well in 2013 in offshore acreage L10A, and L10B in Lamu basin.

Kenya also wants to improve the content of local companies providing goods and services to exploration firms. Tullow Oil in 2011 spent $23.6 million on local suppliers, representing 23 per cent of its overall spending in Kenya.

“A key part of our business is in supporting development of Kenyan contractors and suppliers and ensuring as many jobs as possible are filled by local people,” said Tom Gray supply chain manager Tullow Oil Kenya

http://www.theeastafrican.co.ke/new.../2558/1644652/-/item/0/-/u52btcz/-/index.html


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## systematic

I have this as an extremely poor stock, only worth a short!  You are diligent in following it by the looks!  You must have a special interest in it?


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## Miner

systematic said:


> I have this as an extremely poor stock, only worth a short!  You are diligent in following it by the looks!  You must have a special interest in it?




Dear Systematic

Interesting comments. I am sure we all have some interests on stocks directly or indirectly when putting post. 
I have noticed ST has been consistent to bat in favour of PCL with factual information and minimum comments of his (assuming ST is a He)  own.

So please tell your story - why do you think PCL  a poor stock and against what benchmark ? What is your interest on PCL ?

My personal opinion PCL Apache connection is going to be a constructive partnership notwithstanding exploration is always a speculation.

My interest - I am a holder of PCL and did not sell even the price went sky rocketing because of the value I see with PCL stock.

Good part is after a long time some one other than ST commented PCL thread even it was raising concerns on his posting.

Thanks


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## systematic

Miner said:


> Dear Systematic
> 
> Interesting comments. I am sure we all have some interests on stocks directly or indirectly when putting post.
> I have noticed ST has been consistent to bat in favour of PCL with factual information and minimum comments of his (assuming ST is a He)  own.
> 
> So please tell your story - why do you think PCL  a poor stock and against what benchmark ? What is your interest on PCL ?
> 
> My personal opinion PCL Apache connection is going to be a constructive partnership notwithstanding exploration is always a speculation.
> 
> My interest - I am a holder of PCL and did not sell even the price went sky rocketing because of the value I see with PCL stock.
> 
> Good part is after a long time some one other than ST commented PCL thread even it was raising concerns on his posting.
> 
> Thanks




Oh I was just surfing the recent posts on stocks, took a look at this one and made the comment - all good.
I just noted that ST was being diligent in following it and wondered if they had a particular reason or story to share.  I have no interest in PCL, and have never owned it (just for disclosure).

My benchmark / personal opinion simply came from my value and momentum ratings on this stock.  Essentially that means I just don't think it's shown any strength and I think it's expensive is all.


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## smalltimer

*Hi Guys,  (Systematic & Miner)*

Sorry that I did not get back to you earlier but busy with Christmas stuff etc.

Yes I do hold PCL shares, why would I be interested in PCL otherwise? PCL is the only stock that I own and post about. Currently holding around 3mil shares but try and buy/sell with the ups and downs. Not to make money as such at the moment but trying to build up my holdings for the long term. I’ve been working in the Oil Game for over 30 years working mainly on Offshore Platforms, but nothing to do with Pancontinental. 

I got interested in this stock back in October 2010 while I was working in Singapore and a few of the guys on my job were talking about it. Got in at around 3.5 cents at that time and have followed the highs and lows since.

I try and post articles that show and highlight the Pro’s and Con’s of the stock and I think if you look back on my postings you will see that. It is hard enough out there with the Extra fast electronic trading, the BOT’s not to mention the Brokers that take us for a ride and the high commission fees we have to pay in Australia to trade, and to top it off, if we make a buck, Tax on our profits, without people only posting good news trying to bump the stock up for their own gains. I find a lot of that on the HOTCOPPER PCL forum. 

This is a high risk stock, no two ways about that, but if it ever comes off, the gains will be 10 fold plus. This stock is not for someone to invest their retirement savings in, but if you have a bit of spare cash, I like their holdings and what they are up to, also what is going on in East Africa in general. The potential is certainly there. The trick is (as Kenny Rogers put it) you have to know when to hold them and know when to fold them. No one can tell you when those times come, it is up to you.

All the best guys and a Merry Christmas/Happy New Year to all. 

*************************

*Eni-Anadarko African LNG Plant to Be World’s Second-Largest*
By Eduard Gismatullin & Yuriy Humber - Dec 21, 2012 7:48 AM 

Italy’s largest oil company and Anadarko will coordinate development of gas fields and cooperate in the construction of the plant in the Cabo Delgado province of northern Mozambique, which could have an eventual capacity of about 50 million tons a year, The Woodlands, Texas-based company said today in a statement. That would make it the largest LNG plant outside Qatar, the world’s biggest exporter of the fuel. 

Mozambique’s offshore fields may hold as much as 250 trillion cubic feet of gas, enough to meet world consumption for more than two years, according to national oil company Empresa Nacional de Hidrocarbonetos. Companies such as Royal Dutch Shell Plc (RDSA) and Total SA (FP) have indicated an interest in joining projects in East Africa, while both Anadarko and Eni have said they may sell some of their assets in Mozambique to cut costs. 

The agreement will “lead to a unitization agreement to further facilitate the efficient development of the common resources, as well as the independent reservoirs on both blocks, enabling enhanced economies of scale through shared infrastructure and facilities,” Anadarko Chief Executive Officer Al Walker said in the statement. 

Mozambique is competing with neighbor Tanzania to produce East Africa’s first LNG. Statoil ASA (STL) and Exxon Mobil Corp. (XOM) today announced the third gas discovery in the Lavani-2 well off Tanzania. 

Africa Rises

“If the recent discoveries of natural gas are confirmed, Mozambique will rank fourth in the world for natural-gas reserves -- behind Russia, Iran and Qatar,” Marin Katusa, an analyst at Casey Research LLC, wrote in a report released this week. “It’s not far-fetched to imagine that Africa -- not the Middle East -- will be the most important energy producer for the world in 2040 or even 2030.” 

Eni and Anadarko will have “separate yet coordinated offshore activities,” in both Area 4, operated by Eni, and Area 1, operated by Anadarko, the Italian company said in a separate statement. They “will jointly plan and construct common onshore LNG liquefaction facilities.” 

BG Group Plc (BG/), which also explores for gas in Tanzania, may join forces with the Statoil-led venture to build a unified LNG plant in the African nation. At the same time, Petroleo Brasileiro SA (PETR4) of Brazil plans to sell its assets in Tanzania where it explores with Shell. 

Awarded Contracts 

Anadarko and Eni awarded front-end engineering and design contracts for both onshore LNG construction and offshore installation, the U.S. explorer said. Technip SA (TEC), a venture between Subsea 7 SA (SUBC) and Saipem SpA (SPM), and McDermott International Inc. (MDR) together with Allseas USA Inc. will design the offshore infrastructure. 

The LNG engineering will focus on production units, also called trains, with a 5 million-ton-a-year capacity, according to Anadarko. The plant’s gas supply will be split evenly between the Anadarko-led project and Eni’s development, Mitsui & Co. (8031), a partner in Anadarko’s project said today in a statement. 

Bechtel Group Inc. and ventures between JGC Corp. (1963) and Fluor Corp. (FLR), and Chicago Bridge & Iron Co. and Chiyoda Corp. (6366), will design the LNG plant, according to Anadarko. 

The Eni-led venture holds about 23 trillion cubic feet of gas “exclusively” in its Area 4, the company said Dec. 5. The Rome-based company in October said it has been examining plans for a separate development of this resource, including a possible floating LNG plant or a compressed natural gas facility for exports to neighbor countries. 

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net Yuriy Humber in Tokyo at yhumber@bloomberg.net 

http://www.bloomberg.com/news/2012-...rld-s-second-largest-lng-plant-in-africa.html
Good luck with your trading. ST   (yes male )


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## smalltimer

Oil and Gas: *East Africa’s race to get ready*

The reserves already discovered will make East Africa one of the next gas frontiers. Companies are waiting for policymakers to determine priorities and incentives before they can settle on investment plans.

Fast forward to 2020. The deep waters off the coasts of Tanzania and Mozambique are teeming with rigs: drilling, extracting and transporting gas from the Mafia and Rovuma basins. Shiny new liquefied natural gas (LNG) plants, where the gas is cooled before being shipped to markets in Asia, are dotted up and down the coast.

But just as oil majors such as Royal Dutch Shell, BG Group and Petrobras are looking to buy stakes in the gas fields, the region’s governments are still un- decided about the policy regimes they want. Nothing is set in stone. Final investment decisions, even for the most advanced of the new developments – such as US firm Anadarko’s planned LNG plant in Mozambique – are due next year. Political wrangles could derail those plans at any time.

The scale of the finds so far – and their position close to gas- hungry Asian markets – is attracting big money. In July, Thailand’s state-owned PTT Eploration and Production beat back a bid from Shell to buy Cove Energy – an Irish company with an 8.5% stake in Mozambique’s Rovuma area 1 block – for $1.9bn in August. Looking to cash in, Indian telecoms tycoon Venugopal Dhoot, whose Videocon Industries owns 10% of the same block, is now eagerly searching for a buyer.

Frontier Zone Spreads

Since March, Italy’s Eni has been trying to bring in a partner to take 20% of its 70% stake in Rovuma Basin’s Area 4. In August, Eni upped its estimates for the size of the field to 2trn m3 of gas. Although Shell and BP are reported to be sniffing around, an analyst close to the matter told The Africa Report that Eni is now looking for an emerging market partner. Early September also brought the first signs that the gas boom could stretch into Kenyan waters. Tullow and Australia’s Pancontinental announced they had encounters gas, though not the oil they sought.

Inaugurating a new 107.5MW power station in July at Ressano Garcia, Mozambique’s President Armando Guebuza said coal and gas finds would become “preponderant factors” in the country’s industrialisation. He has also called for patience. In its medium-term gas market report, the International Energy Agency (IEA) says gas production from Africa, excluding Algeria and Egypt, will increase from 62bn m3 per year in 2011 to 94bn m3 by 2017. Little of this growth is likely to come from East Africa, where even the most optimistic estimates do not predict production starting before 2018.

Companies with stakes in the new gas finds are doing feasibility studies and working out the cost of constructing liquefied natural gas (LNG) plants, known as trains. A recent surge in the cost of several ambitious Australian LNG projects is pushing analysts to talk up East Africa as a cheaper alternative. Companies are also scouting around for offtake agreements. Anne-Sophie Corbeau, a senior gas analyst at the IEA, believes final investment decisions will not be reached “without some longterm contracts attached, at least covering half or two-thirds of production”. So far,there are none.

35% Expansion of domestic gas use in Africa from 2011 to 2017, according to the IEA’s projections

At this stage, timing is everything, says Nicolas Bonnefoy, a partner at law firm Ashurst who specialises in gas policy. “If the underlying governing regime were not to be ready in time, it may work as a deterrent for investment in a particular country,” he says.

In Tanzania, there is already confusion over a fourth licensing round for nine offshore blocks that was scheduled to begin in September. The energy ministry instructed the Tanzania Petroleum Development Corporation (TPDC) to cancel it and wait until parliament can ratify a new gas policy in October.

If Tanzanian politicians succeed in their plans, power plants will be prioritised. In July, mines minister Sospeter Muhongo said the government would invest $598m in gas-powered electricity plants in 2012-2013 to alleviate power shortages. MarnÃ© Beukes, energy analyst for sub-Saharan Africa at IHS Energy, thinks Tanzania is “definitely going to increase its royalties”, which currently stand at 5% for deepwater finds, and establish signature bonuses for future contracts.

In the current environment, producers and public entities are already in conflict. Orca Exploration, the first company to operate a gas-to-electricity operation from the Songo Songo fields, is mired in a dispute with the government over arrears and the destination of gas supplies.

The Chama cha Demokrasia na Maendeleo party has voiced concerns that the lack of gas legislation will mean that Tanzania’s age of gas could bring a new wave of corruption. Deputy leader Zitto Kabwe told parliament in June that he has evidence that money from the sale of gas licences between 2004 and 2006 ended up in Swiss bank accounts. He is calling on a moratorium on new licences until the gas masterplan is finalised.

Political Pauses

Politics has already intruded into offshore exploration. Shell is still waiting to begin exploration on four offshore blocks it won in 2002 off the coast of Zanzibar. A dispute between the island and the mainland over revenue sharing has led to a stalemate. A Shell spokesman told _The Africa Report_ there was no progress on negotiations over the blocks.

There is also uncertainty about whether the Tanzanian government will invest in the construction of an LNG plant. Charles Mwijage, a parliamentarian from the ruling Chama cha Mapinduzi party, says that the government’s contribu- tion to an LNG plant “depends on the economic quantity of the gas discovery”.

Some promising policy ideas are emerging, including signs the TPDC wants to persuade gas explorers – notably BG Group and Statoil – to team up to build a single LNG train. A spokesman from Statoil, which found 253bn m3 of gas with part- ners ExxonMobil in Tanzania’s off- shore block 2, said it had a “sound dialogue” on this possibility and was “currently in the early phase of evaluating the concept selection for a possible LNG plant.”

$175m Tax received by Mozambique government after sale of Cove Energy to Thailand’s PTTEP

In Mozambique, the government held a public discussion in early September on the Norwegian government and World Bank-funded Petroleum Governance Initiative’s recommendations for a natural gas masterplan. The study indicated that the government could earn $5.2bn per year from gas by 2026, with enough gas to support 10 LNG trains.

The gas finds in Mozambique – of some 2.8trn m3 – are already yielding rewards for the state, which announced it received $175m by applying a 12.8% tax on profits on the Cove sale. Beukes says the government is keeping its thinking “close to its chest” and suggests that state-owned Empresa Nacional de Hidrocarbonetos (ENH), could look to increase its stakes to as much as 40% in new gas finds. ENH currently has 10-15% stakes that are carried through the exploration phase by the developers.

Without state-owned gas monoliths like those of Algeria and Qatar driving the pace of development, coordination will be key to East Africa’s gas policy regimes. Domestically, question marks remain over whether governments will incentivise companies to team up or to build pipelines. The mechanics of local gas markets will also determine investment decisions. Internationally, gas prices are still a big unknown. The South African cabinet’s decision in early September to lift a moratorium on fracking for shale gas in the Karoo could also alter plans to target South Africa for exports.

However, perhaps the biggest test for the region will be meeting the needs for qualified gas engineers and technicians come 2018. With Uganda’s oil finds and exploration heating up along the Rift Valley into Kenya and Ethiopia, East Africa must act fast to provide the companies with a well-trained cohort – or miss out on jobs

http://abdas.org/?sn=oil-and-gas-east-africas-race-to-get-ready


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## systematic

smalltimer said:


> *Hi Guys,  (Systematic & Miner)*
> 
> Sorry that I did not get back to you earlier but busy with Christmas stuff etc.
> 
> Yes I do hold PCL shares, why would I be interested in PCL otherwise? PCL is the only stock that I own and post about. Currently holding around 3mil shares but try and buy/sell with the ups and downs. Not to make money as such at the moment but trying to build up my holdings for the long term. I’ve been working in the Oil Game for over 30 years working mainly on Offshore Platforms, but nothing to do with Pancontinental.
> 
> I got interested in this stock back in October 2010 while I was working in Singapore and a few of the guys on my job were talking about it. Got in at around 3.5 cents at that time and have followed the highs and lows since.
> 
> I try and post articles that show and highlight the Pro’s and Con’s of the stock and I think if you look back on my postings you will see that. It is hard enough out there with the Extra fast electronic trading, the BOT’s not to mention the Brokers that take us for a ride and the high commission fees we have to pay in Australia to trade, and to top it off, if we make a buck, Tax on our profits, without people only posting good news trying to bump the stock up for their own gains. I find a lot of that on the HOTCOPPER PCL forum.
> 
> This is a high risk stock, no two ways about that, but if it ever comes off, the gains will be 10 fold plus. This stock is not for someone to invest their retirement savings in, but if you have a bit of spare cash, I like their holdings and what they are up to, also what is going on in East Africa in general. The potential is certainly there. The trick is (as Kenny Rogers put it) you have to know when to hold them and know when to fold them. No one can tell you when those times come, it is up to you.
> 
> All the best guys and a Merry Christmas/Happy New Year to all.
> 
> *************************





Thank you, I enjoyed reading that.  Yes it can be a lot of fun following a stock very closely.  Was in the mining game myself and not only observed a 20-bagger (for some, it was a 50-bagger), but also enjoyed following the various tips that would go around.  One guy I knew...worked in services to mines and travelled about the country a lot.  Every now and then - when he believed the "good thing" going around actually sounded like a good thing, would put down the equivalent of a few months wages.  He'd done well over time.  One time he got a ten bagger or somesuch and bought a house somewhere in QLD (can't remember where).  Nice result from a single trade!  The characters that you meet make it worthwhile, that's for sure!


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## smalltimer

Kenya: *Oil Expectations Rise in 2013*
By Solomon Kirimi, 28 December 2012

Kenya has no confirmed oil deposits yet but the year 2012 will remain the best for Kenya's quest to join the league of oil producers.

For a country which a year ago had no reason to think of ever becoming an oil producer, two wells at appraisal stage in Northern Kenya and gas finds at the coast is exciting.

It all started on March 26th of 2012, with the announcement that Ngamia-1 oil well in Lokichar area of Turkana in the Rift Basin had 20 metres of net oil pay.

Tullow Oil made the announcement that the Ngamia-1 exploration well, located in Block 10BB, had then been drilled to a depth of 1,041 metres, within which light waxy crude was discovered.

"This is an excellent start to our major exploration campaign in the East African rift basins and to make a good oil discovery in our first well is beyond our expectations and bodes well for the material programme ahead of us," said Tullow Exploration Director Angus McCoss, We look forward to further success as seismic and drilling activities continue to gather pace."

Two months later the Ngamia-1 well encountered oil and gas shows over a gross interval of 140 metres from a depth of 1,800 metres to 1,940 metres.

"God can not be so unfair to give our neighbor oil and gas and leave Kenya with nothing," energy minister Kiraitu Murungi said in reference to oil discoveries in Uganda, huge gas deposit find in Tanzania and the already oil producing Sudan.

The discoveries by Tullow suddenly the interest in exploration of in Kenya were revived just over a half a year after being dampened by the exit of Chinese explorer CNOOC from Isiolo in October 2012 after finding just traces of gas.

The Isiolo Boghal-1 well in block 9 well was plugged and abandoned because the gas was deemed to be of no commercial value.

"If the gas was of commercial value, Kenya would have received a lot of interest for exploration blocks," The then discouraged Energy permanent secretary Patrick Nyoike said.

CNOOC had sunk $26 million (Sh2.2 billion) to drill the well to a depth of 5,085 metres and quit before reaching 5,556 metres initial target.

CNOOC partner in the initial venture African Oil have now partnered with Marathon Oil to re-open the well following the successes by Tullow oil up north.

The lucky streak by Tullow oil followed them offshore to Mbawa1 in Lamu basin where 50 metres of net gas pay was found.

Tullow is a minor shareholder in the block L8 with Amerca's Apache corporation, Austalia's Pancontinental. Although the gas find was not of commercial value and was plugged, this increased the appetite for explorers with prospects looking good for presence of oil and gas of the Kenyan coast.

Tullow Oil's good run of results followed them to Twiga South-1 exploration well in Block 13T where in late November they encountered oil, confirming a rush announcement by partners Africa Oil Corp on October 26 2012.

Tullow Oil plc announced that the Twiga South-1 exploration well drilling had encountered 30 metres of net oil pay. A further potential of a gross interval of 796 metres net pay is to be assessed before being declared.

The finds have now moved Kenya from a high risk exploration country to high value target for world majors looking for a piece of the action in a region promising to be latest exploration frontier.

http://allafrica.com/stories/201212281070.html


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## smalltimer

East Africa: 
*Energy Boom At Risk*
Posted December 30th, 2012
by Editor in AllAfrica   

As giant oil and gas discoveries have some of the world’s biggest energy firms jostling for space in East Africa, the fate of one gas producer offers them a cautionary tale.

After investing $160 million in Tanzania, an offshoot of Canada’s Orca Exploration (ORCb.V) is close to paralysis because of unpaid bills and quarrels with authorities over terms.

Its story highlights some of the obstacles facing much bigger players as they negotiate with governments that are learning the game as they go along and are keen to both bring investment quickly and make sure they do not get cheated long term.

The speed with which East African countries adapt could determine whether their region lives up to its reputation as the latest great oil and gas frontier, with big implications for global energy flows as well as regional economies.

On the face of it, relations between Orca’s PanAfrican Tanzania and authorities in the East African country should work to everyone’s benefit.

Its gas generates half Tanzania’s electricity, saving it an estimated $1 billion a year on oil imports. When it started producing gas in 2004, it was hailed locally as just the sort of investment one of the world’s poorest countries needed.

But things started to unravel in 2011 when a government audit led a parliamentary committee to accuse PanAfrican of cheating it out of $20m in revenues. Meanwhile, state power firm TANESCO, its biggest customer, stopped paying for gas.

Threats that went as far as criminal charges were quietly dropped when it turned out the missing funds were due to an accounting error, but then a new discrepancy was announced.

Although the parliamentary committee behind the accusations was disbanded and itself accused of corruption, the government said it still wanted to negotiate with PanAfrican on how gas revenue was shared, among other things.

Last month, Orca told shareholders the company still hadn’t reached an agreement with the country’s Minister of Energy and Mines and that it might need extra funding as things drag on.

One of the government negotiators, Gabriel Bujulu, principal petroleum engineer at the Tanzania Petroleum Development Corporation said simply: “It is premature to expect that a solution will not be attained.”

Both Orca and PanAfrican declined further comment.

“NEW MIDDLE EAST”:

Changes to terms by governments seeking more money are nothing new for resource companies, but no matter how well-intentioned, they scare executives and investors.

“As discoveries are made and it becomes clear the size of the prize you can start to see political pressures to change the terms after the fact,” said GH Securities analyst John Malone, who studies East Africa’s energy sector.

Recent gas finds off Tanzania and Mozambique have led to predictions the region could become the third largest exporter of natural gas on the planet.

It could have 28 billion barrels of oil, 440 trillion cubic feet (12 trillion cubic meters) of natural gas and 14 billion barrels of natural gas liquids, according to a recent assessment by the US Geological Survey.

Back of the envelope calculations at today’s prices suggest the prize from oil and gas alone could be more than $9 trillion.

“We are becoming the new Middle East,” proclaimed Kenya’s energy minister Kiraitu Murungi after it licensed all its production blocks and began turning would-be investors away.

First, East African countries have to bring in the investment – convincing energy firms they are safe for the billions of dollars needed in light of other risks from political instability onshore to Somali piracy off the coast.

The scale of future projects would be in a different league to Orca’s operations.

Companies with at least a stake in East African concessions include many of the world’s biggest private energy firms, including ExxonMobil (XOM.N), Royal Dutch Shell (RDSa.L), Italy’s ENI (ENI.MI), France’s Total SA (TOTF.PA).

None of the officials, executives and industry analysts that Reuters spoke to expected East African states to pursue all-out energy industry nationalisation. Most thought there was a good chance they could move the goalposts.

That could scare other firms off, said Duncan Clarke, chairman of oil and gas consulting firm Global Pacific Partners.

“There’s 150 countries they can be working in,” Clarke said.

The trials of Britain’s Tullow Oil (TLW.L), whipsawed by government demands in Tanzania’s neighbour Uganda, make for another lesson for energy firms.

First, it had to pay an unexpected $300 million tax bill after its acquisition of rights. Now, it is at odds with the government over the size and economic feasibility of a refinery Ugandan officials want to process at least some of the crude.

All Uganda wants to do is secure the best deal for its people, Ugandan energy minister Irene Muloni told Reuters.

UNPREPARED:

Although quick deals might get the money moving, there is a greater risk they will not give a country all it wants or raise accusations of corruption.

“We are not prepared for an expansion of exploration,” Tanzanian opposition parliamentarian Kabwe Zuberi Zitto wrote on his blog, calling for a 10-year moratorium on issuing new exploration licenses.

Although officials in Mozambique say they are confident of their policy, critics say the latest 17-page petroleum law does not protect its economic or environmental interests well enough.

“They need to negotiate harder. They shouldn’t be selling out,” said Jenik Radon of Columbia School of International and Public Affairs, who has been advising the government.

Donors have urged both Mozambique and Tanzania to hold off on licensing more blocks for exploration until contracts are made transparent and better terms have been put in place.

Tanzania has enlisted help from Trinidad and Tobago – held up as an example of how a small country can get the best deal for its gas.

With elections over the next three years in both Tanzania and Mozambique, governments are also likely to feel pressure for more populist moves to squeeze foreign companies.

But regardless of the possible tangles for the world’s oil firms, there will be many ready to take a chance, said Keith Hill, whose Africa Oil Cop. (AOI.V) is exploring in Kenya and the politically unstable Hon of Africa.

“No guts, no glory,” he said.

http://afragenesis.net/east-africa-energy-boom-at-risk/


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## smalltimer

*$18.5m rights issue to fund oil projects*

*By KENNEDY SENELWA Special Correspondent 
Posted Saturday, January 5 2013 at 15:51*

US-based ERHC Energy has kicked off a rights issue to raise about $18.5 million to fund its oil and gas operations in African countries like Kenya.

Executives at ERHC Energy ”” a publicly traded firm with largely Nigerian ownership ”” said the money raised through the offer that kicked off last week will fund a survey to define the geology of exploration area 11A in north western Kenya as well as work activities in Chad.

The main surface of acreage 11A located on the Lotikipi plain is similar to the Abu Gabra Rift basins of southern Sudan, which are established petroleum provinces, suggesting high oil and gas prospects.

“Kenya is at the intersection of two major rift systems ”” the Cretaceous Central African rift and the Tertiary East Africa rift ”” and we are very excited that our block’s location enables us to exploit the high potential for hydrocarbons in the region,” said ERHC exploration manager Gertjan van Mechelen.

The offer which opened on December 28 closes on January 31. The company is offering 246,486,285 shares each at $0.075

International firms exploring for oil in East Africa have been on a capital raising spree over the past six months including bringing in new partners.

Each shareholder is entitled to buy one share for every three ERHC stocks held. 

In November, Ophir Energy began identifying a partner to drill oil and gas wells along the coast of East Africa, while Vanoil Energy planned to raise at least $30 million to fund exploration works in Kenya.

Kenya ushered in 2013 with two oil and gas wells expected to be sunk in Lamu in a fresh round of drilling activity which is projected to significantly increase in the next 12 months. 

Anadarko Petroleum Corporation said it would sink two oil and gas offshore wells in Lamu, on the Coast of Kenya this January. 

Kenya expects the drilling of eight more wells later in the year as BG Group, Afren Plc, Ophir Energy, Africa Oil Corporation and Vanoil Energy among other firms intensify their search for hydrocarbons in what oil and gas experts said could greatly transform global energy flows. 

Analysts led by Australian consulting firm Hartleys, project that drilling activity will rise in offshore Kenya with up to 10 wells expected in 2013. 

More discoveries 

Firms are expected to increase investment as competition in Kenya, Uganda, Tanzania and Mozambique for acreage tightens on the back of discoveries. 

Kenya’s status of frontier exploration area changed this year with the discovery of oil in Turkana county and gas offshore in Mbawa well.

http://www.theeastafrican.co.ke/bus...jects--/-/2560/1658246/-/hpivsxz/-/index.html


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## smalltimer

*Kenya set to auction five oil, gas blocks as new rules take effect *

By KENNEDY SENELWA Special Correspondent
Posted Saturday, January 5 2013 at 18:14 

In Summary

•	Ministry of Energy will in the coming weeks publish the new three offshore and two onshore acreages in the Kenya Gazette upon completion of the demarcation of exploration areas surrendered by two licensed companies ”” Anadarko and Tullow. 
•	The five new blocks will increase Kenya’s exploration areas to 51 from the current 46 and the auction is expected to trigger a fresh jostle among oil exploration majors keen to tap into Kenya’s oil and gas business. 
•	Kenya will pocket at least Ksh425 million ($5 million) from the sale of the five blocks. l 

This year starts off with good news for oil explorers: Kenya will in the next two weeks gazette five new crude oil and gas exploration areas to be offered to prospecting firms through competitive bidding.

The blocks fell vacant following the announcement late last year of new rules requiring exploration firms to cede 25 per cent of their licensed acreage if they failed to work on the sites in the stipulated time.
Energy Permanent Secretary Patrick Nyoike said the Ministry of Energy will in the coming weeks publish the new three offshore and two onshore acreages in the Kenya Gazette upon completion of the demarcation of exploration areas surrendered by two licensed companies ”” Anadarko and Tullow. 

Anadarko Petroleum Corporation gave up offshore areas L5 and L7 in Lamu basin while Tullow Oil Plc surrendered area 10BB and 13T in northwestern Kenya. The demarcation is being undertaken by the Survey Department.

The five new blocks will increase Kenya’s exploration areas to 51 from the current 46 and the auction is expected to trigger a fresh jostle among oil exploration majors keen to tap into Kenya’s oil and gas business, which has in the past year attracted huge interest among explorers following two finds. Of the 46, only one is yet to be leased out after negotiations for a production sharing contract between Kenya and Statoil of Norway failed in December.
With the Ministry of Energy’s one off fee of $1 million per exploration area, Kenya will pocket at least Ksh425 million ($5 million) from the sale of the five blocks. 

According to Mwendia Nyaga, the lead consultant of Oil & Energy Services, the amount would be “in addition to other charges. But in open bidding the amount could be less or more.”

It will be the first time Kenya will be allocating oil and gas blocks through an auction, one of the changes introduced in the new rules requiring that acreage is awarded to the highest bidder who offers the best terms to the government and agrees to pay requisite fees. 

The auction will be publicly done, replacing the current system where exploration rights are issued on first come first serve basis. 

The regulations, being rolled out this year, sharply increase licensing fees and introduce tough penalties on exploration schedules. 

Other changes include more royalties, increased taxes and revoking of mining and exploration licences of companies that do not keep to their exploration schedule, as the country sought a bigger slice of the profits from a boom in the oil, gas and minerals exploration business.
According to Nyoike, “Firms are expected to retain portions of acreage deemed most valuable to them and surrender 25 per cent of original contract area at or before end of the initial exploration period of three years.” 

Licensed firms must also surrender obligations of 25 per cent of remaining contract area at or before the end of first additional exploration period of two years under PSCs signed with the Kenyan government.
Mr Nyoike said the five new areas will be offered to prospecting firms in first half of 2013 through competitive licensing bid round for acreage to be awarded to highest bidder who offers the best terms to the government.

http://www.theeastafrican.co.ke/new...n-blocks/-/2558/1658320/-/qg3yhp/-/index.html


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## smalltimer

Nice little kick today...


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## smalltimer

*Kenyan Oil, Hot and Getting Hotter: *

Interview with Taipan’s Maxwell Birley
By James Stafford, Mon 14 January 2013 23:21

Kenya has become the hottest oil and gas venue in East Africa since big discoveries were made in the country’s virgin oilfields last April. All eyes are on Kenya in 2013 to see how quickly and economically they can develop those discoveries into production.

Nairobi based Taipan Resources Inc. (TPN-TSXV; TAIPF-PINK) is the 4th largest acreage owner in Kenya, and is getting ready to carry out seismic on Block 2B. They recently attracted Maxwell Birley as CEO. Mr. Birley has been instrumental in discovering more than 2 billion barrels of oil equivalent in his 30-year career””much of it in Africa and Asia.

In an exclusive interview with Oilprice.com, Taipan CEO Maxwell Birley discusses:

• Why Kenya is the hottest venue in East Africa
• Why 2013 will be a stellar year for Kenya
• Why the regulatory environment remains attractive
• Why Kenya outranks its neighbours
• Why infrastructure will be in place in time for commercial activity
• Why this venue is good for the juniors
• Why the Somalia security risk remains low
• What Taipan is really chasing

Oilprice.com: There were some major discoveries in Kenya last year. Could you give me some colour on these discoveries that has the market thinking Kenya is now one of the hottest exploration spots on earth?

Maxwell Birley: There are a couple””or 2 billion--reasons actually. First, two recent discoveries by Tullow in the Tertiary Lokichar basin of Kenya are in similar geological settings as the discoveries also made by Tullow in the Albertine Basin in Uganda, just to the west. 

Uganda has over 2 billion barrels, and the discoveries are similar enough that one could assume the eventual size of the resources in the Lokichar basin could be in the billions of barrels range as well. 

There are also other Tertiary basins in Kenya that are attractive. Based on geochemical work we recently did it’s possible that the eventual hydrocarbon resource size for the whole of Kenya could be much higher than this. 

Being specific the unrisked prospective resources for Taipan’s acreage in Kenya is 530 million barrels. We also believe that this estimate will likely increase to approximately 1.0 billion on completion of our studies. 
These estimates are for only 2 blocks in Kenya, if this is reasonably extrapolated to other blocks across the country one can easily forecast very significant hydrocarbon resource sizes indeed.

Oilprice.com: What’s the easiest and most challenging thing about working with the Kenyan government and in the Kenyan political climate?

Maxwell Birley: The Ministry of Energy is always ready for a meeting. They listen to our concerns and take the appropriate action. They quickly follow up and give us the support that we need with other Ministries. In the field the local administration is also very helpful. We have regular meetings to make sure our work continues without a hitch.

With regard to the political climate, there is an election coming up in March 2013. We’re making arrangements so that we do not have a slowdown in seismic operations during that period. The last elections in 2007 were associated with some “geographically limited” security issues, however these were located far from our areas of operation, so we are not expecting the elections to have much impact on our operations. 

Oilprice.com: The Kenyan government is reviewing its oil and gas regulations. Among the suggested amendments is one that would see the National Oil Corporation (NOC) get a 25% interest in oil properties that foreign firms are operating in Kenya, but this would put the government in a precarious position vis-Ã -vis attracting investors. How do you see this playing out in the end?

Maxwell Birley: The government is reviewing the terms that shall apply for licences/contracts that will be granted in the future. Oil companies will review all the terms on offer at the time of bid submission and compare them to the attractiveness of the acreage.

Oilprice.com: In November last year, Kenya expelled Norwegian Statoil, after revoking its exploration license. Is Nairobi increasingly ‘policing’ exploration, and what will this mean for investors in the near/medium term? 

Maxwell Birley: One of the main functions of the Ministry is to regulate the companies undertaking exploration activities in Kenya. We feel confident, as in many other countries where we have worked, that if you carry out your commitments in the timeframe of the PSC then your license is 100% secure. If we decide to go into the next phases of exploration on Block 2B we can continue to explore for hydrocarbons on the block for another 4.5 years without concerns to the validity of our contract. 

Oilprice.com: How does the industry view the financial terms offered by Nairobi in oil and gas?

Maxwell Birley: We believe the terms are reasonably attractive, at least for an oil discovery. The reason that only a few exploration wells were drilled in the past was due to the lack of exploration success””and this was driven by the lack of understanding by the oil companies of the basins. It wasn’t because of financial terms offered by the government.

Now that a discovery has been made and our knowledge is increasing, we are going to see a significant increase in drilling activity and therefore reserve additions to the country.

Related Article: What Would Falling Oil Prices do to Russia's Geopolitical Ambitions?

Oilprice.com: Is Kenya becoming more a game for the majors rather than the juniors, and do you think we will see more joint ventures in the near future?

Maxwell Birley: In our opinion there is a place for small companies at every stage of the development of an oil province. But it’s definitely good news for those juniors with large land positions already in the country. The early movers--i.e. the companies like Taipan that acquired their acreage before the oil was discovered””will benefit from the recent oil discoveries. Most of the more prospective acreage has now been leased and therefore the competition for land is increasing. 

As large volumes of oil are discovered, the large independent and Majors will start to notice the country more and more. The Majors””due to their size and complexity””tend to be exploration risk averse and prefer to concentrate on large, lower-risk developments.

Oilprice.com: How would you like to see Nairobi interact with the energy sector moving forward? And how does Kenya compare with other venues in the region like Ethiopia, Tanzania, and Sudan?

Maxwell Birley: There is no doubt that Nairobi is a premium location for business, tourism and families. This is illustrated by the fact that many multi-nationals operating in the sub-Sarahan African region have their head offices in Nairobi. Regarding interaction, it is the oil industry that will need to develop an active and well respected industry body so that broad industry issues can be discussed at the higher levels.

Oilprice.com: Kenya is clearly the East African leader in oil infrastructure, and is now starting the Lamu Port-South Sudan-Ethiopia Transit corridor (LAPSSET) project. But it will cost $25 billion for the roads, the 1200 km pipeline and 120,000 barrel-per-day refinery. How feasible do think this project is and why? Is it feasible in the timeframe projected by Nairobi?

Maxwell Birley: The resources in Uganda and to some extend south Sudan must be exported. A pipeline through Kenya seems to be the most feasible. 

Regarding the time line, having 2.5 billion barrels sitting in the ground just west of Kenya in Uganda is a really strong motivation to build the pipeline quickly. In South Sudan I think they started pumping oil back up north again now, but I think they will want to go through Kenya in the near future. 

Whether it’s LAPSSET or the Tullow consortium someone is going to build a pipeline through Kenya to the coast in the next few years. We think the pipeline will be located within 175 kilometres from our acreage. The pipeline will be good for everybody in the region but it should be particularly positive for us.

So when we make a discovery on Block 2B, the pipeline will be in the construction phase. In the interim we’ll truck the oil by bowser the early production from the fields. Then, depending on the size of any discoveries, we’ll build a connecting pipeline into the pipeline from Uganda. I think we’re in a very fortunate position now.

Oilprice.com: In terms of exploration what are the ‘sweet spots’ in Kenya? 

Maxwell Birley: Definitely the Anza Basin. Currently, the proven sweet spots are in the Tertiary sediments of the rift basins of Uganda and Kenya. More specifically to Kenya in the Lokichar Basin as proven by the Ngamia and Twiga wells by Africa Oil.

These basins form part of the larger East African Rift system. This is a very extensive rift system and many new plays will be discovered in the next few years. The Anza Basin is the largest of these East African rift basins and 10 times the size of Uganda’s Albertine Basin and Kenya’s Lokichar Basin. This rift contains Jurassic, Cretaceous and Tertiary sediments. 

Taipan is exploring for oil in the south eastern end of the Anza basin. Located on block 2B we have proven more than 9,500 feet of Tertiary section on the block. From the geochemical modelling we have undertaken we see the same oil source rocks in the Anza Basin that are present in the Lokichar basin, which are highly likely to be mature for oil generation on Block 2B. In addition we also believe that more oil discoveries will be made in the Cretaceous and Jurassic basins if you can find favourable places to drill. 

Oilprice.com: What has Taipan’s proprietary technical work in Block 2B in the Anza Basin demonstrated so far? 

Maxwell Birley: The Anza basin has proven oil-prone Cretaceous source that in places is potentially in the gas window (Bogal gas discovery), however our technical work has also demonstrated that the basin has an active Tertiary lacustrine (lake) oil source that is in the oil window. Consequently, the Anza basin has an excellent chance of being a much more significant oil producing basin than the small rift basins that have so far been discovered.

Oilprice.com: And that’s what you’re really chasing here””with these roughly 10 million acres in the Anza Basin””the tertiary play...

Maxwell Birley: Agreed. What we’re primarily chasing in Block 2B is the same Tertiary oil play that Tullow inherited originally in Uganda. The discoveries there were the main reason Africa Oil and Tullow drilled the Ngamia and Twiga oil wells in Kenya””which have also been very successful. Of course, don’t overlook the fact we also have a secondary Cretaceous oil play in the block, that appears to be broadly analogous to the Cretaceous plays present in the Muglad Melut basins of southern Sudan and is the main focus of exploration efforts in Block 10A, operated by Africa Oil Corp. Regarding the rest of our acreage, in Block 1 for example where we have a 20% interest in a 31,781 Km² block we are chasing older Cretaceous, Jurassic and Permo-Triassic plays. The block is located in an extension of the successful Ogaden Basin of Ethiopia and Somalia. We think the block will be very prospective as it is surrounded by oil seeps and a well that recovered oil on test. 

The 2 blocks combined makes us the 4th largest acreage holder in Kenya. In terms of near-term drilling and catalysts in the region, we have Tertiary, Cretaceous and Jurassic plays on Block 1 and Block 2B that will be drilled in the next 12 to 18 months. 

Oilprice.com: Tell us what 2013 will look like for exploration in Kenya?

Maxwell Birley: Ten exploration wells should be drilled in Kenya in 2013. Based on the previous success rate it is expected that a significant number of these will be discoveries. Tullow will continue drilling wells on Blocks 10BB and 13T on the west side of the country to find more oil in that string of pearls. 

Also we shall shortly get the results of the Paipai-1 well which is currently drilling in northern part of the Anza Basin. The well is testing Cretaceous & Jurassic plays, with a potential 121 million barrels. Other wells including Sabisa and Kinyonga also expected to be drilled in 2013.

Oilprice.com: For Kenya, a discovery at Paipai-1 would prove that oil discoveries of Sudan extend into Kenya. What would it mean for Taipan?

Maxwell Birley: There have already been Cretaceous gas discoveries in Kenya. Taipan believes that if you can find the Cretaceous that has not been buried too deep it will be prospective for oil. However we think the Paipai well is very high risk as it seems likely to be a recent tectonic inversion structure and therefore may be breached by recent faulting. We think we can find on Block 2B Cretaceous structures that are oil prone that have not been breached by recent faulting. So if that well does come in then it is going to be good news for the Anza Basin in general, but if dry it will not write off the Cretaceous potential in our block. Having said that I should point out that this is not our main focus at this time. 

Oilprice.com: What about other prospects, like the Kinyonga well?

Maxwell Birley: Kinyonga is the next big prospect that is going to be drilled by Africa Oil Corp. and that is very meaningful for us. Kinyonga, which is on Block 9, will be located relatively close to our block, is both Tertiary and Cretaceous prospect. It has an unrisked resource estimate of 320 million barrels prospective, and it is one of the largest prospects in Africa Oil’s portfolio of drilling targets. Africa Oil also has another prospect called Pundamilia which is even closer to our block. This prospect has a unrisked resource Best estimate of 402 million barrels and a High estimate of 952 million barrels which I believe is the largest prospect in Africa Oil’s portfolio. 

Oilprice.com: And what is the status of Kinoyonga?

Maxwell Birley: The timeline Africa Oil report for Kinoyonga is the 2nd half of 2013. 

Oilprice.com: That would be a pretty big corollary for Taipan ….

Maxwell Birley: I think that even prior to getting those drilling results; investors are going to become more aware that the Tertiary play extends into our block. This was proven by the Hothori well which encountered 9500 ft. of Tertiary sediments. Better than this based on seismic data we estimate that in parts of the block there could be greater than 15,000 feet of Tertiary sediments.

Oilprice.com: What can we expect from Taipan over the next six months?

Maxwell Birley: Taipan has contracted BGP to acquire up to 800 kms of 2D seismic survey and Arkex to acquire a block wide FTG survey both over Block 2B. The seismic will commence recording in January 2013 and the FTG in February. Both surveys will be completed and interpreted prior to the 1st June deadline to complete the work. We expect to enter the first additional exploration period and are planning on drilling a well late 2013 early 2014.

Taipan has a 20% interest in Block 1 where Afren has recorded 1900 kms of seismic data. After the seismic has been processed and interpreted the company will commence preparations for well to be drilled in late 2013/early 2014.

Oilprice.com: What do you expect to learn from this North Eastern data?

Maxwell Birley: We will be acquiring world class seismic data with an extremely high fold in Block 2B. We may record data with fold as high as 540 (other operators in Kenya usually only record at 60 fold). We will do this so that we get excellent signal to noise ratio and seismic data improvement. This will then enable us to predict with some certainty the areas that have high shale to sand ratios. This in turn will indicate where the Tertiary lakes sediments were deposited. This will dramatically increase the chances of drilling a successful oil well.

Oilprice.com: Let’s close off then with a note on security and Taipan’s potential concerns in that area...

Maxwell Birley: Our acreage is in a remote region with very few inhabitants. We always take the appropriate health and safety precautions for example we’ve carried out detailed security risk assessments and we have visited the areas on a number of occasions. We work with other operators and security companies to ensure we have good local information. 

To mitigate the risk, we have 50 to 60 armed police on the seismic crew to supply physical security. More importantly we have excellent support from the government and local authorities. We are in the process of undertaking some CSR water projects so that local people benefit from our activities. We also have a team from the area that is in the field communicating continuously to ensure that the local community understands what we are doing and observes the benefits of working with Taipan. 

So in summary, we take it all pretty seriously. There are risks, however, it’s a place where you can work, so we’re being very respectful and careful to nurture successful relationships.

Oilprice.com: Has Kenya’s intervention in Somalia had any impact on exploration in the border area?

Maxwell Birley: Yes, it has ensured that oil companies can undertake their work in relatively safe conditions. 

Oilprice.com: Mr. Birley, best of luck. Thank you for your time and we will check in with you later in the year. For those readers interested in finding out more about Taipan Resources please visit their webpage: http://www.taipanresources.com/

http://oilprice.com/Interviews/Keny...er-Interview-with-Taipans-Maxwell-Birley.html


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## moron

Can anyone suggest a site one can go to  for imformation on Anadarkos drill hole in progress ?
Followers of PCL will be aware that Anardarkos ground ajoins PCL offshore Kenya.


Moron


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## CapnBirdseye

It's unlikely that we will get anything from Anadarko until after the well is completed, they are big enough not to need to - it's unlikely to be a company maker.  The best we can hope for is something from PTT, but that is unlikely also.  I think we will have to sit it out until the end.


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## smalltimer

*Kenya sets tough terms for next oil acreage licensing round*
28 January 2013 | Companies, International, Interviews 

Kenya’s Prime Minister Raila Odinga is set to contest for the Presidency in March. Oil revenue will be key to the success of the incoming government’s programmes.
Any oil company intending to acquire an oil exploration licence in Kenya will have to present audited – accounts showing a minimum cash balance of at least one hundred million dollars. Successful bidders will be required to part with a signature bonus of one million dollars, as well as spend at least half a million dollars on “Community Development Projects” in Kenya every year. The oil companies will also have to spend a minimum of 200,000 dollars per year on training Kenyans to equip them with skills for the oil and gas industry.

Speaking to Oil in Uganda in an exclusive interview in Nairobi last week, Kenya’s Commissioner for Petroleum Energy, Martin Mwaisakenyi Heya, revealed that Kenya had decided to take measures to discourage smaller oil companies from entering its oil and gas sector. 
“We are no longer a frontier country. We want companies with money. We have had a lot of challenges with small companies with them (failing) executing their work programme,” said Mr. Heya.

Without giving examples, he explained that inadequately capitalised oil companies had tended not to accomplish exploration schedules agreed with the government due to lack of funds.

More blocks available

Mr. Heya told Oil in Uganda that some of the exploration blocks have been sub-divided into smaller units, while others have been relinquished by the current operators, creating eight new blocks, in addition to the two previously unlicensed blocks. Forty four out of the total forty six blocks are under license. “The blocks were big”, said Mr. Heya. “Now we are making them smaller and smaller.”

By law, oil companies in Kenya are required to relinquish 25 percent of their acreage after the expiry of the first exploration period, and another 25 percent at the end of the second period. The initial exploration period lasts two years for onshore activity, and three years for offshore work. Two additional periods, of two years each, are allowed for both onshore and offshore oil exploration activities. If a company finds oil, it then has the right to develop the oil field. If it doesn’t find oil within the specified time frame, it has to relinquish the exploration licence.

Mr. Heya added that given the “phenomenal interest” oil companies have shown in Kenya, the government would simply invite bids and evaluate them on a case by case basis. “People will just apply, submit and we evaluate. The person who has given us good terms will get the block”, he revealed. “It is not a real road show, we do not want to waste our money (on marketing the blocks)”.

Last March, when Tullow made an apparently promising oil discovery in Kenya, some observers feared that Kenya and Uganda might become involved in a ‘race to the bottom’, competing to offer international oil companies favourable terms, to attract them to prospect. Kenya’s apparent determination to weed out small players and to demand significant social investments seems to indicate that this race to the bottom will not happen.

Cost Recovery and Profit Oil Split

The new terms will require oil companies to recover sixty percent in ‘cost oil’for crude produced both off shore and onshore. The ‘profit oil’ will be split between the government of Kenya and the oil company starting at a fifty-fifty percentage for production of 0-30,000 barrels of crude oil per day (BOD) onshore, but eventually rising in favour of the government. At peak production of more than 100,000 BOD, the government’s share will be 78 percent against the oil companies’ 22 percent. The same percentages apply for offshore production, starting at the minimum of 40,000 BOD to the peak at 120,000 BOD.

Mwendia Nyaga, the Chief Executive of Oil and Energy Services Ltd, a leading petroleum consultancy in the region, told Oil in Uganda by telephone from Nairobi that these terms are fair to the oil companies. “The world average is 67 percent [for the government],” he said. “Unless world oil prices fall to less than fifty dollars per barrel, 22 percent [share] for the oil companies is okay”. He added that in some countries like Nigeria and Libya “The government take is very big.”

Natural gas development

Mr. Martin Heya also told Oil in Uganda that Kenya had embarked on a programme to develop terms for the exploitation of natural gas. “Most of our PSCs (Production Sharing Contracts) are oil based but some companies think that their blocks are gas blocks. So we have formed a tax force with the help of the World Bank to formulate gas terms,” he revealed.
Report by CM

http://www.oilinuganda.org/features...rms-for-next-oil-acreage-licensing-round.html


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## smalltimer

*Mapping of oil exploration sites heralds race for blocks*

Kenya faces a scramble for oil exploration blocks as multinationals seek licences for newly demarcated areas.

The licensing committee has mapped out eight new blocks , according to Ministry of Energy commissioner for petroleum Martin Heya. 

The new blocks are to be auctioned “within weeks” and are expected to be snapped by other oil majors as demand for exploration blocks in East Africa, enhanced by discoveries of petroleum along the coastlines of Tanzania and Mozambique, increases. 

The country has also drafted new petroleum exploration terms, which will apply to the new blocks, he said.

The expected licensing of the blocks comes as the ministry plans to switch to bidding rounds in oil exploration deals, moving away from one-on-one negotiations with firms as interest increases after several big discoveries, including Kenya’s second ever oil find announced by British explorer Tullow Oil and Canadian venture partner Africa Oil last October. 

Four blocks are in Lamu basin while Blocks 10BB and 13T are in the Tertiary Rift.

“All the blocks will have a minimum proposed PSC (production sharing contract) terms for new petroleum exploration blocks,” said Mr Heya on telephone.

“Block L5 produced three new ones. Block 1 was also surrendered. Others are blocks 10BB and 13T.” 

Block L26, previously held by Norwegian state firm, Statoil is also up for grabs. The company had planned to start drilling the offshore block in January. 
He said that the terms of block L6 in Kipipini Conservancy are also being renegotiated and would be awarded to the same owners. 

“We will divide block into two and award the same company but under new terms. We will renegotiate afresh,” said Mr Heya.

Block L6 is an onshore/offshore area on the Kenyan coast where initial seismic programmes have defined a number of significant prospects. The L6 licence area is adjacent to L8.

All of Kenya’s mapped blocks have been awarded. 

Some of the latest entrants include French oil major Total and Eni of Italy. Under the PSCs, the exploration company must cede 25 per cent of their licensed acreage should they fail to do work on blocks after two years if the site is onshore or three years for offshore one. 

This rule prompted Tullow Oil to surrender two blocks while Anadarko of US, Afren Plc of UK and Statoil gave up a block each. 

The Ministry of Energy expects explorers to drill at least a dozen more wells this year, onshore and offshore. Kenya’s oil search attracted more than 24 players during 2012.

Investors, however , believe the new terms of and gas shall offered by the Government are reasonably attractive, at least for an oil discovery.

http://www.businessdailyafrica.com/...670/-/view/printVersion/-/vo4si3/-/index.html


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## smalltimer

*Middle Eastern oil explorer gives up licence in Kenya*
Jan 28 2013 4:42PM

Edgo Energy, the exploration unit of Jordan's Edgo, has relinquished a licence to explore an area offshore Kenya, citing the technical difficulties of drilling in very deep water.

The licence area, a triangular block off Kenya's southern coast known as L26, lies in "ultra deep water" - meaning the ocean floor is more than 1,500 metres beneath the water's surface, which makes drilling complicated and expensive.

"Edgo Energy has agreed with the Kenyan Ministry of Energy to relinquish block L26 due to the technical challenges of its location in the ultra deep waters of the Lamu basin," said the company in an email sent to Reuters on Monday.

East Africa and the continent's Horn of Africa region have become hot spots for oil and gas exploration in recent years, spurred on by new finds in countries including Uganda, Tanzania and Mozambique.

Edgo obtained the L26 licence jointly with Qatar First Investment Bank in July 2012, according to the company. It has one additional licence with the same bank in onshore block L14 where it has already began preparing for seismic work.

Edgo said it was still interested in an upcoming licensing round offshore, which will be composed of an estimated five blocks within Kenyan waters.

"We will be looking at that ... we're interested," said Mazen Masri, managing director of Edgo, in a phone interview with Reuters last week.

With Edgo's surrender of L26, Kenya has additional acreage to licence to interested explorers, who flocked to the country in 2012 after U.S. explorer Apache Corp found non-commercial quantities of gas offshore and Tullow Oil discovered oil in two separate onshore wells.

Masri said last week a maritime border dispute between Somalia and Kenya was also a challenge in L26 -- which sits squarely in an area both countries claim to be part of their offshore commercial acreage.

However, a spokeswoman for the company said in a phone interview on Monday it was not the main factor in Edgo's relinquishment.

Currently one company, Houston's Anadarko Petroleum, is drilling offshore Kenya - in a non-disputed block called L11-B - while the UK's Tullow Oil is in the midst of drilling two onshore wells. BG Group, Ophir and Afren also each plan to drill offshore in 2013, though they are not drilling in contested territory.

http://www.thenewage.co.za/mobi/Detail.aspx?NewsID=80586&CatID=9


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## smalltimer

*Tullow strikes natural gas deposits in the north*
By Zeddy Sambu
Posted Sunday, February 3 2013 at 18:06

Tullow Oil has discovered deposits of natural gas at a well in northern Kenya, whose drilling is set to be completed later this month.

The deposits were struck at 4,100 metres, less than a kilometre to the target depth of 4,900 metres at the Pai Pai 1 well in Block 10 A. The block is half owned by Tullow, 30 per cent by Africa Oil and the rest by Afren Plc. 

“They are now testing to see output at that high pressure,” said an official conversant with the progress. 

Tullow declined to comment on the status of its operations in Kenya. 

“It’s still status quo, nothing has changed since the last update given. The well is still drilling,” said Evelyne Serro, Tullow’s communications officer for Kenya. “You will receive an update as soon as this is concluded at total depth”.

Industry analyst George Wachira said commercial natural gas deposits interrupt the momentum in the continued search and testing at the Twiga 1 , Ngamia 1 well and also the Mbawa natural gas prospect off the coast of Lamu.

“Finding of gas also delays commercial confirmation of already discovered oil which, hopefully, the drilling of “Sabisa-1” in Ethiopia will help to confirm,” he added.

Kenya is working on laws for exploration, production, logistics and monetisation of natural gas

http://www.businessdailyafrica.com/...e-north/-/539546/1683450/-/lc1n9/-/index.html


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## smalltimer

sorry , news a bit old now, but still worth a read. 
*Moron* was asking for some news a little while ago;

*US Firm Starts Oil Exploration Off Kenyan Coast*
By Mwakilishi | Fri, 01/18/2013 12:07AM -0500.

Anadarko Petroleum Corporation, a US firm, has started exploring for oil and gas off the Kenyan coast in Lamu. The New York Stock Exchange (NYSE) listed firm plans to drill two wells, continuing Kenya’s surge of exploration activity.

“Anadarko has told us they were to spud the well yesterday (Thursday),” said Martin Heya, commissioner for petroleum at the Energy ministry.

The two wells, known as the Kiboko prospect in block L11B and the Kubwa prospect in block L7, will cost about Sh8.6 billion ($100 million) each.

The firm is the operator of blocks L7 and L11B and holds 45 per cent stake in each.

French oil major Total has a 40 per cent stake, and UK’s oil and gas company Cove Energy (recently acquired by Thailand’s Exploration and Production company) holds the remaining stake.

The Kiboko and Kubwa prospects will be Anadarko’s first wells in Kenya and follows significant gas discoveries offshore Mozambique early last year.

Anadarko will be utilising some of the equipment used by US explorer Apache Corporation which drilled a well offshore earlier this year.

Apache’s well, known as Mbawa-1, encountered small, non-commercial quantities of gas instead of oil.

Anadarko which will drill Kiboko first has said it hopes to find oil, rather than gas, because it is cheaper and easier to produce.

The wells will be drilled to a total depth of 6,750 meters.

The US prospecting firm has also mobilised a drilling rig from its Mozambican operations, Mr Heya said.

The Ministry of Energy expects to drill at least 12 more wells onshore and offshore this year as Kenya aims to stake a bigger claim on profits from its natural resources exploration boom.

Anadarko’s vice-president for International Exploration, Frank Patterson recently said two three-dimensional surveys have been acquired and have already been processed “two months earlier than expected.”

“Drilling was dependent on rig availability,” he said.

In recent filings to the NYSE, Anadarko said it planned to spend Sh10 billion prospecting for oil and natural gas in one well in the Lamu basin, where it operates offshore deep-water blocks.

The country has been a hot bed for exploration following reports of oil find by British explorer Tullow Oil in 2012 within the Lokichar sub basin on the floor of the Rift Valley.

Anadarko made gas discoveries offshore Mozambique in 2012 and has moved into other regions of Africa. - Business Daily Africa

http://www.mwakilishi.com/content/a...-starts-oil-exploration-off-kenyan-coast.html


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## smalltimer

*Kenya Ongoing Wells*

Anadarko – Kubwa 1 – L7 – Spudded. On 16 January 2013, Anadarko started operations with the Deepwater Millennium D/S, spudding exploration well Kiboko 1 in deepwater block L11B (Lamu Basin) and drilled the top-hole section. The rig then moved north some 180km to the Kubwa 1 location, in the south-east corner of block L7, and spudded this well on 27 January. Operations are continuing on Kubwa 1; the group hopes for an oil result. The operating group is Anadarko (50% + Operator), Total (40%) and Cove Energy through PTTEP (10%).

http://info.diiinfo.com/2013/01/announcements/east-southern-africa-dii-scout-70/


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## smalltimer

*Kenya's oil firm seeks seismic data in its exploration block 14T**
Posted Tuesday, February 5 2013 at 14:25*

Kenya's State-owned oil firm has said it plans to acquire over 400 km of 2D seismic data in its Block 14T exploration acreage located in the Magadi Basin south of Block 10BB within the tertiary rift sedimentary basin in southern Kenya.

The National Oil Corporation of Kenya (NOCK) has placed an international tender for the acquisition of 2D Seismic Data and its Processing Services as well as Magneto Telluric (MT) survey in the southern part of Block 14T. "The contractor for the 2D seismic data acquisition and processing program shall provide all equipment, personnel, consumables and complete project management for data capture and processing," 

NOCK CEO Sumayya Hassan-Athmani said in a statement issued in Nairobi on Monday. Kenya's energy ministry officials have remained optimistic about possible oil finds following the ongoing exploration by Tullow, which is also engaged in activities around the Mandera region in northern Kenya.

Exploration experts say the semi-arid regions of northern and north-eastern Kenya, have the curvy rocks, formed millions of years back, when the region was an ocean.The creation of the deep sea blocks is meant to attract new investors into the country, especially along the Indian Ocean.Hassan-Athmani said the work shall include maintaining and operating a vibrator set and portable land 2D seismic reflection crew capable of providing National Oil with high quality 2D seismic data. The acquisition of the data is part of the ongoing preparatory works in readiness for drilling in the area. Kenya's first oil discovery was made at the Ngamia one well within Block 10BB by Tullow Oil in March 2012.

The acquisition of seismic data and Magneto Telluric survey for Block 14T is a key step in establishing the hydrocarbon potential of the block and its outcome will be utilized to improve basin study related hydrocarbon exploration models of the region.Kenya and the entire East African region have witnessed intensified exploratory activity since 2003, which led to the discoveries of oil and gas in Uganda and Tanzania. There is also ongoing exploration in Ethiopia. The East African nation has also tendered for the exploration of natural gas in Kilifi, near the coastal city of Mombasa. Analysts say one of the contributors for slow exploration of minerals in Kenya has been lack of mapping of the resources.

Experts say countries in East Africa and on the seaboard from Ethiopia on down to Mozambique have all begun to benefit from the success of Uganda as it made it easier from smaller companies to raise funding for exploration in the region.A 2D seismic survey is an exploration method used to create a map of the structures beneath the earth's surface by sending energy waves into the Earth. The different rock formations then reflect the waves back to the surface, where they are recorded over a period of time and converted into a seismic image.

Seismic data helps geoscientists in identifying possible hydrocarbon deposits in an exploration area.Hassan-Athmani said the Magneto Telluric (MT) survey will be undertaken in altitudes ranging between 600 meters and 1,800 meters above sea level. "The survey will cover an estimated 6,000 square kilometers. MT is an electromagnetic geophysical method of imaging the earth's subsurface," she said. In May 2012, the oil firm entered into a geophysical survey for the evaluation of hydrocarbon potential of onshore Kenya by undertaking geophysical surveys including Full Tensor Gravity Gradiometry (FTG), 2D Seismic, Magneto Telluric and Time Domain Electromagnetic studies.

As part of its strategic efforts to become Kenya's first indigenous company to discover oil in the country, NOCK acquired Block 14T in November 2010 and has so far successfully completed Geochemical studies using Gore Sorber technology and ground gravity studies in the Southern part of the block as well as FTG studies over a significant part of the block. These studies have been important in the geological mapping of the block which previously lacked geological profiling.Prior to its acquisition of the acreage and subsequent entry into active exploration for oil and gas in Kenya, National Oil was involved mainly in the marketing of Kenya's exploration acreage and the management of the national petroleum data centre and petroleum laboratory. National Oil's entry into active exploration is in line with its strategic objective of becoming one of Africa's fully integrated National Oil Companies (NOC's) and helping Kenya realize her development objectives as outlined in Vision 2030

http://www.monitor.co.ug/News/World...ck-14T/-/688340/1685250/-/qg6yid/-/index.html


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## smalltimer

Looks like that Sub 10c is on the way again with the sell order momentum picking up.
Could see sub 10c within the next few days.


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## smalltimer

*Kenya to Offer Nine Oil and Gas Licenses by April, Minister Says*
By Eduard Gismatullin - Feb 13, 2013

Kenya will offer as many as nine oil and gas exploration licenses in the first quarter, said Patrick Nyoike, an official at the Energy Ministry.

Chevron Corp. and Eni SpA have said they may bid for the licenses, Nyoike told reporters in Nairobi today. Some of the acreage was relinquished by explorers, and the blocks will be repackaged for the sale.

Tullow Oil Corp. and Africa Oil Corp. made Kenya’s first oil discovery last March. The country has no proven oil reserves, though Exxon Mobil Corp. and Chevron found gas in the Anza Basin in 1976.

The licenses will be offered “as soon as we get the coordinates right,” he said. “I am talking about this month. Many companies have showed interest.”

East Africa has become one of the world’s most active exploration areas since Anadarko Petroleum Corp. made the decade’s biggest gas discovery off Mozambique. An oil find would be a boon for Kenya as the commodity is easier to sell than the gas found in neighboring Tanzania and Mozambique, which will require spending at least $50 billion on export plants.

http://www.bloomberg.com/news/2013-...-and-gas-licenses-by-april-minister-says.html


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## smalltimer

*Our Oil Dreams Have Just Been Re-Ignited*
By Daniel Steinmann, 15 February 2013 

A flurry of excitement added some push to the usual summer afternoon wind battering Walvis Bay from the south west with the arrival of a drill rig intended for HRT's two prospecting blocks on the northern fringe of the so-called Orange basin.

As far as I know this is the first time ever that a rig of any kind has actually entered the harbour itself. The odd rig that passed the port en route from either Cabinda or Nigeria to Cape Town, always laid moored a fair distance off. Granted this is a drill rig and not a proper oil rig, so it is a much smaller animal, and that is the reason why it fits smack inside the harbour.

But rig design and engineering are not what tickles my fancy. The ultimate riddle that has to be solved is whether commercially viable oil fields exist in the offshore seabed, and if they do, where are they? So far, two holes have been drilled by London-listed Chariot Oil, and both still only contain seawater, so the immediate expectations are not good.

But HRT is not entirely clueless where oil prospecting is concerned. The company is financing its oil exploration activities through several paper issuances on the Bovespa in Sao Paulo focussing on HRT's oil exploration projects in the Amazon basin where conditions are easier than 1000 metres below the surface of the Atlantic Ocean. The offshore exploration in Namibia is prospected as an additional benefit should oil be discovered here. So it is actually the better expectation for discovering oil in the Amazon that is papering over HRT's operational costs in our Exclusive Economic Zone.

Nevertheless, the rig has arrived last Wednesday, very early in the morning setting of a chain of responses from the ports authority, the chamber of commerce, and other interested parties who, hopefully, were not involved last year when an elected in parliament announced we have already discovered oil and that there are so many billion of barrels of the stuff.

I assume, purely from an investment point of view, the people working for HRT know what they are doing, although I am also not fully convinced of this. Whether one thinks the HRT launch was in good style or not, is irrelevant. What was very obvious is that this company knows how to play the politics and will not shy away from actively doing so. Remember the posse of Samba dancer that moved Windhoek that evening and the slightly embarrassing situation when some of them ended up on the laps of the high brass.

Nevertheless, the HRT rig is here and will stay in the harbour for another two weeks. It is the Transocean Marianas, an Earl & Wright Sedco 700 semi-submersible drill rig and it will be towed to the drill site after completion of the mandatory inspection. Actual drilling is expected to start around the end of April and within another month, we should know if HRT found the black gold.

Fortunately, as far as I know, Petrobras has been co-opted as HRT's technical partner so whatever results are obtained from the drilling, can be deemed reliable. Petrobras, the Brazilian state oil utility, is the discoverer of the Tupi oil field in the South Atlantic, the first significant deep sea oil discovery anywhere in the world.

Perhaps the most important elements in HRT's work of the next two months is the locality where they will drill. Their acreage is spread over two prospecting blocks, 1801 and 1802 on the rim of the Orange Basin which is considered to be the same geological structure as the Kudu gas field. So, in a sense, one can argue that hydrocarbons have already been discovered in this morphology, as far back as 1974, and that now it is only a matter of pinpointing the more fluid pockets of this seemingly consistent subterranean complex. That is the positive take.

The negative reality is that since 1974 a myriad of seismic surveys that created the plethora of proprietary 2D seismic data, as well as a small number of holes, have only confirmed the presence of gas, and in some cases, of nothing.

Whether you staunchly believe there is oil, I suppose depends to a large extent on how deeply your are committed to this project either financially or politically. But there is nothing in the models that precludes the existence of oil. It may be there or it may turn out to be more gas. The South African government desperately wanted to find oil in the Kudu gas field but never did. The sole reason why they drilled the holes in the first place was to find oil, not for anything else.

http://allafrica.com/stories/201302151112.html


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## smalltimer

*Tullow Finds More Oil in Turkana*
By Solomon Kirimi, 14 February 2013 

TULLOW Oil yesterday released a set of well test results on Wednesday that it said could lead to Kenya's first commercial production.

Tullow said the Twiga South-1 exploration well in Turkana is likely to be profitable after tests showed the "first potentially commercial flow rates achieved in Kenya."

Four flow tests were carried out on Twiga South-1 in January and early February and a fifth test is ongoing, predicting a total combined flow rate of over 2,850 barrels of oil per day, said Tullow.

"There will be more focus on Kenya as a potential oil producing country," Energy ministry PS Patrick Nyoike told Reuters.

Five of Tullow's oil blocks are within a similar basin in the Rift Valley to the Lake Albert Rift Basin in Uganda where over billion barrels of oil deposits have been discovered and the southeast extension of the geologically older Sudan Rift Basins trend where oil is already being extracted.

Kenya will get the result of the Paipai-1 well later this month, according to Tullow Oil's 2012 financial results released yesterday.

Paipai-1 has been drilled to a total depth of 4,255 metres, deeper than the planned 4,112 metres and has encountered light hydrocarbon.

"We have been unable to obtain samples conventionally due to difficult hole conditions," said Tullow Oil chief executive Aidan Heavey.

The report said the drill at Paipai will be moved to Block 10BB to start drilling the Etuko-1 well in the Lokichar basin where Ngamia-1A well which recorded 100 meters of net oil pay is located. The drilling is programmed to start in the second quarter of 2013.

Etuko-1 Papai will be the fourth well drilled by Tullow since its drilling programme was rolled out with Ngamia-1 well in January last year.

In November 2012, the Tullow announced that the Twiga-1 well had encountered 30 metres of net oil pay and an additional tight reservoir rock section with hydrocarbon shows over a total gross interval of 796 metres.

Two deeper tests conducted at the well reconfirmed the presence of moveable oil. "These tests provide the first potentially commercial flow rates achieved in Kenya and provide real encouragement for the Ngamia test," said Heavey.

With the conclusion of the Twiga South-1 testing programme, the rig will move to Ngamia-1A to re-enter the well and perform four flow tests.

Given the positive results so far, Tullow oil announced that it plans to deploy more equipment to accelerate works in Lokichar basin by drilling 11 exploration and appraisal wells as well as as carry out up to five well tests to understand the potential scale of the South Lokichar discoveries.

"The discoveries at Ngamia and Twiga South demonstrate that substantial oil generation has occurred in the South Lokichar Basin, one of more than 10 Tertiary Rift Basins in the Kenya-Ethiopia acreage, each of which is similar in size to the Lake Albert Rift Basin in Uganda," the full year 2012 report said.

Tullow said these tests are expected to deliver rates similar to Twiga South-1. Tullow also owns 15 per cent of the Mbawa-1 well that encountered 52 metres of net gas pay in the the first hydrocarbon discovery in Kenya in the Lamu basin.

The well was plugged and abandoned because it not commercially viable but it confirmed hydrocarbon in offshore Kenya.

The basin bears the same geological formation as Mozambique's coast where large volumes of gas have been discovered.

http://allafrica.com/stories/201302141635.html?viewall=1


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## smalltimer

Not PCL or East African related, but if your into Oil - Worth watching this video (but read the story attached as well). At bit of a sales pitch, but good info. 

http://moneymappress.com/pro/ECLAus...1638&s=937070&u=52134857&l=542933&g=96&r=Milo

*************************

*$20 trillion ... not: reality check for Linc oil find
Date January 24, 2013*

Big but not that big ... Linc Energy chief Peter Bond.
Linc Energy is distancing itself from estimates in today’s media that it may be sitting on $20 trillion worth of oil in South Australia’s Arckaringa Basin.

Linc’s shares rocketed more than 30 per cent to an 18-month high of $2.82 today after it told the stock exchange yesterday that two independent consultants estimated there was an ‘‘unrisked prospective resource’’ of up to 223 billion barrels of oil equivalent in three shale formations within its 100 per cent-held Arckaringa exploration permits.

Media outlets including the Adelaide Advertiser appear to have multiplied the resource estimate by the prevailing oil price - above $US95 a barrel - to arrive at the $20 trillion figure.

But Linc chief executive Peter Bond told BusinessDay: ‘‘That’s not our valution. I don’t know who did that but someone’s got a calculator out and come up with that number ... but we wouldn’t put a valuation on it at this stage. It’s too hard.

Advertisement ‘‘Obviously if you want to stand up there and come up with $US100 times 100 billion barrels, you’ll come up with a big number. That’s not how you value oil resources anyway.’’

Petroleum resources are classified into booked reserves - proven, probable and possible - or resources which may be contingent or prospective.

The estimates released by Linc on Wednesday were classified by the consultants as unrisked prospective resources - the lowest category of certainty - because of their ‘‘lack of commerciality or sufficient drilling’’.

As the consultants wrote: ‘‘There is no certainty that any portion of the prospective resources estimated herein will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.’’

Mr Bond explained that industry rules of thumb guided valuation of reserves, with good quality 2P (proven or probable) or 3P (proven, probable or possible) reserves valued at between $US1-$US2 a barrel.

‘‘Once you get to 1P (proven reserves) you get to $US10/barrel, or $US100,000 per flowing barrel.’’
Shale plays tended to be valued on an acreage rate, ranging from $US1000-$US2000 an acre at the low end, to $US20,000 an acre at the high-end.

But Mr Bond did not walk away from the potential of the shale play at Arckaringa, where Linc has 16 million acres of which 2-3 million acres could be ‘‘sweet spot’’ territory.

‘‘No matter how you look at it, it’s big,’’ he said.

Mr Bond said Linc paid $104 million for its exploration acreage at Arckaringa four years ago, and spent $30 million on drilling 15-16 holes, of which half targetted shales, and 1000 kilometres of 3D seismic.

But Linc is now looking for a ‘‘farm-in’’ partner to spend up to $300 million to develop the resource and prove up reserves.

Mr Bond said Linc’s consultants estimated there was a minimum of 3.5 billion barrels of oil equivalent at Arckaringa.

‘‘It’s a multi-billion barrel opportunity, and that’s a good news story. OK it’s not $20 trillion. But 3, 4, 5 billion barrel resources are virtually unheard of these days, so even stressing this number down to the minimum number the experts stress it down to, it’s still a big story.’’




Read more: http://www.smh.com.au/business/20-t...nc-oil-find-20130124-2d8zf.html#ixzz2LfZOlLHf


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## smalltimer

*Kenya oil, gas investment on hold*

February 26 2013 at 06:55pm 
By Kelly Gilblom 

Turkina Basin, Kenya - Potential investors in exploring Kenya for oil and gas are holding back to see the outcome of next week's presidential election, worried about the potential for instability and for policy changes under a new leadership. 

Huge discoveries in eastern Africa from Mozambique to Uganda have attracted bids from international oil companies for exploration and drilling rights. 

Kenya's sector is the least developed, with medium-sized companies heading the search for commercial reserves. These firms are more vulnerable than majors to the risk of post-election violence, which five years ago knocked the $35 billion economy flat and forced political rivals to form a rocky coalition. 

With President Mwai Kibaki barred from a third term, Kenya's forthcoming change in leadership is also creating concerns that the government may alter contractual terms. Promising discoveries have given east African governments an advantage in negotiations. 

Canada's Simba Energy estimates its block in northeast Kenya sits atop 1 billion barrels of oil, but it needs investors to help stump up the cash. 

“I really, really want to drill in 2013. I was prepared to commit to 2D seismic but had to consider feedback from some of our potential farm-in partners,” Hassan Hassan, Simba's chief operating officer said in an interview. 

“We've decided to wait, but believe me it pains me to wait,” he added. 

The uncertainty is affecting new money. Explorers already licensed in Kenya are locked into spending agreements and still releasing capital. 

In another development that raises the spectre of a trade embargo, a front-runner in the race, former Finance Minister Uhuru Kenyatta, faces trial for crimes against humanity linked to the election violence in 2007/2008. 

If Kenyatta is elected, western governments will face a dilemma over how to balance a principled stance with diplomatic, security and trade ties with Kenya. 

The United States, without naming Kenyatta, cautioned “choices have consequences”. Officials in other Western capitals have said any talk of economic sanctions is premature, but some investors are anxious. 

“You want to go in when you think there is certainty. If sanctions were to be placed on Kenya, I don't think we would survive two years,” said Don Riaroh of Nairobi-based Bahari Resources. The small firm, which is already exploring in the Indian Ocean's Comoros archipelago, has targeted Kenya. 

The stakes are rising. British explorer Tullow Oil this month announced Kenya's first potentially commercial flow rates, taking it a step closer to production. 

Tullow's venture partner, Africa Oil, estimates there are 23 billion barrels of oil beneath two onshore basins that extend from southern Ethiopia to the southwestern tip of Kenya. 

If proven, that would make Kenya the 13th-largest holder of oil reserves in the world, above the United States. At today's oil prices the reserves would be worth $2.6 trillion, more than 60 times Kenya's 2012 gross domestic product. 

Two additional basins have hardly been explored. 

Kenya's next president will probably oversee multi-billion dollar investments and new legislation to govern production agreements and how to spend hotly anticipated petrodollars. 

In his manifesto, Kenyatta says 5 percent of energy revenues will go into local communities and another 5 percent will fund renewable energy projects. Oil will “benefit all Kenyans”, the manifesto says, but gives no details such as tax structures. 

The manifesto of his rival, Prime Minister Raila Odinga, does not even mention oil. He has stated at campaign rallies in Turkana that he would seek to avoid the so-called “oil curse” that has befallen African countries, where the wealth has not been used to fight poverty. 

Some oil players are concerned that both presidential hopefuls have not laid out more detailed plans for infrastructure, taxation and the handling of oil proceeds. 

“I was surprised that oil didn't get brought up in the debate, really surprised,” Africa Oil Chief Executive Officer Keith Hill said, referring to Kenya's first ever televised presidential debate on February 11. 

If Kenya is to produce and export oil, it will need a pipeline network stretching hundreds of kilometres to link inland oil fields to the coast. It will need a new refinery to supply the domestic market from its own crude. The existing facility in Mombasa is dilapidated and runs only at partial capacity. 

And while there are laws that set out how oil revenue is spent, they are old and vague. The 13-page Petroleum Act became law in 1986. Back then, few expected a serious oil find. 

Nine oil companies operating in Kenya including Tullow, Anadarko and Africa Oil have formed the Kenya Oil and Gas Association. It wants the government to legislate faster. 

“We're very keen on fiscal stabilization. It's very key that investors know terms are going to be fixed. Investors and oil companies don't like the idea that terms will be changed after the fact,” Hill said. 

They point to neighbouring Uganda, where commercial production is finally slated for 2017 after being delayed almost a decade by rows over tax and infrastructure projects, and hope Kenya avoids such setbacks. 

The major oil companies are poised to come in once the small-caps do the dirty work, they say. 

“Barely a week goes by when I don't get a call from one of the super-majors who say: 'How do we get in?',” Hill said.



http://www.iol.co.za/news/africa/kenya-oil-gas-investment-on-hold-1.1477407


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## smalltimer

Stock Trend Analysis - Buy, Sell or Hold "PANCONTINENTAL OIL & GAS NL" (PCL.AX)?

PCL.AX is in a long term downtrend and it has traded about 52% of the time below the 200 day moving average in the last 52 weeks on daily average volume of 2.6M shares changing hands. 

For the medium term, the 50 day moving average is generally in a trading range with a bearish downward bias. The 20 day moving average is very weak as PCL.AX has been trading below its 20 SMA for 87.5% of the time in the last 8 weeks. 

PCL.AX may be overdue for a small relief rally but it has to be noted that as PCL.AX is still in a downtrend characterized by the 200 SMA, currently at 0.13, the most likely scenario is that rallies will be sold into until the 200 SMA is convincingly taken out. Click here for the latest support & resistance levels to help you finetune your entry into or exit out of "PCL.AX".

The analyst consensus estimates for the 1 year price target for this stock is $0.27* (*source: Yahoo Finance)

http://au.bannronn.com/stocks/trend-analysis.php?symbol=PCL.AX


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## Dixiedodo

smalltimer said:


> *Our Oil Dreams Have Just Been Re-Ignited*
> By Daniel Steinmann, 15 February 2013
> 
> A flurry of excitement added some push to the usual summer afternoon wind battering Walvis Bay from the south west with the arrival of a drill rig intended for HRT's two prospecting blocks on the northern fringe of the so-called Orange basin. Etc
> 
> http://allafrica.com/stories/201302151112.html




The Transocean Marianas is making its way to the drill site..in addition interest in all the licenses is starting to light up. As is PCL : http://helioschariot.com/namibia-pcl-pancontinental-oil-and-gas/ there are also links to other explorers in Namibia. Good luck to HRT !!


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## smalltimer

I think that we hit the current cycle low last week at 8.4 cents and are currently on the next trend up.
Looking forward to the 10++ again.

Very little volume today and the sellers are drying up....We hope !
Now that Drilling has started close to the PCL blocks ;

_The semi-submersible drilling rig Transocean Marianas arrived at its drilling location some 160 kilometres west of Walvis Bay last night, and is expected to start within days with the sinking of two exploration boreholes in Namibia’s much anticipated search for oil._

we may see a bit of action in our share price again -- Good luck all.


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## smalltimer

Junior goes extra distance 
by: Barry Fitzgerald 
From: The Australian 
March 26, 2013 12:00AM 

Source: The Australian 

AUSTRALIA'S oil and gas juniors have always been prepared to travel far and wide to secure their shot at the big time. Melbourne-based Far Limited (FAR) -- headed up by a geophysicist capable of spiking a volleyball from great heights, Cath Norman -- is a case in point. 

Far as been under the radar for the past couple of years accumulating big acreage positions in what have become oil and gas exploration hotspots offshore from East and West Africa.

It is a fine example of what juniors do best -- move in early to an area with promise, work up a bunch of exploration targets and entice in a major partner with deep pockets to put the prospects to the test with the drill bit, preferably with the junior's ongoing exposure being on a free-carried basis for as long as possible.

That Far has had some success is reflected in its market capitalisation now topping $100 million, even if its share price yesterday of 4.2c might give the impression it is a penny dreadful. But it is now a question of where to next for Far thanks to Norman securing British-listed independent Cairn Energy as a farm-in partner for Far's oil play off Senegal.

...The deal is as good as a junior could hope for, with Cairn to acquire a 65 per cent working interest in Far's three offshore blocks by fully funding 100 per cent of the drilling and test costs of an initial exploration well, plus reimbursing Far $9.4m for past costs associated with its trail-blazing work on the three blocks.

It doesn't sound like much until it is realised that Cairn's exploration well commitment comes with a cap of $US80m ($76.5m).

So Cairn obviously rates highly the potential that deep-blue waters off Senegal just might contain the sort of big oilfields it is after.

Far has previously crunched the data from a 2000sq km-plus seismic survey across the blocks.

It came up with at least 11 potentially drillable prospects over various "play" types. More to the point is the estimated potential for 3.58 billion barrels of oil (unrisked best estimate, on a 100 per cent basis) across the prospects. The assessed potential of the prospects range in size from a handy 58 million barrels to some 632 million barrels, giant-sized in industry parlance.

All that means nothing until put to the test by the drill bit. The wait is not expected to be long, with Far saying that the Cairn-operated exploration well is expected to start spinning away early next year.

Needless to say, it will be one watched well, given the potential impact on a company the size of Far.

After Far is carried through the initial well, its exposure -- and share of ongoing exploration costs -- will be 27.8 per cent, with Cairn at 72.2 per cent, leaving Senegal national oil company Petrosen with its free-carried 10 per cent stake (through the exploration phase).

While the Senegal play is all very interesting, followers of Far will tell you that it is actually its East African acreage where the excitement lies with the stock.

Maybe so, but at least Senegal is now a done deal, and the drilling of the first well is in sight.

As for East Africa, there has been chatter that Norman is not all that far off from securing a Cairn-like deal for its 60 per cent-owned and operated Block L6 permit (ASX-listed Pancontinental Oil & Gas holds 40 per cent) off Kenya.

It is the East African margin, particularly offshore Tanzania, that has already produced a host of multi-trillion cubic feet (tcf) gas discoveries, with energy-hungry India across the waters the natural home for future production.

Whether the East African gas discoveries represent yet another challenge to Australia's LNG ambitions is another story.

Far has so far matured three prospects in the L6 block. If they are oil-filled, the prospective resource has been estimated at 130 million, 178 million and 327 million barrels. If they are gas-filled, the range is from 388 billion cubic feet up to 807 bcf.

Across the block, the combined prospective resource has been estimated at 3.7 billion barrels of oil or 10.2 tcf of gas.

Those sorts of figures have a certain appeal to would-be farm-in partners given the discoveries being made elsewhere up and down the East African margin.

Robust Resources (ROL)

THERE has been much discussion about what gold's rebound to more than $US1600 an ounce means for the the shell-shocked local market in gold equities.

Gold equities remain down a thumping 35 per cent on their level of a year ago and there is a feeling that the raid on bank accounts in Cyprus might just be the tonic needed to convince investors it is time to stock up on some gold equities as a hedge against what might come from Europe's ongoing debt nightmares. Given the shell-shocked nature of local equities, it should be a case of easy pickings. But braver folk are going a step further and starting to dabble in gold stocks with Indonesian exposure.

As a sub-group of the ASX, they have been smashed something shocking thanks to the on-going saga at Intrepid Mines. It was done over last year by counterparties after spending $100m or so on its Tujuh Bukit gold-copper project. Tough for Intrepid, but even tougher for the other Indonesian players that don't have the same counterparty risk that befell Intrepid.

Robust Resources (ROL) is one such company. Its share price has been anything but robust in the past 12 months, tumbling more than 70 per cent to the 34c seen yesterday. There is a general gold equities sell-off component in that share-price dive, but it is mostly the dumping of anything with an Indonesian flavour on the ASX post the Intrepid saga.

It is a source of frustration to Robust chief executive Gary Lewis. As he said last week, subtract Robust's $25m cash from its $30m market cap and the company is basically being valued at the cost of a Kirribilli apartment.

For its current enterprise value of some $5m, Robust comes with its 1.18 million-ounce gold equivalent project on remote Romang island, also home to a potential low-cost, early-cashflow manganese opportunity.

The plan is to get in to production inside 18 months, initially from the Lakuwahi (oxide) gold project. None of that would be interesting if not for Robust having what Intrepid lacked -- clean and clear tenement status.

More than that, Robust has aligned its interests in Indonesia with the country's fourth-richest businessman and global noodle king, Anthony Salim. Salim owns 19.8 per cent of Robust and 22.5 per cent of the Romang island projects

http://www.theaustralian.com.au/bus...s-extra-distance/story-fnciil7d-1226605822183


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## smalltimer

Press Release:March 27th, 2013

$77.3 billion Expected to be Spent on Offshore Drilling in the Middle East and Africa Between 2012 and 2016 

Global Information Inc. would like to present a new market research report, "Offshore Drilling Industry in Middle East and Africa to 2016 - Pre-Salt Potential in West Africa and Significant Gas Finds Off the East African Coast Driving Exploration Activity" by GBI Research. 

Between 2007 and 2011, a total of $63.5 billion was spent on offshore drilling in the Middle East and Africa region. As a result of increased exploration activities in offshore Middle East and Africa, total offshore drilling expenditure for the region between 2012 and 2016 is expected to reach $77.3 billion, a 21.7% increase over the previous five year period. 

The growth of drilling expenditure is expected to spread to all major countries in the region, with countries in West Africa leading in terms of exploration activity. Increased drilling activities in countries such as Sierra Leone, and Liberia will see the emergence of relatively new players competing with seasoned veteran countries in West Africa such as Angola and Nigeria. Following a number of large discoveries, countries in East Africa such as Tanzania, Mozambique and Kenya are also driving operator activity. In the Middle East region, the development of the Manifa, Arabiyah and Hasban fields in the Kingdom of Saudi Arabia, South Pars in Iran and North Dome in Qatar will result in increased drilling activity over coming years. 

The figure below illustrates offshore drilling expenditure in the Middle East and Africa between 2000 and 2016. 

Ghana Expected to Emerge as Most Promising Exploration Region in West Africa
An abundance of offshore reserves have enabled Ghana to emerge as one of the most prominent countries in West Africa for the exploration of oil and gas. Between 2008 and 2012 period, 16 offshore discoveries were made in Ghana, second only to Angola, where 22 discoveries were made during the same period. Of the 16 discoveries made in the country, 13 were made in the Tano basin and the remaining three were made in the Cape Three Points basin. Other countries in West Africa where substantial discoveries have been made include Equatorial Guinea with seven, Cameroon with four, Gabon, Republic of the Congo, and Cote dIvoire with two each, and Mauritania with one. 

The Kosmos Jubilee discovery in 2007, which is considered one of the largest discoveries in West Africa in recent years, resulted in substantial changes to Ghanas production assets. The companys success at the Jubilee discovery led to a number of other successful discoveries at the West Cape Three Points and deepwater Tano blocks, including Mahogany, Teak, Akasa, and Banda. Kosmos plans to increase its acreage position in offshore Ghana and further accelerate its exploration activities in coming years. In the second half of 2012, Tullow and its associates submitted a Plan of Development (PoD) for the Tweneboa, Enyenra and Ntomme (TEN) project to the Ministry of Energy. The drilling of the Okure exploration well to the south of TEN is currently in progress. Hess Corporation made their first discovery in offshore Ghana in 2011. Later, in June 2012, Hess concluded drilling at the Hickory North-1 well and discovered approximately 100 net feet (30 meters) of gas condensate pay. 

Offshore Blocks of Mozambique, Tanzania and Kenya are Driving Operator Activity in East Africa
The geological conditions in East Africa support the possibility of abundant oil and gas reserves being located in the region. Oil was assumed to be present beneath parts of East Africa as far back as the late 19th century, when thick, greasy sediment was discovered on the shores of Mozambique. Moreover, various seismic studies have revealed that countries up the coast of East Africa possess vast natural gas resources as well as substantial offshore oil deposits. Major new gas discoveries in the offshore region of East Africa will result in the emergence of new countries such as Kenya, Mozambique and Tanzania as active players, alongside other oil producing countries. 

Over the past two years, exploration activities in offshore Tanzania have resulted in a number of gas discoveries. Some of these discoveries include the Pweza-1 gas discovery in block 4 at water depths of around 1,400 meters in 2010, the Chewa-1 gas discovery in block 4 at water depths of around 1,300 meters in 2010, the Chaza-1 gas discovery in block 1 at water depths of around 950 meters in 2011, the Jodari-1 gas discovery in block 1 at water depths of around 1,150 meters in 2012, and the Zafrani-1 gas discovery in block 2 at water depths of around 2,562 meters in 2012. A number of offshore wells are planned to be drilled, including one well in block 1, three wells in block 2, one well in block 5 and one well in block 6. These recent discoveries have made the country a prominent destination for investment in the range of $10-20 billion for exploration and production activities over the coming decade. 

The exploration activities of major players in Kenya have also increased over recent years. Anadarko has been the first major player to enter Kenya; the company has operating interest in blocks L-5, L-7, L-12, L-11A and L-11B. In June 2011, Apache Corporation acquired block L-8 in the country. Following this, companies such as BG, Camac and Total have entered the country for exploration activities. In offshore Kenya, various companies are in the initial stages of exploration. Apache drilled its first exploration well, Mbawa 1, in block L-8 in Q3 2012, and discovered natural gas reserves. The company and its partners Origin Energy Limited, Pancontinental Oil & Gas NL and Tullow Kenya BV are analyzing the well data in order to determine further exploration activities in the block. Total, Ophir and BG plan to drill their first Kenyan wells in 2013. 

In February 2010, Anadarko announced that the Windjammer exploration well in the frontier Rovuma Basin in offshore Mozambique had resulted in the discovery of more than 480 net feet of natural gas. This was followed by the discovery of Ironclad, the first well to encounter the presence of liquid hydrocarbons in offshore East Africa. Together with its partners, Anadarko has drilled 11 successful wells (nine in the Prosperidade complex, two in the Golfinho/Atum complex) to date in offshore area 1. The Prosperidade complex contains an estimated 17-30+ trillion cubic feet (tcf) of estimated recoverable natural gas resources, and the Golfinho/Atum complex contains an estimated 10-30+ tcf of recoverable natural gas resources. Anadarko has continued to make discoveries along with the group companies, and has identified 20 additional exploration prospects on this block. Global energy major ENI SpA is also planning to drill an additional five wells in area 4 in order to fully assess the blocks potential. Both ENI SpA and Anadarko are aggressively involved in exploration activity with the aim of exporting gas reserves to lucrative Asian markets. 

Increasing Trend towards Deep and Ultra-Deep Water Exploration and Production Drives Growth of Offshore Drilling Industry

In the recent past, offshore oil and gas exploration has rapidly spread to deep and ultra-deep waters in the search for fresh oil and gas reserves with attractive production potential. This marks a shift in trends from shallow water offshore drilling activity, which was popular until the 1990s. In the Middle East and Africa region, deepwater activities are concentrated in Angola and Nigeria. There has been a substantial increase in deepwater discoveries in these countries in recent years. Natural gas production, which was the mainstay of shallow water activity in Qatar, has registered a steady increase in recent years. Technological advancement has also paved the way for increased activity in deep and ultra-deep waters in the country. 

Geological similarity between subsalt areas in Angola and Brazil has increased hopes of discovering substantial subsalt reserves in the continental shelf areas of Angola. As shallow water resources decline, deep and ultra-deep subsalt areas are expected to play an increasingly prominent role in offshore oil and gas production. As exploration and production activity moves into deeper water depths, the market for the services of offshore drilling contractors, especially major and technically strong companies, is expected to register strong growth. 

Report: Offshore Drilling Industry in Middle East and Africa to 2016 - Pre-Salt Potential in West Africa and Significant Gas Finds Off the East African Coast Driving Exploration Activity

--------------------------------------------------------------------------------

http://www.giiresearch.com/press/7765.shtml


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## smalltimer

It's been a bad run of late, but will we re-test the $0:080 mark this week and turn for the next run up ?
Hit $0:081 on the last trading session before closing at $0:084.

Hope we see a turn soon, good luck all.


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## smalltimer

April 18, 2013, 7:15 a.m. ET
*Anadarko Provides East Africa Exploration Update *

Discovers New Natural Gas Field Offshore Mozambique; Encounters Oil Shows Offshore Kenya 

HOUSTON, TX--(Marketwired - Apr 18, 2013) - Anadarko Petroleum Corporation (NYSE: APC) today announced the discovery of a new natural gas accumulation fully contained within the Offshore Area 1 of the Rovuma Basin of Mozambique. The Orca-1 discovery well encountered approximately 190 net feet (58 meters) of natural gas pay in a Paleocene fan system. 

"Discovering another large, distinct and separate natural gas accumulation in the Offshore Area 1 continues our outstanding exploration success offshore Mozambique," said Sr. Vice President, Worldwide Exploration Bob Daniels. "We are designing an initial two-well appraisal program to define the areal extent of the Orca field, which will commence immediately after drilling our Linguado and Espadarte exploration wells. Orca is a single large Paleocene column, and its proximity to shore provides additional options and flexibility for potential future development." 

The Orca-1 exploration well was drilled to a total depth of approximately 16,391 feet (4,996 meters), in water depths of approximately 3,481 feet (1,061 meters). 

Anadarko is the operator in the Offshore Area 1 with a 36.5-percent working interest. Co-owners include Mitsui E&P Mozambique Area 1, Limited (20 percent), BPRL Ventures Mozambique B.V. (10 percent), Videocon Mozambique Rovuma 1 Limited (10 percent) and PTT Exploration & Production Plc (8.5 percent). Empresa Nacional de Hidrocarbonetos, ep's 15-percent interest is carried through the exploration phase. 

Anadarko also completed drilling its Kubwa well in the L-07 Block offshore Kenya, which encountered non-commercial oil shows in reservoir-quality sands. 

"We are very encouraged with our first test of Kenya's previously unexplored deepwater basin, in which mudlog and well-site evaluation of core data indicates the presence of a working petroleum system with reservoir-quality sands," Daniels said. "The Kubwa well tested multiple play concepts and provided useful data regarding the prospectivity of our six-million-acre position offshore Kenya. The rig will now mobilize south to drill the Kiboko well." 

Anadarko operates the L-07 Block with a 50-percent working interest. Co-venturers in the L-07 Block include Total E&P Kenya B.V. (40 percent) and PTT Exploration & Production Plc (10 percent). 

A map of Anadarko's position in Mozambique's Offshore Area 1 will be available under the "Media Center/Anadarko News" tab at www.anadarko.com. 

Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world's health and welfare. As of year-end 2012, the company had approximately 2.56 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies. For more information about Anadarko and APC Flash Feed updates, please visit www.anadarko.com. 

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release, including Anadarko's ability to drill, develop and commercially operate the drilling prospects identified in this news release. See "Risk Factors" in the company's 2012 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements. 
.


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## smalltimer

Share price looks like it well and truly broke through the last resistance level (0.080) so no telling now where its going to bottom out this time. Currently down 40% since its last mini rally back in Feb 4th,5th. Other companies must surely be looking at PCL's assets by now.

You can only wait and perhaps pick up a few more when it gets lower to average out your holdings if you got yours at a higher level.

In the mean time, looks like that Somalia is finally getting their act together next door which may pull in a bit more interest into the area and perhaps a bit more stability and confidence as well. Wonder if PCL try for a few more blocks there as well ?

**************************

Tuesday, 23 April 2013 11:22 Somalia targets Shell, Eni for oil, gas output-sharing contracts 

Somalia plans to sign 30 oil and gas production-sharing contracts this year, starting with companies that operated in the country before its government was toppled more than two decades ago, an official said.

“All prior holders have been contacted and three are ready to continue,” including Royal Dutch Shell Plc (RDSA), Eni SpA (ENI), and ConocoPhillips (C), Hussein Ali Ahmed, managing director of the state-owned Somalia Petroleum Corp., said in an interview on April 18 in the Kenyan capital, Nairobi. BP Plc (BP/) has indicated an interest in returning, while Chevron Corp. hasn’t formerly answered the Somali government’s call to come back, he said.

Somalia is one of the last frontiers for oil and gas in eastern Africa as it recovers from a two-decade civil war that shattered the economy and left the nation as one of the world’s least developed. In the region, companies including Eni, BG Group Plc (BG/) and Statoil ASA (STL) have discovered more than 100 trillion cubic feet of gas reserves in Mozambique and Tanzania, while London-based Tullow Oil Plc (TLW) has found oil in Uganda and Kenya.

Somali lawmakers in September elected Hassan Sheikh Mohamoud as the country’s president, marking the 16th attempt to establish an effective central government since 1991, when the former dictator Mohamed Siad Barre was overthrown. The country’s security forces, backed by regional peacekeepers, are still battling al-Qaeda-backed Islamic militants who control parts of southern and central Somalia, after fleeing the capital, Mogadishu, in August 2011.

Exploration Blocks

Somalia plans to increase the number of oil and gas exploration blocks to 300 of 5,000 square kilometers (1,931 square miles) each, after sub-dividing the existing 25 areas, according to Ahmed. Some blocks are currently as big as 200,000 square kilometers, Ahmed said.

“We want to sub-divide because they are too big to award to single companies for exploration in good time,” Ahmed said. Shell had five blocks before Barre’s government fell, he said.

The area available to explore for oil and gas in Somalia is equivalent to about one third of the country’s surface, Ahmed said. The country expects to complete legislation under which oil and gas activities will be managed within in months.

“We had drafted a law in 2008, but the new government asked to review it, and we expect they will send in to parliament soon, and the whole process should be complete in a few months,” Ahmed said


http://www.heemaalnews.com/index.ph...hell-eni-for-oil-gas-output-sharing-contracts

***************************

Stock Trend Analysis - Buy, Sell or Hold "PANCONTINENTAL OIL & GAS NL" (PCL.AX)?
PCL.AX is in a long term downtrend and it has traded about 63% of the time below the 200 day moving average in the last 52 weeks on daily average volume of 2.4M shares changing hands. For the medium term, the 50 day moving average is generally in a trading range with a bearish downward bias. The 20 day moving average is very weak as PCL.AX has been trading below its 20 SMA for 100% of the time in the last 8 weeks. PCL.AX may be overdue for a small relief rally but it has to be noted that as PCL.AX is still in a downtrend characterized by the 200 SMA, currently at 0.11, the most likely scenario is that rallies will be sold into until the 200 SMA is convincingly taken out


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## smalltimer

*Kenya ready to produce oil ‘now’ *

Kenya could start producing oil earlier than expected, with the company currently exploring oil saying it’s ready to start production “now” if the road network is improved.

This, according to Tullow Oil chief executive officer, Mr Aidan Heavey would make it possible for transportation of crude oil to Mombasa refinery pending construction of a pipeline.

Experts estimate that it will take three to five years to lay the pipeline and related infrastructure to Mombasa allowing pumping of the crude oil.

Scouting for partners

“If local roads were improved, Tullow could start producing from Kenya now, possibly trucking crude to the refinery in Mombasa,” Mr Heavey told Bloomberg at the side line of the company’s annual general meeting held in London Wednesday. 

The company is scouting for partners to finance development of the oil fields in readiness for the production.

“It’s too much for any company, even a major company,” Mr Heavey added.

Tullow Oil and its partner Africa Oil are currently exploring oil in northern Kenya and Ethiopia with result for the first well already termed as commercially viable.

The testing of the Twiga South-1 discovery was completed in February 2013 with a flow rate of 2,812 barrels of oil per day (bopd) was achieved, but according to Tullow, it has the potential to be increased to over 5,000 bopd. 

A further five tests are planned over the next month and are expected to lead to an increase in the previous total net pay of 100 metres. 

“…the Twiga South-1 well test has confirmed good productivity,” read a statement issued ahead of its AGM. The companies plan to drill 10 more wells.

However, it suspended exploration on its Paipai-1 well in March 2013 after encountering light hydrocarbon shows “pending agreement on future evaluation options.” 

Drilling efficiency

The company has contracted a “lighter, more mobile rig has been contracted to start work in September 2013 which will increase drilling efficiency by conducting testing operations and drilling shallow prospects and evaluation wells, the oil explorer said.

Mr Heavey further noted that should a few more wells in Kenya prove significantly productive, a pipeline from its wells in Uganda could be built to go through its wells in Turkana for onward transmission to Mombasa for refining. The pipeline will link the refinery in Uganda to the port of Mombasa. 

“Critically, agreement has been reached on a basin commercialisation plan which will include an export pipeline and a refinery sized to meet the local market demand,” Tullow further said. 
Raised hopes

Kenya has continued to attract interest following Tullow’s announcement in March last year, it had struck oil in the country raising hopes the country could be holding substantial oil resources. 

“The next exploration well is Etuko-1, which is expected to spud within the next two weeks. This well is testing the first prospect in the Basin Flank play, and is more centrally located in the basin compared to Ngamia and Twiga South which were drilled along the basin bounding fault,” the statement added.


http://www.nation.co.ke/business/ne...oil-now/-/1006/1846570/-/13ojlfu/-/index.html


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## smalltimer

RIO DE JANEIRO--Brazilian oil startup HRT Participacoes em Petroleo SA (HRTP3.BR) expects to have results from its first well drilled off the Namibian shore this week, a company executive said Tuesday. 

"I think this week we're going to have the results," said Luiz Sguissardi, HRT's governmental affairs manager. Mr. Sguissardi made the comments on the sidelines of Brazil's 11th round auction of oil and natural gas exploration concessions. 

HRT started drilling the prospect, dubbed Wingat, in March. The well is currently undergoing further testing that should be completed in coming days and allow the company to make an announcement, Mr. Sguissardi said. "I hope that we will have news," Mr. Sguissardi said. 

Namibia is the crown jewel of HRT's portfolio of oil and natural gas exploration blocks. Geologists believe the highly prospective region off Namibia's coast could hold billions of barrels of oil under similar conditions to Brazil's subsalt, where oil was discovered trapped under a thick layer of salt. The two areas were connected millions of years ago. 

HRT plans a three-well drilling campaign in West African seas this year. HRT is also in talks to sell an additional stake in its Namibian oil and natural gas exploration blocks, with proceeds earmarked to fund drilling of a fourth well. 

Portugal's Galp Energia (GALP.LB) previously acquired a 14% stake in three of HRT's exploration blocks in return for covering a portion of drilling costs. HRT holds operating stakes in 10 blocks and minority shares in two others in the Walvis, Orange and Namibe basins.


----------



## smalltimer

*HRT Namibia wildcat disappoints*

HRT confirmed its Wingat-1 well off Namibia has hit its geologic target, but reported no discovery and said operations are expected to wrap up next week....

http://africanoilandgasnews.com/news/hrt-namibia-wildcat-disappoints


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## smalltimer

*24th. June*
*Pancontinental Oil & Gas - Shareholder Up-Date*

http://www.pancon.com.au/investor-centre/asx/2013/reports/240613.pdf


----------



## smalltimer

*HRT source rock a good find*
Written by Christine-Rita Abankwah on 27 June 2013. 

http://www.observer.com.na/8-latest-news/1745-hrt-source-rock-a-good-find

You can liken Brazilian energy company HRT Participacoes em Petroleos’ (HRT) recent oil find to drilling for water on a farm, but finding it in the wrong spot, experts say. It is a good sign of existing water–you just need to find it in the spot where you want it. 

Industry experts speaking at this week’s oil and gas seminar co-hosted by Namcor and the Ministry of Mines and Energy, emphasised the need for people to understand the geological aspects of HRT’s recent announcement.

One of the major highlights of the seminar, held in Windhoek, was the presentation on Geology and Geophysics made by James Cheeseman, senior geologist at London-based Tullow Oil. Cheeseman is currently working on the development of large onshore Ugandan oil reserves.

Cheeseman’s presentation provided grounding in petroleum geology and the building blocks of the oil industry; the definition, usage and accumulation into reservoirs were some of the areas he touched on.

“The fact that HRT were able to recover oil from the Wingat-1 well proves the existence of a source rock which has been subjected to the right pressure and temperature conditions to produce oil in an area historically believed to be gas prone.

“This is very encouraging since it has de-risked at least one criteria necessary for a fully working oil system offshore Namibia. We await the results of HRT`s next two planned wells with great interest to see whether they can discover a fully working oil system, together with commercial volumes of oil,” he said.

He stressed the importance of patience, when considering the oil find and the factors involved in finding a working oil system.

In geology, a source rock refers to a rock rich in organic matter, which if heated sufficiently, will generate oil or gas.

Asked if it was not perhaps too early to celebrate an oil find, director and CFO for HRT, Martin Davis said, “I don’t think anybody is celebrating it [the oil find]. One of the major finds was the fact that we have a source rock that’s producing oil, because people felt that Namibia was just there to produce gas.

“But we do have source rock which is operating what we call the ‘oil window’ which has actually produced oil– that’s a fact. So obviously, we couldn’t find commercial volumes but actually finding a reservoir is much easier than finding a source rock.

“So even if HRT never find the oil, the fact that we found the source rock means not just us, but all the companies operating offshore have a great chance of finding oil,” he said.

He explained that HRT started drilling on 1 June and had committed to doing up to four wells.

HRT has experienceda series of shake-ups this year, including the resignation of its CEO and other key staff, as well as a drop in its share price following its abandonment of both the Wingat-1 well and another that turned up dry in northern Brazil’s Solimoes Basin.

Earlier reports show that the company’s market value shrank after investors were discouraged by the find of gas instead of oil in the Amazon, also considering the fact that gas sells for less than crude oil, yet is more expensive to transport.

“I can’t speak for HRT but it doesn’t take a genius to know that what they have found in Brazil is mostly gas, and shareholders in any oil and gas company would be looking for the black gold, not gas- that is what the market demands,” Namcor’s Managing Director ObethKandjozesays.

He explains that people would understandably be furious because they want to see more return on their dollar– which is the difference between oil and gas.

“There are more returns on equity, when you find oil rather than when you find gas. Of course, the other additional issue is where do you want to put your money?

“A significant amount of money was raised on the back of both Namibia and Brazil, now for you to split that money and get the returns on your dollar, shareholders will have their preference; I’m not saying that’s what happened, I’m just imagining what the discussions were.

“So Namibia is among the competition for that small cake. So what transpired is a choice between shareholders,” he says.

The oil and gas seminar aimed to educate non-specialist staff in Namibia, who are interested in the oil industry, especially following HRT’s recent oil find.

Led by local and international industry experts, presentation topics ranged from Drilling and Completions and Logging and Petrophysics to Reservoir Engineering and Petroleum Economics. Clara Altobell, international asset manager for Serica Energy, said she felt the seminar had achieved what it meant to.

“The significance is that it’s the first time in Namibia that we have industry people from all around the world that have come here with several years’ experience to impart their knowledge.

“It was open to people who don’t necessarily study geology or engineering, to appreciate what is involved in the industry. It’s an opportunity for people who don’t usually meet to network and talk about the industry,” she said.

Davis said he believed that since the event targeted people who were not familiar with the oil industry, those who were not on the technical side enjoyed gaining an understanding of the business.

“It’s important because we hope that the oil industry is going to play a fundamental role in the development of the economy in Namibia, so the more people that understand the industry, the better,” he said.

Kandjoze added, “The fact that the industry saw it befitting to dig as deep into their pockets as they did to be here, just to engage the public means that they take this country as a serious destination for oil and gas exploration. That is the most important message in my opnion.”

The organisers hosted the seminar with the significant logistical assistance of Serica Energy Plc. There are no immediate plans to repeat the event next year.


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## smalltimer

Tullow strikes new oil deposits in Turkana 

By George Omondi

Posted Wednesday, July 3 2013 at 21:16

Kenya’s profile as a potential petroleum producer Wednesday rose a rung higher after British oil explorer, Tullow Plc, announced that it had discovered additional deposits in the Lake Turkana basin.

Tullow said it had returned a 60 per cent overall success rate for its Kenya programme in the first six months of 2013, which included the drilling of nine exploration wells and appraising 11 others. 

“Exploration and appraisal across Tullow’s operated acreage in Kenya continues to be very successful,” the company said in its trading and operations update.

The highlight of the company’s activities in Kenya for the six months to June 30 was the discovery of fresh oil deposits with a net pay of more than 40 metres in Etuko-1, some 14 kilometres east of Twiga South-1 in the Lokichar basin.

READ: New oil tests boost chances of striking commercial deposits

Tullow’s partner, Africa Oil, had earlier described Etuko site as one of their most attractive prospects in Kenya, estimating its reserve at 231 million barrels per day.

The company had started its drilling on the block in May 2013, making it the first test in the basin located in South Lockichar, Turkana County.

Wednesday, the British multinational remained positive of prospects in Kenya as it outlined its second half-of-the-year programme which has lined up some 20 exploration sites locally, in Ethiopia, Mozambique, Mauritania, French Guiana and Norway.

“Following recent successes a third rig and a dedicated testing unit have been contracted to support increased exploration and appraisal in Kenya by year-end,” the firm said in a statement.

Tullow’s executives said they had significantly increased their estimate of the resources from both fields after successful flow-testing of Ngamia-1 and Twiga South-1, adjusting potential to over 250 million barrels of oil but warned that this could increase after appraisal. 

Early last year, Tullow stirred the local market with the announcement of an oil find in Turkana’s Ngamia-1 exploration block. 

Potential

The discovery of 200 metres of oil net pay reignited interest in Kenya’s oil and gas exploration fields especially after US-headquartered Apache Corporation followed suit late last year with announcement of discovery of natural gas pay at Mbawa 1 offshore exploration well.

Apart from the approximately 52 net metres (170 feet) of natural gas pay that the US Corporation encountered in three zones, it said the presence of hydrocarbons in its wells pointed to the areas’ oil potential.

The government has since altered its preferred path to the middle income status by adding mining and petroleum as the seventh pillar of the country’s long-term development blueprint, Vision 2030.

The county’s economic planners estimate that it will take two years for explorers such as Tullow to confirm whether the country has e commercial quantity of oil and another five years before production commences.

“We should use this time to build infrastructure and the human capital required for commercial exploitation of oil,” says Vision 2030 director-general Mugo Kibati.

Wednesday, Tullow announced that its flow testing programme at Ngamia-1 in the Lokichar Basin had been successfully completed and found to have a flow rate totalling 3,200 barrels per day (bpd).

The oil is of 25 to 35 degree American Petroleum Institute (API) gravity, sweet waxy and shows no indication of pressure depletion. 

“The analysis of the test data from both the Ngamia-1 and Twiga South-1 wells has resulted in the doubling of our previous estimates of net oil pay to 200 metres and 75 metres respectively,” the company said in its update.

It said the oil discovered so far also had an enhanced flow rate potential of around 5,000 bpd per well and significantly increased discovered volumes. 

Ekales-1, the next exploration well lined up in the Basin Bounding Fault Play on trend with Ngamia and Twiga-South, will commence drilling in late July 2013.


Link to article:

http://www.businessdailyafrica.com/...39546/1903846/-/item/1/-/mcb2t8z/-/index.html


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## smalltimer

*Dry Hole for HRT in Nambia*

RESULTS OF MUROMBE - OFFSHORE NAMIBIA

Rio de Janeiro, July 19, 2013 - HRT ParticipaÃ§Ãµes em PetrÃ³leo S.A. (the "Company" or "HRT") (BM&FBOVESPA: HRTP3, TSX-V: HRP) through its wholly-owned subsidiary HRT Walvis Petroleum (Proprietary) Ltd. ("HRT Walvis"), announces that the Murombe-1 (2212/06-1) ("Murombe-1"), the second offshore well in our exploratory drilling campaign has been concluded and is a dry hole. This well was targeting the Murombe Prospect, located in Petroleum Exploration License 23 ("PEL 23"), in the Walvis Basin, offshore Republic of Namibia.

The main objective of the well was to test the resource potential of the Murombe (Barremian Age) basin floor fan turbidites that demonstrate a well-defined amplitude anomaly on 3D seismic PSDM. The drilling plan was to penetrate the top Murombe reservoir and reach total depth (TD) below the reservoir at 5,658 meters, run the wireline logs, conduct sidewall core sampling, acquire fluid samples and abandon the well. A secondary target, the Baobab (Santonian Age) confined channel complex, would also be penetrated. 

The Murombe-1 well penetrated the Baobab objective and it contained 36 meters net sand within a 242 meter interval (15% N/G). The average porosity was 19% and the sands were water wet. 

The well-developed marine source seen in the Wingat-1 well located 15 kilometers east of Murombe-1 was also present above the deeper Murombe turbidite prospect. Ongoing sample analysis will determine the quality of this source interval. 

The Murombe objective was penetrated and petrophysical evaluation of wireline logs indicates that interval consists of non-reservoir facies with low porosity. The well reached at Total Depth of 5,729 meters. The wireline evaluation program included a quad combo tool and rotary sidewall cores. 

The Murombe-1 will be completed, considering wireline logging and P&A activities, in a total of 62 days, by the semi-submersible Transocean Marianas (NYSE:RIG). 

The Transocean Marianas will move 635 kilometers south to PEL 24 to drill the Moosehead Prospect in the northern Orange Basin after concluding P&A activities at the Murombe-1 location. The Moosehead-1 well will target Barremian carbonates and drill to a total depth of 4,100 meters. 

"This well proved that we are still on our learning curve in Namibian basins exploration. Our model was that the Baobab objective would be charged by the Aptian source rocks discovered at Wingat-1 and this did not occur. The Murombe-1 result further proved presence of Aptian source rocks, in the oil window, and poor reservoirs in the Murombe main target. We will now proceed to the Orange Basin to drill our third exploration location - the Moosehead-1 Prospect - in PEL 24," highlighted Milton Romeu Franke, the CEO of HRT. 

HRT is the operator of 10 blocks offshore Namibia, contained in four Petroleum Licenses. GALP Energia (NYSE Euronext Lisbon: GALP), with 14% participating interest, is HRT’s partner to drill the first 3 wells of the current exploration campaign.

Last Update on July 19, 2013

http://ir.hrt.com.br/hrt/web/conteudo_en.asp?idioma=1&tipo=32124&conta=44&id=177074


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## smalltimer

*BG Group entered Kenya in 2011, acquiring an interest in offshore Blocks L10A and L10B.*

E&P

In 2011, BG Group signed Production Sharing Contracts with the government of Kenya for two offshore exploration blocks – L10A and L10B. BG Group is operator on both blocks and holds a 40% equity interest in 
Block L10A (Cove Energy 25%, Premier Oil 20%, *Pancontinental 15%*) and a 45% interest in 
Block L10B (Premier Oil 25%, Cove Energy 15%, *Pancontinental 15%*). 

In line with the initial work programme commitment, 2D and 3D seismic data acquisition commenced in late 2011 and will continue to be processed during 2012, *with a view to drilling a first exploration well in 2013.* 

Blocks L10A and L10B together cover an area of more than 10 400 square kilometres in the southern portion of the Lamu Basin, located in water depths ranging from around 200 metres to in excess of 1 900 metres.

http://www.bg-group.com/OurBusiness/WhereWeOperate/Pages/Kenya.aspx

*It seems that Aussie Bulls now thinks that it is time to get in again ?*

http://www.aussiebulls.com/SignalPage.aspx?lang=en&Ticker=PCL.AX


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## smalltimer

*500,000 Barrels of Oil Per Day* 

Tyler Laundon - August 1, 2013

A rare and exciting event occurred in the oil market yesterday…

One of the world’s most promising new oil basins - in the East African country of Kenya - clearly holds enough oil to make commercial production possible.

This will be the first ever oil production in the country, with estimates topping 250,000 barrels of oil per day within the next five years.

That means Kenya could increase sub-Saharan African oil output by 8%, and make up for the last three years of decreased supply from Nigeria, according to Reuters. 

Two companies are largely responsible for this success: Tullow Oil (OTC: TUWOY) and its partner Africa Oil (OTC: AOIFF). Tullow now estimates that Kenya’s oil resource tops 300 million barrels.

That’s enough to justify a pipeline tie-in with Tullow’s projects in neighboring Uganda, which together could bring at least 500,000 barrels a day to the Kenyan coast.

The relative speed with which commercial quantities of oil have been discovered in Kenya is impressive. Just two years ago Africa Oil and Tullow had a dream and some cash…but no wells had been drilled.

Now that dream has become a reality, both for these companies and for shareholders.

After recommending shares of Africa oil two years ago, I’ve been closely watching events unfold in Kenya. I recommended Africa Oil to 100% Letter subscribers back in January 2011 when shares sold for $1.85. They have since soared by 320% to trade at $7.82.

While I’m personally sitting on a nice profit in the stock, I have no intention of selling. These are still early days in Kenya as its oil industry is barely in the incubation stage.

Over the last couple of years the companies have drilled five wells in the Lokichar Basin, in the northeast part of the country. Three of these wells hit pay-dirt, and collectively make commercial quantities of oil production possible by surpassing the 250,000 barrels per day threshold.

The latest, the Etuko-1 well, is what tipped the scales toward commercial viability when 90 meters of oil were discovered.

There is little doubt that East Africa is one of the hottest oil-exploration regions of the world, and M&A activity is picking up as companies try to secure rights to the best properties. Tullow and Africa Oil are right in the thick of it, driving the country toward its first ever domestic production which could be just two years away.

This will most likely be achieved by moving the oil by road or rail, given that pipeline infrastructure – which is considerably more complicated - is likely five years away.

That’s because Kenya, Ethiopia, Uganda (and let’s throw in Somalia too) currently lack the infrastructure to allow for commercial-scale oil production. To make that dream possible there are at least a few more years of cross-border negotiations and development.

A slide from Tullow's investor presentation shows proposed development options for the region (see below image). You can see how a pipeline (or multiple pipelines) could go directly from Lake Albert in Uganda to multiple locations along the coast of Kenya, picking up oil along the way.

The scenario I believe is most likely at the moment is the pipeline to Lamu for export. This is an increasingly likely route given these latest drill results.

What’s more exciting than surpassing commercial thresholds, however, is that these latest discoveries could just be the tip of the iceberg.

There are more than two dozen prospective sedimentary basins in the entire East Africa Region, spreading over Kenya, Uganda, Ethiopia and Somalia. Tullow and Africa Oil have rights to a good portion of this acreage. And the companies have already selected 90 additional drilling prospects.

That’s a lot of potential drilling catalysts for investors to keep an eye on. And just one reason why I believe there are still gains to be made investing in the region.

I’ve recently put together a detailed investment report on the entire region. The report explains all of the details of oil drilling in East Africa, including my investment analysis of the top companies. The most exciting thing you’ll discover in my report is details on a new company that’s preparing to drill its first well in the region. This stock could be the “next” Africa Oil. You can get all the details by clicking here now.

Good investing, Tyler Laundon - Newport, Rhode Island

http://www.wyattresearch.com/article/500000-barrels-of-oil-per-day/30134


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## smalltimer

*Acquisition and merger deals sweep Kenya oil industry *By JOINT REPORT The EastAfrican

posted  Saturday, August 3  2013 at  13:06

Kenya’s recent successes in oil exploration are triggering a new round of mergers and acquisitions in the lucrative but high-risk business as the new finds reshape company strategies.

Junior exploration firms ”” companies that do exploration in the hope that a positive find will tempt shareholders to invest more in them or make them an acquisition target ”” are excepted to become prime targets for multinationals seeking a foothold in the country before commercial production of crude oil and natural gas starts.

Over the past three months, at least four deals have been closed and another three are expected in the coming months, making this the busiest year in Kenya’s exploration business.

The country’s risk profile has been greatly reduced by last week’s announcement by Tullow Oil and partner Africa Oil that their find was commercially viable as well as the discovery of gas by Apache Corporation in offshore exploration area L 8 in September last year.

Tullow estimates it has discovered about 300 million barrels of oil.

Elsewhere in Kenya, in the Anza Basin in Block 10A, the Paipai-1 well was drilled in March and encountered light hydrocarbon shows while drilling. The well has been suspended and will be tested in the future.

Interest in offshore Kenya is likely to be raised as Anadarko Petroleum Corporation has high expectations of making a discovery in the Kiboko well being drilled in exploration area L11B in the Lamu basin.

The discoveries confirm the existence of hydrocarbon deposits and offer a deeper understanding of the region’s geological features as well as reducing the risks of hitting dry wells by multinationals

*IFC investment*

Early July, the International Finance Corporation, the private investment arm of the World Bank, said it was investing $60 million in a new UK-based company, Delonex Energy, as part of a $600 million equity line to be used for oil and gas exploration in the East African region.

First Oil Plc has acquired a 30 per cent interest of Bowleven’s exploration rights in onshore exploration area 11B in north-western Kenya jointly owned by Adamantine Energy.

Simba Energy in May signed a memorandum of understanding for Ajax Exploration to acquire 66 per cent in area 2A near Mandera town in north-eastern Kenya.

ERHC Energy Inc has signed a letter of intent for a multinational to acquire part of the firm’s interest in area 11A near Lodwar town to expedite exploration work that requires a well to be drilled by 2015.

FAR Ltd and *Pancontinental Oil and Gas are seeking to sell part of their exploration rights * to a block offshore area L6 to raise funds for well drilling by 2014.

To illustrate the risk, considering that in 2007, Woodside spent $100 million to drill Kenya’s first offshore well on the L5 block situated in the Lamu basin, but the well turned out to be dry.

Apache found gas on the block adjacent to Woodside’s.

Kenya has for a long time been seen as a frontier exploration field as there was no commercial discovery of oil, which made oil companies wary.

For example, Citigroup estimates that the discovery of oil in the Ngamia and Twiga South wells doubled the chances of striking oil in the Lokichar basin from 15-20 per cent to approximately 40-50 per cent.

Interest in Kenya’s offshore areas is likely to be raised by Anadarko Petroleum Corporation making a discovery of either oil or gas in Kiboko well, currently being drilled in acreage L11B in the expansive Lamu basin.

“We are drilling Kiboko prospect, designed to test multiple cretaceous sands. While we are early in our exploration programme, we remain very optimistic about the potential this area holds,” said Anadarko’s spokesman Brian Cain.

Anadarko started on April 19 sinking on Kiboko prospect a well expected to reach a depth of 3,000 metres in acreage L11B. The firm had encountered non-commercial oil shows in Kubwa well in area L 7.

Anadarko’s capital expenditure on the two wells is over $250 million.

Tullow and Africa Oil’s announcement marks yet another milestone for Kenya, which is emerging as a hot spot for oil and gas exploration, as well as other minerals like gold and rare earths.

On July 19, mineral explorer Cortec announced it had found rare earths deposits worth $62.4 billion, raising Kenya’s profile as a potential producer.

Mrima Hill, in the coastal county of Kwale, has one of the top five rare earth deposits in the world. The area also has niobium deposits estimated to be worth $35 billion, Cortec said.

The main challenge for Tullow and other oil marketers will be how to evacuate the oil, considering that the country lacks the requisite infrastructure required to lift the oil to the country’s port for export.

Tullow has indicated that it would look at lifting the oil and gas through rail and roads as it awaits an agreement with the government on building a pipeline.

“Resources discovered to date are of a scale that the partnership will initiate discussions with the government of Kenya and other relevant stakeholders to consider development options. These discussions include consideration of a ‘start-up phase’ oil production system with potential to deliver significant production rates with oil export via road or rail in advance of a full-scale pipeline development,” said Tullow in its 2013 half year results.

At least 15 wells will be drilled in Kenya in the next 12 to 18 months, which could further “de-risk” the country and increase its appeal among oil majors.

Taipan Resources Corporation, which wholly owns exploration area 2B, is among junior exploration firms in Kenya that are likely to form joint ventures with international companies, according to industry players.

Others are A-Z Petroleum, which has a 100 per cent stake in exploration area L1A and L3 as well as Imara Energy Corporation, and Rift Energy Corporation that wholly owns acreage L19 and L20.

“We welcome First Oil as a strategic partner in our early stage exploration activities in East Africa and look forward to working with the team in this exciting emerging area,” said Bowleven’s chief executive Kevin Hart.

First Oil, which has since inception in April 2001 developed into the largest private company producing oil and gas in the North Sea in Britain, may also contribute up to $3.6 million to Bowleven’s new investments in East Africa.

ERHC’s chief executive Peter Ntephe said negotiations are currently being held with the integrated company involved in exploration and refining as well as distribution and marketing of petroleum products.

Any agreement reached on sale and acquisition of a portion of exploration rights of acreage 11A near Lodwar town will be subject to approvals of the boards of the two firms and the Kenyan government.

The Simba Energy and Ajax deal requires Ajax to commit to fund exploration work including drilling one well, representing gross investment of up to $36.5 million and pay Simba up to $3.1 million for past expenses incurred on the acreage.

Simba’s managing director for operations, Hassan Hassan, said the MOU with Ajax provides an attractive valuation marker for the asset and delivers required funding for the upcoming exploration campaign.

Simba anticipates it will receive government approval later this year.

Ajax’s associate, GeoDynamics Worldwide, in 2012 conducted a seismic survey that identified potential areas with deposits for oil and gas in acreage 2A.

“We now intend to apply our suite of technologies with the aim of speeding up the exploration phase, and drill our first well in late 2014,” said Ajax chairman Andrew Shrager.

Pancontinental has a 15 per cent interest in offshore acreage L8 owned by Apache among others. Pancontinental’s interest in area L8 may reduce to 10 per cent if Tullow acquires a five per cent stake from the Australian firm.

Kennedy Senelwa and Peterson Thiong’o

http://mobile.theeastafrican.co.ke/.../-/format/xhtml/item/0/-/2s9t7hz/-/index.html


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## smalltimer

*Firm confident of major Namibia oil find*
Published August 15, 2013

WINDHOEK (AFP) –  Finding large quantities of oil in Namibia is only "a matter of time" the head of Brazilian oil firm HRT said on Thursday, playing down lacklustre initial drilling results.

The chief executive of HRT, Milton Franke, told AFP he was confident Namibia would become the latest in a string of major Africa crude producers, despite around a dozen exploratory wells largely coming up dry.

HRT discovered some oil in a Walvis Basin well off Namibia's Skeleton Coast earlier this year but not in commercial volumes.

"HRT believes that finding oil in Namibia is a matter of time. Both basins, Walvis and Orange, have good source rocks, in the oil generation window," he said.

Drilling at HRT's third test well is now underway, with results expected in mid-October, he added.

Franke said they had learned from experience in Brazil that patience is needed.

"We see that in Campos Basin the first commercial oil discovery came with the drilling of the ninth well. Today it is the largest producer of the country."

Similarly, in Brazil's Santos Basin around 50 wells were drilled before major energy discoveries, he said.

In Namibia offshore exploration began in the late 1960's and resulted in major gas finds, but so far no oil.

But there are high hopes that Namibia could replicate crude discoveries in neighbouring Angola to the north, Africa's second-biggest producer of crude, after Nigeria.

"There is much work to do in Namibian basins exploration. If it is not HRT that will come up with the first oil discovery, it will be another major or independent oil company."

The company operates 10 offshore blocks in Namibia and its exploratory drilling programme is worth around $200 million.

Franke became CEO in May, after serving as the firm's production director and working with Brazilian state-backed oil major Petrobras.

Other companies with exploration licenses in Namibia include Spain's Repsol and Petrobras.

http://www.foxnews.com/world/2013/08/15/firm-confident-major-namibia-oil-find/#ixzz2c7A4gBjn


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## smalltimer

*Kenya From Nowhere Plans East Africa’s First Oil Exports*
By Eduard Gismatullin
August 19, 2013

Kenya is headed to become the first oil exporter in East Africa, moving in less than five years from being a have-not nation to the regional leader in cutting reliance on foreign energy suppliers such Royal Dutch Shell Plc. 

After Tullow Oil Plc (TLW) discovered oil last year, Kenya is set to start shipments in 2016, overtaking neighboring Uganda, where Tullow found crude more than seven years ago. The U.K. explorer plans to start pumping in Kenya as soon as next year, Chief Operating Officer Paul McDade said in an interview. Kenya’s deposits may top 10 billion barrels, according to the company, more than three times the U.K.’s remaining reserves. 

Exports will underpin Kenya’s shilling currency and are being pushed by a government that wants a lead on Uganda and Democratic Republic of Congo, whose East African resources in recent years attracted explorers such as China’s Cnooc Ltd. (883) and France’s Total SA. (FP) Most oil companies traditionally had focused on the African powerhouses of Nigeria and Angola to the west, and Libya and Egypt on the Mediterranean. 

Oil will allow Kenya to “diversify export earnings and act as a catalyst for infrastructural spending, especially on the transport network,” Phumulele Mbiyo, regional head of macroeconomic research at Nairobi-based CfC Stanbic Bank Ltd., a unit of Standard Bank Group Ltd., said in an interview. “The shilling is expected to benefit from inflows of foreign exchange and reduced spending on fuel imports.” 

Kenya imports all its fuel, almost 80,000 barrels of oil a day at a cost of more than $8 million a day, according to U.S. government data. It relies on exports such as coffee and tea to support the balance of trade in a $37 billion economy, East Africa’s largest. 

Viable Rate 

Tullow estimates it’s found more than 300 million barrels of oil equivalent resources after making three discoveries in Kenya’s South Lokichar Basin. In February, Twiga became the first well in Kenya to produce oil at a commercially viable rate and has the potential produce 5,000 barrels a day. 

Vivo Energy, a Shell joint venture with Vitol Group, as well as Total and KenolKobil Ltd. are the biggest suppliers of crude and petroleum products to the nation. Kenya Petroleum Refineries Ltd., the nation’s sole refinery, half-owned by Essar Energy Plc (ESSR), only refined crude from Abu Dhabi last year. 

The discoveries have been made in the remote and underdeveloped Turkana region in the northwestern part of Kenya’s Rift Valley. Shipments will initially be made by truck or train for refining in Mombasa or exports. Once more fields are discovered and developed a pipeline can be built. 

Bullish Idea 

Kenya oil exports are “a very bullish idea, because Turkana is one of the least developed parts of Kenya,” Clare Allenson, an analyst at Eurasia Group, said in a phone interview. “This is definitely worth watching to see how” it will progress. 

Tullow and partner Africa Oil Corp. (AOI) plan to spend at least a year exploring for further deposits. They have two drilling rigs in Kenya and expect to secure one more later this year. 

The Kenyan government wants things to go faster. 

“They are not drilling enough wells,” Kenyan Petroleum Commissioner Martin Heya said in phone interview from Nairobi. “Uganda drilled a long time ago, but it’s possible that we can produce earlier than anybody else. We shall be happy.” 

Tullow is facing delays in Uganda, where the government and oil companies are negotiating the terms of production after 1.7 billion barrels of oil were discovered. Oil from landlocked Uganda will eventually be exported through Kenya. 

Local Refinery 

Ugandan President Yoweri Museveni’s government has delayed the $10 billion investment planned by Tullow and its partners, Total and Cnooc, to tap the Lake Albert fields. The sides need to agree on the size of a local refinery and an export pipeline, which is likely to cross Kenya in 2018. 

“Uganda missed the boat and Kenya will become the oil-sector hub,” John Small, the chief executive officer of the Eastern Africa Association, said in an interview. “It only makes real commercial sense to cooperate and have linked pipeline network” in the region. 

In Kenya, Tullow and Africa Oil still have to submit their field development plan to the Kenyan government. Eventually, a pipeline will be built from the fields to a terminal on the Indian Ocean coast, McDade said. 

“For the Kenyan economy it’s going to be a major step forward,” Africa Oil Chief Executive Officer Keith Hill said in a phone interview. “Once the export pipeline is completed they will have a significant influx of capital coming in from oil export revenues.” 


http://www.businessweek.com/news/20...-plans-east-africa-s-first-oil-exports-energy

Also , check out Hartley's last PCL report at;

http://www.pancon.com.au/investor-centre/broker-reports/reports/230713.pdf


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## smalltimer

6 September 2013 

*TULLOW OIL FARMS-IN TO NAMIBIA EL 0037 *

Pancontinental Oil & Gas NL is very pleased to announce a farmout agreement with Tullow Kudu Limited, a wholly owned subsidiary of Tullow Oil plc, regarding licence EL 0037 offshore Namibia. 

See details at ;

http://www.pancon.com.au/investor-centre/asx/2013/reports/060913.pdf


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## smalltimer

Very interesting trading over the past week starting with a sell down in the first four days and ending with the announcement of the farmout agreement on Friday.


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## smalltimer

*BG Group to spend $160m on oil wells*
By KENNEDY SENELWA Special Correspondent

posted  Saturday, September 14  2013 at  12:57
UK oil explorer BG Group will next year spend Ksh13.9 billion ($160 million) to drill two offshore wells for crude oil and natural gas in Kenya, its executives said.

The London Stock Exchange-listed firm expects to move a rig from Tanzania and sink two wells in exploration area L10A and L10B near Mombasa in January 2014. Drilling of the two wells is expected to take about six months.

“The current plan is to relocate Deepsea Metro-1 drillship from Tanzania to Kenya in the first quarter of 2014,” said BG’s external communications manager Mark Todd.

The first well will be in shallow waters with depths of 500 to 700 metres at least 20 kilometres from shore. The second well will be in the deep sea at depths of 1,000 to 1,600 metres over 110 kilometres from shore.

Drilling activity is expected to intensify in the final quarter of this year and early next year with brightening prospects of oil and gas.

On September 3, Africa Oil ”” a Canadian company prospecting for petroleum in northern Kenya ”” raised five-fold the estimated deposits in the Lokichar basin, affirming a recent report by British exploration firm Tullow Oil.

In a released statement, Africa Oil said that northern Kenya has commercially viable oil and gas reserves. The firm is an exploration partnership with Tullow Oil in some of the wells with fuel deposits in northern Kenya.

Mr Todd said BG Group believes Kenya has the potential to discover either crude oil or natural gas in acreage L10A and L10B as various companies have discovered fossil fuel deposits in other exploration areas in the country.

BG owns 40 per cent of acreage L10A and 45 per cent of acreage L10B.

http://mobile.theeastafrican.co.ke/Business/-/433844/1992376/-/format/xhtml/-/vgsr8a/-/index.html


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## smalltimer

PCL Took another 14 1/2 % hit in early trade today. 
Best of luck guys, but it seems that it may fall further before it gets better.

******************************

*KENYA L8 CLARIFICATION *
10 October 2013 

Pancontinental notes media reports that Bob Dye, Apache's senior vice president of corporate affairs, has stated that Apache is withdrawing from the L8 licence, offshore Kenya. 

Apache has not yet given written notification of its withdrawal to the L8 Joint Venture participants under Article 13.1(A) of the L8 Joint Operating Agreement (“JOA”), nor has it given written notice of its resignation as Operator under the JOA. Withdrawal from the JOA requires 60 days’ written notice, and resignation as Operator requires 90 days’ notice; however Pancontinental expects Apache to give these notices shortly. 

The media report of Apache’s withdrawal from L8 (its only venture in Sub-Saharan  Africa) follows other Apache divestments around the globe, including Apache’s divestment of projects in the Gulf of Mexico (announced 18 July 2013), in Alberta, Canada (announced 15 August 2013) and in Egypt (announced 1 September 2013).The series of withdrawals are consistent with Apache’s announcement in May 2013 that it planned to divest $4 billion in assets by year-end 2013. 

The L8 Joint Venture will discuss the best way forward and determine the new operator of the Licence after it has been formally notified by Apache of its intention to withdraw.  

Subject to ministerial consent Pancontinental expects to increase its interest in the L8 licence on a pro-rata basis, at no material cost.  

The current participants in the L8 licence are -

Apache Corporation 50% Origin Energy Limited (ASX: ORG) 20% 
Pancontinental Oil & Gas NL (ASX: PCL)  15% 
Tullow Oil plc           15% 

Pancontinental considers, while it is unfortunate to see Apache’s  strategic withdrawal, that this provides an opportunity to increase its interest in what it regards as a very worthwhile exploration area offshore East Africa. 

Kenya L8 Licence Potential Including L8, Pancontinental holds interests in four licences over 20,000 sq km offshore Kenya. 

L8 contains numerous Prospects and Leads to pursue for oil and Pancontinental is now looking forward to a new Operator and a re-formed Joint Venture. 

Following the Mbawa 1 gas discovery, it is interpreted that there is a major, deeper opportunity to discover oil in strata that have not yet been tested in L8.  A number of Prospects have been mapped out as potential future drilling targets to test this concept. 

Pancontinental continues to regard Kenya as one of the best and most stable business environments in Sub-Saharan Africa. 

About Pancontinental Oil & Gas NL 

Pancontinental Oil & Gas NL is an independent oil and gas exploration company listed on the Australian Securities Exchange (ASX: PCL). 

Pancontinental’s focus is on exploring for oil in new frontiers in Africa and surrounding regions and it currently holds interests in four licences over 20,000 square kilometres in East Africa offshore Kenya, and the EL0037 licence over 17,000 square kilometres offshore Namibia. 

Pancontinental is one of the few small-cap junior companies amongst an increasing number of much larger companies offshore East Africa and Namibia. 

Pancontinental’s website is www.pancon.com.au/ 

Yours sincerely for and on behalf of Pancontinental Oil & Gas NL 

Barry Rushworth, CEO and Director 

The summary report on the oil and gas projects is based on information compiled by Mr R B Rushworth, BSc, MAAPG, MPESGB, MPESA, Chief Executive Officer of Pancontinental Oil & Gas NL. Mr Rushworth has the relevant degree in geology and has been practising petroleum geology for more than 30 years. Mr Rushworth is a Director of Pancontinental Oil & Gas NL and has consented in writing to the inclusion of the information stated in the form and context in which it appears.


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## smalltimer

*Apache Corp abandons hunt for hydrocarbons in Kenya*

American explorer Apache Corp has abandoned its hunt for hydrocarbons in Kenya, a hotspot in the race for new oil and gas deposits, after finding only non-commercial quantities of gas in its sole Kenyan interest.

Bob Dye, senior vice president of corporate affairs at Apache, said the company was relinquishing its 50 per cent stake in Kenya's offshore L8 Block where it partnered with Britain's Tullow Oil and Australia's *Pancontinental Oil and Gas*.

"We determined that other areas in our worldwide portfolio provided better opportunities for future capital investments," Dye told Reuters in an email late on Tuesday.

Dye said Apache had informed the Kenyan government of the move on Sept. 27. The decision, he said, was not influenced by a militant attack on a Nairobi shopping mall a week earlier which killed at least 67 people.

The attack, the worst on Kenyan soil since the 1998 U.S. Embassy bombing carried out by al Qaeda, has raised questions over the security of oil and gas exploration facilities. 

Commercially viable oil discoveries in Kenya, along with oil struck in Uganda and gas finds offshore Tanzania and Mozambique, underlines east Africa's potential to become a major oil and gas producing region in the next five years.

Other companies that own exploration blocks or are prospecting for oil and gas in on the Kenyan coastline include FAR Limited which is listed on the Australian Stock Exchange. 

In June this year, FAR Limited and *Pancontinental * announced that they are seeking to sell part of their exploration rights on a block off the coast of Kenya, to raise funds that will be used in drilling. 

FAR Limited owns 60 per cent of block L6, which has three prospects; Tembo, Kifaru and Kifaru West, while the remaining 40 per cent of the joint venture is owned by *Pancontinental*.

FAR, in disclosures contained in its latest annual report for the period ended December 2012 said that the combined prospective resources for the L6 block have been assessed at 3.7 billion barrels of oil or 10.2 trillion cubic feet of gas.

The company said that Tembo, Kifaru and Kifaru West have prospective resources of; 327, 178 and 130 million barrels of oil respectively or 807, 517 and 388 billion cubic feet of gas.

The cost of prospecting and drilling can run into millions of dollars and chances of striking oil or gas are usually low.

FAR Limited had assessed the chances of a discovery of the three prospects to be 21 per cent, 19 per cent and 18 per cent respectively

http://www.businessdailyafrica.com/...Kenya/-/539546/2025030/-/4m7kcrz/-/index.html


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## smalltimer

18 October 2013
Tullow Namibia EL 0037 Farmin Complete

http://www.pancon.com.au/investor-centre/asx/2013/reports/181013.pdf


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## smalltimer

*British oil firm in talent hunt ahead of drilling*

British oil and gas giant BG-Group has stepped up recruitment of senior managers for its Kenyan operation ahead of an expected drilling of off-shore exploratory wells later in the year.

The company, based in Reading, UK, said it plans to drill two wells at its South Coast blocks to determine whether they have commercially viable oil deposits.

Among the positions that the company seeks to fill include those of a policy adviser, lead accountant and a legal expert tasked with linking up with the government on issues such as tax and regulations once the oil exploration kicks off.

“BG Group plans to drill key exploration wells, and its first Kenya well is scheduled to spud around the end of the year,” said BG-Group chief executive Chris Finlayson in the company’s annual report.

Each well is expected to take between 60 to 80 days to drill.

Kenya has witnessed increased oil exploration activity in the wake of the discovery of commercially viable crude deposits in Turkana by another UK firm, Tullow Oil.

BG Group plans to spend Sh13.7 billion ($160 million) in drilling for oil and gas at the exploration blocks L10A and L10B located East of Mombasa island, in which it holds 40 and 45 per cent stakes respectively.

Other rights holders on block L10A are Cove Energy (25 per cent), Premier Oil (20 per cent) and *Pancontinental (15 per cent)*. Cove Energy and *Pancontinental* each hold 15 per cent in L10B with Premier Oil owning 25 per cent.

“Acquisition and processing of 2D and 3D seismic data has identified significant prospect in multiple gas and oil prone plays,” said BG-Group in its 2013 exploration activities appraisal.

Following the sinking of the first two wells, the company will move into the second phase of its exploration with a third well in 2015, it said in a projection of operations and strategy that was released in September

BG-Group also has operations in four other African countries in Tanzania, Egypt, Madagascar and Tunisia.

The government has also started to lay the groundwork for the commercial exploitation of Kenya’s oil reserves.

It has already moved to recruit an audit firm to monitor financial records of oil and gas exploration companies operating in Kenya, a key step towards commercial exploitation of the resource.

In August, the government through the National Oil Corporation of Kenya issued a call for expressions of interest from audit firms to carry out the work. The audit reports will be necessary when determining compensation to be paid to oil firms to cover their costs of exploration.

Only last month, Tullow made its fourth consecutive wildcat discovery, at the Ekales-1 well in Block 13T in Turkana County, and is now testing the commercial viability of its finds.

While the find is being tested for productivity, reservoir volumes are expected to be more than 50 million barrels gross recoverable oil.

In its July update, Tullow announced that Ngamia-1 and Twiga South-1 wells on additional study yielded a net oil pay of 200 metres and 75 metres respectively or double the previous estimates, with a combined potential of producing 250 million barrels of oil.

http://www.businessdailyafrica.com/...02/-/view/printVersion/-/agma0dz/-/index.html


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## PinguPingu

Wow, very thin trading today compared to its recent averages.


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## smalltimer

*Global firms eye growing oil and gas resources*
Posted by: The People in Business November 7, 2013 0 38 Views 

Four major international oil companies have shown interest in Kenya’s remaining oil exploration licences following the Turkana basin discovery, according to an economic update report. In its latest assessment of Kenya’s oil and gas potential, global analyst on economic matters, Oxford Business Group (OBG) says France’s Total, China National Offshore Oil Corporation, ExxonMobil and Chevron are also eyeing the huge exploration opportunities in the country.

“The Turkana discovery has led to major international interest in Kenya’s remaining oil exploration licences, including from France’s Total, China National Offshore Oil Corporation, ExxonMobil and Chevron, though no other companies have yet announced commercially viable discoveries,” says OBG in a statement. Kenya has 46 blocks, of which 44 are licensed to 23 exploration companies.

While the government plans to create and offer seven new blocks in the near future, OBG says the new interest has signaled that Kenya’s run of geologic luck continues. UK’s Tullow Oil and Canada’s Africa Oil have recently announced the fourth consecutive discovery of oil in Turkana, further indicating that interest will grow among international oil explorers.

Similarly, while activity in the natural gas sector is proceeding at a slower pace, following the recent departure of one explorer, the outlook for new finds is promising, OBG says in its report titled ‘Recent discoveries in Kenya highlight oil and gas potential. Tullow and Africa Oil, joint partners in the exploration of the East Africa Rift Basin, announced in late September that drilling revealed oil in the Auwerwer and Upper Lokone sandstone reservoirs, bringing their total discoveries in Kenya to an estimated 300 million barrels.

The companies had previously announced a major discovery in Turkana after beginning exploration in late 2012. The partners have exploration licences for 12 blocks and have identified 10 additional leads and prospects. They plan to drill 12 wells over the next year, the report further says. Meanwhile, there is continued activity around the existing licences.

The UK’s Premier Oil recently bought into an exploration project through a deal with Taipan Resources for Block 2B, which contains the Pearl prospect, with its potential for 100 million barrels. In the economic update, OBG says upstream investment in oil production already stands at an estimated Sh85 billion ($1billion) a year excluding exploration.

“It is expected to grow by 60 per cent per year through 2018,” notes OBG in the report. The sudden surge in interest has led Kenya to reconsider its regulatory regime for the award of licences. In July, the government announced it would adopt open tendering for exploration licences to replace the “first-come-first-served” process after recommendations by a World Bank consultant. The recommendation is anchored on the need for transparency in the tendering process and to attract competent contractors to the oil and gas sector.

“We recommend that Kenya adopts a public tendering regime for contract awards as more interest in the country’s exploration blocks yields competitive environment,” Hunton & Williams and Challenge Energy Consultants said in a final draft seeking to come up with a regulatory framework. The draft was made public at an energy forum in July attended by Energy and Petroleum Cabinet Secretary Davis Chirchir and World Bank officials.

Under the current regime, the Cabinet Secretary in charge of petroleum simply puts out a notice of available open blocks, paving way for interested contractors to submit applications for negotiations. However, the approach, based on first-come-first-served principle, has been criticised for handing mining rights to highly-connected speculators who make billions of shillings by selling them to real investors.

Following the Turkana discovery, the government also switched to a production sharing contract model for oil discoveries to replace its prior practice of collecting three per cent royalties on natural resources. OBG further says following the new government approach, oil production will also be subject to a 42 per cent corporate tax on net profits in addition to the PSC arrangement.

However, despite the significant discoveries, major production is still some distance away, the group observes. The IMF forecasts Kenya will begin producing oil in six to seven years. Tullow is more optimistic, predicting that Kenya could start exporting oil by 2016. - By GEORGE KEBASO

http://www.thepeople.co.ke/30629/global-firms-eye-growing-oil-and-gas-resources/


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## smalltimer

22 November 2013

*CHAIRMAN’S ADDRESS TO AGM* 

Ladies and gentlemen, I am very pleased to welcome shareholders and friends to the 2013 Annual General Meeting of Pancontinental Oil and Gas NL. 

The Company is planning for an active forthcoming year of 3D seismic and offshore drilling. 

Based on extensive interpretation of recent 3D seismic data, we will start drilling early in 2014 in the L10A area offshore Kenya,operated by BG Group. 

The L10A drill target is the very interesting Sunbird Miocene reef prospect. Miocene reefs like Sunbird are amongst the most prolific oil and gas fields around the world, and Sunbird is the first real test of this play type offshore Kenya. If Sunbird is successful we have numerous follow-up reef targets in our four Kenyan licenses. 

The L10 Joint Ventures are also considering a second well later in 2014. 

As part of Apache Corporation’s global project reduction strategy announced earlier in 2013, we have been advised of the withdrawal of Apache as the operating partner in our Kenyan L8 area.This is disappointing, however the Apache strategy is at odds with the enthusiasm that otherlarge companies have for East Africa, in general,and for Kenya, in particular. 

Amongst the other large players offshore Kenya we count Anadarko, Total, BG Group, ENI and PTTEP. These are among the most impressive oil and gas companies on the world scene. To the south of us in East Africa we also have Shell, Petrobras, Ophir, and Statoil, to name a few. 

The Apache withdrawal in no way affects the prospectivity of the area, and Australia’s own Origin Energy has taken up the reins as Operator in L8. Origin is Australia’s foremost electricity generation and distribution expert and we believe that this expertise will be very welcome in Kenya, which has only a nascent energy generation and distribution profile. 

We are also happy to have been able to take a share of the Apache interest, doubling our equity in L8 to 30%, at very little cost to the Company. 

We now count Pancontinental as the longest standing explorer amongst all of the international companies in Kenya. 

One of the Company’s key achievements this year was our success in negotiating with Tullow Oil as the farminee to our EL 0037 license, offshore Namibia. Tullow is one of Africa’s best oil finders, and EL 0037 is Tullow’s first entry to exploration offshore Namibia. EL 0037 covers a very large area of 17,000 sq. km in the Walvis Basin, a position we regard as the prime area for oil versus gas in this very exciting new exploration province. 

The Tullow farmin could involve as much as 130 million dollars expenditure on seismic and optional drilling, and this will be at zero cost to Pancontinental, as the Company retainsa 30% free carried interest through seismic and drilling, including any cost overruns. 

The Tullow farmin comes after a hugely important first-ever oil recovery offshore Namibia, immediately to the south of the EL 0037 area, confirming Pancontinental’s model. This oil recovery bodes very well for future oil discovery, and Tullow is already preparing for 3D seismic over a number of major prospective leads. 

Financially, Pancontinental retains a very healthy cash balance of approximately $32 million. We are expecting to
top this up by about $1 million through a cash recovery resulting from the Apache withdrawal from the L8 joint venture. 

In the near to medium term, the Company will maintain its efforts to farm out from its Kenya L6 and L8 licenses
and continue evaluating a range of new opportunities, especially in and around Africa. 

Overall, despite some recent interruptions, Pancontinental has increased its position in its range of worthwhile projects in key locations in Africa, and we are well funded to commence drilling early in 2014


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## smalltimer

November 22, 2013 10:08 am

*Tullow strikes oil in northern Kenya*
By John Aglionby in London

Tullow Oil, has found oil in one of its north Kenyan operations that have been disrupted by a dispute with local people.

The share price of the Africa-focused FTSE 100 explorer, which has fallen 35 per cent in the past year, rose 2.2 per cent in early London trading to 904p.

Tullow announced on Friday that its Agete-1 exploration well in Block 13T, close to the Ugandan border, has “discovered and sampled moveable oil”. 

It marks the fifth such oil find in Tullow’s exploration across the region, following oil strikes in its Twiga South, Ekales and Ngamia fields. It has a 50 per cent stake in the well with Toronto-listed Africa Oil holding the rest. 

Angus McCoss, Tullow’s exploration director, said the discovery “highlights the emerging world-class exploration and production potential within our rift basin acreage”. 

He added that further appraisal would be conducted in 2014 and pioneering wells drilled in similar rift basins.

Tullow was forced temporarily to abandon operations at Block 13T and the nearby Block 10BB last month after demonstrations and a break-in at its drilling sites.

Local Turkana people were upset that the company was using too many outsiders and contractors.

Tullow acquired its 50 per cent stake in the two blocks in 2010 as part of a wider deal that secured stakes in five adjacent Kenyan licences and one Ethiopian block in the east African Rift Valley system. 

Earlier this month Tullow said it expected to end the year with a record production level of 84,000 to 88,000 barrels of oil equivalent a day despite an exploration setback off the coast of French Guiana.

http://www.ft.com/intl/cms/s/0/1f567802-5355-11e3-b425-00144feabdc0.html#axzz2lPnLl6hC


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## smalltimer

*Namibia to limit oil, gas exploration*
Mon, 25 Nov 2013 2:23 PM

Namibia plans to stop oil and gas companies from carrying out off-shore exploration for part of the year, to protect the fishing industry, a senior official said Monday.

Amid concerns that seismic surveys may be disrupting the migratory routes of tuna, senior fisheries ministry official Anna Erastus told AFP such tests would now only take place from May to September.

"This arrangement is to be communicated to the companies that are issued with such licences by the ministry of mines," said Erastus.

Brazilian oil firms HRT and Petrobras, as well as Spain's Repsol have exploration licenses in Namibia.

Offshore exploration began in Namibia in the late 1960's and resulted in major gas finds, though little in the way of oil.

But technological advances mean there are now high hopes that Namibia can become a crude producer on a similar scale to neighbouring Angola, Africa's second-biggest producer after Nigeria.

A rush of companies are now carrying out seismic testing in the southern Atlantic, which involves bouncing sound waves off undersea rock formations to detect deposits.

But there are fears these activities may be responsible for a decline in the tuna haul, from 1800 tonnes last year to about 650 tonnes so far this year.

Output in 2011 was 4000 tonnes.

Namibia's fishing industry is worth around 5-billion rand ($500-million) a year.

Erastus said that as a first step the ministry has decided to delay a proposed seismic survey for oil and gas due to take place in the Orange River Basin in February.

She did not name the company involved.

Namibian officials are also in talks with neighbouring South Africa, which Windhoek wants to adopt similar restrictions.

"The issue is further complicated by the fact that the same company is also proposing to undertake a February survey in South African waters, just across the Namibia-South Africa border," Erastus said.

"This is in the direct path of tuna migrating from South African to Namibian waters."

Apart from the unspecified upcoming survey, there are about four wells that are expected to be drilled in 2014.

A task force has also recommended further research to establish the effects of noise pollution on the fish, explore alternative methods of conducting seismic surveys and satellite tagging of tuna to identify migratory routes.

Namibia's cabinet in September placed a 16-month moratorium on marine phosphate mining, pending an assessment on its impact for fishing.

http://business.iafrica.com/worldnews/888753.html


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## smalltimer

*PCL's Share Price is not looking good at the moment*

I can't see much improvement coming until drilling starts again. :1zhelp:
So when to take the gamble and top-up on a few more shares ?
Will we see 4.5 cents in the near future ? There are not many buyers out
there at the moment, so we can expect it to get worse before it gets better.


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## smalltimer

*Italy's ENI commits $28 bln to boost African output*

Italy's ENI aims to drill 140 new wells over the next four years to 2016, part of an ambitious $28-billion programme the company hopes will boost production in African markets.

Heavily invested in the resource-rich continent, ENI last month cut its production targets to reflect shrinking volumes from Libya and Nigeria, saying it expected output to be lower than in 2012.

"We are targeting 3 billion barrels of equity resource in four years. If achieved this will give us access to new resources at an exploration cost of $1.2 a barrel," Luca Bertelli, ENI's executive vice president for exploration, told an African oil and gas conference on Thursday.

"With the results achieved so far in 2013 we are very confident that this target will be met," he said at the conference, organised by Global Pacific & Partners.

Bertelli said the Italian company aimed to spend an average of $7-billion a year to develop a variety of projects in deep-water *Nigeria, Ghana and Mozambique*.

A giant discovery in Mozambique's Rovuma basin is the group's biggest resource with an estimated 80 trillion cubic feet of gas.

"Production is expected to grow with an average production growth of 3.2% per year," Bertelli said.

Last month, the group saw its oil and gas production fall 3.8% in the third quarter to 1.653-million barrels of oil equivalent a day.

Edited by: Reuters

http://www.engineeringnews.co.za/ar...its-28-bln-to-boost-african-output-2013-11-28


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## smalltimer

Announcement  9 December 2013

*SUNBIRD-1 DRILLING OFFSHORE KENYA PLANNED TO COMMENCE MID- JANUARY 2014*

* Sunbird Prospect approved for the first exploration well by the Kenya L10A Joint Venture, led by BG Group 

* Sunbird-1 drilling planned to commence mid-January 2014 using drillship Deepsea Metro-1 

* Sunbird-1 will be a play-opening first-ever test of a Miocene Pinnacle Reef offshore East Africa 

* Numerous other Prospects and Leads have been high-graded for a second L10A / L10B well, potentially mid-late 2014 

Pancontinental Oil & Gas NL (“Pancontinental”) is pleased to announce that final preparations are under way for the Sunbird-1exploration well in licence area L10A offshore Kenya, with a best-estimate commencement date between 9 to 12 January 2014. 

Sunbird-1 will be the first-evertest of a Miocene Pinnacle Reef offshore East Africa and the first-ever exploration well within L10A in the Lamu Basin offshore southern Kenya. 

L10A operator BG Group intends to use the drillship Deepsea Metro 1 to drill Sunbird-1. 
The drillship is on contract to BG Group and is currently drilling offshore Tanzania. 

Barry Rushworth, CEO and Executive Director of Pancontinental commented - 

“We are very pleased to have been allocated the Deepsea Metro 1 for drilling next month. The Sunbird Prospect is one of a number ofMiocene Reefs that have never before been properly tested offshore East Africa. Miocene Reefs globally have a high record of success for oil and gas and they are often highly productive, due to high porosity and permeability. 

Commercial oil has not yet been discovered offshore East Africa, however oil shows in reservoir-quality sands (Kubwa-1), the discovery of gas from a possible mixed gas/oil source rock (Mbawa-1) offshore Kenya, the nearbyPemba Island oil seep and oil slicks on satellite imagery, all lead us to believe thatPancontinental and its partners are pursuing an important oil play offshore Kenya. 

Pancontinental believes the inboard area of L10A is ‘oily’ and the Joint Venture is targeting a significant oil opportunity in Sunbird-1. The Joint Venture is looking to be the first group to make a first commercial oil discovery in a region that continues to have increasing attention from the industry majors.” 

The Sunbird Prospect is a buried Miocene Pinnacle Reef build-up, straddling the western sector boundary of the L10A / L10B areas. The licence areas together cover 10,547 sq km in water depths from 200m to 1,800m offshore from the port of Mombasa. 

The Sunbird well is planned to take 50 to 60 days to drill to 3,000m below sea level, with an option to extend to 3,700m. It is intended to plug and abandon the well regardless of the drilling outcome. Water depth is 721m. 

The Sunbird Prospect is a “textbook” Miocene Reef, with a prominent central reef core and a detrital skirt of talus material. It is interpreted that the reef was “drowned” by rising sea levels and then buried and sealed by fine grained hemipelagic sediment. 

In a number of regions around the globe buried Miocene Reefs host large oil and gas reserves, such as the extensive reefs of Southeast Asia and the pinnacle reefs of Libya. 

Miocene Reefs are often relatively shallow (700 to 2,000m burial depth), and are noted for their high porosity, permeability, and high flow rates of oil and /or gas. 

The Sunbird Prospect covers an area of 73 sq km, including the flanking areas, with vertical relief of approximately 700m. 

While not all Miocene Reefs globally contain oil or gas and it will not be known if the Sunbird Prospect contains any oil or gas until drilling has been undertaken, some examples of successful discoveries in Miocene Reefs and related carbonate plays are- 

* Intisar ‘D’ Oil Field, Libya, Area approx 13 sq km, 291m oil column, approximately 1.6 Billion Stock Tank Barrels Oil Initially In Place (STBOIIP)

* Nido Oil Field, Philippines, Area 1.5 sq km, Oil Column 200m, approximately 26.3 Million STBOIIP (3P)

* Central Luconia Field, Indonesia, Area 90.5 sq km approximately 7 Tcf Gas Initially In Place

Pancontinental holds licences over approximately 4/5ths of what it interprets to be the Miocene reef trend offshore Kenya. In the eventof a Sunbird-1 discovery, Pancontinental has access to approximately 20 other buried reefs and reef-like features it believes to be present over its four licence areas; a portion of these are in the L10 licence areas. 
Considerable further seismic and mapping is required to verify and define these features. 

Additional Drilling 
The L10 Operator, BG Group, is continuing to map Prospects and Leads using the 4,800 sq km of 3D seismic data acquired in two surveys over the last two years. 

A number of other Prospects have been mapped for possible drilling after Sunbird-1. 
In the western sector the very large Crombec Lead continues to be mapped. Crombec is a large faulted anticline covering 550 sq km, with vertical relief of about 400m. It is one of number of Prospects and Leadsthat are being considered for drilling mid-late 2014.

Barry Rushworth, CEO and Executive Director of Pancontinental further commented - 
“Through its four licences Pancontinental has access to approximately 4/5 ths of the Miocene Reef trend offshore southern Kenya. 

In L10A and L10B, our inboard reefs are about 50km from the port of Mombasa and are in relatively shallow water. In the event of a discovery there are multiple follow-ups for drilling in both the L10 licences and our two other licences. 

Elsewhere in the L10 areas the clastic channel and other sandstone prospects that are still being mapped form a spectrum of other opportunities for a second well that is tentatively planned for mid-late 2014”.

L10A Joint Venture 
Premier Oil has elected not to participate in the Sunbird-1 well and has withdrawn from the L10A Joint Venture. Ministerial approval has been given for the withdrawal and the Premier interest has been taken up pro-rata by the other participants. 

The Kenya L10A consortium now consists of – 
BG Group (Operator) 50% 
PTTEP 31.25% 
Pancontinental 18.75%

About the Operator – BG Group 
BG Group plc (LSE: BG.L) is a world leader in natural gas, with a broad portfolio of business interests focused on exploration and production and liquefied natural gas (LNG). 
Active in more than twenty countries on five continents, BG Group combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves. 

BG Group is the twelfth-largest publicly listed company on the London Stock Exchange. 

About Pancontinental 
Pancontinental Oil & Gas NL isan independent oil and gas exploration company listed on the Australian Securities Exchange (ASX: PCL). 

Pancontinental’s focus is on exploring for oil in new frontiers in Africa and surrounding regions and it currently holds interests in four licences,L6, L8, L10Aand L10B over 20,000 square kilometres in East Africa offshore Kenya, and the EL 0037 licence over 17,000 square kilometres offshore Namibia. EL 0037 was recently farmed-out to Tullow Oil.

Pancontinental is one of the few junior companies remaining amongst an increasing number of much larger companies offshore East Africa and Namibia.

Yours sincerely for and on behalf of 
Pancontinental Oil & Gas NL 



http://www.aspectfinancial.com.au/d...Jyb3JwYWdlcy9wZGZkZWxheWVkLmpzcA==&popup=true


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## smalltimer

December 9, 2013, 2:49 a.m.
*Premier Oil Withdraws From Block L10A Offshore Kenya After Review*

By Razak Musah Baba

LONDON--Independent exploration and production company Premier Oil PLC (PMO.LN), said Monday it has withdrawn from Block L10A, offshore Kenya, following an exploration review.

The company retains its 25% equity in the adjacent Block L10B and prospect maturation is ongoing, with a 'drill or drop' decision to be made by mid-2014, it said.

Premier Oil Chief Executive Simon Lockett said "whilst we remain committed to exploration in Kenya, we continue to focus our resources on projects that meet our internal corporate investment metrics and to high grade our exploration portfolio accordingly."

Premier Oil held a 20% equity stake in Block L10A.

Partners in Block L10B are BG Group PLC (BG.LN), with 45% and operator status; Premier with 25%; PTT Exploration and Production Public Company Ltd., or PTTEP, with 15%, and Pancontinental Oil & Gas with 15%.

Premier Oil shares closed Friday at 301 pence, valuing the company at GBP1.59 billion.

http://online.wsj.com/article/BT-CO-20131209-700366.html?mod=WSJ_qtoverview_wsjlatest


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## smalltimer

http://africanoilandgasnews.com/news/bg-group-preparing-to-drill-offshore-kenya-in-2014

*BG Group preparing to drill offshore Kenya in 2014*

*Best-estimate commencement date between 9 to 12 January 2014*

JV partner Pancontinental Oil & Gas has announced that final preparations are under way for the Sunbird-1 exploration well in licence area L10A offshore Kenya, with a best-estimate commencement date between 9 to 12 January 2014. Sunbird-1 will be the first-ever test of a Miocene Pinnacle Reef offshore East Africa and the first-ever exploration well within L10A in the Lamu Basin offshore southern Kenya.

L10A operator BG Group intends to use the drillship Deepsea Metro 1 to drill Sunbird-1. The drillship is on contract to BG Group and is currently drilling offshore Tanzania.

Barry Rushworth, CEO and Executive Director of Pancontinental commented – ‘We are very pleased to have been allocated the Deepsea Metro 1 for drilling next month. The Sunbird Prospect is one of a number of Miocene Reefs that have never before been properly tested offshore East Africa. Miocene Reefs globally have a high record of success for oil and gas and they are often highly productive, due to high porosity and permeability.

Commercial oil has not yet been discovered offshore East Africa, however oil shows in reservoir-quality sands (Kubwa-1), the discovery of gas from a possible mixed gas/oil source rock (Mbawa-1) offshore Kenya, the nearby Pemba Island oil seep and oil slicks on satellite imagery, all lead us to believe that Pancontinental and its partners are pursuing an important oil play offshore Kenya.

Pancontinental believes the inboard area of L10A is ‘oily’ and the Joint Venture is targeting a significant oil opportunity in Sunbird-1. The Joint Venture is looking to be the first group to make a first commercial oil discovery in a region that continues to have increasing attention from the industry majors.’

The Sunbird Prospect is a buried Miocene Pinnacle Reef build-up, straddling the western sector boundary of the L10A / L10B areas. The licence areas together cover 10,547 sq km in water depths from 200m to 1,800m offshore from the port of Mombasa.

The Sunbird well is planned to take 50 to 60 days to drill to 3,000m below sea level, with an option to extend to 3,700m. It is intended to plug and abandon the well regardless of the drilling outcome. Water depth is 721m. The Sunbird Prospect is a ‘textbook’ Miocene Reef, with a prominent central reef core and a detrital skirt of talus material. It is interpreted that the reef was ‘drowned’ by rising sea levels and then buried and sealed by fine grained hemipelagic sediment. In a number of regions around the globe buried Miocene Reefs host large oil and gas reserves, such as the extensive reefs of Southeast Asia and the pinnacle reefs of Libya.

Miocene Reefs are often relatively shallow (700 to 2,000m burial depth), and are noted for their high porosity, permeability, and high flow rates of oil and /or gas. The Sunbird Prospect covers an area of 73 sq km, including the flanking areas, with vertical relief of approximately 700m.
While not all Miocene Reefs globally contain oil or gas and it will not be known if the Sunbird Prospect contains any oil or gas until drilling has been undertaken, some examples of successful discoveries in Miocene Reefs and related carbonate plays are-

•Intisar ‘D’ Oil Field, Libya, Area approx 13 sq km, 291m oil column, approx. 1.6 Billion Stock Tank Barrels Oil Initially In Place (STBOIIP) (1)
•Nido Oil Field, Philippines, Area 1.5 sq km, Oil Column 200m, approx. 26.3 Million STBOIIP (3P) (2)
•Central Luconia Field, Indonesia, Area 90.5 sq km approx. 7 Tcf Gas Initially In Place (3)
Pancontinental holds licences over approx. 4/5ths of what it interprets to be the Miocene reef trend offshore Kenya. In the event of a Sunbird-1 discovery, Pancontinental has access to approx. 20 other buried reefs and reef-like features it believes to be present over its four licence areas; a portion of these are in the L10 licence areas. Considerable further seismic and mapping is required to verify and define these features.

Additional Drilling

The L10 Operator, BG Group, is continuing to map Prospects and Leads using the 4,800 sq km of 3D seismic data acquired in two surveys over the last two years. A number of other Prospects have been mapped for possible drilling after Sunbird-1. In the western sector the very large Crombec Lead continues to be mapped. Crombec is a large faulted anticline covering 550 sq km, with vertical relief of about 400m. It is one of number of Prospects and Leads that are being considered for drilling mid-late 2014.

Barry Rushworth, CEO and Executive Director of Pancontinental further commented – ‘Through its four licences Pancontinental has access to approximately 4/5 ths of the Miocene Reef trend offshore southern Kenya. In L10A and L10B, our inboard reefs are about 50km from the port of Mombasa and are in relatively shallow water. In the event of a discovery there are multiple follow-ups for drilling in both the L10 licences and our two other licences. Elsewhere in the L10 areas the clastic channel and other sandstone prospects that are still being mapped form a spectrum of other opportunities for a second well that is tentatively planned for mid-late 2014′.

L10A Joint Venture

Premier Oil has elected not to participate in the Sunbird-1 well and has withdrawn from the L10A Joint Venture. Ministerial approval has been given for the withdrawal and the Premier interest has been taken up pro-rata by the other participants. The Kenya L10A consortium now consists of – 

BG Group (Operator) 50%
PTTEP 31.25%
Pancontinental 18.75%.


----------



## piggybank




----------



## smalltimer

*Hi piggybank,* 

Love your PCL SP timeline graphics.
I'm expecting a breakout to the up-side shortly due to the coming drilling activity. But something tells me that it will not be a huge spike as their last drill unless they actually hit pay dirt this time round. There has been a lot of news activity in the last couple of weeks as they try and drum up the support level.

I would love to see some more graph updates leading up to the drilling date which is expected around the 10th. of Jan.

*********************************

*Gas find offshore Kenya could be commercially viable - Pancontinental *

A map of Pancontinental Oil and Gas's block 10A and 10B off the coast of Kenya. 
Pancontinental has said that it will start drilling for oil and gas on block 10A and 10B next year.   

*By David Mugwe - Posted  Thursday, December 12   2013 at  17:12*

The Australian based explorer on Thursday said that block L8, which it co-owns with American explorer Apache Corp, another Australian explorer Origin Energy and British explorer Tullow, had gas findings which if combined with other discoveries could be commercially viable (See graphic).




Two months ago, the Australian explorer’s partner on block L8, Apache Corp said that it would cede its stake on the block following the non-commercial gas finds but Pancontinental said that it would increase its stake if the American explorer relinquished its stake

Pancontinental and its partners this week also disclosed that that they spend between $300 and $400 million over the next one and a half years in exploration activities in Kenya and Namibia

Pancontinental plans $400m exploration, drilling starts January 
Pancontinental may increase stake in L8 Block 
Apache Corp cedes 50 pc stake on offshore block 

Oil and gas explorer Pancontinental has said that gas found on block L8 off the coast of Kenya could be commercially viable if other wells planned for drilling yield results. 

The Australian based explorer on Thursday said that block L8, which it co-owns with American explorer Apache Corp, another Australian explorer Origin Energy and British explorer Tullow, had gas findings which if combined with other discoveries could be commercially viable.

“The well did intersect 52 metres of gas. The well on its own may not currently be commercially viable, but could be when aggregated with other gas discoveries which may occur in the L8 or nearby blocks,” said Ernest Myers, finance director Pancontinental, in a statement. 

Pancontinental early this week said that it expects to start drilling at the Sunbird exploration well which is on block 10A in the second week of January. 

Two months ago, the Australian explorer’s partner on block L8, Apache Corp said that it would cede its stake on the block following the non-commercial gas finds but Pancontinental said that it would increase its stake if the American explorer relinquished its stake (See graphic). 

Pancontinental and its partners this week also disclosed that that they spend between $300 and $400 million over the next one and a half years in exploration activities in Kenya and Namibia.

Some of the funds will be used to drill for oil and gas on block 10A off the coast of Kenya and on block 10B by the middle of the year (See graphic).

The rest of the funds will be used on exploration activities on block L6 where it has a 40 per cent interest, block L8 where it has 30 per cent and Namibia’s block EL 0037 where it has a 30 per cent interest. 

dmugwe@ke.nationmedia.com

http://www.businessdailyafrica.com/...cially/-/539552/2109494/-/kbb1rd/-/index.html


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## smalltimer

*ERHC Energy Reports Positive Results from Kenya Block 11A*
November 27, 2013

ERHC Energy Inc. (OTCBB: ERHE), a publicly traded American company with oil and gas assets in Sub-Saharan Africa, on November 26 announced initial encouraging results from an airborne Full Tensor Gravity Gradiometry (FTG) survey. Bell Geospace, a world leader in gravity gradiometry, is flying the FTG on behalf of ERHC's wholly owned subsidiary, ERHC Energy Kenya Ltd. When completed in a few weeks, the survey will have covered up to 15,500 line kilometers. 

An independent third party is bearing the cost of the FTG survey under the Company's previously announced financing initiatives. 

"Preliminary results confirm the presence of the Lotikipi basin and it appears to have a larger extent than was indicated by gravity data acquired by previous operators of this area," said Gertjan van Mechelen, ERHC's exploration manager. "Obviously these results are very encouraging and we are looking forward to seeing the eventual final results upon completion of this survey. Those final results are bound to show in much more detail the internal structure of the Lotikipi rift basin and will allow us to identify the most prospective areas." 

ERHC plans to pursue a rift margin play in Block 11A similar to those that led to recent major discoveries in neighboring Uganda and northwest Kenya. Block 11A is located to the north of the Lokichar Basin, which was the focus of international attention last week with an oil discovery at the Agete-1 exploratory well. This was the fifth significant discovery in the area, joining the Ekales-1, Etuko-1, Ngamia-1 and Twiga South-1 oil discoveries were drilled. 

Source: ERHC Energy Press Office, 2013 

http://www.oilandgaseurasia.com/en/news/erhc-energy-reports-positive-results-kenya-block-11a


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## smalltimer

http://www.pancon.com.au/investor-centre/asx/2013/reports/201213.pdf

*Hartleys Report - 17th. Dec
PANCONTINENTAL OIL AND GAS NL (PCL)
East not being outdone by West*

Not to be outdone by the drilling activity offshore West Africa in 2014, PCL has announced that its drilling campaign will start offshore Kenya in January 2014. PCL and its joint venture partners in the L10A block offshore Kenya have approved the Sunbird-1 well with drilling expected to commence in mid-January 2014. This is a significant catalyst for PCL’s share price and therefore investors should position themselves well before drilling begins. We maintain our Speculative Buy recommendation on the stock with a 12-month target price of 23c.

The Sunbird-1 target

PCL and its joint venture partners have not released an estimate of the prospective resource contained in the Sunbird-1 target however our rough calculation estimates gross un-risked oil in place of approximately 830m bbls. Put differently, a company with the production and reserve base of BG would not be testing this target if it did not think it had the potential to be a significant commercial discovery. Numerous examples exist around the world, especially in South-East Asia, of significant Miocene reef discoveries containing both oil and gas. The drill ship “Deepsea Metro” will drill the Sunbird-1 well after it completes its current assignment offshore Tanzania.

Well timing and cost

According to the announcement the well will be drilled to a depth of 3,000m below sea level in a water depth of 721m, with an option to drill to a depth of 3,700m. We assume a dry hole cost of US$80 -100m of which PCL will pay 18.75% (US$15-19m). It should be noted that PCL’s interest in the 10A block has increased to 18.75% because Premier Oil has withdrawn from the block. In our view the withdrawal is more to do with Premier conserving cash rather than being concerned with the geology because they have not withdrawn from L10B. A discovery in 10A would significantly de-risk many of the targets identified in L10B. It is worth noting the well will be “plugged and abandoned”, as per industry best practice, because the rig is not equipped for production testing, however PCL will receive full well log and sampling data.

Beyond Sunbird-1 – multiple other targets

Should the Sunbird-1 drilling confirm a working hydrocarbon system it opens up the potential of similar targets within the L10A block but also a play fairway running north into the Block L6 and L8. PCL and operator FAR are in the process of farming down their respective interests in L6.

Valuation and target price

In valuing PCL we place a significant discount on the risked prospective reserves valuation (75%) to derive our target price. We maintain our Speculative Buy recommendation. We increase our target price from 21c to 23c primarily because we have assumed a larger prospective resource for L10A. Other near term catalysts for the stock include a farm down of PCL’s 40% stake in the L6, possible farm down of L8 and a second well in L10B. We expect PCL to have approximately A$15m cash post Sunbird-1.

http://www.pancon.com.au/investor-centre/asx/2013/reports/201213.pdf


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## smalltimer

*Rich suitors woo prospectors for piece of Kenya’s multimillion-dollar oil industry*
Updated Monday, December 23rd 2013 at 19:09 GMT +3 : By MACHARIA KAMAU 

*KENYA:* 

Little known oil exploration and production companies that acquired land in Kenya’s oil blocks are finding themselves increasingly spoilt for choice on who to partner with.

Since Tullow Oil announced in March last year that it had found shows of oil in its Ngamia 1 well, as well as later discoveries, firms that took up exploration licences are being courted by major production and private equity firms.

At the Oil Council World Assembly in London in November, Susan Prior of PricewaterhouseCoopers noted that there was an increased flow of private capital into exploration activities as investors look for alternative opportunities.

“We are seeing more private money come into upstream deals, which is often the combination of high net worth individuals or people with access to private capital that want to start exploring oil exploitation opportunities,” she said.

“A combination of factors is triggering this, and one of them is the amount of capital that is out there that is looking for a productive home. There are also people that are realising that though upstream is a risky place to be, if you are sensible about it and you spread that risk, you can get good returns.”

*Big leagues*

Among the junior oil firms that seem positioned to hit the big leagues are Taipan Resources ”” a Canada-based oil firm that operates in Kenya as Lion Petroleum Corp.

The company on Thursday announced the completion of a Sh2.6 billion farm-out agreement with Premier Oil Investments. A farm-out deal is an arrangement where the holder of mineral rights gives a second party an agreed interest in its exploration activities in exchange for a sum of money.

In the deal, Premier acquired 55 per cent participating interest in Block 2B in North Eastern Kenya. Taipan retained 45 per cent interest and operatorship during the exploration phase of the block.

Premier will finance Taipan’s exploration to the tune of Sh2.5 billion and also pay Sh85.8 million in back costs, which will help Taipan recover some of the money spent on initial exploration.

“[Premier’s financing] will enable us do more surveys and also drill a well in the third quarter of next year that will go to a depth of 3,000 metres,” said Taipan Chief Executive Maxwell Birley.

*Drilling and testing*

“This includes the drilling and testing of a Pearl-1 prospect that is estimated to have gross resources of 200 million barrels of oil. The remaining inventory on Block 2B, in addition to Pearl-1, is capable of delivering in excess of 500 million barrels gross.”

The Pearl-1 site ”” on Block 2B ”” is along the same geological formation as Tullow Oil’s discoveries.

“The Anza Basin is one of the largest tertiary-age Rift basins of the East African Rift systems that together contain multi-billion barrel oil discoveries. We believe that the ‘sweet spot’ of the Anza Basin is located on Block 2B,” said Mr Birley.

The firm also expects to drill its first well in Block 2A towards the end of next year.

“We do not have people running around throwing money at us, people will only invest if they believe in the management team and the prospects,” said Birley.

“We have been able to convince a number of companies that we are on the right track and a number of companies have technically approved farm-ins to our licences.”

Simba Energy, another Canadian headquartered firm with exploration blocks in several African countries, including Kenya, said it is working with individual investors, private equity firms and major oil companies.

“We have seen that the most successful way is to bring in a private equity company or high net worth individuals who can invest between $2 million (Sh171.6million) and $10 million (Sh858 million) in specific exploration projects. It is a model that has worked for us in Kenya and Chad,” said Mr Oleg-Serguei Schkoda, vice president of exploration at Simba Energy.

Mr Schkoda, also speaking at the November Oil Council conference, noted that exploration firms have been having difficulties raising money from shareholders, necessitating the need to attract private equity and major exploration and production companies.

*Raising money*

“We are talking to larger companies on different projects, but it has been quite difficult to raise money from the capital markets. Our experience is that small companies should start exploration, show the potential and make it interesting for the independent companies to bring the exploration to the second stage,” he said.

Simba Energy’s chief executive of production, Mr Hassan Hassan, said the firm has been getting a lot of interest from global companies after it moved its block in the Anza Basin from the preliminary phase.

However, despite there being many suitors, not all are willing to part with the millions of dollars required for exploration, particularly with commercial viability yet to be established.

Simba Energy last week Wednesday announced the collapse of talks with American company Ajax Exploration. It was hoped the firm would finance Simba’s exploration with Sh3.1 billion in a farm-out deal that was to be firmed up before the end of this year.

The firm said in an update on December 18 that it is now in negotiations with an undisclosed company for a farm-out agreement that would push forward prospecting activities at its Block 2A site.

Another junior oil company that has been prospecting for oil in Kenya, specifically in Lamu, is Australian Far Limited.

The firm has previously carried out seismic surveys and estimates that its block might contain more than 300 million barrels of oil. It plans to start drilling in 12 to 18 months’ time.

*Far* is currently firming up financing deals with a number of companies that have expressed interest in its activities.

*This article is relevant to PCL, as FAR is PCL's partner and operator of block L6 offshore Kenya (FAR 60%, PCL 40%).*

http://www.standardmedia.co.ke/busi...a-s-multimillion-dollar-oil-industry?pageNo=1


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## smalltimer

ASX Companies Announcement Office

6 January 2014

*Sunbird-1 Drilling Commences in Area L10A Offshore Kenya*

Pancontinental Oil & Gas NL (ASX: PCL) is pleased to advise that the exploration well Sunbird-1 has commenced drilling in Licence area L10A offshore Kenya. 

The well is managed by the L10A Joint Venture operator BG Group, using the drillship Deepsea Metro 1. 

The Sunbird-1 well is planned to take 50 to 60 days to drill to 3,000m below sea level, with an option to extend to 3,700m. 

Extensive wireline logging and both pressure and fluid sampling are planned. The Joint Venture intends to plug and abandon the well in accordance with normal good oilfield practice regardless of the drilling outcome, however it is planned to leave the well in a condition that would allow re-entry at a later date. Water depth is 721m. 

Sunbird-1 is the first-ever test of a Miocene Pinnacle Reef offshore East Africa and the first-ever exploration well in L10A in the Lamu Basin offshore Kenya. An extensive trend of Miocene Reefs is evident in Pancontinental’s four licence areas offshore southern Kenya. 

Sunbird-1 is regarded as a “tight hole” exploration well and results will be announced after completion of the drilling and assessment and integration of the gathered data. 

Pancontinental’s ASX release dated 9 December 2013 providesadditional information on the Sunbird Prospect and the L10A and L10B licences (also see Figure 1 in Appendix 1). 

The Kenya L10A consortium consists of – 
BG Group (Operator) 50% 
PTTEP 31.25%
Pancontinental 18.75%M

Yours sincerely for and on behalf of 

Barry Rushworth, CEO and Director

http://www.pancon.com.au/investor-centre/asx/2014/reports/060114.pdf


Also see the 6 January 2014
GMP Securities Report - Pancontinental Oil and Gas NL

http://www.pancon.com.au/investor-centre/broker-reports/reports/060114.pdf


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## smalltimer

*Kenya Delays Oil Law Revision*
Thursday, January 9, 2014

The government of Kenya has pushed back the first draft of its revised laws on the petroleum sector for parliament’s approval until June; the law was supposed to have been presented to parliament in November of last year. The delay is to allow for the Ministry to continue its consultation with those active in Kenya’s petroleum industry. The Ministry is also expected to hold meetings with county governors and senators in February.

“So by the end of this (fiscal) year, that is by June, we expect to have put everything in place,” Energy and Petroleum Principal Secretary Joseph Njoroge said.

The new law is also expected to provide guidance on natural gas exploitation, not adequately covered by Kenya’s current law.

http://www.petroleumafrica.com/kenya-delays-oil-law-revision/


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## smalltimer

*Tullow Oil Is Potential Acquisition Target For Statoil*
Bloomberg LONDON (Alliance News) - 

10 January, 2014 | 1:08PM

 LONDON (Alliance News) - State-owned Norwegian oil and gas giant Statoil ASA is studying overseas acquisitions after the conservative Norwegian government announced the possible reduction of its 67% holding in the company, according to a Bloomberg report Thursday.

The financial news agency said that, according to people familiar with the matter, the company is examining takeover targets outside of Norway, as the government's USD51 billion shareholding is diluted.

Bloomberg said FTSE 100 major oil producer Tullow Oil is being eyed as one such possible acquisition by Statoil, which sold offshore fields in Norway for more than USD5 billion over the past two years to Centrica PLC, Wintershall AG and OMV AG.

Tullow Oil has major projects in Uganda's Lake Albert Rift Basin, offshore Ghana and in Kenya’s South Lokichar Rift Basin.

“It would be easier with smaller targets, for example companies specialized on Africa, which is getting higher and higher on Statoil’s agenda,” Carl Christian Bachke, an analyst with Nordea Markets told Bloomberg.

In addition to Tullow, Edinburgh-based Cairn Energy PLC, with operations in West Africa and Europe, could be such a target, Bachke said.

Cairn Energy declined to comment on prospects for a deal with Statoil Friday. Tullow was not immediately available for a response Friday, but declined to comment to Bloomberg on Thursday. 

In the past Statoil has targeted deals with rivals such as EOG Resources Inc and BG Group PLC. However the insiders told Bloomberg that merging with such large companies means the company would struggle to keep its majority state ownership.

Tullow Oil shares were up 6.2% to 897.50 pence, putting them top of the FTSE 100 movers Friday.

By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1

http://www.morningstar.co.uk/uk/new...quisition-target-for-statoil---bloomberg.aspx


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## smalltimer

15 Jan 2014
Operational Update - Kenya

*Tullow Oil plc (“Tullow”) today announces oil discoveries at the Amosing-1 and Ewoi-1 exploration wells* in Block 10BB onshore northern Kenya. As a result of these latest successes and recently reported discoveries at Ekales-1 and Agete-1, Tullow has updated its estimate of discovered resources in this basin to over 600 mmbo. Tullow believes that the overall potential for the basin, which will be fully assessed over the next two years through a significant programme of exploration and appraisal wells, is in excess of one billion barrels of oil.  

Exploration well results

The Amosing-1 and Ewoi-1 discoveries in Block 10BB continue Tullow’s 100% success record in the basin with seven out of seven discoveries to date. Based on results of drilling, wireline logs and samples of reservoir fluid, the Amosing-1 well has intersected net oil pay of between 160 and 200 metres, significantly exceeding Tullow’s pre-drill expectations. The Ewoi-1 well has encountered net pay of 20 to 80 metres and has continued to de-risk the basin flank play opened up by the Etuko-1 well in 2013. Following completion of logging operations the wells will be suspended for future flow testing to confirm the net pay counts. The rigs will then move to drill the Emong-1 well, adjacent to the Ngamia field, and the Twiga South-2 appraisal well, both in Block 13T. The partnership has elected not to continue into the next exploration phase in Block 10A in Kenya.

Development and pipeline studies

Given the significant volumes discovered and the extensive exploration and appraisal programme planned to fully assess the upside potential of the basin, Tullow and partners have agreed with the Government of Kenya to commence development studies. In addition, the partnership is involved in a comprehensive pre-FEED study of the export pipeline. The current ambition of the Government of Kenya and the joint venture partnership is to reach project sanction for development, including an export pipeline, in the period 2015/2016.

Tullow operates both the Amosing-1 and Ewoi-1 wells with a 50% interest and Africa Oil has a 50% non-operated interest.

ANGUS McCOSS, EXPLORATION DIRECTOR, TULLOW OIL PLC, COMMENTED TODAY,

“Exploration results to date from the first basin, amongst a chain of basins, have proven that Tullow's onshore acreage in northern Kenya has the potential to become a significant new hydrocarbon province. The programme of over 20 wells we have planned across our licences over the next twenty four months should materially add to the 600 mmbo discovered to date through a combination of exploration and appraisal. With up to five other analogous basins being tested during this programme, Tullow has the opportunity to increase Kenya’s resources significantly beyond today’s estimates.”

http://www.tullowoil.com/index.asp?pageid=137&category=&year=Latest&month=&tags=&newsid=878


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## piggybank

*Hi piggybank,                 

Love your PCL SP timeline graphics.*

Thanks for the kind words - they have been pretty rare of late!!

I'm expecting a breakout to the up-side shortly due to the coming drilling activity. But something tells me that it will not be a huge spike as their last drill unless they actually hit pay dirt this time round. There has been a lot of news activity in the last couple of weeks as they try and drum up the support level.

I would love to see some more graph updates leading up to the drilling date which is expected around the 10th. of Jan.

*6th January - Sunbird-1 Well commences drilling in Kenya Block L10A* Can be looked at by clicking on this link - http://stocknessmonster.com/news-item?S=PCL&E=ASX&N=663496




Sorry to be the bearer of bad news (smalltimer) in that the stock has gone down since I posted my last chart. As you can see if it goes below the most recent low (0.0475) then that will become the new resistance line (well on my chart anyway). However if it does bounce of that line, then there is some positiveness to look forward to in the short term.

Regards
PB


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## smalltimer

*Hi Piggybank,* 

Thanks for the up-date. Going on the current share price trend, you would not think that we are
only weeks away from Drilling completion. The share price looks like that it is reflecting a duster already.

Hopefully we can get a kick soon, both on the well and the share price.

Good luck to all those that are still holding...

*********************************

17 January 2014 

*3D Seismic Survey Commences in EL 0037 Offshore Namibia*

Pancontinental Oil & Gas NL (ASX: PCL) is pleased to advise that 
a 3D seismic survey has commenced in Licence area EL 0037 
offshore Namibia. 

The 3D acquisition will be of approximately of 3,000 sq km and a 
second acquisition phase will cover approximately 1,000 km of 2D data. 
The total acquisition is expected take up to 120 days. 

The survey is managed by the EL0037 Joint Venture operator Tullow Oil, 
using the seismic acquisition vessel Polarcus Asima. 

Tullow Oil farmed-in to EL 0037 in September 2013 and subsequently 
identified a number of geological “Leads” to be covered by the 3D survey. 
Pancontinental retains a 30% free-carried interest through the surveys and one 
optional well to be drilled by Tullow. 

The Namibia EL 0037 consortium consists of - 

Tullow Kudu Limited (1)
(Operator) 65% 

Pancontinental Namibia (Pty) Ltd (2)
30% 

Paragon Oil & Gas (Pty) Ltd (3)
5%

(1) Tullow Kudu Limited is a wholly owned subsidiary of Tullow Oil plc 
(2) Pancontinental Namibia (Pty) Ltd is a wholly owned subsidiary of 
Pancontinental Oil & Gas NL 
(3) Paragon Oil & Gas (Pty) Ltd is a wholly owned subsidiary of Paragon 
Investment Holding’s (Pty) Ltd

http://www.pancon.com.au/investor-centre/asx/2014/reports/170114.pdf


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## smalltimer

*Camac to start oil drilling after initial tests*
Updated Tuesday, January 21st 2014
By MACHARIA KAMAU

Camac Energy, US oil and gas exploration and production firm says it has successfully carried out initial test surveys in its two onshore blocks.

The firm is currently preparing to undertake a survey on two of its blocks in offshore Lamu, which will take place in the course of this year. It also plans to fast track its exploration activities in the four blocks it is prospecting for oil.

The company operates two blocks in Mandera and another two in offshore Lamu.

“Camac successfully carried out Aero-magnetic and Gravity survey of our onshore blocks L1B and L16 in Kenya last year and we plan to carry out 2D seismic surveys on our two offshore deep water L27 and L28 blocks in 2014,” said Kase Lawal, Camac president and chief executive in a statement.

“We also plan to shoot some 2D seismic surveys on our two onshore blocks this year.” Camac also said it intends to quicken the initial tests in an effort to start test exploration following successful discovery of commercial oil deposits by UK-based Tullow Oil. Tullow Oil, a Canadian wildcat explorer, which had earlier announced five oil discoveries, made two more discoveries last week and pushed up its estimates in Turkana basin from 300 million barrels of oil to 600 million.

Camac Energy’s four oil blocks cover a total surface area of about 37,000 square kilometres. Two of the four blocks – L27 and L28 ”” are located in more than 3,000 metres of ultra-deep waters of the Indian Ocean in Lamu Basin.  The onshore blocks are located in the Mandera Basin. 

With more drilling being undertaken, Kenya is poised to be a major oil exporting country. Estimates indicate that Kenya may have over 3.5 billion barrels of yet-to-find (YTF) volumes.  Kenya has 46 oil exploration blocks divided into four  exploration basins. These are Lamu Basin, Anza Basin, Tertiary Rift Basin and Mandera Basin.

http://www.standardmedia.co.ke/busi...mac-to-start-oil-drilling-after-initial-tests


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## smalltimer

Hi Piggbank,

Sorry to be the bearer of bad news (smalltimer) in that the stock has gone down since I posted my last chart. As you can see if it goes below the most recent low (0.0475) then that will become the new resistance line (well on my chart anyway). However if it does bounce of that line, then there is some positiveness to look forward to in the short term.

Well looks like we have gone through the 0.0475 level hitting 0.046 this morning. Not looking good !


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## piggybank

smalltimer said:


> Hi Piggbank,
> 
> Sorry to be the bearer of bad news (smalltimer) in that the stock has gone down since I posted my last chart. As you can see if it goes below the most recent low (0.0475) then that will become the new resistance line (well on my chart anyway). However if it does bounce of that line, then there is some positiveness to look forward to in the short term.
> 
> Well looks like we have gone through the 0.0475 level hitting 0.046 this morning. Not looking good !




Hi Smalltimer,

Well it closed at 5c (up just over 6% on the day) on a whopping 10 million shares trading hands.

Regards
PB


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## smalltimer

By MACHARIA KAMAU

An Australian firm, *Pancontinental Oil and Gas has signed a Sh2.5 billion ($30 million) farm-in agreement *with a Dubai based firm.

The pact is expected to enable it carry out comprehensive survey and drill exploratory wells on a block it has been prospecting for oil in coastal Kenya. The firm yesterday announced that it had completed the first farm-in deal on onshore segment of its Kenya exploration permit, Block L6, located in the Lamu Basin with Dubai based Milio E&P and Milio International.

The block has onshore and offshore portions. At the same time, Pancontinental and Far Ltd (its joint venture partner in the block) said they planned to fast track the development of the block, should exploratory drilling find viable natural gas deposits.

This is hoped to position them to tap into the planned natural gas electricity generation plant planned for Lamu. Kenya plans to put up an 800-megawatt natural gas fired electricity plant in Lamu. Surveys of the block indicate there is potential for as much as 3.7 billion barrels of oil and gas.

Pancontinental holds a 40 per cent stake while Far Ltd, also Australian, has a 60 per cent per cent interest. With the entry of Milio, the ownership structure will change with Milio owning 60 per cent, Pancontinental 16 per cent interest and Far Ltd the remaining 24 per cent.


Milio will also operate the block going forward. It will embark on a 2D seismic survey in April and start drilling an exploratory well in the first half of next year. The company will however not participate in the offshore portion of the Block L6. Far Ltd has been the operator of the block.

“The current joint venture (Pancontinental & Far Ltd) will be fully funded through the acquisition, processing and interpretation of the regional 1,000 km stretch of 2D seismic survey to confirm at least three prospects as drilling targets,”

The deal is subject to State approval.

http://www.standardmedia.co.ke/busi...ian-firm-inks-sh2-5b-deal-to-prospect-for-gas


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## smalltimer

Copy of ASX Announcement

http://www.pancon.com.au/investor-centre/asx/2014/reports/210214.pdf

ASX Announcement 
21 February 2014 

*KENYA BLOCK L8 UPDATE *

Pancontinental Oil & Gas NL (“Pancontinental”) recently attended meetings with the Kenyan Ministry of Energy and Petroleum (“the Ministry”)  to discuss the Kenyan offshore Block L8 Production Sharing Contract (“PSC”) and its forward exploration programme. 

Until recently the PSC participants consisted of Apache Corporation as operator (“Apache”) 50%, Origin 20%, Pancontinental 15% and Tullow Oil 15%.  

Unfortunately Apache, having decided not to carry out further exploration under the PSC, would not participate in any further discussions and the Ministry considers that the PSC has now expired. 

PSC Expiry and Negotiations for Renewal 

Pancontinental has had initial scoping talks with the Ministry and has requested to enter into negotiations with the Ministry and a potential co-venturer for the grant of a new PSC in respect of Block L8. 

Pancontinental is the longest-standing explorer and licence holder in Kenya and has a lengthy and cordial relationship with the Ministry. In addition, Pancontinental has been part of a consortium that has spent more than $135 million on exploration within Block L8. Considerable exploration data in respect of Block L8 is held by Pancontinental. 

While there is no guarantee that a new PSC can be agreed with the Ministry, Pancontinental aims to negotiate and finalise a new PSC that will replace the old PSC and better reflect matters such as production sharing and a revised forward work programme. 

Yours sincerely for and on behalf of  
Pancontinental Oil & Gas NL 

Barry Rushworth, CEO and Director


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## smalltimer

*Pancontinental aims to retain lapsed PSC offshore Kenya*
02/27/2014 

PERTH, Australia – Pancontinental Oil & Gas has met with the Kenyan Ministry of Energy and Petroleum to discuss the offshore block L8 production-sharing contract (PSC).

Operator Apache recently decided not to pursue further exploration and the PSC has now expired. Origin, Pancontinental, and Tullow are the other partners.

Pancontinental has requested negotiations with the Ministry and a potential co-venturer for the grant of a new PSC for the block.

The company hopes to negotiate new terms that better reflect production-sharing and a revised forward work program.

02/27/2014

http://www.offshore-mag.com/article...onal-reports-rss+(OS+-+Regional+Reports+News)


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## smalltimer

*PCL - Pancontinental Oil &amp; Gas*

*Kenya Discovers Oil, Natural Gas In Lamu*March 14, 2014

VENTURES AFRICA – Oil exploration is the real deal in Kenya at the moment, as exploration companies have struck black gold repeatedly in recent times.

The latest find was at the tourist town of Lamu where UK-based independent oil and gas exploration firm, British Gas had been working.

“British Gas Group has found oil and natural gas,” Energy Cabinet Secretary Davies Chirchir announced to a forum of energy sector stakeholders in Nairobi.

He added however that the discovery was “very prospective”, but not commercial.

The find adds to successful discoveries earlier in the year at Lokichar, near Lake Turkana by another British company Tullow Oil who has been in Kenya for three years.

British Gas’ find, according to Chirchir is located “next to Mbawa 1 and block L4 (licensed to Zarara), all in Lamu County with a high potential for gas”.

BG Group holds 45 percent stake in the block and is therefore the operator. Other partners include Thailand’s PTTEP (15 per cent) and *Pancontinental Oil & Gas (15 per cent).*
Discoveries made by Tullow have placed Kenya in a position where it is regarded as a promising frontier in the oil and gas industry. Already, the East African country plans to drill ten wells in different basins before the year-ends.

Kenya’s first ever find was made by a consortium led by US firm Apache Corporation in September 2010. The country had since grown the exploration side of its oil and gas industry, with new finds signifying a bright future for the industry.

Kenya’s economic growth would be boosted by oil revenues once commercial production starts. The country boasts of a 600 million barrel deposit as part of its several finds.

For Lamu, a UNESCO world heritage site that relies on tourism as the mainstay of its economy, the find was a great one, and is expected to reshape the future of the Kenyan island.

Foreign investment has continued to grow since a 2012 record of $5 billion, according to the International Monetary Fund (IMF). The new industry is expected to attract more investments, as Kenya’s fledgeling oil industry brews with opportunities foreign and local investors can take advantage of.

http://www.ventures-africa.com/2014/03/kenya-discovers-oil-natural-gas-in-lamu/

- - - Updated - - -

*Kenya Discovers Oil, Natural Gas In Lamu*
March 14, 2014

VENTURES AFRICA – Oil exploration is the real deal in Kenya at the moment, as exploration companies have struck black gold repeatedly in recent times.

The latest find was at the tourist town of Lamu where UK-based independent oil and gas exploration firm, British Gas had been working.

“British Gas Group has found oil and natural gas,” Energy Cabinet Secretary Davies Chirchir announced to a forum of energy sector stakeholders in Nairobi.

He added however that the discovery was “very prospective”, but not commercial.

The find adds to successful discoveries earlier in the year at Lokichar, near Lake Turkana by another British company Tullow Oil who has been in Kenya for three years.

British Gas’ find, according to Chirchir is located “next to Mbawa 1 and block L4 (licensed to Zarara), all in Lamu County with a high potential for gas”.

BG Group holds 45 percent stake in the block and is therefore the operator. Other partners include Thailand’s PTTEP (15 per cent) and *Pancontinental Oil & Gas (15 per cent).*
Discoveries made by Tullow have placed Kenya in a position where it is regarded as a promising frontier in the oil and gas industry. Already, the East African country plans to drill ten wells in different basins before the year-ends.

Kenya’s first ever find was made by a consortium led by US firm Apache Corporation in September 2010. The country had since grown the exploration side of its oil and gas industry, with new finds signifying a bright future for the industry.

Kenya’s economic growth would be boosted by oil revenues once commercial production starts. The country boasts of a 600 million barrel deposit as part of its several finds.

For Lamu, a UNESCO world heritage site that relies on tourism as the mainstay of its economy, the find was a great one, and is expected to reshape the future of the Kenyan island.

Foreign investment has continued to grow since a 2012 record of $5 billion, according to the International Monetary Fund (IMF). The new industry is expected to attract more investments, as Kenya’s fledgeling oil industry brews with opportunities foreign and local investors can take advantage of.


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## smalltimer

17 March 2014

*SUNBIRD-1 DRILLING UPDATE *

Pancontinental Oil and Gas NL (“Pancontinental”) (ASX: PCL) is pleased to provide an update regarding the Sunbird-1 exploration well in area L10A (Pancontinental 18.75%) offshore southern Kenya. 

As advised in Pancontinental's ASX release on 6th January 2014, Pancontinental was not intending to provide any information concerning the progress of the drilling of the Sunbird-1 well until the well had been completed and it was in a position to provide information that was not considered speculative or incomplete. However, due to the news media reports over the weekend stating that the Sunbird-1 exploration well had discovered oil and natural gas, Pancontinental provides the following clarification: 

Sunbird-1 Drilling 

The Sunbird-1 well operated by BG Group (“Operator”), using the drillship Deepsea Metro-1, has reached a final depth of 2,850 metres below the drill floor. The water depth is 723 metres. 

The top of the Sunbird Miocene Pinnacle Reef was penetrated at 1,583.7 metres subsea. 

The Sunbird Miocene Reef has been found to contain a hydrocarbon column, however the vertical extent of the hydrocarbon column has not yet been determined due to the difficulty of assessing wireline logs in the upper section of the reef where there were extensive losses of drilling fluid into highly porous and permeable parts of the reservoir. 

Hydrocarbon samples have been recovered for detailed analyses. The full nature of the hydrocarbons will not be known until geochemical and other analyses have been completed. 

At this early stage of results interpretation, the Operator has advised Pancontinental that it is not yet in a position to properly and fully estimate the vertical extent of the hydrocarbon column, the potential volumes of hydrocarbons, or to provide an accurate assessment of the nature of the hydrocarbons; nor is it in a position to comment on whether the volumes of hydrocarbons discovered appear to be commercial or sub-commercial. 

Recent and current activities include wireline logging, formation and fluid sampling and preparations for completing the well. 

It is intended that Sunbird-1 will be “plugged and abandoned” in accordance with the planned drilling programme and industry best practice, meaning that the well will be made safe in such a way that it can be left permanently without further intervention. These measures are designed to ensure that there is no leakage of hydrocarbons within the well, or to the sea floor. 

Pancontinental will provide further information regarding the well results and a forward work programme when the fully assessed results have been provided by the Operator in the coming weeks. 

http://www.asx.com.au/asxpdf/20140317/pdf/42nfdcxywdst6d.pdf


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## smalltimer

http://www.upstreamonline.com/live/article1355381.ece

*Pancontinental clears up speculation* 

Bianca Bartucciotto 17 March 2014 02:05 GMT 

Australian company *Pancontinental Oil & Gas has cleared up speculation *that mounted over the weekend concerning the Sunbird-1 exploration well in licence area L10A offshore Kenya. 

According to the joint venture partner, media reports over the weekend stated the BG-operated well had made an oil and gas discovery.

Pancontinental cleared up the rumour on Monday stating “the Sunbird Miocene Reef has been found to contain a hydrocarbon column, however the vertical extent of the hydrocarbon column has not yet been determined”.

The company said it had been difficult to assess wireline logs in the upper section of the reef where extensive losses of drilling fluid occurred into the porous and permeable parts of the reservoir.

The well reached a final depth of 2850 metres below the drill floor penetrating the Sunbird Miocene Pinnacle reef.

Samples were taken from the well and final results will not be known until geochemical and other analysis has been completed.

BG said it was not as yet in a position to fully estimate the extent of the hydrocarbon volume and whether it is commercial or not.

BG will complete wireline logging, formation and fluid sampling and preparations to complete the well, which it is intended will then be plugged and abandoned


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## smalltimer

Check out *(FAR)*'s Report to ASX dated the 19th. of March

http://member.afraccess.com/media?id=CMN://6A671513&filename=20140319/FAR_01502272.pdf


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## smalltimer

*The Liquid Gold Dream: Search for oil offshore Namibia intensifies* 
by Felix Njini     20140320 

Windhoek ‑ Repsol SA, Spain's biggest oil producer, will drill its first well offshore Namibia at block 1911 in the Walvis Basin next month, rekindling Namibia's hopes for a commercial discovery of crude oil.

Repsol has a 44 percent interest in offshore licence 0010 and is operator of the block on which the Welwitschia-1 well will be drilled.

London-listed Tower Resources Oil & Gas Exploration has a 30 percent interest in licence 0010 in the Walvis Basin, situated 200 kilometres north of Brazilian HRT's Wingat well, on which a sub-commercial discovery was announced in May 2013.

Block 1911 shows “some promise” and Repsol's drilling in April “will lead to a discovery”, Immanuel Mulunga, Namibia's petroleum commissioner, said in an interview.

"They are going to spend around US$95 million in drilling this well, it's a tremendous risk they are taking and one that raises hope for us, it's a risk worth undertaking, as we believe this block has oil," Mulunga said.

Momentum has been building for the drilling of Welwitschia-1 well with Tower Resources saying early this month that a Rowan Renaissance drillship, which arrived in Namibia on March 4, is expected to start operations on or around April 11, with the spud being approximately one week later.

"This new build drill ship will now undergo the scheduled preparation and final acceptance testing by Repsol, to whom it is being hired on a three-year contract. 

It is still expected to commence its operations for the Welwitschia-1 well on or around April 11, with the spud being approximately one week later," Tower Resources said on March 5.

Namibia has no known commercial crude deposits but interest in oil and gas discoveries spiked up during the past years highlighted by the presence of international oil majors, which are active in the country's oil and gas exploration sector.

Shell Oil and Exploration's return to the country when it announced taking over exploration blocks 2913A and 2914B in the Orange Basin on February 17, has also stoked optimism for a commercially viable deposit.

International oil majors have kept Namibia in their sights despite 18 wells, which have been drilled so far, failing to come up with commercially viable deposits. BP Plc., Chariot Oil & Gas, Tullow Oil Plc, Total SA are active on Namibia's coastal shelf as they pursue Africa's Atlantic coastline following huge discoveries in Ghana, Sierra Leone, Ivory Coast, Gabon and Angola.

Namibia has also granted permission to US-based Murphy Oil Corporation to farm into blocks 2613A and 2613B in LÃ¼deritz Basin, Mulunga said.

Murphy, which holds 40 percent in the blocks and is the operator, is expected to start 3D seismic surveys and drilling is expected in 2015 or 2016, Mulunga said.

"International companies still have faith in Namibia's oil potential. They also believe we are doing a good job in terms of regulating the industry," Mulunga said.

Namibia's only known discovery is the Kudu gas fields, offshore Southern Namibia, estimated to contain 1.3 trillion cubic feet, which is going to be pumped to fire a planned 800 mega-watt power plant in Oranjemund.

Located on the south west African coast, Namibia is the world's fourth largest uranium producer and the largest miner of highest-quality offshore diamonds.

Namibia's belief in oil potential stems from the fact that its coastal shelf likely mirrors that of Brazil, across the ocean and discoveries in Angola, its northern neighbour and Gabon, continues to feed national optimism, Mulunga said. 

Investors are betting on Africa and Brazil's geological history and there is belief that the continent's coastal shelf mirrors Brazil across the Atlantic and that there are chances that exploration in Namibia might strike major finds such as those in neighbouring Angola.

US geological data also says that the water running along the west coast of Africa may hold 75 billion of crude oil.

"The fact that Brazil and Africa were once joined years ago, we have that expectation. On the African side there are discoveries in Angola, Gabon and we expect there is oil in Namibia's part of west Africa margin," Mulunga said.

http://www.southerntimesafrica.com/...l-offshore-Namibia-intensifies-/#.Uys5olOsVaS


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## smalltimer

*Some big wells out there IF they hit...* 

African exploration faces a “defining year” in the next 12 months with a large amount of high-profile wells being drilled, but increased offshore well costs are set to see smaller players struggle to go full cycle on some plays, according to a report. 

Increased cost pressure is also a reason for smaller independents to monetise any offshore discoveries soon after the find, investment intelligence firm Edison argued in a recent report on pan-African drilling.

The report looked in detail at some of the wells to be drilled in or off Africa in the next 12 months in which a select group of small-cap exploration and production (E&P) players are involved. Those chosen companies – namely Canadian Overseas Petroleum, Chariot Oil & Gas, Far, Fastnet Oil & Gas, Hyperdynamics, Longreach Oil & gas, Pancontinental Oil & Gas, Pura Vida Energy, Sterling Energy, Taipan Resources, Tangiers Petroleum and Tower Resources – are together involved in wells targeting more than 27 billion barrels of oil equivalent in Africa in the next 12 months.

“The next year should be an important time for exploration drilling across the continent, with six wells being drilled in Morocco alone (by Kosmos Energy, Cairn Energy, Freeport McMoRan, GALP and Genel Energy),” Edison wrote.

“Elsewhere, important wells will be drilled in Guinea by Tullow Oil and in Namibia by Repsol, while the Sunbird well currently being drilled by BG in Kenya could open up new plays. 

“Small-cap explorers will be participating in many of these wells and are clearly most leveraged to the upside in the success case.”

Edison highlighted Repsol’s Welwitschia-1 well off Namibia, to be drilled in the second quarter, as of particular interest, with Tower currently holding a 30% stake. However, with the well chasing gross resources of 9.9 billion barrels of oil equivalent, the London-listed junior is looking to farm out a 10% to pay for well costs, which are set to hit between $80 million and $100 million.

This sort of funding pressure is set to affect more of the small-sized independents going forward, Edison saying: “While most of the smaller independent E&Ps have secured well carries for their 2014 drilling activities, beyond the current programme there are significant funding questions for many. 

“At Tullow’s recent 2013 results presentation, the company was at pains to highlight what the market is acutely aware of, namely that deep-water exploration is becoming increasingly expensive. 

“If a company of the size and reputation of Tullow, with its opportunity set, is starting to prioritise onshore over offshore because of spiralling costs … the ability of smaller players to go full cycle is, in our view, bleak.”

Edison thinks all signs are pointing toward “early, flagged exits” from discoveries for the smaller players.

“We argue that any meaningful offshore discovery by the small caps should be monetised by managements relatively early as the best value creation strategy.”

The report added: “Investors are likely to reward companies that recognise when to get out of exploration plays as much as when to get into them.”

Some big wells out there IF they hit...


African exploration faces a “defining year” in the next 12 months with a large amount of high-profile wells being drilled, but increased offshore well costs are set to see smaller players struggle to go full cycle on some plays, according to a report. 

Increased cost pressure is also a reason for smaller independents to monetise any offshore discoveries soon after the find, investment intelligence firm Edison argued in a recent report on pan-African drilling.

The report looked in detail at some of the wells to be drilled in or off Africa in the next 12 months in which a select group of small-cap exploration and production (E&P) players are involved. Those chosen companies – namely Canadian Overseas Petroleum, Chariot Oil & Gas, Far, Fastnet Oil & Gas, Hyperdynamics, Longreach Oil & gas, Pancontinental Oil & Gas, Pura Vida Energy, Sterling Energy, Taipan Resources, Tangiers Petroleum and Tower Resources – are together involved in wells targeting more than 27 billion barrels of oil equivalent in Africa in the next 12 months.

“The next year should be an important time for exploration drilling across the continent, with six wells being drilled in Morocco alone (by Kosmos Energy, Cairn Energy, Freeport McMoRan, GALP and Genel Energy),” Edison wrote.

“Elsewhere, important wells will be drilled in Guinea by Tullow Oil and in Namibia by Repsol, while the Sunbird well currently being drilled by BG in Kenya could open up new plays. 

“Small-cap explorers will be participating in many of these wells and are clearly most leveraged to the upside in the success case.”

Edison highlighted Repsol’s Welwitschia-1 well off Namibia, to be drilled in the second quarter, as of particular interest, with Tower currently holding a 30% stake. However, with the well chasing gross resources of 9.9 billion barrels of oil equivalent, the London-listed junior is looking to farm out a 10% to pay for well costs, which are set to hit between $80 million and $100 million.

This sort of funding pressure is set to affect more of the small-sized independents going forward, Edison saying: “While most of the smaller independent E&Ps have secured well carries for their 2014 drilling activities, beyond the current programme there are significant funding questions for many. 

“At Tullow’s recent 2013 results presentation, the company was at pains to highlight what the market is acutely aware of, namely that deep-water exploration is becoming increasingly expensive. 

“If a company of the size and reputation of Tullow, with its opportunity set, is starting to prioritise onshore over offshore because of spiralling costs … the ability of smaller players to go full cycle is, in our view, bleak.”

Edison thinks all signs are pointing toward “early, flagged exits” from discoveries for the smaller players.

“We argue that any meaningful offshore discovery by the small caps should be monetised by managements relatively early as the best value creation strategy.”

The report added: “Investors are likely to reward companies that recognise when to get out of exploration plays as much as when to get into them.”

Some big wells out there IF they hit...


African exploration faces a “defining year” in the next 12 months with a large amount of high-profile wells being drilled, but increased offshore well costs are set to see smaller players struggle to go full cycle on some plays, according to a report. 

Increased cost pressure is also a reason for smaller independents to monetise any offshore discoveries soon after the find, investment intelligence firm Edison argued in a recent report on pan-African drilling.

The report looked in detail at some of the wells to be drilled in or off Africa in the next 12 months in which a select group of small-cap exploration and production (E&P) players are involved. Those chosen companies – namely Canadian Overseas Petroleum, Chariot Oil & Gas, Far, Fastnet Oil & Gas, Hyperdynamics, Longreach Oil & gas, Pancontinental Oil & Gas, Pura Vida Energy, Sterling Energy, Taipan Resources, Tangiers Petroleum and Tower Resources – are together involved in wells targeting more than 27 billion barrels of oil equivalent in Africa in the next 12 months.

“The next year should be an important time for exploration drilling across the continent, with six wells being drilled in Morocco alone (by Kosmos Energy, Cairn Energy, Freeport McMoRan, GALP and Genel Energy),” Edison wrote.

“Elsewhere, important wells will be drilled in Guinea by Tullow Oil and in Namibia by Repsol, while the Sunbird well currently being drilled by BG in Kenya could open up new plays. 

“Small-cap explorers will be participating in many of these wells and are clearly most leveraged to the upside in the success case.”

Edison highlighted Repsol’s Welwitschia-1 well off Namibia, to be drilled in the second quarter, as of particular interest, with Tower currently holding a 30% stake. However, with the well chasing gross resources of 9.9 billion barrels of oil equivalent, the London-listed junior is looking to farm out a 10% to pay for well costs, which are set to hit between $80 million and $100 million.

This sort of funding pressure is set to affect more of the small-sized independents going forward, Edison saying: “While most of the smaller independent E&Ps have secured well carries for their 2014 drilling activities, beyond the current programme there are significant funding questions for many. 

“At Tullow’s recent 2013 results presentation, the company was at pains to highlight what the market is acutely aware of, namely that deep-water exploration is becoming increasingly expensive. 

“If a company of the size and reputation of Tullow, with its opportunity set, is starting to prioritise onshore over offshore because of spiralling costs … the ability of smaller players to go full cycle is, in our view, bleak.”

Edison thinks all signs are pointing toward “early, flagged exits” from discoveries for the smaller players.

“We argue that any meaningful offshore discovery by the small caps should be monetised by managements relatively early as the best value creation strategy.”

The report added: “Investors are likely toreward companies that recognise when to get out of exploration plays as much as when to get into them.”

http://www.investorvillage.com/groups.asp?mb=17397&mn=21373&pt=msg&mid=13661633


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## smalltimer

http://standardmedia.co.ke/m1/story.php?id=2000106004&pageNo=1

*State’s tough talk on oil moves beyond rhetoric as rogue explorers lose licences *
Last updated on 4 Mar 2014 00:00 

Kenya: The recent spat between the Ministry of Energy and Petroleum and Canadian oil explorer Vanoil in December might have been brushed off by many as a small issue. This especially because it occurred in an industry that has over the last two years churned out nothing but good news for the country.

The ministry turned down a request by Vanoil to extend its initial exploration period by 18 months. The ministry argued that the firm had failed to meet the terms of its licence, and had not done in six years what it was legally required to do in two.

But what may have initially been dismissed as a small matter could end up being just the tip of an iceberg as the Government gets tough on oil firms.

As Kenya’s reputation as an emerging global oil province grows, the Energy ministry has announced that it has embarked on a process to streamline the sector and weed out rogue exploration firms.

Auditing

Energy Cabinet Secretary Davis Chirchir said he has written to oil exploration and production companies that have been allocated blocks to prospect for oil and gas in the country, asking them to give the ministry an update on the progress they have made.

The ministry is also recruiting a consultant to undertake regular audits of licensed oil companies, as the Government gets serious about the country’s oil wealth.

“We have written to all exploration companies and asked them to give us an update on their work progress as well as adhere to the work programmes, and that we will not give any extensions unless in exceptional circumstances,” he told Business Beat.

Vanoil got its licence to explore for oil in North Eastern Kenya in 2007. It signed a Public Sharing Contract (PSC) whose terms state that an exploration and production firm has to meet certain obligations within the initial exploration period, which is usually two years.

The obligations include carrying out surveys, drilling at least one exploratory well and achieving certain expenditure minimums, including in investing in the community.

The firm said it had invested $32 million (Sh2.7 billion).

But Mr Chirchir said despite this investment, the firm had failed to meet the required minimums in the six years it was on site, and hence was unlikely to meet its obligations even if its initial exploration period was extended by 18 months.

Once the two-year initial exploration period is over and the explorer has met the obligations of the PSC, explorers are given the go ahead to further their project in the second exploration period ”” also two years with more obligations ”” and then on to the third exploration period. If the firm finds commercially viable resources, then it can move on to production.

The exploration periods can, however, be extended where circumstances cause a firm to fall behind its work schedule.

In Vanoil’s case, the extensions for the initial period were granted four times.

According to Chirchir, the firm did not deserve the extensions it got.

Speculation

The Energy Cabinet Secretary added that there are some rogue companies using exploration contracts for speculative purposes and have no intention of undertaking any prospecting.

“We have companies that have taken acreage and go to look for farm-ins or raise money using the PSC but do not get any work done on the blocks,” he said.

A farm-in is a process where a company invites another to participate in an oil block in return for cash.

Speaking separately, Energy Principal Secretary Joseph Njoroge said the ministry is at an advanced stage in procuring the services of a consultant who will undertake regular audits on exploration firms.

Vanoil is, however, not the only firm that has failed to adhere to the terms of the PSC.

Chirchir, during a sitting with the Parliamentary Committee on Energy last Tuesday, said the ministry had recently turned down a request from one of the major oil explorers to extend its initial period on one of its blocks.

The firm, according to Chirchir, said it had committed its resources in other blocks and could not commence exploration on another one of the blocks it had been allocated.

Mr Jamleck Kamau, the chairman of the energy committee, said the ministry may not have been keen on doing due diligence before issuing oil exploration licences, which is now haunting the country.

“There was a problem in how the ministry went about giving companies licences to explore for oil in the country. Licences were issued on a first-come-first-served basis, which resulted in many licences being issued to companies that can be said to be questionable,” said Mr Kamau.

Among the companies that may have a suspect background include Milio International.

Unknown owners

The firm has been prospecting for oil in Block L20 through Pacific Sea Board, where it has majority shareholding. Milio has also recently farmed-in to Block L6 in offshore Lamu, but it failed the integrity test since the owners of the company are not known.

Due diligence done by the ministry of Foreign Affairs at the request of a local business that planned to do business with Milio was unable to identify the directors and proprietors of the firm. In a letter in late 2012, the UK High Commissioner to Kenya noted that even after an extensive search in company registries in the UK, it was unable to “know the people behind them [Milio] or their nationalities”.

Further inquiry found that Milio has connections to Marc Rich ”” an American billionaire who was at one time the most wanted white-collar criminal in the US until he was pardoned by then President Bill Clinton, a move that generated a lot of controversy. Mr Rich died in June last year. His companies were involved in major scandals, including an oil-for-aid scandal in the Middle East. Milio International was formed by Rich Traders in 1997.

When contacted for comment, the firm declined to talk about its prospecting operations in Kenya.

In addition to having interests in exploration, the firm’s website says it also supplies petroleum products in the country, and claims to supply 35 per cent of liquefied petroleum gas (LPG) used in Kenya.

Another firm, Cove Energy, marketed its stake in a number of offshore blocks it had been allocated and was able to sell them, but the firm failed to remit capital gains tax to the Government following its $1.9 billion (Sh163 billion) pay day.

The move by Cove ”” buy low and sell high ”” could pass for outright speculation, something the ministry has been campaigning against. This has been rather unsuccessful, however, as many firms with acreage in Kenya operate in the same manner.

There have been numerous farm-ins and the Government could be losing hundreds of millions of shillings, if not billions, if the companies are not paying the recently introduced capital gains tax for the petroleum industry.

Another firm that was okayed to prospect for oil in Kenya was found to have been smuggling gold out of the Democratic Republic of Congo. According to a UN report, the directors and senior employees of the firm would use private jets to fly out gold supplied by senior officials in the DRC government.

Price revision

In 2012, the Government revised the rules for acquiring new blocks, requiring new entrants to pay $1 million (Sh86.2 million) up from $310,000 (Sh26.7 million) for a licence to explore in a bid to weed out speculators.

Companies that had acquired blocks before then were required to pay the difference of $690,000 (Sh59.5 million) if they had not met contract obligations.

Correspondence between former Energy Permanent Secretary Patrick Nyoike and exploration firms showed that some companies paid the difference, but there are still others that are yet to do so yet continue to hold the rights to their blocks.

emacharia@standardmedia.co.ke

http://standardmedia.co.ke/m1/story.php?id=2000106004&pageNo=1


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## smalltimer

Buru Energy: *Cracking The Canning*
BY RICHARD CAMPBELL - 20/01/2014

The Canning Basin has been much studied, but not much explored. 

By using analogies with similar sedimentary basins across the world the US Geological Survey estimates that it contains 230 TCF. This is 35 times the gas produced by the Gippsland Basin over the last 40 years or about half the gas resources of all the fields of the North West Shelf, the Browse and the Bonaparte combined. As Buru Energy holds the dominant position in the Canning and has a forward supply contract with Alcoa as well as legislative backing from the WA government, it should be in a strong position to drive a significant lift in value beyond the current $530m.

Exactly how far beyond is of course the key question. If there were absolutely no doubt that the gas and oil it shares 50/50 with Mitsubishi is recoverable on the scale that its independent expert report predicts, Buru’s price would already be closer to $10 than the current $2.00, but as well as scale and recovery, there is the no small matter of logistics and the securing of long term contracts. After peak of $2.50 in 2012 as volume estimates arrived doubts emerged about the logistics and the local opposition to fracking. The price dipped twice to $1.40 over 2013, but now confidence is returning. Buru has proved that some parts of the giant Canning Basin – two thirds the size of Texas – is not only gas rich, but has one or more handy oil windows as well.

This renewed interest follows months of multi-rate production tests on Ungani-1 and 2, a pair of conventional wells flowing at over 1000 bpd on chokes. Both wells were re-worked and volume is now enough to start sending shipments – ie truck and ship – from a temporary facility at Wyndham. Output is planned to rise to 4000 bpd by the end of the year and then gradually lift to a target 15,000 bpd as more wells of the Ungani trend come on line. This oil fairway is 120 kms by 40 kms wide with up to a hundred targets identified from 2D and 3D seismic. The source is a dolomite limestone similar to the limestone and dolomite reefs at Blina almost 300kms to the east where a Canadian company recovered over 1.5 million barrels of sweet oil from two wells in the early eighties. Both levels had excellent permeability, but the moderate volume and low price at the time didn’t justify trucking oil from an area which gives full meaning to the term “the middle of nowhere”.

Buru now controls the Blina field at a time when the oil price is much higher, but it has also picked up more acreage down-trend from Ungani to give it a strong position near Broome which will become the transhipment point as volumes rise.

Conventional oil is only an appetiser as work is about to begin on a second phase of drilling for deeper gas in the Laurel formation, a sedimentary layer which spreads more or less continuously across the greater part of the Basin for depths of up to 3 kilometres. Independent experts believe Buru’s half share of the Laurel formation dry gas is likely to be 47 TCF with “liquids” at over one billion barrels. Other deeper formations also giving indications of dry and wet gas could extend these numbers by 10-30%.

To give this 47 TCF some proportion the greater Gorgon is estimated at 40 TCF and the still to be discovered gas in the Gippsland Basin is reckoned at 6-10TCF and so for 3-5 TCF for BHP.

It should be said at once that this is not an apples for apples comparison. Gippsland’s gas fields are largely free-flowing and shallower than the compacted deeper sands, mudstones and shales of the Canning. While the Canning’s gas bearing intersections may be 10-15 times thicker, this is largely “tight gas” requiring fracturing with highly pressurised water, sand and solvents. Gippsland also had the advantage of relatively shallow off-shore depths (although deep for the time), proximity to the one of the country’s largest population clusters and large oil pools to propel the economics of development.

But Buru can counter with a few strong cards of its own: first the agreement to supply Perth industry and households following the failure of the Perth Basin’s geology to give up the volumes of gas in place and second, part of the infrastructure to deliver gas south already exists in the form of the Dampier-Perth and Dampier-Goldfields pipelines. The scale of the potential volumes also raises the possibility of an on-shore LNG facility. While James Price Point was not economic for Woodside’s Browse partners, it is a different matter to lay pipes on land. Point Torment north of Derby could be the place as it is already gazetted for industrial development. This low muddy peninsula juts out into King Sound and forms the last visual surface evidence of the ridge that divided two sections of a vast embayment which once spread 250-300kms inland between the more stable Kimberly and the Pilbara cratons. As this trough’s deep floor rose and fell it gradually filled with coral reefs, mud and the sediments of eons of wind, rain and periods of glaciation.

Buru supporters have also noted that Apache Energy which is experienced in “unconventional” oil and gas recovery has arrived on the scene. The partners have traded 50% of several coastal and southern tenements on favourable 80% cost carried terms. These funds will largely target deep, gas prone sand formations, but also conventional oil.

Experience of a major is welcome, but the technical hurdles can often be easier than the social ones. Concerns by the native total association that fracking operations could permanently pollute surface water are understandable even if the operations will be 2-3 kms below their ground water. Buru is acutely aware of the political and reputational risk and has made it clear that it will not begin fracking unless it has local support. The fact that its native liaison officer has recently become the Chairman of the Yawuru land rights association tends to put this risk in context.

While it is clearly too early to think of Buru as a Woodside in the making, that prospect is not sheer fantasy. The Ungani oil field may be small by world terms but its cash will help build momentum for what could be “company making” prizes to come.

http://www.sharecafe.com.au/richard...&utm_medium=cpc&utm_campaign=outbrain_amplify

*From PCL's Web Page*

*Canning Basin - Onshore Lennard Shelf Western Australia 
EP104 / R1 (11.11%)* 

Joint Venture partners: Buru Energy (32.95% and Operator), Emerald Gas Limited (18.75%), Gulliver Productions Pty Ltd (14.8%), Phoenix Resources Plc (10%) First Australian Resources Limited (8%), Indigo Oil Pty Ltd (5.5%)

The EP104 permit is located 20km north of Derby in Western Australia's Kimberley Region. 

The permit area is on the Lennard Shelf of the Canning Basin, known for oil discoveries such as Blina and Sundown. The basin has rich source rocks and good quality reservoir rocks, but is largely under-explored.

Renewed testing of the Stokes Bay 1 well was carried out in November 2010 using a coiled tubing unit (CTU). Saline water was recovered and this is interpreted to be formation fluid. No oil or gas was recovered during the test.

The joint venture will now undertake an examination of the prospectivity of the licence areas and plan a new forward exploration programme.

Petroleum Retention Lease R1 was renewed by the Minister of Mines and Petroleum of Western Australia for a period of five years from 8 November 2010.

*Canning Basin - Onshore Lennard Shelf Western Australia 
L15 (12%) *

Joint venture partners: Buru Energy Ltd (15%), Gulliver Productions Pty Ltd (49.0%), FAR Ltd (12.0%), Indigo Oil Pty Ltd (11.5%)

Pancontinental and its co-venturers have been granted Petroleum Production Licence L15 over the West Kora-1 oil discovery well in the Canning Basin of Western Australia. The licence is for 21 years commencing 1 April 2010. The final percentage interests of the joint venture participants are yet to be resolved.

L15 covers two graticular blocks 6054 and 6126 adjacent to the R1 licence area over the Stokes Bay-1 well and the Point Torment-1 gas discovery in which Pancontinental has a 10% interest.

West Kora-1 was drilled in 1984 and produced some 20,000 Barrels of oil during an extended production test, commencing at a rate of 350 BOPD.

The L15 Joint Venture aims to upgrade the production facility and restore oil production from West Kora 1. 

With improvements in technology and significantly higher oil prices, revived production from West Kora-1 could be feasible now that the Production Licence has been secured.


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## smalltimer

*Potential deepwater discovery reported for BG offshore Kenya*
03/26/2014 

PERTH, Australia – Pancontinental Oil and Gas (ASX: PCL) says a BG-operated well has discovered hydrocarbons in the Sunbird structure offshore Kenya.

The drillship Deepsea Metro-1 drilled Sunbird-1 in 723 m (2,372 ft) of water in offshore area L10A, and to a final depth of 2,850 m (9,350 ft) below the drill floor.

The well penetrated the top of the Sunbird Miocene pinnacle reef at 1,583.7 m (5,196 ft) subsea, intersecting a hydrocarbon column. However, the vertical extent of the column remains unclear due to difficulties assessing wireline logs in the upper section of the reef, with extensive losses of drilling fluid into porous and permeable parts of the reservoir.

Recovered hydrocarbon samples will undergo geochemical and other analyses.

BG says it is unclear at this stage whether the find is commercial. Sunbird-1 will be P&A’d

http://www.offshore-mag.com/article...discovery-reported-for-bg-offshore-kenya.html


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## smalltimer

*Drillships start work on deepwater frontier wells offshore Africa*
03/27/2014 

LONDON – Ophir Energy has started drilling two deepwater frontier wells offshore West and East Africa.

The drillship Titanium Explorer is drilling Affanga Deep-1 offshore Gabon, targeting an extension to the proven OgoouÃ© Delta play with potential recoverable resources of 170 MMbbl. Planned TD is 4,500 m (14,764 ft) TVDSS.

A success would de-risk various follow-on prospects that could be integrated into a hub development, according to Ophir. Drilling operations are expected to last around 35 days. On completion, the drillship will transfer to the Mbeli block off Gabon to drill the Okala presalt prospect.

Another drillship, Deepsea Metro 1, is drilling the Taachui prospect on the northwest margin of block 1 offshore Tanzania. The BG-operated well (Ophir has a 20% interest) is targeting potential recoverable resources of 1.4 tcf (40 bcm) in Cretaceous reservoirs.

Planned TD is around 4,050 m (13,287 ft) TVDSS. Drilling is estimated to last 55 days.

http://www.offshore-mag.com/article...deepwater-frontier-wells-offshore-africa.html


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## smalltimer

http://www.pancon.com.au/investor-centre/asx/2014/reports/110414.pdf

_ASX Announcement 
11 April 2014_ 

*Extensive 3D seismic survey completed in EL 0037 offshore Namibia *

*Key Points: *

• 3,000km² 3D seismic survey completed in EL 0037 in the Walvis Basin, offshore Namibia, southwest Africa 
• Survey covers several strong leads mapped on existing 2D seismic data 
• Second 2D acquisition phase now underway covering ~1,000 line km 
• Fast-track processed results of 3D data expected in 2 to 3 months 
• Drilling on a major prospect (496Mmboe) about to commence in adjacent permit. 

Pancontinental Oil & Gas NL (ASX: PCL) is pleased to advise that an extensive 3D seismic survey has been completed within its highly prospective offshore acreage in licence area EL 0037 offshore Namibia, southwest Africa. 

The 3D acquisition, over approximately of 3,000km², covers a number of strong “Leads” that have already been mapped on existing 2D seismic data. A second 2D acquisition phase will cover approximately 1,000 km. 
The survey is designed to prove-up a number of Prospects for drilling. 

EL 0037 covers an area of 17,295km² in the Walvis Basin. Offshore Namibia is considered highly prospective for oil and gas, lying south of the prolific producing areas offshore Angola, with which it shares some geological characteristics.  

High quality oil-prone source rocks have been seen in regional wells, and two of these source rocks have been reported to be oil mature and considered to be generating oil in the Wingat-1 well in an area immediately south and geologically on-trend to EL 0037. 

*3D Seismic Survey *

The 3D survey was managed by the EL0037 Joint Venture operator Tullow Oil, using the seismic acquisition vessel Polarcus Asima.  

Tullow Oil farmed-in to EL 0037 in September 2013 and subsequently identified a number of geological Leads for coverage by the 3D survey. Pancontinental retains a 30% free-carried interest through the surveys and one optional well to be drilled by Tullow. 

An oil recovery and reports of high quality source rocks in the Wingat-1 well, drilled in 2013, have given considerable encouragement for exploration in the Walvis Basin. 

Wingat-1 is directly on-trend in an “Oil Mature Fairway” interpreted by Pancontinental in EL0037. 

*Ongoing Activity *

Acquisition of the 2D phase of the 1,000 line km seismic survey in EL 0037 has now commenced. It is estimated that it will take approximately two weeks to complete. 

Results of the 3D data will now be processed, with final results expected in approximately five months. 
Fast-track processed 3D data are expected within approximately ten weeks, enabling mapping of the Prospects to commence. 

*Regional Activity *

The joint venture participants in Block EL 0010, neighbouring Pancontinental’s EL 0037 (see Figure 1 below) have reported that preparations are being made to commence drilling the Welwitschia-1 exploration well in mid-April 2014. The Welwitschia-1 drilling site is approximately 75km from the north-east boundary of EL 0037. 

Drilling results from elsewhere in the Walvis Basin have proved encouraging for the presence of mature source rocks, and regional wells show good evidence of reservoir quality sands in the Cretaceous interval. 

*Further Namibia Background *

Namibia is under-explored with only seven onshore and fourteen offshore wells drilled over a coastline of some 1,300km. 

Active oil & gas systems are demonstrated by oil recovery from the Wingat-1 well in the Walvis Basin in May 2013 and the significant Kudu gas discovery offshore southern Namibia.  

Offshore Namibia and Angola form the tectonic conjugate of offshore Brazil, which contains some highly oil-productive basins.  

Namibia has an encouraging oil & gas regulatory regime and is economically and politically stable. Exploration activity, including drilling, is expected to continue to be high in coming years. 

The Namibia EL 0037 consortium consists of: 

Tullow Kudu Limited1 (Operator) 65%
Pancontinental Namibia (Pty) Ltd 30%
Paragon Oil & Gas (Pty) Ltd 5%


Pancontinental Namibia (Pty) Ltd is a wholly owned subsidiary of Pancontinental Oil & Gas NL 
Paragon Oil & Gas (Pty) Ltd is a wholly owned subsidiary of Paragon Investment Holding’s (Pty) Ltd 

Yours sincerely for and on behalf of  
Pancontinental Oil & Gas NL 

Barry Rushworth, CEO and Director  

The summary report on the oil and gas projects is based on information compiled by Mr R B Rushworth, BSc, MAAPG, MPESGB, MPESA, Chief Executive Officer of Pancontinental Oil & Gas NL. Mr Rushworth has the relevant degree in geology and has been practising petroleum geology for more than 30 years. Mr Rushworth is a Director of Pancontinental Oil & Gas NL and has consented in writing to the inclusion of the  information stated in the form and context in which it appears. 

*Disclaimers *

Any estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. 
This document may include forward looking statements. Forward looking statements include, and are not necessarily limited to, statements concerning Pancontinental’s planned operation programme and other statements that are not historic facts. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward looking statements. Although Pancontinental believes its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward looking statements.

http://www.pancon.com.au/investor-centre/asx/2014/reports/110414.pdf


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## smalltimer

ASX Announcement 
14 April 2014 

*Sunbird-1 intersects hydrocarbon zone offshore Kenya 
Analysis of the Sunbird-1 discovery is ongoing *

• Sunbird-1 has intersected a gross hydrocarbon column of approximately 44m in the Sunbird Miocene Reef 
• Recovered Gas and Liquids samples continue to be analysed and assessment of the discovery zone is ongoing 
• Results highlight the strong potential of Pancontinental’s extensive offshore Kenyan acreage 

Pancontinental Oil and Gas NL (ASX: PCL) is pleased to advise that the Sunbird-1 well off the southern Kenyan coast has been completed and the well has intersected a hydrocarbon-bearing zone in the top of the Sunbird Miocene Pinnacle Reef. Analysis of the zone itself and recovered hydrocarbon samples are continuing. 

Analysis of the wireline log data and the fluid samples recovered from the limestone reservoir is complex due to the large volume of drilling fluid, seawater and cement lost to highly porous and permeable zones in the Sunbird Reef, including into the hydrocarbon bearing zone. 

Both gas and liquid samples have been recovered. In addition to the recovered gas, the nature of the liquid samples and whether or not these contain naturally occurring hydrocarbon liquids (oil or condensate) remains to be determined by further analysis.

The top of the Sunbird Miocene Pinnacle Reef was reached at 1,583.7m subsea. The water depth is 723m. 
The 43.6m gross hydrocarbon bearing zone is currently assessed to contain a net pay thickness of 27.8m. In this case, net pay is defined as the cumulative thickness of zones having porosity of 10% or greater. Zones with porosity lower than 10% are not included in the net pay assessment.

At this stage, due to its estimated size, the Sunbird discovery itself is considered unlikely to be commercial. 
Pancontinental has an 18.75 percent interest in the well and block L10A.

The Operator of the Block L10A Petroleum Sharing Contract, BG Group, is continuing to assess the results for the L10A consortium and will recommend a follow-up program. 

A further statement regarding the discovery will be made once the remaining analyses have been completed. 
Sunbird-1 has now been “plugged and abandoned” in accordance with the planned drilling program, meaning that the well has been made safe in such a way that it can be left permanently without further intervention. These measures are designed to ensure that there is no danger of leakage of oil or gas within the well or to the sea floor.

Pancontinental’s Chief Executive Officer Barry Rushworth said the implications for regional exploration were very positive.

“The drilling operation using the Deepsea Metro 1 drillship has been completed, with the well drilling into a hydrocarbon-bearing carbonate reef reservoir that was highly porous and permeable” Mr Rushworth said. 
“We await the results of the continuing analysis of the data acquired from the well”.

“We encountered a thick and effective seal over the top of the Sunbird Reef, which was an initial risk for us, and the regional follow-on implications are truly great. Porosity, permeability and seal for the reservoir were all better than Pancontinental expected”.

“While the high quality of parts of the reservoir, in terms of porosity and permeability, resulted in the loss of quantities of drilling fluids and consequently the analysis of the hydrocarbon column has been made difficult, we expect to have a conclusive result after further analysis”.

“We look forward to receiving the full and final Sunbird results and we believe that we are now in an excellent position to explore for larger volumes of gas and oil over our very extensive portfolio of prospects and leads offshore Kenya”.

*Future Exploration*

The L10A joint venture is considering follow-up exploration activities after the Sunbird-1 discovery. 
The Sunbird discovery is expected to yield important details of the hydrocarbon system in the Lamu Basin, including the age of the source rock and the timing of generation.  

L10A covers a variety of play types, prospects and leads. Many of the prospects have been defined using the two 3D seismic surveys carried out by the joint venture.

The Sunbird Prospect is one of an inboard cluster of Miocene reefs. Outboard prospects include Tertiary and Cretaceous channels, large anticlinal complexes and series of Cretaceous and Tertiary fault bounded prospects.

Other offshore Kenyan activity includes an exploration well to be drilled by Anadarko, as recently announced for later in 2014.

*L10A Consortium *

The Kenya L10A consortium consists of:

BG Group (Operator)  50.00%
PTTEP  31.25% 
Pancontinental  18.75% 

*About Pancontinental *

Pancontinental Oil & Gas is a petroleum (oil and gas) exploration company based in Perth, Western Australia and listed on the Australian Securities Exchange (ASX: PCL). 

With a focus on Africa and Australia, it has excellent exposure to a range of high-potential oil and gas targets. 
High levels of project equity, together with Pancontinental’s modest market capitalisation, mean that the Company is very well leveraged in the event of exploration success. Pancontinental has interests in three exploration licences offshore Kenya: L10A, L10B and L6. 

Pancontinental has a 40% interest in the offshore section of licence L6 and 16% in the onshore portion, an 18.75% interest in Kenya licence L10A (Sunbird) and 15% in L10B. 

Co-venturers in these three Kenyan licences (although not in each licence) are BG Group PTTEP, Premier Oil and FAR Limited. 

Pancontinental holds a 30% free-carried interest in offshore Namibia licence EL0037, where Tullow Oil has recently completed a 3D seismic program as part of its farmin agreed in September 2013. 

Pancontinental’s website is http://www.pancon.com.au/ 

Media Enquiries 
Nicholas Read / Paul Armstrong Read Corporate Tel: +61 89 388 1474 
Yours sincerely for and on behalf of 
Pancontinental Oil & Gas NL 

Barry Rushworth, CEO and Director 

The summary report on the oil and gas projects is based on information compiled by Mr R B Rushworth, BSc, MAAPG, MPESGB, MPESA, Chief Executive Officer of Pancontinental Oil & Gas NL. Mr Rushworth has the relevant degree in geology and has been practising petroleum geology for more than 30 years. 

Mr Rushworth is a Director of Pancontinental Oil & Gas NL and has consented to the inclusion of the information stated in the form and context in which it appears. 

Disclaimers Any estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. 

This document may include forward looking statements. Forward looking statements include, and are not necessarily limited to, statements concerning Pancontinental’s planned operation programme and other statements that are not historic facts. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward looking statements. Although Pancontinental believes its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward looking statements.


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## smalltimer

*Kenyan Government gives L10B licence partners an additional year to plan future exploration*

Pancontinental also lifts its stake in this highly prospective licence, adjacent to the recent Sunbird discovery in L10A

Pancontinental Oil & Gas NL (ASX: PCL) is pleased to advise that the Government of Kenya has granted a 12-month extension to the current Initial Exploration Period of the L10B offshore licence.

Following the current Period (as extended), the joint venture can then elect to move into the First Additional Exploration Period of the licence.

Pancontinental considers this to be extremely favourable because it gives the joint venture partners more time to assess the impact of the Sunbird-1 discovery in the adjacent L10A area (PCL 18.75%) and its implications for
possible future drilling in L10B.

Pancontinental also intends to use the extended Period to secure a farm-in agreement for any future L10B drilling.
L10B has a number of large prospects and leads identified using 3D seismic and these are being examined as potential exploration drilling targets.

Pancontinental also advises that it has notified BG Group, the London-listed FTSE-100 company which operates the licence, and the other joint venture joint venture participants, that it will increase its stake in L10B from 15
percent to 20 percent.

Pancontinental has increased its stake in L10B by taking up its pro-rata share of the interest held by Premier Oil, which has elected to withdraw. The changes in interests are subject to the approval of the Ministry of Energy
and Petroleum of Kenya and such approval is not expected to be withheld.

Pancontinental will increase its stake prior to 15 June 2014, subject to Ministry Approval.

ASX ANNOUNCEMENT 16 MAY 2014

Pancontinental believes that the significant prospectivity of L10B and the opportunity to increase its interest with other partners in L10B at no cost, as well as the prospectivity of adjacent area L10A, means it is well-placed to
farm-out a portion of its interest in both licences on attractive terms and in a suitable time-frame under the 12-month extension.

L10A Sunbird -1

Pancontinental advises that the analysis of the Sunbird-1 discovery results in area L10A (PCL 18.75%) is ongoing. L10A is located immediately to the north of L10B.

Following Pancontinental’s ASX release on 14 April 2014 titled “Sunbird-1 intersects hydrocarbon zone offshore Kenya”, Pancontinental notes that L10A operator, BG Group, has announced that oil, as well as gas, has been
discovered in Sunbird-1.

The characteristics of the oil and gas discovery continue to be analysed and will be announced when a complete and integrated analysis has been made available to the joint venture by the operator.

Yours sincerely for and on behalf of Pancontinental Oil & Gas NL
Barry Rushworth, CEO and Director


----------



## smalltimer

News
Press release
*Namibia Drilling Update*
02 May 2014

*Tower Resources plc* (the "Company" or "Tower" (TRP.L, TRP LN)), the AIM-listed Africa-focussed oil and gas exploration company, provides an update on drilling operations for the Welwitschia-1 well. In summary, there has been a delay to the drilling schedule. It presently appears that the financial consequence for the Company will not be material, but the Company does not expect drilling operations to recommence until the end of May.

On 23 April 2014, through its wholly-owned subsidiary, Neptune Petroleum (Namibia) Limited ("Neptune"), Tower announced that it had received formal notification from Repsol Exploration (Namibia) (Pty) Limited ("Repsol"), the operator of Namibia PEL0010 (Neptune 30% working interest), that the Rowan Renaissance Drillship spudded the Welwitschia-1 well at 14:40 GMT. The drilling operations were expected to be completed within 46 days and the well status was to remain "tight hole" with a full update once operations on the Welwitschia-1 well had been fully completed and analysed.

The Company, along with the PEL0010 joint-venture partners (the "JV Partners") wish to provide the following update:

Following the spud of Welwitschia-1 and installation of the 36-inch casing it was observed that the wellhead housing had "slumped". A decision was taken by the JV Partners to plug and abandon the Welwitschia-1 well and re-spud the well as Welwitschia-1A at a distance of approximately 50 metres from the original spud location. Welwitschia-1A was spud at 3:30am on 1 May 2014 with no recurrence of the above issue. Despite the delay, it was expected that the re-spud would not impact on the overall cost or timing of the well. 

Repsol has since reported a further operational delay to the drilling programme due to a fault with part of the Blow Out Preventer ("BOP") control system. Drilling has been suspended whilst Repsol and the drilling contractor, Rowan, are taking measures to rectify the fault so that they are able to recommence drilling safely. It is estimated that commissioning issues relating to the BOP control system will delay further drilling until the end of May 2014.

The current status of the well is that casing has been set to a depth of 1,879 metres and we anticipate drilling into the primary target section shortly following the restart of drilling operations.

The cost implications of the delay are currently being examined by the JV Partners and depend upon allocation between Repsol and the drilling contractor, Rowan. However, it is the view of Tower and the JV Partners that the well will be completed within budget despite the recent delays. 

Jeremy Asher, Chairman, commented "It is not unusual to encounter technical issues with new equipment and in particular BOPs on-board a new drill-ship such as the Rowan Renaissance. However, safety is of paramount importance to Tower and its JV Partners and we are confident that Repsol and Rowan will resolve the BOP issues shortly and we look forward to informing the market when drilling recommences. These issues have no connection with the prospects for the well itself, which remain as exciting as ever". 

Contacts

http://www.towerresources.co.uk/news/2014/news_210514.html

(A good result here may help PCL's share price - we hope, as they also have a field in the area)


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## smalltimer

Kenya extends Australia firm licence for explore oil
May 18,2014

NAIROBI, May 17 (Xinhua) -- The Kenyan government has granted a year extension to an Australian oil and gas firm Pancontinental to plan future explorations in the East African nation. 

Pancontinental said in a statement released on Saturday that it intends to use the extended period to secure a farm-in agreement for any future L10B drilling. 

The Australian firm is the longest standing oil and gas explorer offshore Kenya and participated in originating the L6and the L8 projects. 

According to Pancontinental, L10B has a number of large prospects and leads identified using 3D seismic and these are being examined as potential exploration drilling targets. 

"Pancontinental also advises that it has notified BG Group, the London-listed FTSE-100 company which operates the licence, and the other joint venture participants, that it will increase its stake in L10B from 15 percent to 20 percent," the statement said. 

Pancontinental said it will increase its stake prior to June 15, subject to the government's approval. 

In L10A and L10B, the Joint Venture led by BG Group is interpreting 3D data in anticipation of identifying a number of prospects for drilling. 

It said the extension of the exploration period by Kenya will give the joint venture partners more time to assess the impact of the Sunbird-1 discovery in the adjacent L10A area (PCL 18.75 percent) and its implications for possible future drilling in L10B. 

Pancontinental has increased its stake in L10B by taking up its pro-rata share of the interest held by Premier Oil, which has decided to withdraw. 

The changes in interests are subject to the approval of Kenya's ministry of energy and such approval is not expected to be withheld. 

In April, the exploration company announced that oil, as well as gas, had been discovered in Sunbird-1 offshore Kenya. 

The characteristics of the oil and gas discovery continue to be analyzed and will be announced when a complete and integrated analysis has been made available to the joint venture by the operator. 

"The characteristics of the oil and gas discovery continue to be analyzed and will be announced when a complete and integrated analysis has been made available to the joint venture by the operator," it said. 

Pancontinental believes that the significant prospectively of L10B and the opportunity to increase its interest with other partners in L10B at no cost, as well as the prospectively of adjacent area L10A, means it is well-placed to farm-out a portion of its interest in both licences on attractive terms and in a suitable time-frame under the 12-month extension. 

The East African margin has become a focus of the global oil and gas exploration and production industry. 

South of Kenya, offshore Tanzania and Mozambique, several major gas discoveries have been made by Anadarko Corporation, ENI, Statoil and BG. 

The East African nation has a huge mineral potential but its exploration efforts have only picked in the last five years with the awarding of commercial licences in prospecting for oil, gold, coal, geothermal and rare earths.

http://www.shanghaidaily.com/article/article_xinhua.aspx?id=218998


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## smalltimer

*Kenyan Oil Discovery to Generate Billions*, 
by: energytribune Posted date: May 20, 2014 

From Energy Global

Kenya’s first commercial oil discovery is set to generate approximately US$ 10 billion, as a delay in its first licensing round attracts further foreign investment.

Despite growing global interest in Kenya’s oil and gas industry, its first competitive licensing round has been postponed to at least Q4 2014. However, this delay could serve as a long-term benefit for the country’s economy, as well as its oil and gas industry, says an analyst with research and consulting firm GlobalData.

Commercial oil discovery

John Sisa, GlobalData’s Lead Analyst covering Upstream Oil & Gas in the Sub-Saharan region, states that international interest in Kenya’s oil and gas sector has intensified over the last 20 months, following Tullow Oil (Tullow) and Africa Oil Corporation’s announcement of the country’s first commercial oil discovery in block 10BB/13T within the South Lokichar Basin.

According to GlobalData, block 10BB/13T alone could generate approximately US$ 10 billion in revenue over a 30-year production period, based on regional geological characteristics and well test results. This volume of cash flow alone will cause Kenya’s Gross Domestic Product, which is currently at US$ 40.7 billion, to grow at an average yearly rate of 0.83%.

Licensing round delay

Sisa says: “The delay in Kenya’s first licensing round could prove beneficial to the country’s economy, as International Oil Companies (IOCs) could make additional, commercial oil and gas discoveries before the end of the year. This would in turn strengthen prospectivity and interest in the country’s oil and gas industry.

http://www.energytribune.com/80418/...nerate-billions#sthash.kaieaLf2.IicV925f.dpbs


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## smalltimer

*Pancontinental Oil and Gas targets ‘attractive’ farm-out in Kenya*
Posted on 18 May 2014. 

Pancontinental Oil and Gas (ASX: PCL) believes the prospectivity of the L10A and L10B oil and gas licences offshore Kenya will allow it to farm-out a portion of its interests on “attractive” terms.

It has a 18.75% stake in L10A and is increasing its interest in L10B to 20% from 15%.

The L10B joint venture has been granted a 12 month extension to the current initial exploration period to assess the impact of the Sunbird-1 discovery in the adjacent L10A area.

Sunbird-1 had intersected a 44 metre gross hydrocarbon column and analysis recovered gas and liquid samples is ongoing.

Following this, the joint venture can then elect to move into the First Additional Exploration Period of the licence.

L10B has a number of large prospects and leads identified using 3D seismic and these are being examined as potential exploration drilling targets.

Pancontinental has also advised L10B operator BG Group that is increasing its stake in the licence to 20% from 15% by taking up its pro-rata share of the interest held by Premier Oil, which has elected to withdraw.

http://oilinkenya.co.ke/pancontinental-oil-and-gas-targets-attractive-farm-out-in-kenya/


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## smalltimer

Press release
*Welwitschia-1A Drilling Re-commences *
04 Jun 2014

Tower Resources plc (the "Company" or "Tower" (TRP.L, TRP LN)), the AIM-listed Africa-focussed oil and gas exploration company, through its wholly-owned subsidiary, Neptune Petroleum (Namibia) Limited ("Neptune"), is pleased to announce that it has received notification from Repsol Exploration (Namibia) (Pty) Limited ("Repsol"), the Operator of Namibia PEL0010 (Neptune 30% working interest), that the drilling of Welwitschia-1A re-commenced on the morning of 4 June 2014.

http://www.towerresources.co.uk/news/2014/news_040614.html


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## smalltimer

A new announcement has been released for PCL
Summary: Change of Director's Interest Notice
Announcement number: 679734
Release time: 6/3/2014 1:40:05 PM
Price sensitive: No

View attachment PCL Directors Notice.pdf


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## smalltimer

*PCL Investor Presentation*
June 2014

View attachment PCL Investor Presentation.pdf


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## smalltimer

*Australian firm seeks Sh688m to explore oil in coastal Kenya*
BY Macharia Kamau
Updated Thursday, June 5th 2014 at 09:45 GMT +3 

Nairobi, Kenya: Australian oil explorer Far Limited plans to raise Sh688 million to undertake oil exploration works in coastal Kenya.

The firm said it seeks to raise $8 million through a private placement. Far Ltd, which is listed on the Australian Securities Exchange, is set to offload 200 million new ordinary shares to a selected group of investors.

The proceeds of the share issue, it pointed out, will be used to fund oil exploration in offshore Lamu.

“The placement is being undertaken to fund further exploration in offshore Kenya, potentially including accelerating the evaluation of the Miocene reef oil play offshore Kenya,” said Far Ltd in a statement.

 It explained that it has a significant acreage position and for general working capital purposes. Managing Director Cath Norman explained that the money would enable the firm to go ahead with planned exploration works in its blocks off the Lamu coast, including drilling of exploratory wells.

She said the money would allow the company to move forward its key position in Kenya in the short term. “Building our portfolio of opportunities for our shareholders is key to our strategy and we aim to deliver a high impact drilling programme in Kenya following on from the current drilling programme in offshore Senegal,” Norman stated.

The company has been prospecting for oil in Kenya in what it says is a highly prospective region in Lamu. It has a 60 per cent ownership and is the operator of Block L6 – which is partially onshore – and has a 30 per cent stake in the offshore Block L9.

Farm-in agreement

The money that will be raised through the placement is in addition to Sh2.5 billion that Far Ltd and its partner in Block L6 Pancontinental Oil and Gas got in a farm-in agreement with Dubai-based Milio International.

The agreement will see Milio become the operator of the onshore portion of L6, with a 60 per cent stake while the two initial partners split the remaining 40 per cent.

The larger offshore bit will, however, still remain in the hands of Far Ltd (60 per cent) and Pancontinental (40 per cent).

While no major finds have been made in Lamu – both onshore and offshore – the firms that have been exploring the area note that it is a matter of time before this is realised

Far Ltd has in the past said seismic survey data shows Block L6 to have combined prospective resources of 3.7 billion barrels of oil or 10.2 trillion cubic feet of gas.

http://www.standardmedia.co.ke/busi...-seeks-sh688m-to-explore-oil-in-coastal-kenya


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## smalltimer

Posted  Sunday, June 8, 2014
ZEDDY SAMBU

*New Bill seeks to create oil and gas sector watchdog*

An independent regulator to manage the oil and gas industry in Kenya could be set up by December.

An oil exploration vibrator at a site in Todonyang, Turkana County, doing seismic survey on June 18, 2013. An independent regulator to manage the oil and gas industry in Kenya could be set up by December.

An independent regulator to manage the oil and gas industry in Kenya could be set up by December.

A new Bill proposes that petroleum production will be managed under Energy Regulatory Authority. 

Formation of the watchdog will be culmination of a review of the current Petroleum (Exploration & Production) Act in order to address emerging issues in exploitation of what policy makers say are commercial quantities of oil in Turkana County.

The ongoing review follows concerns by the government that latest developments in the sector have outpaced the existing law, giving oil explorers an upper hand in marketing of Kenya’s natural resources.

It has emerged that investors in the oil and gas industry have to wait for sound rules before committing funds.

Two amendment Bills to the Exploration and Production Act of 1986 and the Energy Act are being drafted and would be presented to Parliament by end of the third quarter this year. A working committee has converged in Mombasa to finalise on the Energy Bill and Upstream Bill as well as the energy policy ”” the anchor regulation for the industry.

“The new draft Bills are still at the preliminary stage. The final decision rests with the Cabinet Secretary,” said Mr Hudson Andambi, a ministry geologist and member of the technical team. 
“We are moving quickly and hope to conclude by the third quarter,” he said.

“The idea is to draft two Bills and not the omnibus Energy Bill as initially planned. This is in an effort to incorporate stakeholders’ views,” said Frederick Nyang’, acting director-general at the Energy Regulatory Commission. 

The oil and gas industry is presently governed by the Petroleum (Production and Exploration) Act but its provisions have been deemed insufficient. 

At the moment, the National Oil Corporation of Kenya is the legal investment arm in the oil and gas business on behalf of the government, while the National Fossil Fuels Advisory Committee advises the government on contracts with investors while the licensing role lies with the Energy minister.

The current Energy Act 2006 over concentrated on electricity necessitating the review. 

The law review team has modelled on the experiences of Indonesia, Brazil, Norway, US, India, Malaysia, India, Australia Philippines and South Korea.

http://mobile.nation.co.ke/business...2341476/-/format/xhtml/-/5usaqlz/-/index.html


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## smalltimer

*Hope as Lamu well shows traces of oil and gas*
Posted on June 9, 2014 by Zadock Malika

Kenya is reviewing the results of the Sunbird 1 well drilled by BG Group of London in an offshore block in the Lamu basin.  A column of approximately 44m of crude oil and natural gas (hydrocarbons) was encountered by BG, state owned PTTEP of Thailand and Pancontinental Oil & Gas of Australia in the Sunbird 1 well in block L10 A.

“BG Group and its joint venture partners in consultation with my ministry are carrying out further analysis on the Sunbird 1 well results to inform next cause of action,” said Energy Cabinet Secretary Mr Davis Chirchir.

He said Africa Oil and Marathon Oil Corporation are drilling Sala-1 well in block 9 in northern Kenya where China National Offshore Oil Corporation in 2010 found natural gas but not in commercial quantities. Metro 1 rig finished drilling Sunbird in March this year after work started in January about 50km from Mombasa. Sunbird is the second offshore discovery as gas has been found in Mbawa 1 well in block L8 in 2012. 

Sunbird 1 well has been sealed to prevent leakage of hydrocarbons to the sea floor. BG owns 50% of L10 A while PTTEP has 31.25% share and Pancontinental 18.75%. Pancontinental said samples of gas with liquids obtained from Sunbird1 well are currently being assessed and the joint venture partners are considering follow-up exploration activities of acreage L10 A in Lamu basin. “Sunbird results highlight the strong potential of Pancontinental’s extensive offshore Kenyan acreage,” said Mr Barry Rushworth, the Chief Executive Officer of Pancontinental which has interests in block L 6, L8, L9 and L10 B.

Out of 15 wells drilled since March 2012, seven encountered oil in Tullow’s acreage 10BB and 13 T in north western Kenya. Apache Corporation discovered natural gas in Mbawa 1 well in offshore area L 8.  Over 10 wells are set to be drilled in Kenya by first quarter next year. Afren Plc has identified70 square kilometres Khorof prospect after acquiring two (2) dimension seismic data for oil and gas in onshore block 1in Mandera basin.  “The company will carry out further 2 D seismic survey to increase confidence of drilling next year. In offshore acreage L 17 and L18, Afren has completed 3D seismic programme and identified Mombasa High and Wasini prospect,” said Mr Chirchir. 

http://nairobibusinessmonthly.com/hope-lamu-well-shows-traces-oil-gas/


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## smalltimer

*Kenya upbeat on ocean deal with Somalia*
Business daily,Posted on June 9, 2014 by Warsame

Kenya is optimistic of reaching a deal with Somalia over the exploration of resources around a disputed section of their shared Indian Ocean off-shore border territory.

In its preliminary prospectus for the planned Sh132 billion Eurobond, the government said the two countries were in discussions to amicably resolve the matter.

“Kenya and Somalia are in discussion with regards to their respective submissions to the UN Commission on the Limits Continental Shelf,” the document said in part.

Kenya and Somalia signed a memorandum of understanding in 2009 that the border would run east along the line of latitude, but Somalia, which has lacked an effective central government since 1991, then rejected the agreement in parliament..

In 2012, the Somali government accused Kenya of awarding offshore oil and gas exploration blocks illegally to multinationals Total and Eni, claiming that the concessions lie in waters claimed by Somalia.

Kenya denied the accusation that ownership of the blocks was contested and said there was no need to hold up exploration. Both countries have since submitted separate submissions to the UN agency seeking to claim additional territory on the shared Indian Ocean border

According to the UN Convention on the Law of the Sea, all countries that border the ocean are allowed to use the 200 nautical miles into the ocean for exclusive economic purposes without interference from other countries..

Kenya formally laid claim to an additional 103,320 square kilometres of seabed off its coastline, beating an April 13, 2013 deadline that was set for the submissions.

Failure to beat the deadline would have left all exploration and exploitation rights over the territory in the hands of the International Seabed Authority (ISA).

Failure to secure such rights would also mean that firms eyeing investments in such zones would have to go through strenuous and expensive processes to secure permission from the ISA.

Kenya and Somalia habour ambitions of striking oil and gas off-shore and analysts say they would immensely benefit from privileged provisions of the UN convention.

The provisions exempt developing countries that are net importers of a mineral resources produced from its continental shelf from financing the exploration of non-living resources beyond the 200 nautical mile limit

Kenya and Somalia are net importers of oil and gas and qualify for the exemption. Kenya is also in talks with Tanzania over the demarcation of their shared Indian Ocean territory as the scramble for off-shore resources intensifies.</spanTanzania made a late claim in 2012 for its share of the Indian Ocean territory, delaying the commencement of proceeding to decide the demarcation of the extra seabed claimed by Kenya and Somalia.

Kenya, by virtue of sharing a common border with Tanzania, had to wait for Tanzania’s final submission to get the UN’s verdict on its application.

Sea law experts say the UN Commission on the Limit of Continental Shelf – the arbiter in the fresh scramble for sea wealth – must receive all applications from neighbouring states to demarcate the new borders

http://www.mareeg.com/kenya-upbeat-on-ocean-deal-with-somalia-business-daily/


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## smalltimer

•Release Date: 10/06/14 08:31
•Summary: Africa Independents Conference

View attachment Summary Africa Independents Conference.pdf


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## smalltimer

*Tower Resources Fails To Find Hydrocarbons At Welwitschia-1A, Namibia*
06/13/2014

Tower Resources PLC's shares slumped on Friday after saying it has failed to find hydrocarbons in early targets at the Welwitschia-1A well on the PEL0010 licence, offshore Namibia, and has had to stop drilling deeper at the well due to spiralling costs. 

Tower Resources shares were down 64% to 1.05 pence, making it the worst AIM ALL-Share faller during early trading on Friday. 

The company has a 30% working interest on the site while Repsol Exploration Ltd is the operator and owns 44% of the site. 

The AIM-listed Africa-focussed oil and gas exploration company said the well reached its total depth of 2,454 metres and logging evaluations have shown that the Palaeocene, Maastrichtian and upper Campanian section reservoirs were less well-developed than expected, and no hydrocarbons were encountered at the site. 

The company said that due to late rig-delivery and operational issues during drilling and logging, including the onset of winter weather conditions, Repsol's current expectations are that costs will now be around 10% higher than the previously expected USD91 million gross well budget. 

Tower Resources said that the estimated cost of the company continuing to drill the well to test deeper, large potential targets, now appears to be as much as a further USD40 million gross. 

The company and its partners on the site have now agreed not to drill the site further and are currently evaluating the information and its implications for the block as a whole. The Welwitschia-1A well is being plugged and abandoned. 

"The well emphasises the risk of exploration and the wisdom of having moved to diversify our portfolio," Chief Executive Graeme Thompson said in a statement. "We expect much activity in the coming months on and in the areas surrounding our assets.

http://www.4-traders.com/TOWER-RESO...rocarbons-At-Welwitschia-1A-Namibia-18586931/


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## smalltimer

*Sunbird-1 Oil Zone verified Offshore Kenya*

17th. June 2014
See the attached file

View attachment Sunbird-1 Oil Zone Verified Offshore Kenya.pdf


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## smalltimer

*BG’s discovery of 9.2 metre net oil pay in Kenya*





By Sa’ad Bashir, in Dar es Salaam
June 19, 2014

BG’s discovery of 9.2 metre net oil pay in Kenya’s deepwater Lamu Basin is clearly understandable from the point of view of plate tectonics, in the opinion of Africa’s leading exploration thinker.

“There has been production from the Bombay High which was India’s primary oil producing region before new discoveries of (predominantly gas) in the east Indian offshore”, recalls Ebi Omatsola, former Chief Geologist at Shell and Managing Director of Conoil, the Nigerian independent. “The western part of India was derived from Gondwana during late Jurassic separation of the Indian subcontinent from Gondwana. Sedimentary sequences since some 150 Million years should be sufficient to create an active petroliferous oil pool”, he explains

BG plugged and abandoned the frontier wildcat probe in April 2014 and went ahead to match the gas and liquid samples with wireline data and pressure readings. On June 17, 2014, Pancontinental, an 18.75% equity partner on the property came out with the result.

After an evaluation process lasting close to three months, the wildcat Sunbird-1 in Block L10 was declared as intersecting “a gross 29.6metre gas column overlying a gross 14metre oil column in the Sunbird Reef”. BG operates the Block L10A petroleum-sharing contract with a 50% interest. PTTEP holds a 31.25% interest. “The corresponding net values are 9.2metres for the oil zone and 28.3 metres for the gas zone”, Pancontinental explains. “The net values are calculated for the reservoir using cut-offs of 10% porosity (Phi) and 50% shale volume (Vsh). Oil and gas samples have been recovered and analysed using sophisticated geochemical techniques.The Sunbird Reef is an ancient Miocene pinnacle reef buried beneath approximately 900m of younger sediment”.

Omatsola argues that “the Morondava Basin of SW Madagascar has discoveries of oil even though it is heavy oil due to several tectonic events with concomitant removal of the lighter fractions of the oil etc; whilst the corresponding Gondwana mirror image is the south west offshore Indian Ocean Lamu Basin”.

Lackluster exploration results in Kenya’s deepwater Lamu basin in the last ten years have included Woodside’s  Pomboo-1 (2007), long after TOTAL’s luckless Simba-1(1978), which came up with minor oil and gas shows. In September 2012, Apache Corp., America’s third-largest independent oil and natural-gas producer, plugged Mbawa-1 with 52 meters of gas. “We were drilling for oil,” said Tom Giblom, the company’s country manager in Kenya. For all this however the truth is that offshore Kenya has not been comprehensively explored.

The Sunbird discovery itself is considered unlikely to be commercial going by its estimated size, but it is the first encounter of oil column of some appreciable footage, in this basin. “The Sunbird-1 oil is the historic first-ever oil discovery offshore Kenya,” gushes Barry Rushworth, Pancontinental’s Chief Executive Officer ‘It is the only offshore oil column ever reported seaward of the eastern coastal margin of the African continent, from South Africa to the northwest tip of Somalia. We believe that this is a play-opening discovery in Kenya’s Lamu Basin. Because of the Sunbird discovery we expect to see a significant increase in industry interest offshore Kenya. We encountered a thick and effective seal over the top of the reef, which was an initial risk for us, and the regional follow-on implications of this are truly significant. Porosity, permeability and seal for the reservoir were all better than Pancontinental expected’. 

http://africaoilgasreport.com/2014/...-kenyan-discovery-is-not-surprising-omatsola/


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## smalltimer

*Kenya loses out on oil and gas riches * 
By KENNEDY SENELWA Special Correspondent
Posted  Saturday, June 21   2014 at  15:22

Kenya is losing out on millions of dollars in investments as areas designated for prospecting for oil and gas remain unexplored. 

The vacant lots are offshore L25, L26, L15, L8 and onshore 10A. 

Oil and gas prospecting rights for these areas cannot be awarded until a new regulatory framework has been finalised. Edgo Energy, Ophir Energy Plc, Apache Corporation and Tullow Oil Plc in 2013 surrendered block L26, L15, L8 and 10A, respectively. 

Kenya’s Ministry of Energy said crude oil and natural gas prospecting rights will be awarded to firms interested in undertaking exploration after the Petroleum Bill is debated by parliament and new legislation is enacted.

Collapsed talks

Negotiations between the ministry and Statoil for deep offshore area L25 collapsed in 2012. Kenya wanted at least $11.7 million spent in three years on various activities, but the Norwegian firm asked for a downward review of the terms. 

Statoil would have paid $300,000 as a one-off payment as signature bonus, surface fees of $5 per square kilometre, training fees of $175,000, and spent $50,000 on community development projects. 

Oil and Energy Services Ltd said Kenya will benefit if competitive licensing is implemented. 

“Proposed licensing rounds will give the true value of acreage as Kenya will select the company that submits the highest bid and offers the best deal,” said the consulting firm’s chief executive, Mwendia Nyagah.

http://www.theeastafrican.co.ke/bus...riches-/-/2560/2357030/-/j2wln5z/-/index.html


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## smalltimer

*Australian firm concludes oil exploration*
20 June 2014, 15:52

Simba Energy, the Australian company conducting oil exploration in Northern Kenya, has announced that it has completed the flight programme portion of the survey at Block 2A.

Simba, which holds 100 percent of Block 2A, announced that the FTG (full Tencor Fradiometry) survey’s preliminary data had identified 11 high ranking and sizeable anomalies in the portions of the Mandera (5) and Anza (6) basins lying within Simba's concession and that the survey has enabled it to better target and reduce the area of exploration.

The company said that final results of interpretations of the survey were expected before the end of July. 

Simba Energy’s Chief Executive Officer, Robert Dinning, said with the FTG, they were now able to better the target and reduce the area that would otherwise need to be covered by the 2D seismic program being planned as part of the selection process to locate the first test well sites on Block 2A.

“The final FTG results in Block 2A will lend support to our discussions with potential farm-in partners,” stated Dinning.

Bell Geospace is the company contracted by Simba Energy to conduct the FTG survey.

Dr Colm Murphy, a Senior Geoscientist with Bell Geospace, said that over the past few years, Bell Geospace’s patented technology had proven to be an invaluable tool at a number of recent discoveries in East Africa.

“Backed with these data sets and others within the region, our FTG survey at Simba's Block 2A has yielded a number of very encouraging and high ranking targets that compare favourably with those of recent discoveries,” said Murphy. 

 – CAJ News

http://www.news24.co.ke/Business/News/Australian-firm-concludes-oil-exploration-20140620


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## smalltimer

*Investors are rushing to acquire shares in Kenya’s oil exploration*
By KENNEDY SENELWA Special Correspondent
Posted  Saturday, July 12  2014 at  09:20

Investors are rushing to acquire shares in Kenya’s oil exploration areas from small companies following recent hydrocarbon discoveries headlined by Tullow Oil’s success.

Junior prospectors under pressure to fund well drilling and other activities are increasingly being tempted by offers from better endowed rivals, sparking a wave of acquisitions worth $250 million in a region previously considered a backwater of exploration. 

Nairobi-based Hydrocarbons Management Consultants said the smaller explorers were being targeted by firms seeking to reposition themselves in Kenya’s upstream oil segment.

“They have to sell part of their exploration rights to raise funds for expediting compliance with work programmes agreed on with Ministry of Energy,” said Hydrocarbons lead consultant Robert Shisoka. Kenya’s status as a destination for investment has been raised by discovery of oil and gas in various wells. 

Swala Energy has completed farm out (partial sale) of a 25 per cent interest in block 12B in western Kenya to CompaÃ±Ã­a EspaÃ±ola de PetrÃ³leos (Cepsa) of Spain.

The sale followed approval by the Competition Authority of Kenya and left Swala with 25 per cent of the shares and Tullow Oil with a 50 per cent stake. Cepsa committed to drill two wells at a cost of up to $15 million. 

Swala’s chief executive officer David Mestres Ridge said the farm-in agreement would enable the Australian firm to grow its portfolio.

Cepsa had in February this year acquired a 55 per cent stake in block 11A in northwestern Kenya where ERHC Energy of the US (35 per cent) and National Oil Corporation of Kenya (10 per cent) are the other partners. 

Imara Energy Corporation, Rift Energy Corporation and FAR Ltd are among companies seeking a new partners or raising money to fund exploration and avoid their acreage being repossessed by the Ministry of Energy.

Imara Energy of Canada is offering a convertible debenture ”” priority debt that can be swapped for shares ”” of up to $15 million. The proceeds will be used for exploration of block L2 in the Lamu Basin, which requires $7.9 million this year and in Morocco.

The debenture will be converted into Imara Energy shares that can be traded at the United Kingdom main board standard listed Pubco. 

Rift Energy wants to sell part of its equity in onshore area L19 near Mombasa while FAR Ltd and Pancontinental Oil and Gas are seeking a partner in drilling a well in the L6 offshore block. 

The well is expected to cost FAR and Pancontinental, both listed on Australia Stock Exchange, about $80 million.

Privately owned Rift Energy of Canada, which owns Block L19, is obliged by a 2012 agreement with the government to spend $5 million on acquisition of seismic data by the end of this year. In March, it started carrying out two dimensional (2D) seismic survey covering 680 kilometres to map hydrocarbon deposits in the area. 

Rift Energy vice president of operations Tom Guidish said the data derived from the three month exercise would help build an inventory of prospects for drilling.

It would then be required to spend $20 million on the block for every two years that the licence is renewed.

He said in a brochure issued to potential investors that the block’s proximity to the Mombasa port provided a ready outlet for any oil and gas discovered, lowering the economic threshold for success. 

FAR and Pancontinental want to sell part of their interest in L6 before drilling of a well next year. FAR’s executive director and commercial manager Ben Clube said the target partner should be willing to contribute equity, share past expenses of $21 million and fund well drilling.

The area has features similar to block L10A where BG Group and Pancontinental discovered oil and gas in Sunbird well this year. 

In February, Milio International Ltd of Dubai acquired 60 per cent of the onshore part of area L6 after agreeing to spend up to $30 million on future exploration work.

FAR retained a 24 per cent stake in the acreage leaving Pancontinental and its wholly owned subsidiary, Afrex, with a combined 16 per cent interest.

http://www.theeastafrican.co.ke/bus.../2560/2381338/-/item/0/-/lbm19cz/-/index.html


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## smalltimer

*Tullow Oil To Farm Into Eco Atlantic's Cooper Block, Offshore Namibia, Resulting In A Full Carry On Enlarged 3D Seismic Program And Exploration Well*

Toronto – July 17, 2014 – Eco (Atlantic) Oil & Gas Ltd. (“Eco Atlantic” or the “Company”) (TSX-V:EOG, NSX:EOG) is pleased to announce that it has executed a Farm-out agreement (the “Agreement”) with Tullow Kudu Limited, a wholly owned subsidiary of Tullow Oil plc. (“Tullow”), pursuant to which Tullow has agreed to acquire up to a 40% working interest in Block 2012A, situated in the Walvis Basin, offshore Namibia (the “Cooper Block” or the “Block”). This Farm-In, in conjunction with Eco Atlantic’s prior Farm-Out to Azimuth for 20%, nets the Company a 100% carry of all costs on an expanded 1,000 km² 3D seismic survey and interpretation (the “Seismic Program”). The Seismic Program is expected to commence the fourth quarter of 2014. Dependent on the establishment of a target from the Seismic Program, Tullow has also committed to a full carry of cost to drill an exploration well on the Block.  

Pursuant to the Agreement, the Company will initially transfer a 25% working interest in the Cooper Block to Tullow in return for a carry of the Company’s share of costs to execute and process the Seismic Program, and the reimbursement of 25% of the Company’s past costs in an amount to Eco Atlantic of approximately US$1 million (the “First Transfer”). Following the First Transfer, if Tullow elects to participate in the drilling of an exploration well on the Cooper Block, Tullow will be transferred an additional 15% working interest in the Block, in return for a full carry of the Company’s share of costs to drill an exploration well on the Block (capped at $53 million) and the reimbursement of an additional 15% of the past costs (the “Second Transfer”). Eco Atlantic will remain Operator until the Second Transfer, at which time, Tullow will be appointed as Operator of the Cooper Block.

The completion of the First Transfer and the Second Transfer are subject to a number of conditions, including the approval of Namibia’s Ministry of Mines and Energy and various approvals of the other Block participants. AziNam Limited, an existing Block 2012A partner with 20% working interest, has given their approval to the transaction and expanded work program.   

Dundee Securities Europe LLP acted as financial advisor in relation to the Agreement.

Eco Atlantic currently holds a 70% working interest in the Cooper Block, AziNam Limited holds a 20% working interest, and NAMCOR, the Namibian national oil company, holds a 10% working interest. Following the First Transfer, the Company will hold a 45% working interest in the Cooper Block, Tullow will hold a 25% working interest, and AziNam and NAMCOR will retain their respective working interests.

Gil Holzman, President and CEO of Eco Atlantic, stated: “We are extremely happy to complete this farm-out deal with one of Africa's preeminent and successful oil and gas explorers – Tullow Oil. This provides the requisite financing to progress activities on the Cooper Block, and further validates our exploration work and findings to date. Our strategy is one of identifying, acquiring and derisking our prospective acreage while attracting world class partners to progress the exploration process. We are delighted to welcome Tullow to partner with us on this block, and to join our other partners - AziNam and NAMCOR. Now that Cooper’s exploration is funded, we will continue to review further partnerships across our portfolio. We also wish to thank our Block partner AziNam for their positive support of the process as well as to our financial advisors, Dundee Securities.

Colin Kinley, COO and Director of Eco Atlantic comments: “Eco has taken a very strategic approach to the exploration of its Namibian assets; each well drilled in this frontier basin has helped to further define our targets. Our approach, specifically to the Walvis Basin is simple. The mechanics are all there and the region is generating oil and gas, we know that for a fact. The Cooper Block has been analyzed closely by multiple parties – all resulting in acute interest. Attracting Tullow, who is one of Africa’s most successful explorers as a partner, who now has well over 100,000 barrels a day under its belt, is exciting for us. We have a highly credible team of upstream industry experts already within our own members and partners in AziNam and NAMCOR, and now we are bringing fresh eyes into the block who have the unique interpretation strength to find oil, drill wells and bring it on line quickly and economically.”

About Tullow

Tullow is a leading independent oil & gas, exploration and production group, quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW) and is a constituent of the FTSE 100 Index. The Group has interests in over 140 exploration and production licenses across 24 countries which are managed as three regional business units: West & North Africa, South & East Africa and Europe, South America and Asia.

About Eco Atlantic

Eco Atlantic is an oil and gas exploration company focused on the new and bourgeoning energy play in Namibia. Through a wholly owned Namibian subsidiary (“Eco Namibia”), it holds four petroleum licenses issued by the Government of the Republic of Namibia. Offshore in the Walvis Basin, Eco Atlantic holds three license blocks covering more than 25,000 square kilometers (6,177,000 acres). Eco Atlantic holds an additional license block covering 23,000 square kilometers (5,683,000 acres) which includes both onshore and offshore areas. Founded in 2008, Eco Namibia enjoys a strong local presence and has a longstanding relationship with the energy and oil and gas sector in Namibia and the region. The terms and conditions of these licenses are regulated by agreements signed by Eco Namibia with the Government of the Republic of Namibia in March 2011, as amended.

http://www.ecooilandgas.com/news/index.php?&content_id=80

Here's a quick picture of the location of the ECO/Tullow block relative to the PCL/Tullow blocks.....


----------



## smalltimer

I would like to express my sympathy to Mr Maslin (_Independent Non-Executive Director – PCL_) and his family at this very tragic time. 

The Oil & Gas community across Australia has been truly saddened by your loss and that of all the families, friends and loved ones of victims affected by the MH17 tragedy.


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## smalltimer

*Namibia EL 0037 Exploration Update*

Early interpretation of Seismic yields Major Offshore Prospects; 

*3D – based mapping under way*
Early mapping identifies major prospects in EL 0037, offshore Namibia. New 3D & 2D data are being used to confirm early mapping. The Albatross Prospect has potential to contain 422 Million Barrels of Oil (gross unrisked mean) or 1.093 Billion Barrels of Oil (P10), from initial mapping (See cautionary Statement Below)
● 
Further prospects and leads have gross mean risked potential resources exceeding 150 Million Barrels of Oil (See Cautionary Statement Below) EL 0037 contains a number of major turbidite fans prospects up to 300 sq km in area
● 
Oil system in “fairway” verified by Wingat-1, on-trend to EL 0037;

*Prospects are close to mature oil source rocks in “fairway”*

Final 3D mapping September-October 2014 expected to present a number of potential drilling targets Pancontinental Oil and Gas NL (ASX: PCL) is pleased to advise that the 3D and 2D seismic surveys carried out earlier in 2014 in EL 0037 offshore Namibia are starting to yield very encouraging results.

*Initial Assessment of Seismic Data*

Initial mapping has confirmed at least four main prospects in the 3D area - the Albatross, Gannett, Petrel and Seagull Prospects. The Prospects appear to be large and robust (up to 300 sq km in area) and are in favourable geological settings. Additional prospects and leads are expected to be mapped within and outside the 3D area in due course.

*Cautionary Statement*: 

The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation is required to determine the existence of a significant quantity of potentially movable hydrocarbons.

see attached for more details;

View attachment 684713_PCL.pdf


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## smalltimer

*Pancontinental identifies elephant potential offshore Namibia*

23 Jul 2014 - 

Australia’s Pancontinental Oil and Gas NL has identified billion barrel plus potential off the coast of Namibia from early assessment of 2D and 3D seismic surveys acquired there earlier this year.

Pancontinental, an early mover offshore Namibia, said it has seen increasingly encouraging results from early assessment of the 3D and 2D seismic surveys in the EL 0037 permit.

The company said initial mapping has confirmed at least four main, large and robust prospects in the 3D area – the Albatross, Gannett, Petrel and Seagull Prospects.

Initial mapping suggests the Albatross Prospect in the 3D area covers approximately 300 sq km and assessed to have potential to contain 422 Million Barrels of oil (gross unrisked mean), or 1.093 Billion Barrels of oil (P10 basis).

Albatross is interpreted to be horizontally and vertically close to the “fairway” of mature oil source rocks identified by Pancontinental and subsequently verified in the Wingat-1 well drilled in the adjacent exploration licence area. Good oil-prone and oil-mature source rocks were seen, and live oil was recovered from Wingat-1 in 2013.

A number of other Prospects and Leads have been identified in addition to Albatross in the very large EL 0037 area of some 17,000 sq km. Other prospects and leads are currently assessed to have potential to hold gross mean risked resources exceeding 150 Million Barrels of Oil.

Processing of the 2D and 3D seismic survey data continues to progress, with “fast track” processed results anticipated to be available mid- to late-August and fully processed data will be available in September 2014. The results of complete mapping from the fully processed data are expected in October 2014.

Pancontinental said that following full mapping, the Prospects will be examined for drilling potential and the EL0037 joint venture will then be in a position to determine drilling sites and dates.

As part of its commitment under the late-2013 farmin agreement with Pancontinental, Tullow Oil has carried out a 3,000 sq km 3D seismic survey and a 1,000 line km 2D survey at its sole cost. Pancontinental has retained a 30% free-carried interest through the surveys, at no cost to Pancontinental.

To maintain its 65% farmin interest, Tullow must fully free-carry Pancontinental’s 30% interest through one exploration well.

https://www.pesa.com.au/news/pancontinental-identifies-elephant-potential-offshore-namibia


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## smalltimer

*Kenyan petroleum law faces further delays, exposing investors to risk of bribe demands and unclear legislative framework*

Published: 7/24/2014

Kenya's cabinet secretary for energy and petroleum, Davis Chirchir, said on 1 July a revised petroleum law would be presented to parliament for approval by October.

IHS perspective

Significance - Despite the new timeline for the passage of the new Kenyan petroleum law, further delays to the adoption of a clear regulatory and legislative framework are likely due to political disputes and preoccupations.

Implications - The eventual passage of the petroleum law does not preclude the introduction of a capital gains tax on concession sales at a later stage, while the national oil company is likely to take a free carried stake in concessions.

Outlook - Further delays to the petroleum legislation, which are likely, will expose investors to demands for large bribes and high risk of contract cancellation for investors in breach of license agreements.

Investors have increasingly pressured the Kenyan government to implement a clear fiscal and contractual regime and to open up new acreage for investment. The schedule for proposed legislation was first promised in late 2012 and, despite the new deadline, is likely to face further delays due to internal political disputes and external political pressures on the ruling Jubilee Coalition of President Uhuru Kenyatta. This will delay new licensing in oil and gas, as well as investment in existing license areas. Parallel legislative processes for mining and for natural resource revenue sharing are also likely to delay the passage of the petroleum law. On 18 July, the government announced that parliament was to introduce a new mining law aimed at giving government ownership of mineral resources and enhancing transparency in the sector. The Energy Bill, which has specific provisions for the oil and gas sector, is also due for passage through parliament, but faces further delays. 

The sector is currently governed by the Petroleum (Exploration and Production) Act 1986 and the related regulations and model production-sharing contract; the Income Tax Act 2012 and relevant Finance Acts; and the 2010 constitution. 

*Further delays to petroleum law*

Amendments to Kenya's Petroleum (Exploration and Production) Act 1986 were tabled in October 2013; however, progress has been delayed. Parallel to the review of the Petroleum Act, the Energy Bill was produced, with a first draft appearing in March 2013; it is now in its fifth iteration. The Energy Bill covers upstream elements also covered by the Petroleum Act – resource management, granting of licences, operations and oversight of the sector. It also covers extraneous issues such as revenue management. A Mining Bill has also been in development since 2013, an area also covered by the Energy Bill. 

More recently, the minister has promised a new Petroleum Bill to be presented to parliament this month or next and passed by October. The Ministry of Petroleum, in a recent statement, said it has been in preparation since March this year, led by the Inter-Ministerial Technical Committee. 

Legislative delays have been caused by several factors. First, central leadership at the highest level has been distracted or preoccupied. Since taking office in April 2013, President Uhuru Kenyatta and Vice-President William Ruto have primarily focused on avoiding an appearance at the International Criminal Court, where they face charges for alleged crimes against humanity arising from the post-election violence of 2007. Attention on petroleum-sector reform has been further distracted by further terrorist attacks since the attack on Westgate Mall in Nairobi in September 2013 and the Lamu County attacks in June and July 2014. 

Second, the ruling coalition of Kenyatta and Ruto has been prone to internal rivalries. The coalition has brought together two different communities, Kenyatta’s Kikuyu and Ruto’s Kalenjin tribes. Power-sharing has been ineffective and has triggered disputes between the energy and petroleum and mining cabinet secretaries. The former, Davis Chirchir, supports Ruto’s faction, while the latter, Najib Balala, who, though from the Coast, is a Kenyatta loyalist and, according to IHS sources, is a confidant of the president. Both Kenyatta and Ruto’s ethnicity-based factions within the Jubilee Coalition are seeking control over government revenues from extractive sectors and disputes over revenue control are likely to further delay the petroleum legislation. 

*Outlook and implications*

Though promised for this year, it is unlikely that new legislation will be ready in time to allow for new licensing. Cabinet Secretary Chirchir has stated that there are 15 new oil blocks to be allocated, drawn from relinquished acreage. Continued delay in clarifying procedures for awarding licences and clarifying the fiscal regime will require navigating informally, so exposing investors to possible demands for bribes from public officials. 

The interim period will also expose investors to increased risk of contract renegotiation or cancellation, especially for investors aligned with certain political interests. In February 2014, Cabinet Secretary Chirchir revoked the licences held by Canada’s Vanoil Energy for Blocks 3A and 3B located in Garissa. Chirchir claimed Vanoil had failed to carry out basic work requirements in accordance with the production-sharing contract (PSC) it signed with the government in 2007. In June, the parliamentary Energy and Transport Committee confirmed the licence cancellation and claimed Vanoil was speculating with its licences, in violation of the PSC. In 2013, the ministry cancelled licences held by Pancontinental Oil & Gas NL, although the company has since successfully negotiated extensions to the PSC. 

IHS sources say Vanoil was given four extensions before the licence was rescinded. Chirchir and Balala have both increased pressure on oil and gas and mining companies to meet basic work requirements, which has resulted in a number of work progress announcements by investors in 2014. Investors that do not meet requirements outlined in their PSCs will face high risk of licence cancellation, at least until the petroleum legislation is in place and clearer guidelines mitigate risk of arbitrary contract frustration. On 7 July, Vanoil said it would seek arbitration at the United Nations Commission on International Trade Law (UNCITRAL), claiming that the value of the blocks had increased after Africa Oil struck oil in the same Anza Basin. 

Proposals drawn up by World Bank-funded consultants are likely to form the basis of any new legislation, but will not necessarily inform all aspects of it. The Finance Act 2014 removes the obligation to withhold tax on capital sales, which had been introduced the previous year. The introduction of a capital gains tax was specifically recommended by the World Bank consultants in 2013. This year’s Finance Act suggests that it may not be included in petroleum legislation. However, there is a regional trend (Mozambique, Uganda) for governments to apply a capital gains tax on sales of concessions by foreign investors, even if such transactions are carried out in offshore jurisdictions. IHS assesses that a capital gains tax could still be implemented at a later stage, especially when large transactions are carried out as part of farm-out agreements by existing investors. 

The ministry is likely to continue to have a central role in the petroleum sector over licensing; however, oversight responsibility is more likely to be spread out among bodies. The National Fossil Fuel Advisory Committee (NAFFAC), an ad-hoc body, is likely to be formalised as recommended by the consultants and as contained in the Energy Bill. Oversight functions, however, are more likely to be split. The consultants’ recommendation had been for a compliance unit within the ministry, while the Energy Bill called for general oversight of the sector to be part of the mandate of an Energy Regulatory Commission. If both options are taken forward, there is likely to be competition between the ministry and the commission. This is likely to increase regulatory uncertainty as firms are stuck between the minister and commission.

http://www.ihs.com/products/global-insight/industry-economic-report.aspx?ID=1065991564


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## smalltimer

*East Africa's new found wealth to bring regional transformation*

Elayne Wangalwa 
Last Updated: 25 July 2014|14:27 GMT

East Africa has emerged as a significant prospect for oil and gas that is set to fundamentally transform the regional economies. 

East Africa's new found wealth to bring regional transformation

According to Standard Bank, the discoveries in Uganda, Kenya, South Sudan, Ethiopia, Tanzania and Mozambique have emerged as some of the most prolific oil and gas exploration spots in the region and in the world over the last 10 years.

“It really comes from the fact that it [East Africa] has been ignored for the last 40 years. The oil industry has been much more interesting in Russia or in the developed markets and really in  Africa it looked at North and West Africa, so Nigeria, Algeria, Egypt, Libya, places like that but East Africa was perceived as a barren area,” Simon Ashby Rudd, global head of oil & gas at Standard Bank told CNBC Africa.

A survey by the United States has estimated that more gas lies off shores of Kenya, Tanzania and Mozambique than off Nigeria, Africa's biggest energy producer.

“Fist discoveries were really made in Uganda by the likes of Heritage and Tullow and then Mozambique where they found huge volumes of gas. In the last four years they have found almost 200 trillion cubic feet (Tcf) of gas which is equivalent to what they have discovered in Nigeria in 40 years. So East Africa is now on the radar,” Rudd noted.

“We are seeing more discoveries in Tanzania, more gas in Tanzania and more oil in Kenya, potentially Ethiopia and the industry [oil and gas] believe this is a start of a major development in this part of the world,”

East Africa's oil & gas discoveries to bring regional transformation

According to Standard Bank, recent oil & gas discoveries in East Africa will fundamentally transform the regional economies as the resources bring in new investment in other infrastructure.

The major challenges identified by organisations in the oil and gas industry are that East African countries not only lack infrastructure and technical expertise, they also lack distinctive oil and gas policies, while legislation of the sector is uncertain.

“The challenge now is about getting the regulatory environment right in order to encourage investment. These discoveries while they are world class discoveries, they are in isolated locations and the investment that is going to be required is going to substantial,” Rudd explained.

According to Rudd, getting the regulatory and commercial environment right now and making sure that it is beneficial to all stakeholders, that is, the country, the economy of the local region and to the investors are critical components to ensuring the oil and gas industry in East Africa flourishes.

http://www.cnbcafrica.com/news/resources/2014/07/25/east-africa-oil-and-gas-industry/


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## smalltimer

*East Africa's oil & gas discoveries to bring regional transformation, CNBC Video*

http://www.cnbcafrica.com/video/?bctid=3694867094001

http://www.cnbcafrica.com/video/?bctid=2874854028001

http://www.cnbcafrica.com/video/?bctid=3654511414001


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## smalltimer

*PCL Quarterly Reports*


Activities
View attachment Quarterly Report - Activities.pdf



Cash Flow
View attachment Quarterly Report Cash Flow.pdf


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## smalltimer

*Insecurity Killing Oil Investors Appetite*

_By James Waithaka_

A pending energy law, rising insecurity and potential inability by oil companies to secure necessary funding could affect Kenya's quest to be an oil producer by 2017.

A report by Ecobank Research released last week estimates that Kenya's upstream oil segment - at exploration and drilling stage - will need $16 billion (Sh1.4 trillion) to finance operations over the next 36 months.

The middle Africa insight series on energy titled 'Key dynamics in Kenya's emerging upstream oil industry' says a revised petroleum law expected to be passed in Parliament by October is likely to introduce new levies to cater for community development.

In addition, insecurity is a major concern and will impact on investor appetite, while a simmering maritime border dispute with Somalia could affect offshore exploration.

"These dynamics make the next 18 months critical in the development of the Kenyan upstream sector," the report states.

Ecobank says the Sh1.4 trillion would go into projects related to the country's developing oil and gas sector. This includes drilling of more than 30 new wells, development of the Ngamia oil field by Tullow Oil Plc and its partner Africa Oil, construction of a crude oil pipeline from Lamu to Turkana, and completion of Lamu Port.

It says oil companies would be forced to sell portions of their oil blocks (farm-outs) to meet exploration and drilling commitments if fundraising becomes difficult.

"More importantly, it could delay the start-up of oil production by another one or two years," Ecobank says.

London-listed Tullow and Australia's Africa Oil are expected to submit a field development plan by 2015, and Kenya could become an oil producer in 2017 starting off with 100,000 barrels per day.

"Oil companies in Kenya are likely to drill almost 20 wells over the next 18 months and are likely to make more discoveries," the report projects.

Two laws - on energy and mining - are expected to redefine the extractives industry once passed into law. The Mining Bill awaits debate in Parliament while the Energy Bill - which dissects coal, petroleum and gas - is still pending.

The energy law will provide a framework for hydrocarbon revenue management. According to Ecobank, the law "possibly increase the government's take from oil operations and enforce more local content initiatives."

"Communities in the oil discovery areas have intensified demand for involvement in the industry, which is likely to provoke inclusion of community development levies in the new bill," the report reads in part.

The bank says Tullow Oil risks being "over-extended on borrowings" if it takes additional debt to develop its Kenya oilfields, but it is likely to attract valuations as high as $452 million (Sh39.23 billion) for a planned farm-out of a 10-15 per cent stake in its Lokichar basin blocks.

The Sunbird-1 discovery in June by UK's BG Group confirmed presence of offshore oil reserves, raising Kenya's oil potential onshore and offshore.

The country will play a pivotal role in the emerging East Africa oil and gas industry with the new export terminal at Lamu and crude oil pipeline

http://allafrica.com/stories/201407281895.html


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## smalltimer

*Kenya Calls for Border Checks Amid Risk of Ebola Spread*

By Henry Kibira

The Ebola Virus. 

THE number of ebola cases in three West African countries as at July 23 stands at 1201, including 672 deaths. The revelation comes amid heightened fear that Kenya risks falling victim to the deadly disease that has rocked Liberia, Guinea, Sierra Leone and Nigeria.

A government circular sent out yesterday to county health directors has called for surveillance at all border points. "I am emailing you an important communiquÃ© from the Ministry of Health addressing the increasing risk of Ebola Viral Disease that this country faces," reads the letter sent by the acting head of disease surveillance and response, O-tipo Shikanga.

A US doctor working with ebola patients in Liberia is among the lat- est victims of the deadly virus. This is according to an aid organisation, Samaritan's Purse, that is based in the country.

A Liberian man died on Sunday upon landing in Lagos. He is reported to have boarded the plane despite having a high fever that resulted in his vomiting aboard the aircraft.

Nigerian health officials are said to be taking precautions as other passengers in the plane that was carrying the passenger could "take the disease beyond Africa due to weak inspection and the fact that ebola's symptoms are similar to other diseases such as malaria and typhoid".

Shikanga has however sought to allay public fears of the attack, but cautioned that safety measures have to be stepped up to prevent any occurrence. "We are at risk and are not taking any chances," he said.

http://allafrica.com/stories/201407300557.html


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## smalltimer

*Kenya’s first offshore discovery misses commercial threshold*
August 5, 2014 by Samuel Kamau Mbote 

The sunbird-1 well in Kenya’s offshore block L10A that which showed oil and gas samples did not register enough reserves to constitute a commercial discovery according to PTTEP one of the companies with interest on the block.

According to the company’s latest operating results PTTEP expects to write off this well in the third quarter of 2014.

According to Pancontinental that confirmed oil deposits in the well the gross oil column in the well was assessed to be 14m thick beneath a gross gas column of 29.6m in a reefal limestone reservoir in the Sunbird Miocene Pinnacle Reef in area L10A.

The confirmation was after months of analysis that verified the sunbird-1 well as the first ever oil discovery off the East African coast.

Despite the disappointment PTTEP says the findings will be valuable for future geological studies especially offshore where a number of companies are planning to sink more wells motivated by the sunbird prospect.

Recently Pancontinental oil and gas announced it is considering drilling a second well in the Kenyan block L10A where BG Group is the operator.

The Sunbird-1 prospect was an important finding as its results were the first proof of the presence a prospective oil system in the Lamu Basin offshore Kenya.

“The oil and gas have been geochemically typed in detail and the prospective source rocks have been dated and characterized for use in future exploration,” Pancontinental said in a statement while confirming the oil discovery in June.

Block L10A has 3 joint venture partners including BG Group which is the operator with 50 percent interest, PTTEP with 31.25 percent and Pancontinental oil and gas with 18.75 percent.

http://oilnewskenya.com/2014/08/05/kenyas-first-offshore-discovery-misses-commercial-threshold/


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## smalltimer

*AziNam ups Namibian block stake*
05 August 2014 13:20 GMT 

Namibia-focused player AziNam has increased its footprint in the frontier African nation after taking an additional stake in an offshore block. 
The company, backed by a Bermuda-based investment fund, is getting 10% more in blocks 2111B and 2211A, together known as the Guy block, from operator Eco (Atlantic) Oil & Gas.

The increase will take AziNam up to 30% alongside Eco on 60%, while state-owned National Petroleum Corp of Namibia (Namcor) holds 10%.

AziNam said on Tuesday it is “planning to progress with a major seismic acquisition programme shortly” off Namibia.

The company made a splash in the Namibian offshore scene in late 2012, when it bought up interests in 13 oil exploration blocks covering more than 67,000 square kilometres.

On Tuesday managing director David Sturt said: “The Namibian coastline continues to offer a significant frontier exploration province holding huge exploration potential.

“To date, the wells drilled by other operators have proved up the existence of a working petroleum system, we now need to focus on identifying the right conditions for the presence of large hydrocarbon accumulations.

“We have recently seen a new wave of major international oil companies moving into the region including Shell, Tullow, OMV and Murphy. This has added further exploration interest and momentum within the area.”

http://www.upstreamonline.com/live/1371832/AziNam-ups-Namibian-block-stake


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## smalltimer

*Kenyatta Sees Kenya Windfall Tax in Resource Laws in Months*
Posted on 04 August 2014. 

Kenya will impose capital-gains and windfall taxes on oil, gas and mining companies within months to ensure the East African nation maximizes benefits from its mineral resources, President Uhuru Kenyatta said.

“This is something that we are very clear about,” Kenyatta said in an Aug. 2 interview at State House in the capital, Nairobi. “We want to ensure that we as a country also are able to benefit from both the windfall and capital-gains tax.”

Tullow Oil Plc (TLW) and partner Africa Oil Corp. (AOI) have found oil reserves in northern Kenya, while BG Group Plc (BG/) is exploring for gas and Randgold Resources Ltd. (RRS) is studying the nation’s potential for gold production. Kenya wants to avoid a similar situation to Tullow’s experience in Uganda, where the company is contesting in court the state revenue authority’s demand that it pay capital-gains tax of about $473 million following its sale of assets in Uganda. The explorer has paid 30 percent of the amount, it said on July 30.

“Uganda has lost a lot of revenue as a result of not really having focused on that,” Kenyatta said. “We want something that’s fair, but equally recognizing that Kenya as a country must benefit from this.”

Kenyatta’s administration is preparing legislation for the extractive industry as investors demand to expand operations in a more predictable environment. Mines Secretary Najib Balala last year canceled 43 mining and exploration licenses held by companies including Base Resources Ltd. (BSE)’s Base Titanium unit, after discovering possible irregularities in the granting of permits.

Before Parliament
In “a couple of months we should have all these laws firmly in place as well as the regulations that will guide the operations of oil and gas as well as mining,” Kenyatta said. The mining law is already before parliament, while the oil bill will be submitted shortly, he said.

Enacting the laws this year will be a positive signal to investors that Kenya is keen on creating necessary conditions for the industry, Ahmed Salim, a senior associate at Teneo Intelligence, said in an e-mailed response to questions.

“The state of Kenya’s regulatory framework on energy policy and petroleum legislation is one of confusion and in drafting and implementing the laws there will have to be substantial coordination within the government,” he said. “It will also be important to see what measures will be in the legislation that will protect companies in case the government chooses to unilaterally revoke licenses, similar to what happened last year.”

Kenya Rankings
The nation ranks third globally in production of soda ash, used in the manufacture of glass, and seventh in output of fluorspar, used in steel, according to the U.S. Geological Survey. The government said last December it plans to offer 31 coal blocks for exploration. While the country has deposits of gold, rubies and sapphires, mining represents less than 1 percent of its gross domestic product, according to the African Development Bank.

Kenya may begin producing crude by the end of the decade, Kenyatta said. Tullow said in August it was looking to start pumping oil as early as this year.

“We are talking about a five- to six-year cycle before we get the first oil,” Kenyatta said.

Fingers Crossed
Kenya, the last frontier in East Africa’s hydrocarbons resource-search after oil finds in Uganda and natural gas in Tanzania, has its “fingers crossed” before gas discoveries in the northern part of the country are quantified “soon,” according to Kenyatta.

The president said he wants to ensure the laws also provide for benefits to national as well as county governments, and communities where the resources are located.

“We are looking at the legal framework and revenue sharing that will ensure these resources are shared in the most equitable fashion, while at the same time recognizing that the investors who we are partnering with also need their return,” he said.

The government is now seeking ways of using its coal, and gas if viable finds are made, to produce the electricity needed to expand its industries, as it builds infrastructure to ultimately export the resources, according to Kenyatta.

Growth Rate
Kenya, East Africa’s biggest economy, will probably grow at 5 percent this year, the World Bank said in its Global Economic Prospects document on June 11. The lender reduced the prediction to 4.7 percent for 2014 as delayed seasonal rains have curbed agricultural production and worsening insecurity has scared off tourists, it said on June 26.

Kenyatta, who become president after last year’s general elections in March, said he is confident Kenya can still achieve an economic growth rate of 10 percent by 2017.

The first year has been a “roller-coaster year,” where his administration began to implement a new constitution, establish new institutions of government, and improve efficiency in land and company registry, he said. Kenya will see economic growth at the desirable levels once institutions and investments in infrastructure start to pay dividends, according to Kenyatta.

Fitch Ratings affirmed the country’s credit assessment at B+, the fourth-highest non-investment grade, with a stable outlook on July 25.

Kenya sold its first Eurobond in June, with yields on the $1.5 billion of debt maturing in 10 years falling 64 basis points since they were issued to 6.23 percent on Aug. 1.

Source: bloomberg.net

http://oilinkenya.co.ke/kenyatta-sees-kenya-windfall-tax-in-resource-laws-in-months/


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## smalltimer

*BGP International completes 2D seismic survey of Kenya’s Block 11A * 
Thursday, 07 August 2014 03:01 

ERHC Energy has announced that BGP International has completed the 2D seismic acquisition of Block 11A in Kenya 

Block 11A is located to the northwest of the Lokichar Basin where the significant Ekales-1, Ngamia-1 and Twiga South-1 oil discoveries were drilled earlier. (Image source: Space & Light/Flickr)
The geophysical service company has acquired the data over approximately 1,000 line kilometres on behalf of ERHC Energy Kenya Limited and its operating partner CEPSA Kenya Limited, completing the work programme requirements for the initial two-year exploration period under terms of the production sharing contract.

The seismic survey, along with the structural mapping of prospective basins from a full tensor gravity (FTG) gradiometry survey completed last year, will help to identify potential drilling targets in Block 11A, BGP International officials said.

Peter Thuo, general manager of ERHC Energy, said, “Interpretation of the seismic data is not yet complete, but we can say we are encouraged.”

The block is ERHC Energy’s first exploration acreage in East Africa.

In addition to Kenya Block 11A, the company’s oil and gas exploration interests extend across the African continent, including SÃ£o TomÃ© & Principe Exclusive Economic Zone (EEZ), Chad and the Nigeria-SÃ£o TomÃ© & Principe Joint Development Zone (JDZ).

http://www.oilreviewafrica.com/geol...pletes-2d-seismic-survey-of-kenya-s-block-11a


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## smalltimer

*Could Ebola de-rail Oil and Gas exploration in Kenya ?*
13 August 2014 Last updated at 16:48 

*Ebola outbreak: Kenya at high risk, warns WHO*

The current outbreak is the deadliest since Ebola was discovered in 1976

The World Health Organization (WHO) has classified Kenya as a "high-risk" country for the spread of the deadly Ebola virus.

Kenya was vulnerable because it was a major transport hub, with many flights from West Africa, a WHO official said. 

This is the most serious warning to date by the WHO that Ebola could spread to East Africa. 

The number of people killed by Ebola in West Africa has risen to 1,069, the WHO said in its latest update. 

Fifty-six deaths and 128 new cases were reported in the region in the two days to 11 August, it added. 

Canada said it would donate up to 1,000 doses of an experimental Ebola vaccine to help fight the outbreak.

Airport health checks

In Sierra Leone, a doctor who treated patients infected with Ebola has died, reports the BBC's Umaru Fofana from the capital, Freetown. 

Women have been holding daily prayers in Liberia for people affected by Ebola Dr Modupeh Cole is the second Sierra Leonean doctor to die of the disease.

In Nigeria, Africa's most populous state, a third Ebola-related death was reported on Tuesday. 

In other developments:

Germany has ordered all its citizens, except health workers, to leave Guinea, Sierra Leone and Liberia, the three states where the outbreak has been the deadliest.

Guinea-Bissau has decided to shut its border with Guinea, Reuters news agency reports.
Ghana has delayed the opening of universities and colleges by at least two weeks to put in place measures to screen students arriving from Ebola-hit countries.

The African Union has pledged $1m (£600,000) to help fight the disease. 
The WHO's country director for Kenya, Custodia Mandlhate, said the East African state was "classified in group two; at high risk of transmission".

Health checks at the main airport in the capital, Nairobi, have been stepped up in recent weeks. 

'Global resource'

The Kenyan government said it would not ban flights from the four countries hit by Ebola. 

Strict precautions must be observed when burying those who have died of Ebola 
"We do not recommend ban of flights because of porous borders," health cabinet secretary James Macharia said. 

Kenya receives more than 70 flights a week from West Africa. 

The West African regional body, Ecowas, said one of its officials, Jatto Asihu Abdulqudir, had died of Ebola in Nigeria. 

The 36-year-old had been in contact with Patrick Sawyer, the Liberian government employee who was the first to be killed by the virus in Nigeria on 25 July, Ecowas said in a statement. 

Mr Sawyer had flown in from Liberia, when he was diagnosed with Ebola after collapsing at the airport in Lagos, the biggest city in sub-Saharan Africa.

This is the first time West Africa has been affected by Ebola - previous outbreaks have affected East and Central Africa.

There have been 1,975 confirmed, probable and suspected Ebola cases in West Africa since it was identified in February, according to the WHO. 

There is no cure for Ebola and the WHO has declared the outbreak a global health emergency. 

On Tuesday, it approved the use of untested drugs on Ebola patients.

However, experts say supplies of both the vaccine and the experimental drug Zmapp are limited and it could take months to develop more supplies.

Dr Gregory Taylor, deputy head of Canada's Public Health Agency, said he saw the vaccines as a "global resource".

He said he had been advised that it would make sense for healthcare workers to be given the vaccine, given their increased risk of contracting the disease.

Zmapp has been used on two US aid workers who have shown signs of improvement, although it is not certain what role the medication played in this.

A Roman Catholic priest, infected with Ebola in Liberia, who died after returning home to Spain is also thought to have been given the drug.

What drugs exist currently ?

There are a handful of drugs that have been shown to work well in animals.

One is Zmapp - the drug requested by the Liberian government. This contains a cocktail of antibodies that attack proteins on the surface of the virus.

Only one drug has moved on to early safety testing in humans. Known as TKM-Ebola, this interrupts the genetic code of the virus and prevents it from making disease-causing proteins.

The drug was trialled in healthy volunteers at the beginning of 2014 but the American medicines regulator asked for further safety information. The manufacturer says human studies may soon resume. 

Another option would be to use serum from individuals who have survived the virus - this is a part of the blood that may contain particles able to neutralise the virus. 

Vaccines to protect against acquiring the disease have also been shown to work in primates. American authorities are considering fast-tracking their development and say they could be in use in 2016. Trials are likely to start soon, according to the WHO.

But experts warn that ultimately the only way to be sure a drug or vaccine is effective is to see if it works in countries affected by Ebola. 

Symptoms include high fever, bleeding and central nervous system damage
Fatality rate can reach 90% - but the current outbreak is about 55%
Incubation period is two to 21 days
There is no vaccine or cure
Supportive care such as rehydrating patients who have diarrhoea and vomiting can help recovery
Fruit bats are considered to be virus' natural host


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## smalltimer

*Kenyan Senators in Perth to gain insights into dealing with resource riches*

August 26, 2014

A large delegation of senior Kenyan officials has flown to Perth this week to gain invaluable knowledge from their Western Australian counterparts on how to deal with resource riches created by their rating as one of world’s most exciting new oil and gas destinations.

Kenya is right at the forefront of the dramatic growth in international interest in East Africa’s oil and gas potential, following a string of onshore and offshore oil and gas discoveries.

While the East African nation and its neighbours are welcoming the tremendous opportunity that oil and gas drilling success has brought to their countries, a number of major issues have arisen, including an urgent requirement to upgrade their legislation covering the resources sector, along with their taxation laws.

In Perth to participate in the inaugural East Africa Oil & Gas Australia (EAOGA) Conference being staged at the Hyatt Regency on Thursday and Friday August 28 and 29, the Kenyan delegation of Senators and advisors are also holding meetings with a number of leading experts in resources law and community expectations while in Western Australia.

According to Stephen Kuria, an organiser of EAOGA 2014 Conference and Chairman of the Kenya-Australian Chamber of Commerce, the Kenyan delegation views its visit to Western Australia as a vital step in the process of updating its oil and gas and mining laws.

“Western Australia has a tremendous amount of experience in oil and gas and mining and is well recognised around the world as a leading producer of LNG, along with gold and iron ore,” Mr Kuria said.

“With East Africa now considered as the newest significant region in the LNG race and Kenya’s oil and gas sector opening up at an incredible rate because of recent oil and gas discoveries, the Nation is keen to ensure that it is prepared for the many changes, economic and culturally, that being an oil and gas ‘hot spot’ brings with it,” he said.

While in Perth the Kenyan delegation, which includes Senators Paul Wamatangi, Catherine Mukitte, and Dr Wilfred Machage, is meeting with Western Australian Government representatives from the Department of State Development, Department of Resources and Industry Development, and the Department of Mines and Petroleum, while they will also receive a special presentation on mining education and environmental and social issues at the Bentley Campus of Curtin University.

The Kenyan visitors will also attend a special dinner hosted by the Kenyan High Commissioner, HE Isaiya Kabira, which will also be attended by WA Minister for Mines and Petroleum, Bill Marmion and WA Minister for Commerce, Michael Mischin. They will also be flying to Kalgoorlie for a tour of the “Super Pit”.

The dramatic effect of the forecast oil and gas riches on Kenya will also be a major topic for discussion at EAOGA 2014.

Dr Machage, will provide a presentation on “Lapset, Transport and Infrastructure in East Africa” on the morning of the second day, while later in the day, Mwendia Nyaga, Chief Executive Oil & Energy Services and former MD of Kenya National Oil, will discuss “The East African status of the upstream oil and gas industry”, and Isaiya Kabira, the High Commissioner of Kenya in Australia, will present on “Government Policies, Regulation and Bidding Rounds –Kenya”.

“Kenya has a very close relationship with Australia and many Australian resource companies have been long time explorers there, and have been successful in making some important discoveries.

“So we are really pleased with the strong support we have received for EAOGA 2014 from both the Kenyan, Western Australian and Australian governments,” Mr Kuria said.

http://www.resourceinvestor.com/201...perth-to-gain-insights-into-dea?t=commodities


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## smalltimer

*Somalia takes Kenya to U.N. court in oil rights row*

AMSTERDAM Aug 29 (Reuters)

Somalia filed a suit against Kenya at the U.N.'s highest court, seeking to resolve a long-running dispute over lucrative oil reserves in the Indian Ocean.

Somalia asked the International Court of Justice in The Hague to determine the maritime boundary between the coastal nations, which disagree about the rights for exploration and collect revenue from oil discoveries.

Somalia asked the court to intervene, saying "diplomatic negotiations, in which their respective views have been fully exchanged, have failed to resolve this disagreement," a statement issued by the court early Friday said.

Kenyan Attorney General, Githu Muigai, told Reuters he had not yet been served a legal suit but would "take legal steps to defend the interest of the Republic of Kenya".

Somalia has said the row risks deterring multinational oil companies from exploring for oil and gas offshore east Africa.

Kenya recently identified eight new offshore exploration blocks available for licensing, and all but one of them are located in the contested area.

The row could threaten exploration rights that Kenya has granted to oil and gas companies, which have already started exploring in the area.

(Reporting By Anthony Deutsch ni Amsterdam and Humphrey Malalo in Nairobi, editing by John Stonestreet)

http://uk.reuters.com/article/2014/08/29/worldcourt-somalia-kenya-idUKL5N0QZ46H20140829


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## smalltimer

*Tullow Oil Exploration And Appraisal Update In Kenya *

SOURCE: Tullow Oil | 28 Aug 2014 

Tullow Oil plc (“Tullow”) announces the successful results from a series of exploration, appraisal and testing activities conducted in Blocks 10BB and 13T onshore Kenya.

Etom-1 exploration well

The Etom-1 well in Block 13T is the most northerly well drilled to date in the South Lokichar basin, 6.5 km north of the previous Agete-1 discovery. The well encountered approximately 10 metres of net oil pay, extending the proven oil basin significantly northwards. Based on this result the ongoing 550 sq km 3D seismic survey in the South Lokichar basin has been extended to cover a further 247sq km in this northern area, including several similar prospects which are scheduled to be drilled in 2015. 

The Weatherford 804 rig drilled the Etom-1 well to a final depth of 2,000 metres. The well will be suspended for use in future appraisal and development operations, following which the rig will move to drill the Kodos-1 well in September 2014 to test the first of several prospects identified in the neighbouring Kerio Basin. 

Amosing-2 appraisal well

The Amosing-2 well in Block 10BB is the first appraisal well on the Amosing field discovered in January 2014, and was drilled from the Amosing-1 well pad. The well was deviated 1,350 metres towards the northeast and downdip from the discovery well to calibrate the oil-water contacts of the several oil pools identified in Amosing-1. The Amosing-2 well encountered up to 30 metres net oil pay. As planned, the well was then sidetracked back to some 400 metres from the discovery well to provide additional insight into reservoir distribution in the area and for use in interference testing, planned to start later in 2014. The Amosing-2A sidetrack encountered up to 90 metres net oil pay in several oil pools.

The Sakson PR5 rig drilled Amosing-2 to a final depth of 2,878 metres and the Amosing-2A sidetrack to a final depth of 2,165 metres. The rig will now be moved to explore the southern extent of the South Lokichar basin to drill the Ekosowan-1 well in September 2014, 11.9 km south east of the Amosing-1 well.

Ngamia-3 appraisal well

The Ngamia-3 well in Block 10BB continued the appraisal of the Ngamia field. The well was successfully drilled 1.6 km north of the Ngamia-1 discovery well and encountered 150 metres of net oil pay in both Auwerwer and Lokone reservoirs. The well has been suspended for likely use in future interference testing, appraisal and development activities. 

The Marriott PR46 rig drilled Ngamia-3 to a final depth of 2,700 metres. The rig will now be moved to continue the appraisal of the Ngamia field, drilling the Ngamia-4 and Ngamia-5 wells which are planned to be used in an interference testing programme in the Ngamia field.

Ewoi-1 flow test

The SMP-105 testing/workover rig recently completed testing activities at the Ewoi-1 well. The well demonstrated good permeability in the water-bearing Lokone reservoirs and a programme to target these updip is under consideration. Flow rates from the Auwerwer reservoir DST were limited to around 50 bopd, potentially due to the high wax content and shallow depth of this DST. 

The lightweight rig is currently testing the Twiga South-2A appraisal well where two to three tests are planned. 

Tullow Operates Blocks 10BB and 13T with 50% equity and is partnered by Africa Oil Corporation, also with 50%.

Commenting today, Angus McCoss, Exploration Director, said:

“Etom-1 has successfully extended the South Lokichar rift bounding fault play northwards and we look forward to testing the southern area of the basin with Ekosowan-1. Continued success in appraisal of the Ngamia and Amosing fields reinforces our belief that the South Lokichar basin holds very considerable potential which we hope to replicate in additional basins. The next basin-opening test will be in the neighbouring Kerio Basin, with the Kodos-1 well expected to spud in early September”.

http://www.epcengineer.com/news/post/12189/tullow-oil-exploration-and-appraisal-update-in-kenya


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## smalltimer

*Tullow lifts mood with northern Kenya find*

Sunday, August 31, 2014 

LOOKING TO FUTURE: Tullow has set 2015 as the year to start drilling for the oil.

NAIROBI, Kenya -Tullow Oil lifted the spirits of its investors in London last week, after reporting a potentially big find in northern Kenya.

In a statement, the company said the Etom-1 exploration well it drilled in Block 13T was the most northerly drilled so far, and extended the proven oil basin significantly northwards after it hit about 10 metres of net oil pay.

“Based on this result the ongoing 550 square kilometre 3D seismic survey in the South Lokichar basin has been extended to cover a further 247 square kilometres in this northern area, including several similar prospects which are scheduled to be drilled in 2015,” the company said.

Meanwhile, the Amosing-2 appraisal well in Block 10BB encountered up to 30 metres net oil pay, and was then sidetracked back to some 400 metres from the discovery well to provide additional insight into reservoir distribution in the area. The sidetrack encountered up to 90 metres net oil pay in several oil pools.

The Ngamia-3 appraisal well, also in Block 10BB, was successfully drilled 1.6 kilometres north of the Ngamia-1 discovery well and encountered 150 metres of net oil pay in both Auwerwer and Lokone reservoirs, Tullow said.

The Ewoi-1 flow test well demonstrated good permeability in the water-bearing Lokone reservoirs and a programme to target these updip is under consideration, Tullow added.

“Etom-1 has successfully extended the South Lokichar rift bounding fault play northwards and we look forward to testing the southern area of the basin with Ekosowan-1. Continued success in appraisal of the Ngamia and Amosing fields reinforces our belief that the South Lokichar basin holds very considerable potential which we hope to replicate in additional basins,” Tullow Exploration Director Angus McCoss said in a statement.“The next basin-opening test will be in the neighbouring Kerio Basin, with the Kodos-1 well expected to spud in early September,” he said.

http://www.busiweek.com/index1.php?Ctp=2&pI=1775&pLv=2&srI=9&spI=7&cI=11


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## smalltimer

*Tax capital gains only after discovery, says oil, gas industry*

Posted on 02 September 2014. 

Kenya’s ability to attract investments in oil and gas exploration could be affected by a plan by the government to impose capital gains tax (CGT) on profits made from selling exploration blocks.

The National Assembly’s Finance Trade and Planning Committee on Wednesday amended the Finance Bill 2014, requiring that a CGT of five per cent be charged on earnings from property transactions from January next year.

“Income on which tax is chargeable is the whole gain that accrues to a company or an individual on or after January 1, 2015 on the transaction of property situated in Kenya,” reads the amended Finance Bill, which is awaiting assent from President Uhuru Kenyatta to become law.

The government expects to earn Ksh9 billion ($102 million) annually from the CGT, which had been abolished 36 years ago in 1978.

This is likely to make prospecting blocks less attractive as CGT on transfer of shares before discovery of oil or gas increases the risk profile. The amendments will also see the withholding tax on dividends from mining operations rise from 10 per cent to 20 per cent.

Eduardo and Associates, a consulting firm, said CGT and windfall taxes may discourage investors from prospecting in other parts of the country, as commercial oil exists only in the Lokichar basin in northwestern Kenya.

“During farm-in (buying) and farm-out (sale) of interests in exploration blocks, there is no gain. Capital gains tax is applicable only when either commercial oil or gas has been discovered, and the amount quantified,” Eduardo’s managing consultant Patrick Obath said.

He added that the meaning of CGT and windfall taxes needs to be well defined with clear rules on when the taxation regimes come into effect without being applied retrospectively.

Windfall tax is influenced by changes in the international market such as when the price of a barrel of crude oil increases from $100 to $200. Investors need to be cushioned when prices fall.

Windfall taxes

Oil and Energy Services Ltd, a consulting firm, said since 2005, windfall taxes have been included in production sharing contracts (PSCs) that companies negotiate and sign with the Kenyan government.

“There is no gain in farm-in or farm-out as it covers exploration costs. CGT and windfall taxes ought to be well structured as the sector is nascent,” said Oil and Energy Services chief executive Mwendia Nyaga.

Introduction of CGT and windfall taxes would enhance government revenues in the short term. The impact on the hydrocarbons sector is still unclear but it could be disruptive if the interests of investors and the government are not balanced.

Africa Oil Corporation is working with joint venture partners and the government to ensure the range of taxes does not hamper the exploration phase of the industry’s development in Kenya.

The discussions are being held parallel to a World Bank- supported project to develop a petroleum master plan for Kenya that will ensure that such decisions are focused on maximising long term benefits to the country.

Africa Oil’s vice president of external relations Alex Budden said the company and its partners have spent approximately $1 billion exploring various blocks in Kenya. Africa Oil’s share is over $400 million.

“We are currently spending around $80 million net per quarter in Kenya and see that level continuing through 2015.  This is important foreign investment for Kenya and any decision must take all of these factors into account,” said Mr Budden.

Africa Oil and Tullow Oil Plc each own 50 per cent of block 10BA, 10BB and 13T. Tullow has 65 per cent stake in block 12A while Africa Oil holds 20 per cent and Marathon Oil Corporation 15 per cent.

Mixed feelings

“We would not want to speculate on the implications of the proposed taxes,’’ said Marathon’s external communications specialist John Porretto.

Africa Oil and Marathon Oil each own 50 per cent stake in block nine.

FAR Ltd of Australia is in early stages of exploration activities in Kenya and the company said it looks forward to working closely with government, regulatory agencies and partners in joint ventures.

“It would be inappropriate at this time to comment publicly on domestic matters in Kenya where FAR Ltd expects to begin an exploration programme in the future,” said the company’s spokesman, Ian Howarth.

Camac Energy on its part said it was proud to be part of the future energy industry in Kenya. The company has a combined 37,000 square kilometres in the Lamu Basin, including two onshore and two offshore blocks.

“Kenya has a conducive business environment, and we continue to encourage other companies to also invest in the country,” said Camac’s director of corporate finance and investor relations Christopher D Heath.

Source: theeastafrican.co.ke

http://oilinkenya.co.ke/tax-capital-gains-only-after-discovery-says-oil-gas-industry/


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## smalltimer

*PCL Pancontinental Oil & Gas has a stake in Kenya L6;
40% Offshore
16% Onshore*


*Far Ltd receives term extension in Kenya’s Block L6*
September 12, 2014 by Samuel Kamau Mbote

Australian explorer Far Ltd has announced that it has received a 1 year extension in the PSC term of Block L6 after the company delayed planned activities Government of Kenya due to the inability to access the ground to complete planned seismic operations because of security incidents in the country.

In February 2014, the Group signed a farm-out to Milio E&P Limited and Milio International Limited of Dubai in relation to the onshore part of Block L6, Kenya. Under the terms of the farm-out deal, the Group will be fully carried through the drilling of an onshore exploration well in 2015 and the acquisition, processing and interpretation of a regional 1,000 line kilometre 2D seismic survey.

At the reporting date the conditions precedent of the farm out agreement had not been completed and the parties were negotiating an amendment to the farm-out agreement in light of the implications of the security incidents.

The Group will hold 24% in the onshore area, retains its full 60% interest in the offshore part of Block L6 and remains the operator in the block.

Meanwhile the company says it continues to pursue entry into Block 9 and the plans for future work program and has been in discussions with Dominion Petroleum Kenya Limited.

FAR’s subsidiary, Flow Energy Ltd, was a member of the bidding consortium that made an application bid for Block L9 in 2010.

Following negotiations with the Ministry of Energy and Petroleum, a heads of agreement was signed and Block L9 was subsequently awarded in May 2011.

Far says it is of the view that that the Miocene carbonate reef play, identified in Block L6 extends along the Kenyan coast and into Block L9 and that a future 3D seismic survey over the inboard part of Block L9 would evaluate this potential.

http://oilnewskenya.com/2014/09/12/far-ltd-receives-term-extension-in-kenyas-block-l6/


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## smalltimer

*Urgent talks as Somalia claims Kenya coast*
Posted  Saturday, September 13, 2014 |  by- ISAAC ONGIRI

Somalia's claim could effectively turn Kenya into a landlocked country.

Kenya risks losing almost all of its territorial waters in the Indian Ocean if a case filed by Somalia in an international court succeeds.

Alarmed by the grave implications of the move by its war-torn neighbour, the Jubilee Government has reopened negotiations with Somalia over its claim to a huge swathe of maritime territory considered rich in oil deposits and fish, which the ministry of Foreign Affairs says could effectively turn Kenya into a landlocked country.

On Saturday, Cabinet Secretary for Foreign Affairs and Trade Amina Mohammed told the Sunday Nation the matter is so sensitive that a quick meeting to facilitate direct talks between President Uhuru Kenyatta and his Somalia counterpart Hassan Sheikh Mohamud has been arranged in New York.

“We are in discussions with the government of Somalia. It is unfortunate they logged their complaints even as we dialogued over this matter,” Ms Mohammed said, adding that Kenya preferred to settle the matter out of court.

Documents seen by the Sunday Nation show that the way Somalia wants the boundaries redrawn would take away at least five oil blocks and vast oceanic territory where deep sea fishing is conducted.

It would also mean that Kenya might have to access the Indian Ocean only with Somalia’s permission.

In June, an Australian firm prospecting off Kenya’s Indian Ocean coast reported a verified oil find at one of its recently completed wells in the Lamu Basin.

Pancontinental Oil and Gas NL confirmed their completed Sunbird well has intersected an oil column, making it the first-ever discovery of oil off the East African coast.

The dispute could also unsettle regional harmony as the proposal by Somalia could automatically move the Tanzanian island of Pemba to Kenyan territory, according to Foreign Affairs and International Trade Principal Secretary Karanja Kibicho.

“This claim by Somalia could make Kenya a landlocked country which may restrict our access to the high seas. And if the alterations adopt the proposal by Somalia then the island of Pemba will become part of Kenya,” said Dr Kibicho.

If the case filed by Somalia at the International Court of Justice (ICJ) is determined in its favour Somalia’s maritime boundary in the Indian Ocean would stretch all the way to Tanzania’s shores.

ECONOMIC INTERESTS

Based in the Dutch city of The Hague, ICJ is the primary judicial branch of the United Nations that mostly determines legal disputes between states.

In its application to the ICJ, the Somali government is making reference to a number of oil fields in the disputed area which Kenya has laid claim to, signalling that the battle may have been precipitated by economic interests.

Ms Mohammed, an experienced diplomat with vast experience in the UN system, said Kenya was keen on preserving good relations with Somalia and is making every effort to find a solution to the impending crisis that could create tension in the region.

She said the New York meeting between President Kenyatta and President Mohamud on the sidelines of the annual UN General Assembly later this month was part of the diplomatic push to sort out the problem.

Her views were reinforced by PS Kibicho: “We have set technical teams who are negotiating. Somalia is considered a friendly state ”” it is our neighbour, and it will remain so.”

The Sunday Nation has also learnt that even as the diplomatic efforts continued Attorney-General Githu Muigai had scheduled an appointment with the ICJ president to discuss ways of handling the crisis.

“I recently appeared before the Law of the Sea Commission in New York to try to attend to this matter. But we were referred to the ICJ because the case had been filed (by Somalia),” Prof Muigai said.

The AG explained that his office was assembling a team of experts to support Kenya’s case.

“We have already submitted an MoU (Memorandum of Understanding) to the UN secretary-general showing the delimitation of our boundaries with Tanzania. We want the same formula adopted in our case with Somalia,” the AG stated.

CASUAL NATURE

Somalia rushed to court over what sources at the Ministry of Foreign Affairs claimed was the casual nature in which the Kenyan government was handling the long-standing matter.

Somalia was apparently angered by Kenya’s decision to skip without notice a negotiation meeting that was to be held between August 25 and 26 this year.

“The Kenyan delegation, without providing either advance notification or subsequent explanation, failed to arrive and, as a consequence, the additional round of meetings that Kenya had requested were not held,” reads part of the application Somalia filed in court.

The Registrar of the ICJ Philippe Couvreur wrote to Kenya on August 28 detailing the case filed by Somalia.

“I have the honour to inform Your Excellency that the Federal Republic of Somalia has today filed in the Registry of the Court an Application, instituting proceedings against the Republic of Kenya concerning a dispute in relation to the establishment of the single maritime boundary between Somalia and Kenya in the India Ocean, delimiting the territorial sea, exclusive economic zone and continental shelf including the continental shelf beyond 200 nautical miles (M),” reads the letter.

Kenya’s ambassador to The Netherlands, Ms Makena Muchiri, forwarded the letter to Ms Mohammed the following day.

APPOINTED AGENT

“Kindly note that the provision of Article 40 of the Rules of the Court that requires Kenya to inform the court of their appointed agent and the address of service at the seat of the court to which all communications can be sent,” Ms Muchiri wrote.

President Mohamud appointed his minister for Foreign Affairs and Investment Promotion Dr Abdirahman Dualeh the country’s agent in the case.

In the application, Dr Dualeh made it clear there were “no special or relevant circumstances that could justify Kenya’s claim” to the territory it occupied.

According to the technical descriptions used in documents, in previous negotiations with Somalia, Kenya insisted that the maritime boundary should run due east along the parallel of latitude from the land boundary terminus while Somalia said the boundary should be drawn to follow an azimuth (angle) of approximately N131.5 degrees east from the land boundary terminus out to the outer limit of the two states’ maritime entitlements.

A source at the Foreign ministry, who did not want to be named, explained this meant Kenya preferred the horizontal line from the land through the sea while Somalia wanted a diagonal dissection that would give it most of the territory.

“The parties have met on numerous occasions to exchange views on the settlement of the dispute over the delimitation of their maritime boundary. None of these negotiation sessions has yielded agreement. Indeed no meaningful progress towards an agreement has been achieved at any of them,” reads part of the application by Somalia.

On oil exploration, Somalia claimed that Kenya had acted unilaterally on the basis of the current boundary to exploit both living and non-living resources on the Somali side.

However, Kenya’s Foreign Affairs PS denied that oil exploration in the disputed area may have sparked off the controversies.

However, Somalia claims in court papers: “Relevant Kenyan petroleum blocs include L-5, L-21, L-22, L-23,L24 and L-25.According to publicly available information Kenya awarded block L-5 to an American company.”

The country also lays claim to oil blocks Kenya awarded to a French company.

“The blocks lie entirely or predominantly on the Somali side of provisional equidistance line,” read part of the court filings. 

Sources in the Foreign ministry in Nairobi allege some Western and Gulf oil investors may have convinced the Somali Parliament and top politicians to claim the territory.

Even more intriguing are allegations that some senior Kenyan officials may be colluding with the Somalis by providing them with insider information that strengthens the ICJ case and any diplomatic negotiations.

Any loss of territorial waters could also compromise security as it would restrict Kenya Navy patrols.

http://mobile.nation.co.ke/news/Som.../2452028/-/format/xhtml/-/fajjmx/-/index.html


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## smalltimer

*Kenya oil deposits to hit 1billion barrels *
Saturday, September 20th, 2014

Kenya’s recoverable oil reserves in the country’s tertiary rift basin is likely to exceed one billion barrels, the ministry of energy and petroleum said on Friday.

Cabinet Secretary for Energy and Petroleum David Chirchir said the four recently discovered oil wells that were drilled by Tullow Kenya in the Lokichar sub-basin have raised the country’s recoverable oil reserves from 300 million barrels to 600 million.

“However, with further appraisal drilling which is currently on- going, the recoverable reserves are likely to be in excess of billion barrels in the Tertiary Rift Basin alone,” Chirchir said in a statement issued in Nairobi.

“These positive developments indicate that Kenya could become a significant oil producer,” Chirchir said.

“In readiness for the commercialization of the oil, the ministry is fast tracking the construction of the Uganda-Kenya oil crude pipeline,” the official said.

He noted the construction of a new Nairobi to Mombasa oil pipeline will be completed in the next 18 months.

The East African nation has already made a gas discovery in the Anza Basin in northwest Kenya that is capable of producing approximately one trillion cubic feet of gas.

Chirchir said Kenya is seeking to enhance and diversify national power generation by identifying new supply sources.

“The government plans to expand electricity production capacity to ten gigawatts by 2024 and eventual to 25 gigawatts by 2030,” he said.

Principal Secretary for Energy and Petroleum Joseph Njoroge said the rural electrification program will be funded by the sale of state energy assets.

“We intend to reach every village through small renewable energy projects such as solar panels and wind turbines,” he said, adding the government is encouraging Public Private Partnership projects in order to plug the energy deficiency.

http://sweetcrudereports.com/2014/09/20/kenya-oil-deposits-to-hit-1billion-barrels/


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## smalltimer

*2014 Full Year Statutory Accounts released today *


View attachment 2014 Full Year Statutory Accounts.pdf


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## smalltimer

*ASX Price and Volume Query for PCL Share Trades*


View attachment ASX Price and Volume Query for PCL.pdf


PCL Stock currently stands at $0:042 which is up 23:53 % on todays trade as of  13:14 hrs. Friday 3rd. of Oct.


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## smalltimer

*African drilling powers FAR, Pancontinental Oil * 


 The Australian , October 04, 2014 12:00AM 

OIL stocks focused on Africa provided excitement on the stock exchange this week, with both Melbourne-based FAR and Perth-based Pancontinental Oil issued speeding tickets and asked to explain price gains.  

FAR has generated a lot of *interest in the past two months, courtesy of hoped-for progress on a confidential well that British explorer Cairn Energy is drilling off Senegal.

FAR says it is not being told exactly what the well is turning up and no announcement will be made until it is finished.

But the fact Cairn has left an expensive rig over its target for so long ”” with no news of any problems ”” has seen FAR’s share price nearly triple in the past two months, giving it a market value near $300 million.

Early on in the drilling some oil was recovered to the surface from a secondary target, boding well for the deeper target shareholders are waiting on.

FAR managing director Cath Norman yesterday told the ASX speculation about the Senegal well, known as FAN-1, was probably driving the price higher.

“The well has been declared a ‘tight hole’ by Cairn and, as such, no information related to depth or formation will be provided during well operations beyond what is required to meet ASX continuous disclosure obligations,” Ms Norman said.

“FAR is reliant on the operator to provide information on the status of the well and ... we are awaiting further information.”

The stock finished 0.1c higher yesterday at a record 10c. This gives the company a $270m market value and caps a 20 per cent rise since Ms Norman told the FAR story to the Resources Rising Stars conference on the Gold Coast earlier this week. “Rest assured we’re getting close to the end of the first hole (FAN-1),” she told the conference.

FAN-1 is designed to test a structure with a pre-drill estimate of 900 million barrels on an unrisked, prospective resource basis. The joint venture plans to follow FAN-1 with the SNE-1 well, which has a pre-drill estimate of 600 million barrels.

The gain in Pancontinental yesterday was more spectacular. The stock ended 1.1c, or 32 per cent, higher at a six-month high of 4.5c, giving a market value of $50m. Pancontinental, which shares some offshore Kenya acreage with FAR, had no real explanation for the jump.

It said the Sunbird oil and gas discovery off Kenya (in acreage FAR does not have a stake in) had provided strong interest from potential farm-in partners.

http://www.theaustralian.com.au/bus...ncontinental-oil/story-e6frg9df-1227079559408


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## smalltimer

*Australian firm blames Kenya for poor results*

Thursday, October 2, 2014 - 00:00 -- BY JAMES WAITHAKA 

Pancontinental Oil and Gas, an Australian explorer, has attributed its poor performance to the zero value of an exploration licence in Kenya on offshore Block L8, which expired early this year. Financial statements filed with the Australian Securities Exchange for the year ended June 30 show it piled a loss per share of 1.66 Australian dollars (Sh128.82), a six-year low for the company. 

Its loss per share was 0.06 dollars. It made a net loss of $19.07 million (Sh1.48 billion) in the period, higher than the previous year’s $662,822 (Sh51.44 million). The share price stood at $0.023 (Sh1.79) a piece as at June 30. 

The licence for the block is yet to be renewed and the firm said it is engaging the Ministry of Energy and Petroleum over the possibility of a new licence. “The company is in continued discussions with the Kenyan ministry for the issue of a new licence,” it said. Its shareholders primarily rely on returns through share price appreciation as the firm is in an exploration phase. 

Pancontinental has a 18.75 per cent interest on Block L10A, on which the first-ever offshore oil column – 14 metres thick – was discovered on Sunbird-1 well drilled this year. It cites “commercially confidential Sunbird-1 oil data” as opening a significant opportunity to find commercial oil in offshore areas that it holds interest. 

The firm has a 40 per cent interest on Block L6 offshore and 16 per cent onshore of the same block. It said a farm out was secured with Milio International for the onshore portion and it will be free-carried for drilling of an exploration well. 

It increased stake on Block L10B this year to 25 per cent, with London-listed BG Group, which operates the block’s licence, holding a 75 per cent interest. It said a 12-month extension of the licence was granted to enable further exploration and assessment of adjacent Sunbird results.

 - See more at: 

http://www.the-star.co.ke/news/arti...lames-kenya-poor-results#sthash.2CuL8Kae.dpuf


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## smalltimer

*PCL up over 100 % within a week*

What is going on ? 
No news yet just ASX speeding tickets, 
so hang on to your seats, 

Is it just a play, or do people really want in now ? I guess time will tell.


----------



## smalltimer

Congratulations to *FAR* holders , yes dreams sometimes do come true. Hang in there PCL holders, we may get our turn as well one of these days.

*Explorer FAR's shares soar after Senegal offshore oil discovery*

Date October 8, 2014 - 5:37PM - Angela Macdonald-Smith

FAR's oil discovery off the coast of Senegal may be the biggest since the Jubilee find off Ghana in 2007, some experts say. 

Investors in junior oil explorer FAR have welcomed a 45 per cent surge in the value of their company thanks to an oil discovery off Senegal that has triggered comparisons with the billion-barrel-plus Jubilee find off Ghana.

The discovery by the FAN-1 well, revealed by venture operator Cairn Energy in London, was described as  "transformational" for FAR by managing director Cathy Norman, who spent much of Tuesday afternoon at a celebration lunch in Melbourne.

London-listed Cairn has given potential oil-in-place numbers at FAN-1 as 250 million barrels in the 90 per cent case and 2.5 billion barrels in the 10 per cent case, with the most likely number 950 million barrels.

Estimates of potential recoverable volumes range from 15 to 18 per cent of that from more cautious analysts to 30 to 40 per cent by others.

Ms Norman signalled FAR was assuming the upper end of that range, given positive results so far.

Melbourne-based UBS oil and gas banker Gordon Ramsay, a petroleum geophysicist by training, drew a comparison between the find made by the FAN-1 well and the Jubilee oil discovery made by Tullow Oil and *Kosmos Energy off Ghana in 2007 – the largest oil find off west Africa.

"Jubilee looks like a very interesting analogy to this," Mr Ramsay said. "It is highly likely this is a multi-hundred-million-barrel oil discovery."

Ms Norman said the comparison with Jubilee was "fair, maybe not in terms of size because we haven't proven that, but certainly in terms of significance".

"It's probably going to open up a whole new area for exploration – that's the significance more than anything," she said.

Ms Norman said the find would open up exploration in the Senegal, Guinea-Bissau and Guinea area just as Jubilee did around the Ghana, Sierra Leone and Liberia part of west Africa.

FAR shares jumped as much as 60 per cent before closing at 14.5 ¢, adding $120 million to the junior's market cap.

Some believe it has much further to go, with NSW silk Timothy Robertson's family company Farjoy buying another 53 million shares in FAR on Wednesday morning at an average of 14.13 ¢.

Mr Robertson, whose company now owns 10 per cent of FAR, took to the day trader website HotCopper to explain his confidence in the Senegal play, describing it as "the best prospect off the upper west coast" of Africa.

He pointed to several other "fan system" structures that could also be filled with oil from the same "source kitchen".

Many risks still remain, however.

US energy consultant Tudor, Pickering, Holt & Co said it was "good to see a play-opening oil discovery", but raised questions over whether the discovery could be* *commercially developed.

The quality of the reservoir would be key, as that has caused a number of finds on the west African margin to be non-commercial, the consultant said.

Ms Norman said stating commerciality of the find now would be "foolish".

But she said at a conservative estimate of 350 million barrels of oil, the find cleared the hurdle to be commercial, which was 150 million to 200 million barrels.

"It's clear that what we've got at the moment could be a stand-alone development, which is fantastic news," she said. "And we're only just scratching the surface, there is still a lot more to come."

US major ConocoPhillips, which owns a 35 per cent stake in the find, said preliminary results from the drilling were "encouraging" but noted further evaluation was needed "in order to determine commerciality".

Cairn owns 40 per cent, while Senegal's national oil *company Petrosen owns the remaining 10 per cent.

http://www.theage.com.au/business/m...l-offshore-oil-discovery-20141008-10rpyq.html


----------



## smalltimer

*Pancontinental Oil & Gas NL Earns “Buy” Rating from Hartley’s Research (PCL) *

October 8th, 2014

Pancontinental Oil & Gas NL logoPancontinental Oil & Gas NL (ASXCL)‘s stock had its “buy” rating restated by investment analysts at Hartley’s Research in a note issued to investors on Tuesday.

Shares of Pancontinental Oil & Gas NL (ASXCL) opened at 0.047 on Tuesday. Pancontinental Oil & Gas NL has a 1-year low of A$0.021 and a 1-year high of A$0.073. The stock has a 50-day moving average of A$0.03 and a 200-day moving average of A$0.02. The company’s market cap is A$54.1 million.

Pancontinental Oil & Gas NL is an oil and gas exploration company. The Company has key assets in Australia, Kenya and Namibia

http://www.intercooleronline.com/st...-buy-rating-from-hartleys-research-pcl/98549/


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## kingink

Bought some yesterday...


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## kingink

I knew I should have waited a day haha, oh well I'm looking forward to some long term results.


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## smalltimer

*How Kenya plans to get more money from oil, gas *

By KENNEDY SENELWA
Posted  Saturday, October 25  2014 at  10:11

Kenya is reviewing how revenues from oil and natural gas sales will be shared in a bid to maximise the benefits to the government, communities and counties while safeguarding the interests of investors.

A production contract now under discussion by government officials proposes a model of sharing that is not based on volumes of oil brought to the surface but is calculated on profitability, known as “R-factor” in industry-speak.

“With a progressive R-factor, if a discovery is not made, the investor’s loss is limited to costs incurred during exploration phase,” said Hunton & William’s lead consultant John Beardworth.

Hunton & Williams of the US and Challenge Energy Ltd of Britain were contracted by the Kenyan government and the World Bank to advise on how the revenues should be shared.

The R-factor is the ratio of revenue earned from oil divided by the costs of bringing the oil to the market. The smaller the ratio, the less the profit realised, with a ratio of less than one indicating a loss-making operation.

In the proposed formula, the government would earn more from production as the profitability rises, starting with sharing of the losses equally with the operator when the R is less than one.

The government’s share will increase to 65 per cent of the profit where R is between one and 2.5 and 75 per cent when it is 2.5 per cent or above. The three bands were proposed by the International Monetary Fund (IMF) in the draft Extractive Industries Fiscal Regimes report.

However, a consultant report seen by The EastAfrican recommends that the middle band be split into three so that, for R of between one and 1.5, the government’s share would be 55 per cent, 60 per cent for between 1.5 and 2.0 and 65 per cent for2.0-2.5.

“This would maintain the higher flexibility afforded by a five-band R-factor framework while providing returns for contractors that are still competitive with Mozambique,” the report said. 

As an alternative, the consultant recommended a sliding rate such as that used in Cyprus and Kurdistan, where the tax rate is calculated for a given R factor. 

“This provides much more granularity when fewer bands are used,” the report said.

Energy Principal Secretary Joseph Njoroge said the model production sharing agreement (PSA) would be used to negotiate agreements with contractors ”” including those involved in natural gas exploration, who were not covered in previous documents.

Currently, the profit will be shared based on daily output in four bands ”” the first 20,000 barrels, the next 30,000 barrels; the next 50,000 barrels and above 100,000 barrels. The accruing percentages were kept strictly under wraps in line with confidentiality clauses that make the extraction industry one of the most opaque in the world.

http://www.theeastafrican.co.ke/new...498760/-/format/xhtml/-/15rjmqhz/-/index.html


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## smalltimer

*Ministry to create new oil and gas blocks*

By IMMACULATE KARAMBU
More by this Author 

The Energy ministry is planning to create at least eight new exploration blocks from the ones that have been surrendered by locally operating companies as the search for oil and gas gathers steam.

This will add to seven others that were carved out of existing blocks last year, but which the Cabinet secretary for Energy and Petroleum Davis Chirchir is yet to gazette to pave the way for licensing to exploration companies.

“Since the first oil discovery in 2012, we have seen very high interest in applications for blocks. We are currently doing the third revision and we expect that the total number of blocks will be about 61 by the end of this year,” commissioner for petroleum at the ministry of Energy, Mr Martin Heya, said. He was speaking yesterday at the third East Africa upstream summit organised by the Petroleum Institute of East Africa.

At the moment, the total number of gazetted blocks stands at 46, having increased from 25 which existed before the first revision was conducted in 2006. Of the gazetted blocks, 41 have already been licensed to 21 international oil and gas exploration firms.

The targeted blocks during this year’s revision will be constituted from block 10A that was given up by Tullow Oil Plc and blocks L15 and L8 surrendered by Dominion and Apache respectively, among others.

Kenya has struck commercially viable quantities of oil in the northern part of the country. Government records put the recoverable oil reserves at 600 million barrels while the total crude reserves in Lokichar basin, where the oil finds have taken place, are estimated to be about one billion barrels.

REVENUE
The Energy ministry has since last year put on hold licensing for new blocks as it awaits a review of the current Petroleum (Exploration & Production) Act which it says would secure more revenue for the government from the blocks.

However, in June, Mr Chirchir said that the government is mulling issuance of oil and gas exploration blocks under the current law to meet growing demand from international oil and gas companies as enactment of a new law seem to delay.

http://www.nation.co.ke/business/Mi...s-blocks/-/996/2498188/-/fceni7z/-/index.html


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## smalltimer

*PCL Presentation*

see attached
View attachment PCL Presentation.pdf


or go to the Pancontinental Wed Site ;

http://pancon.com.au/


----------



## smalltimer

*Proposed Kenyan oil gas Bill, meets most expectations of the stakeholders*

Posted on 12 November 2014. 

Proposed oil, gas Bill meets most expectations of the stakeholders	
I have browsed through the recently released final drafts of Petroleum Exploration, Development and Production Bill 2014, the Model Production-Sharing Contract, and the Local Content Regulations 2014.

According to me these documents are excellent pieces of legal drafting which cover the critical areas of oil and gas in good detail. There is evidence that the drafts have taken in most of stakeholders’ and experts’ opinions and concerns.

The investors, who are a key party in these documents, will of course microscopically scrutinise the details of the draft law for direct and indirect implications on their investments.

It also needs to be appreciated that the drafting was done in a fairly short time of six months from the time it was agreed that upstream laws should stand alone from the combined energy laws.

Good laws and regulations are a key initial step in de-risking the upstream oil and gas sector. They offer assurances and security to investors while detailing government and public expectations from investors.

The draft law has the Upstream Petroleum Regulatory Authority as the institution which will be in charge of implementing the upstream legal and regulatory systems. The inter-ministerial National Upstream Advisory Committee shall advise the Cabinet Secretary on matters pertaining to upstream petroleum operations.

The draft Local Content regulations are a sterling text that mostly meets our expectations. Local content is a subject that has received a lot of attention and interest from various quarters in Kenya.

The timing of these regulations is apt, since they can be launched as soon as the anchor Bill is signed into law. These regulations closely mirror the detailed Nigerian Local Content law, whose detailed and prescriptive structure has impressed many of us here in Kenya.

The Local Content laws have covered all relevant areas including materials, support services, employment, training, financial, banking. insurance and legal services. They also tabulate what percentage of local content that must be incrementally implemented by investors by year one, year five and year 10.

Through these regulations, the cabinet secretary has sufficient discretion to adjudicate on local content implementation issues. This is quite important to prevent stalemates in procurement issues that are grinding upstream operations to a halt. There will be a Local Content Unit domiciled in the Authority to monitor local content implementation.

But Kenyans should be well aware that quality of goods, services and skills will be critical in local content participation. Capacity-building for various areas of local content participation is therefore the next most urgent task for Kenyan enterprises.

In respect of oil and gas revenue allocation, the draft law has 75 per cent 20 per cent and five per cent of allocation to the national government, counties and local communities respectively.

This revenue allocation formula differs from the recently passed 70 per cent, 20 per cent and 10 per cent for mining, implying that we may expect some reactions from oil and gas prospective counties.

As we allocate resource cash to counties and local communities, let as carefully think through their capacity to absorb these allocations without destabilising socio-economic systems in those counties. A high value resource bonanza has the potential to set counties in a direction of “county resource curse”.

Yes, we need to economically empower resource counties, but there is also a looming danger of highly imbalanced development among counties, especially neighbouring ones.

Although this draft Bill attempts to limit revenue allocations based on CRA system, we need to think through the entire chain of possible scenarios and impacts in deciding modalities for capping resource allocations.

The model Production Sharing Contract (PSC) now has a “return” criterion for sharing of oil production. The government share of profit oil (total oil less cost oil) shall increase from 50 per cent to 75 per cent depending on the ratio (R-Factor) of investor cumulative cash inflows (revenues) to investor cumulative cash outflows (costs). This formula hedges the investor in situations and times of overwhelming costs.

It is important that the government has sufficient and effective capacity to account for all investor allowable costs from the day the contract is signed.

Correctness of oil accounts ensures that the country receives accurate amounts of revenues. It is understood that the government has already started creating this capacity through overseas training.

There have been calls from investors that upstream laws should have sufficient provisions for “natural gas” discoveries. Whereas the draft law touches on “associated natural gas” I am not quite sure that there is sufficiency in this draft law in respect of natural gas-prone blocks. We need to listen to investors on this subject.

In respect of taxation, although the draft law lists capital gains among other tax obligations for investors, it should be appreciated that capital gains is a subject of another law, the Finance Bill.

Having in place an effective upstream regulatory framework is a major achievement that must now be followed up with effective and fair implementation.

Mr Wachira is director, Petroleum Focus Consultants.

Source: businessdailyafrica.com

http://oilinkenya.co.ke/proposed-oil-gas-bill-meets-most-expectations-of-the-stakeholders/


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## smalltimer

*Tullow Oil cuts on offshore exploration to focus on East Africa acreage as crude oil price drop*

November 12, 2014 by Samuel Kamau Mbote	

Following the drop in global crude oil prices Tullow Oil says I will be reducing on exploration cost as well as focus on high margin oil and its major basin-opening potential.

“In light of current oil and gas sector challenges including the commodity price environment, we are reviewing our capital expenditure and our cost base to ensure that Tullow is well-positioned for future success,” Tullow Oil Chief Executive Officer Aidan Heavey says in the latest interim statement

The reduction in exploration expenditure according to the company will impact more on offshore drilling where there is reduced commercial success and also faces the lack of asset transactions while returns from drilling complex, deepwater wells are currently less attractive.

As a result Tullow says it will now focus the majority of its exploration and appraisal expenditure on its operated onshore East Africa portfolio where significant value can be created by adding further resources and appraising existing discoveries to progress development in both Uganda and Kenya.

“Our overall exploration spend will be significantly reduced and will focus primarily on East Africa where we have major basin-opening potential. Tullow remains exploration-led and will continue to add further high quality frontier acreage so that, as conditions allow, we can return to drilling the types of prospects that have given us the development portfolio we have today,” Aidan says.

Tullow Oil has 6 licenses in Kenya (10BA, 10BB, 10A, 12A, 13T and L8) of which the last is offshore where the company holds a 15% equity position with a 5% additional equity option and is likely to be affected by the latest decision by the company.

The company adds that it will also continue focus on the Jubilee production and the non-operated West Africa portfolio where it expects to generate significant value and cash flow in 2015.

“In 2015, we will be focusing our capital spend on producing and development assets, particularly in West Africa where, by 2017, the Group expects to be producing, net to Tullow, over 100,000 bpd of high quality, high margin oil,” adds Aidan.

Tullow says it will continue to seek new low cost and highly prospective exploration acreage in its core areas of Africa and the Atlantic Margins to ensure that the business continues to have an industry-leading exploration position

http://oilnewskenya.com/2014/11/12/...-east-africa-acreage-as-crude-oil-price-drop/


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## smalltimer

*Shell positions for oil revival *

Friday, 14 November 2014 08:24 

Senior Shell officials welcomed the the Minister of Mines and Energy, Hon Isak Katali and other government dignataries to the opening of Shell’s new Windhoek offices on Tuesday this week. The Shell high brass expressed their excitement about working in Namibia’s emerging offshore oil and gas industry.

“Earlier in 2014, Shell Namibia Upstream BV (Shell) acquired a 90% controlling interest in Petroleum Exploration License 39 (PEL 39) located offshore Namibia. The license area covers blocks 2913A and 2914B on the Namibian / South African border and measures some 12,000km ²” said Dennis Zekveld, Shell Namibia’s Country Chairman. 

Flaunting their green credentials, the Shell delegation said the planning of the seismic survey took into account fishing activities and the presence of marine animals and Shell has been constructive in cooperating with the fishing industry on a data gathering exercise.

“Once we receive the seismic data and get an understanding of the geological subsurface, we can interpret this data and make a decision on drilling an exploration well,” said Alastair Milne, Shell’s Vice President for Sub-Saharan Africa. 

Giving an update on offshore Namibia, Milne said that the Shell blocks has large potential for oil and gas prospects.  Shell is in the early stages of exploration in Namibia. Experience teaches that it can take a number of years to determine if there are sufficient reserves to progress to an oil and gas production stage.

“Opening an office in Windhoek provides us with an opportunity to work more closely with the people of Namibia and make a real sustainable impact to the country,’ says Dennis Zekveld who has relocated from the US to Namibia to head up the Shell operation. 

Shell said it aims to contribute to socio-economic development in Namibia. According to the Country Chairman, Shell collaborates with Namibian partners on skills development, road safety, and educational projects.

“Should commercially viable amounts of oil or gas be found offshore, Namibia could significantly benefit in terms of a stable energy supply, economic growth and job creation.” This is Shell’s second attempt at oil exploration in Namibian territorial waters.

http://www.economist.com.na/headlines/6555-shell-positions-for-oil-revival


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## smalltimer

*Well time did tell, and yes, the Shorters Win again.*

All the gains of last month wiped off the board. 

Hope you managed to Sell High and Buy back Low. Its all part of the game.


----------



## Trembling Hand

smalltimer said:


> *Well time did tell, and yes, the Shorters Win again.*




 % of issued capital sold short PCL     0.01%


----------



## smalltimer

Trembling Hand said:


> % of issued capital sold short PCL     0.01%





http://www.asx.com.au/data/shortsell.txt

*Daily *Gross Short Sales reported for 17-Nov-2014, ASX Limited (ASX) & Chi-X Australia (CHI-X)


I'm sorry, I didn't just mean yesterday, It's has taken a few weeks to come back down from the last little run.
There have been a lot of other factors as well, I know, and we will continue to cycle in the future, I'm
counting on it.

PCL  PANCONTINENTAL OIL & GAS NL  FPO Reported Short Today 184,000  /  1,150,994,096     .01%

Take Care and good luck...


----------



## smalltimer

*Local Policies Set Back East Africa Oil And Gas Projects*

By Kevin Mwanza Published: November 18, 2014, 06:26am

East Africa is set to emerge as a global supplier of oil and gas within the next decade due to the recent major oil and gas discoveries in Mozambique, Tanzania, Kenya and Uganda. Uganda and Kenya alone are estimated to hold 4 billion barrels of crude oil while Tanzania and Mozambique claim 200 trillion cubic feet of natural gas. With the promise of unprecedented petro-revenues possible, host governments are working on bold, detailed, and comprehensive local content policies as they eye the next phase: production.

These policies, though intended to boost the economic well-being of the local population and indigenous enterprises, may bear unexpected costs. In an environment characterized by lack of skilled labor and poor infrastructure, the timing of local content policies may negatively impact the project costs, quality of work and schedule.

*Current local content legislation in East Africa*

Mozambique’s current local content legislation requires foreign contractors to contract local companies in procurement of goods and services, but there is no clarity as to what extent and percentage of jobs would be allocated to the citizenry. In Tanzania, local content policies are entrenched in the 2013 Production Sharing Agreement Model (PSAM) but are yet to be adopted into any effective petroleum contract.

Kenya plans to enact an ambitious local content policy in the next energy bill which is now expected to be completed by Q2 2015. With Kenyan current upstream hydrocarbons sector presently governed under the 1986 Petroleum Act (Cap 308), local content programs in the current oil and gas economic environment are limited in their effectiveness by the outdated legislation.

*New efforts to create local content policy*

It seems that East African governments are gradually devolving power to lower levels of governments to allow the control of natural resources to shift to the local population and companies. Central governments and international oil companies (IOCs) alike are facing increasing pressure to adopt and design upstream development and corporate social responsibility projects that are tailored to specific local communities.

In theory, this should ensure that labor, goods and services used in oil and gas operations are sourced locally. In reality, this has not gone smoothly due to the poor infrastructure and absence of the required skilled workforce, forcing IOCs to spend more time training local populations and building infrastructures to handle logistical issues.

In October Last year, Tullow Oil suspended drilling operations across blocks 10BB and 13T  in Northern Kenya citing security concerns for their employees after local population protested asking for more jobs and better benefits. Tullow Oil eventually held meetings with local leaders, reaching an agreement to build a local office to handle the communities’ concerns. With similar incidents having been witnessed in Uganda’s Albertine and Tanzania’s Mtwara regions, these types of events highlight some of the roadblocks oil and gas companies encounter in managing local expectations in frontier regions.

*Content Policy in long-term produces*

Until now, East African countries new to the oil and gas markets have shown themselves as unready for implementation of comprehensive local content policies due to lack of skilled labor, poor infrastructure and inadequate capital. Yet even long-time oil producer Nigeria, producing oil and gas since the late 1950s, waited until 2010 when they enacted more complete local content programs. Now after half a century of oil revenues and productions, Nigeria has finally managed to develop better infrastructure and skilled labor relevant to the industry to give it the ability to withstand most of the challenges that followed generated policies.

While Nigeria is held up as a success story, another long time producer proves that time in the market does not necessarily equate with successful local content policy. Angola, a country with one of the most controversial local content policies in Africa, has been characterized by high operational costs, project development delays and some cases low quality work. The USD 10 billion Angola LNG plant project has experienced a string of setbacks that forced the plant to shut down. Some the problems facing the Angola LNG plant may be connected to local content policy.

Ghana which started producing crude oil in 2010, set up progressive local content policy in its draft bill initially beginning at 10% with target of 90% by 2020 but this is likely to be changed.

Recent oil and gas discoveries could provide an opportunity to stimulate economic advancement and social development in East Africa, if local content policies can address the needs of local communities. Only then can exploration and production (E&P) companies begin production and expect a reasonable return on investment.

_Written by John Sisa, a Sub Saharan Africa expert and consultant on Energy and Mining._

http://afkinsider.com/78877/local-policies-set-back-east-africa-oil-gas-projects/


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## smalltimer

*Oil industry risks trillions of 'stranded assets' on US-China climate deal*

Petrobas' hopes of becoming the world's first trillion dollar company have deflated brutally

By  Ambrose Evans-Pritchard
9:52PM GMT 19 Nov 2014

Brazil's Petrobras is the most indebted company in the world, a perfect barometer of the crisis enveloping the global oil and fossil nexus on multiple fronts at once. 

PwC has refused to sign off on the books of this state-controlled behemoth, now under sweeping police probes for alleged graft, and rapidly crashing from hero to zero in the Brazilian press. The state oil company says funding from the capital markets has dried up, at least until auditors send a "comfort letter". 

The stock price has dropped 87pc from the peak. Hopes of becoming the world's first trillion dollar company have deflated brutally. What it still has is the debt. 

Moody's has cut its credit rating to Baa1. This is still above junk but not by much. Debt has jumped by $25bn in less than a year to $170bn, reaching 5.3 times earnings (EBITDA). Roughly $52bn of this has been raised on the global bond markets over the last five years from the likes of Fidelity, Pimco, and BlackRock. 

Part of the debt is a gamble on ultra-deepwater projects so far out into the Atlantic that helicopters supplying the rigs must be refuelled in flight. The wells drill seven thousand feet through layers of salt, blind to seismic imaging.

The Carbon Tracker Initiative says the break-even price for these fields is likely to be $120 a barrel. It is much the same story - for different reasons - in the Arctic 'High North', off-shore West Africa, and the Alberta tar sands. The major oil companies are committing $1.1 trillion to projects that require prices of at least $95 to make a profit. 

The International Energy Agency (IEA) says fossil fuel companies have spent $7.6 trillion on exploration and production since 2005, yet output from conventional oil fields has nevertheless fallen. No big project has come on stream over the last three years with a break-even cost below $80 a barrel. 

"The oil majors could not even generate free cash flow when oil prices were averaging $100 ," said Mark Lewis from Kepler Cheuvreux. They have picked the low-hanging fruit. New fields are ever less hospitable. Upstream costs have tripled since 2000. 

"They have been able to disguise this by drawing down legacy barrels, but they won't be able to get away with this over the next five years. We think the break-even price for the whole industry is now over $100," he said. 

A study by the US Energy Department found that the world’s leading oil and gas companies were sinking into a debt-trap even before the latest crash in oil prices. They increased net debt by $106bn in the year to March - and sold off a net $73bn of assets - to cover surging production costs. 

The annual shortfall between cash earnings and spending has widened from $18bn to $110bn over the last three years. Yet these companies are still paying normal dividends, raiding the family silver to save face. 

This edifice of leverage - all too like the pre-Lehman subprime bubble - will surely be tested after the 30pc plunge in Brent crude prices to $78 since June. 

Prices could of course spike back up at any moment. Data from the US Commodity Futures Trading Commission show that speculators have taken out big bets on crude oil futures. NYMEX net long contracts have reached 276,000. This is a wager that the OPEC cartel will soon cut output. 

Yet there is little sign so far that the Saudis are ready to do so on a big enough scale to make a difference. JP Morgan expects US crude to slide to $65 over the next two months, a level that could lead to a "cumulative default rate" of 40pc for the low-grade energy bonds that have financed much of the fracking boom, if it drags on for two years. 

Gordon Kwan from Nomura says OPEC (or at least the Saudi-led part) is "engaged in a price war with US shale producers" and will not rest until it has inflicted serious damage. He thinks Saudi Arabia will deflate US crude prices to $70 and hold them there for three to six months, targeting high-cost shale plays in the Bakken and Eagle Ford fields. 

OPEC has a clear motive to do this. The US has slashed its net oil imports by 8.7m barrels a day (b/d) since 2005, equal to the combined exports of Saudi Arabia and Nigeria. Yet this game of chicken could be dangerous. There will be collateral damage along the way. 

*Deutsche Bank says the oil price needed to balance the budget is $162 for Venezuela, $136 for Bahrain, $126 for Nigeria, and over $100 for Russia. Algeria is extremely high, and already sliding into political crisis. Any one of these countries could fly out of control.* 

Nor is it certain that $70 oil prices will in fact stop the US juggernaut. Shale wildcatters have hedged much of their production by selling forward into 2015 and 2016. They can withstand a short hit. Citigroup's Edwin Morse says shale critics are "wildly underestimating" the resilience of key US fields. 

Yet the greater question is whether any of the world's oil projects in high-cost regions make sense as China and the US agree to slash carbon emissions. The accord signed between President Barack Obama and China's Xi Jinping last week - if ratified by the US Congress - has devastating implications. Oil companies have booked vast assets that can never be burned. 

These are the world's G2 superpowers, the two biggest economies and biggest polluters. Their deal marks the end of a bitter stand-off between the rich nations and the emerging economies that has dogged climate talks for years. It isolates the dwindling band of hold-outs, and greatly increases the likelihood of a binding global accord in Paris next year. 

The IEA says that two-thirds of all fossil fuel reserves are rendered null and void if there is a deal to limit CO2 levels to 450 particles per million (ppm), the target level agreed by scientists to stop the planet rising more than two degrees centigrade above pre-industrial levels. 

Chevreux's Mr Lewis said the fossil fuel industry would lose $28 trillion of gross revenues over the next two decades under a two degree climate deal, compared with business as usual. The oil companies would face "stranded assets" of $19 trillion. 

The Obama-Xi deal does not in itself secure the two degree goal but it does commit China to peak CO2 emissions by 2030 for the first time. China will raise the share of renewable energy by 2020 from 15pc to 20pc, a remarkable target that can only be achieved by breakneck expansion of solar power. 

China is already shutting down its coal-fired plants in Beijing. It has imposed a ban on new coal plants in key regions after a wave of anti-smog protests. Deutsche Bank and Sanford Bernstein both expect China's coal use to peak as soon as 2016, a market earthquake given that the country currently consumes half the world's coal supply. 

The US in turn has agreed to cut emissions by 26-28pc below 2005 levels by 2025, doubling the rate of CO2 emission cuts to around 2.6pc each year in the 2020s. 

Whether or not you agree with the hypothesis of man-made global warming, the political reality is that the US, China, and Europe are all coming into broad alignment. Coal faces slow extinction by clean air controls, while oil faces a future of carbon pricing that must curb demand growth far below what was once expected and below what is still priced into the business models of the oil industry. 

This is happening just as solar costs fall far enough to compete toe-to-toe with diesel across much of Asia, and to reach "socket parity" for private homes in much of Europe and America. The technological advantage is moving only in one direction only as scientists learn how to capture ever more of the sun's energy, and how to store the electricity cheaply for release during the night. The cross-over point is already in sight by the mid-2020s. 

Mr Lewis said shareholders of the big oil companies are starting to ask why their boards are ignoring so much political and technological risk, investing their money in projects that are so likely to prove ruinous, and doing so mechanically as if nothing had changed. 

"Alarm bells are ringing. Investors can see that this is unsustainable. They are starting to ask whether it wouldn't be better to return cash to shareholders, and wind down the companies," he said. 

Great fortunes were made in 18th Century in the British canal boom. The network of waterways halved coal prices and drove the first leg of the Industrial Revolution. Yet you had to know when the game was up. 

The canal industry was on borrowed time even before the Liverpool and Manchester Railway first opened in 1830, unleashing the railway mania that entirely changed the character of Britain. 

These historic turning points are hard to call when you are living through them but much of today's the fossil fuel industry has a distinct whiff of the 19th Century canals, a pre-modern relic in a world that his moving on very fast.

http://www.telegraph.co.uk/finance/...stranded-assets-on-US-China-climate-deal.html


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## smalltimer

*Emerging and existing oil and gas opportunities in sub-Saharan Africa*

November 17, 2014 |  Author: U. J. Itsueli 

Look at the last full year 2013. The biggest oil and gas discoveries are all over the place, worldwide. Some in non-surprising areas, with others in new or frontier areas: 

(1) Lontra – Angola – 900m boe
(2) B14/B17 – Malaysia – 850m boe 
(3) Ogo – Nigeria – 775m boe
(4) Nene – Congo Brazzaville – 700m boe
(5) Agutha – Mozambique – 700m boe
(6) Tangawizi – Tanzania – 575m boe
(7) Coronado – Gulf of Mexico – 550m boe 
(8) Salamat – Egypt – 500m boe
(9) Maximino – Gulf of Mexico – 500m boe
(10) Bay du Nord – Canada – 450m boe

Five of the above 10, totalling approximately 3.65b boe, are in sub-Saharan Africa. That is 2013 alone!

African oil and gas has seen very interesting times in the past five to 10 years. Some might even say “exciting times”, especially sub-Saharan Africa. Countries not usually referred to in oil and gas context have suddenly come into oil and gas reckoning. There is so much oil and gas yet to be discovered in sub-Saharan Africa.

Last year, Oil Review Africa, an oil and gas publication, said: “New energy-producing countries such as Uganda, Kenya, Ghana and Niger are set to redraw sub-Saharan Africa’s oil and gas map over the next five years, contributing to a significant increase in output and attracting top global companies.”

Wood MacKenzie said sub-Saharan Africa could be producing an extra 400,000 bpd by 2018, taking the region’s crude output to 7mbpd.

Mozambique and Tanzania are looking for and planning compression plants to liquefy gas. Mozambique’s gas reserves could be as much as 150tscf. Let’s look at Africa’s current production.

Nigeria and Angola are sub-Saharan Africa’s heavyweight producers. Between them, they produce just over 4mbpd. Currently, sub-Saharan crude oil production is just about 6.5mbpd, and natural gas is just about 200mn cubic metres per day. This could rise to 255mn cubic metres/day by 2018 and 360mn cubic metres/d by 2024.

Presently, about two-thirds of sub-Saharan Africa’s gas is exported as liquefied natural gas (LNG) from Nigeria, Angola and Equatorial Guinea. Mozambique may soon join.

Companies such as Tullow Oil, Anadarko, ENI, Global, Fastnet, Ophir, Azonto, Far, Chariot, Africa Oil, WHL, *Pan Continental*, Chevron, Total, Shell, Petrobras, ExxonMobil, Kosmos, Cove, etc have either taken up acreages or are exploring in new oil and gas countries such as Liberia, Sierra Leone, Kenya, Tanzania and South Africa.

The search for new oil and gas is on, big time! The Western Africa region – Morocco, through Mauritania, Ivory Coast, Nigeria, Gabon to Angola and Namibia – is arguably the hottest oil play in the world today. If you add the inland basins of Chad, Niger, South Sudan, the Rift Valley and additionally venture round the Cape of Good Hope and add the East African play, then definitely and unarguably, the sub-Saharan African play is the hottest.

In all this, the Nigerian play is the diamond in the crown. So, I shall concentrate on Western Africa and specifically on Nigeria.

Nigeria has been producing and exporting oil since 1956. Just under 60 years now. Play in this specific area has matured, with Nigerian-owned independent producers ever more active. Dubri Oil Company was the first Nigerian and African independent crude oil and gas producer. Dubri started production of oil and gas in 1987 – 27 years ago.

Currently, Nigerian independent companies are active both inside and outside Nigeria – Ghana, Uganda, Equatorial Guinea and Angola.

With reserves of over 37bbls of crude oil and 260Tscf of gas, Nigeria will remain a significant player in oil and gas on the world scene for a few years to come. Thus, I see the Nigerian independents playing an increasing role both within and outside Nigeria. Currently, they are estimated to be holding about 10bbls out of Nigeria’s 37bbls of crude oil reserves, and 45Tcf of gas, according to the DPR.

Within the past 24 months, Oando, quoted on both Toronto and Lagos Exchanges, bought the Nigerian interests of ConocoPhillips. Seplat, quoted on both London and Lagos Exchanges, bought some of Shell’s interests in Nigeria. A few others are quoted in London, Johannesburg, Lagos and Toronto Stock Exchanges.

However, I see the paradigm changing. The paradigm is changing on more than one front at the same time. This conference, the essence of which is to take another look at existing and emerging oil and gas opportunities in sub-Saharan Africa, in light of today’s realities, could not have come at a more opportune time. I congratulate the organisers. Here are why the paradigm is changing:

•      Africa is home to 54 countries, and 6 of the 10 fastest growing economies on the planet. Consumer spending in Africa will climb to $1trn by 2020. There is tremendous demand for US goods and services in sub-Saharan Africa.

•      More than half of consumer expenditure in sub-Saharan Africa comes from Nigeria and South Africa. This year Porsche, the German Car maker, stated that their Lagos operations met their annual targets in the first three months of the year. Rolls Royce has just opened a new franchise in Lagos. New real estate development in Nigeria is astronomical.

•      UNICEF predicts that by 2050, there may be 1 billion Africans under the age of 18; and that by 2100, one in four people on the planet will be African.

•      The African youth bulge, especially in sub-Saharan Africa, can be a tremendous purchasing machine.

•      This, in an atmosphere of high GDP growth rates and an emerging middle income group, is the real emerging opportunity in sub-Saharan Africa.

•      How to tap into this is what the US and the rest of the world should be looking at.

•      No country exemplifies the challenges and ambiguities of demographic and economic growth like Nigeria.

•      The Carlyle Group CEO, David Rubenstein, says the private equity industry in Africa will “take off”; that opportunities there are far greater than people thought a few years ago. Africa-focused PE firms raised $3.3bn in 2013, a 130 percent increase from 2007. Dangote and the Blackstone Group have committed to invest $5bn over the next five years in power projects in sub-Saharan Africa.

•      The US, long Nigeria’s largest export market for our crude oil, has been extremely successful in producing additional oil and gas, mainly from recent Shale oil and gas activity. Nigeria was a top-5 oil supplier to the US. However, as reported by the US Department of Energy, the US has not imported a single barrel of oil from Nigeria since July 2014. This was the first such occurrence since records started being kept in 1973. This trend is likely to continue. To put the situation in perspective, at its peak in 2006, the US was importing 1.3m bpd from Nigeria.  Most of this oil is now being exported to Asian countries.

•      Nigeria is now Africa’s largest and most diverse economy, even if not the most sophisticated; and 26th in the world.  Nigeria’s economy overtook South Africa’s earlier this year, following a rebasing and updating of the parameters.

•      Only 15 percent of the GDP is from Resources, with Oil and Gas contributing 14 percent; Retail and Services contributing 51 percent; Agriculture 22 percent; Telecoms 8.7 percent; Manufacturing 6.7 percent; Entertainment & Films 1.2 percent. Current growth rate is 6.3 percent for 2014 and 6.5 percent is estimated for 2015.

•      Nigeria’s new economic figures have shown that Nigeria’s economy is much more diversified than previously thought.  Given the country’s population of 170m people, of which about 70 percent are young people, Nigeria has a large labour force, the 11th in the world, and a large market for consumer goods and services.

•      Nigeria accounts for 2.35 percent of the world’s population. This means that one in every 43 persons on the planet resides in Nigeria. That’s a large demographic market for labour, goods and services. This translates to a frontier market for Foreign Direct Investment.

•      It’s not just a large population, but the character of the population is changing. The Nigerian middle class jumped six-fold in 14 years, riding on growth rates that have exceeded 7 percent annually over the past 10 years, driven by steady growth in the non-oil sector.

•      The Nigerian middle class (daily consumption between $2.0 and $20 in 2005 PPP) is estimated at about 23 million people. McKinsey Global recently reported that there are almost 40m Nigerians in the consuming class household – households with incomes more than $7,500.00. Further, the rebased GDP has shown opportunities in other areas, such as Manufacturing, Telecommunications & IT, Construction, Wholesale & Retail and Agriculture.

•      However, a few warning clouds: The commodities cycle is drawing to a close! Demand from China is waning, as the character of her economy changes. This will impact commodities pricing.

The US Federal Reserve’s review of its assets buying programme will affect emerging economies like Nigeria. Thus the prospect of a rise in US interest rate, in the near future, is high. Crude oil prices are plunging.

All these mean that frontier and emerging markets, such as Nigeria, must contend with a paradigm shift regarding their commodities and exports. It’s time Nigeria rethinks its economic and growth strategies.

When we think oil and gas, we must move away from the conventional production of Crude oil and gas only. When we think oil and gas, we now need to move into value-added aspects of oil and gas – refining, LPG, CNG, LNG, urea/ammonia, petrochemicals, plastics, etc, plus services, maintenance and fabrication facilities in oil and gas. Turn Nigeria to the petroleum hub of Western Africa. That must be the 2015-2025 vision for Nigeria and West Africa’s oil and gas. Nigeria’s economy is more than 60 percent of West Africa’s. There are ample investment opportunities to create a Western African investment hub in Nigeria. That is gradually happening, board the train now!

Let me end by quoting Thomas Donohue, the president and CEO of the US Chamber of Commerce: “The United States is wisely pursuing trade and investment opportunities round the world…given that 95 percent of the world’s customers and 80 percent of its purchasing power lie beyond US shores…. Our strategy would be even smarter if Africa was a bigger part of the mix.”

Donohue is a wise man. I believe China and India have both seen these opportunities and are aggressively pursuing trade and investment in sub-Saharan Africa. The US must not lose its previous advantage here – the train is about to leave the station; please get on it!

U. J. Itsueli

http://businessdayonline.com/2014/1...rtunities-in-sub-saharan-africa/#.VG-1aeYcS00


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## smalltimer

*Chairman’s Address to Annual General Meeting*

Ladies and Gentlemen, welcome to Pancontinental's Annual General Meeting for 2014. Against the backdrop of a rather subdued market for junior oil and gas companies over the last 12 months, Pancontinental continues to pursue its strategic objective of discovery of large volumes of conventional oil and gas in favourable fiscal and geological settings. 

We predict a resurgence of interest in conventional opportunities, as lower oil prices force a movement away from unconventional resources, particularly in the USA.

Pancontinental has had a very successful year on several fronts, including a major farmout of its Namibian offshore project in late 2013, and a historic oil discovery in Sunbird - 1, off the Kenyan coast, early in 2014. The Sunbird oil discovery this year follows the Mbawa - 1 gas discovery, also drilled by Pancontinental and its partners, in a different joint venture, in 2012.

The Company's cash position was strong at year - end and continues to be healthy, with reserves of some $ 8.5 million.

Your Company holds key positions in two of the globe's most exciting oil and gas provinces -- offshore Kenya and offshore Namibia. I have some brief comments, following which Barry Rushworth will provide more detail concerning our prospects. Pancontinental has a long - standing thesis that the Lamu basin, offshore Kenya, is an oil bearing province. This has proven to be correct, with the first-ever offshore Kenya oil discovery in the Sunbird - 1 well, drilled early in 2014. Sunbird is truly a "play opener" for offshore Kenya and for all of East Africa, as it is the first offshore oil column discovered over some 6,000 kilometres along the East African coast.

The Sunbird discovery has reversed a previous industry misconception, arising from the recent huge gas discoveries offshore Mozambique and Tanzania, that East Africa has potential only for gas. As a result of Sunbird, many major exploration groups are considering offshore Kenya in a new light.

With detailed knowledge of the newly proven oil system, the L-10A and L-10B joint ventures, led by the operator BG group, will focus future drilling on prospects that are large enough to host commercial oil reserves. In these permits, we have defined numerous prospects in varying geological settings, and these continue to be studied and rated by the operator. No formal recommendation has yet been put to the joint ventures for additional drilling, however we expect the operator to propose drilling one or two wells on large, oil-based prospects early in 2015, with a view to drilling possibly late 2015.

Sunbird has strongly increased the attractiveness to other companies of Pancontinental's three offshore Kenya project areas, and we are seeking to farm out for further drilling on these properties. This includes the offshore portion of L-6, although the onshore portion ASX ANNOUNCEMENT 28 November 2014 2 has already been farmed out for seismic and drilling during the past year. We expect a well to be drilled onshore L-6 in 2015, and your Company will be free - carried through the well, this, alone, is a very exciting opportunity, and we look forward to a positive outcome.

Pancontinental's previous L-8 licence, which includes the Mbawa gas discovery, expired in 2013. The Company is making representations to the Kenyan Government for a new licence over the L-8 area, and will report further on this matter in due course. 

The Namibian EL 0037 area is an extremely exciting project, with early indications of very large and oil - prone drilling opportunities. Considerable international attention continues to be focused on Namibia, as the Namibian coast forms part of the tectonic "conjugate margin" with offshore Brazil, so the company is doubly enthusiastic about
these targets.

Under farmin by Tullow Oil, signed in 2013, Pancontinental has been free - carried through the acquisition and processing phases of extensive 3D and 2D seismic programs, and we are now firming up a number of drillable prospects. The total cost of these surveys is about 30 million dollars, of which Pancontinental's share was entirely paid by Tullow. Tullow must now free - carry Pancontinental's 30% interest through one future exploration well at an estimated cost of some 100 million dollars. The Tullow farmin has no "caps", meaning that the company will not have any overhanging financial exposure for work under the farmout. We believe this is an exceptional outcome for your company.

The EL 0037 prospects, presently being detailed, are comparable in size and geological character to some of the largest oil discoveries ever made off the coast of Brazil. We expect mapping of the seismic to be completed later this calendar year, and will be reporting more extensively when we have the full results.

I wish to thank our small and dedicated staff, who continue to produce results well in excess of expectations for an organisation of this size. I must remind you that companies of Pancontinental's activity level usually have a far larger staff, and consequently much greater overheads. Many such companies in no way achieve the positive outcomes that Pancontinental achieves.

Pancontinental continues to be regarded as one of the most notable junior explorers on the African scene. We look forward to building on this for the benefit of all shareholders in the forthcoming year.

H.D. (David) Kennedy, Chairman

http://clients2.weblink.com.au/clients/pancon/article.asp?asx=PCL&view=6702030

Other Reports from the General Meeting may be found at ;
http://pancon.com.au/investor-centre/asx-releases/


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## smalltimer

*PCL now sitting around 6 year lows*

Where to from here ????

Money to be made, or more to lose ?





*There's more to oil prices than just supply and demand*

http://www.theage.com.au/business/m...n-just-supply-and-demand-20141211-1252iz.html

December 11, 2014 
Chris Tomlinson

Many factors feed into the oil rout, which triggered another sell-off on the New York Stock Exchange and other bourses this week. 

Federal Reserve policy, the US dollar exchange rate and market speculators. These are just a few of the factors that help determine the price of oil.

Supply, demand and geopolitics factors help explain why the West Texas Intermediate benchmark price has dropped nearly 40 per cent since June. A boost in North American production, weakening economies in Europe and Asia and Saudi Arabia's desire to pressure rivals all contributed to the fall in global prices.

*But they don't tell the whole story.* 

Oil is also a commodity, traded on international markets and used as a hedge against other investments. When trying to predict where oil will go next in the absence of OPEC action and changes in the global economy, these factors will have a profound effect.

The first thing to know is that oil is priced in US dollars. That linkage means when the US dollar goes up against the euro, the yen or another major currency, the price of oil goes down.

This past [Northern hemisphere] summer, investors learned that the Asian and European economies were slowing while the US economy was growing. They quickly bought dollars to invest in the US economy and between August and mid-November alone, the value of the dollar compared to a basket of other major currencies went up 8.1 per cent as the price of oil dropped.

*Bets both ways*

That's probably the simplest part of the story. Oil is also a commodity that sells on a futures exchange, making it an asset like gold, stocks, bonds or real estate. Oil producers offer contracts to sell oil in the future to guarantee they will get a minimum cash flow in case prices go down. Traders buy futures contracts because they think the price will be higher when the contract comes due.

Commodities dealers absorb risk in the market from producers who need to maintain cash flow. For example, traders who paid $US102 a barrel in June for December oil contracts are now selling it for $US65 and taking part of the hit that oil producers would have suffered if they hadn't sold futures contracts.

Several readers have written me to complain that speculators drove up oil prices, but it's not clear to me that traders intentionally tried to manipulate what is a huge market.

"People make bets in the market both ways. A lot of folks took the views that prices would continue to appreciate, and a lot of folks are taking the view now that prices will fall," said Michelle Foss, chief energy economist at the University of Texas' Center for Energy Economics. She said her team has looked for intentional manipulation of the oil market in recent years and hasn't found any evidence of it, but she added that low rates of return on stocks, bonds and other asset classes have brought inexperienced investors into commodities, and oil in particular, adding volatility.

"There are many, many, many more people that participate in the commodity markets now than there has ever been before," Foss said. "People move in herds, and once everybody in the corral is convinced the direction out the gate is one way or another, they go tearing off in that direction."

This is how the Federal Reserve's decisions are felt in the oil patch. By keeping interest rates low, the Fed sent investors searching for yield in the commodities market, often with borrowed money, and that created trouble.

*'Something's got to give'*

"There has been so much cheap money for people to throw at things for years now," Foss lamented. "Oil has been this weird thing that has remained highly valued, while the prices of metals, non-metal goods, agricultural goods and other commodities have given up 30 per cent to 40 per cent of their value from the 2008 peak. There was no way oil was going to hang out at those price levels. Something's got to give, and that's partly what's going on."

Which is how, in part, WTI dropped from $US109 in June to $US63.82 on Tuesday and $US60.94 on Wednesday. And there is no reason to believe prices are recovering anytime soon.

The Federal Reserve is tightening the money supply by no longer buying bonds and is expected to signal an interest rate hike will come next year. Central banks in Europe and Asia, meanwhile, are trying to kick-start those wavering economies, and that means investors will keep buying dollars and therefore keep oil prices low.

When it comes to the commodities market, the Chicago Board Options Exchange's Oil Volatility Index was 14.67 when the WTI price spiked in June and is now 39.68. The US Energy Information Administration's short-term outlook on Tuesday said "uncertainty relating to future oil supply remains pronounced."

That takes us back to the fundamentals of supply, demand and geopolitics. OPEC has said it will not cut supply, and no one knows how quickly other producers will take oil off the market to balance with demand. Global economic forecasts remain modest, which means demand is unlikely to go up. That leaves the geopolitical wild card, and there are no predictable disruptions to oil supply on the horizon.

No matter how you slice the data, low oil prices are with us for a while. 

The New York Times


http://www.theage.com.au/business/m...n-just-supply-and-demand-20141211-1252iz.html


*Small cap stocks lure performance chasers*

http://www.cnbc.com/id/102257245

Dominic Chu	| @TheDomino 
Wednesday, 10 Dec 2014 | 2:05 PM ET

As 2014's trading days dwindle, some traders are turning toward small cap stocks in hopes of boosting their portfolio returns.

During Tuesday's sharp decline in U.S. equities and subsequent rebound, one notable outperformer was the Russell 2000 Index of small cap companies. While the Dow Industrials managed to recover 150 points from session lows and close lower by around a third of a percent, the Russell 2000 actually rose by 1.8 percent on the day. It was the best day for small caps since late October.

Of the 2,000 stocks in the index, 50 posted one-day gains of 10 percent or more, and one industry group in particular made up the bulk of the upside standouts—energy. 

Energy stocks have been hit hard in 2014 due in large part to a decline in crude oil prices. As a result, the S&P 500 energy sector has lost 14 percent this year. That move lower has been filled with abnormally large swings in the stocks that are in that sector, and even more so with smaller capitalization companies that don't trade with as much ease and liquidity as larger names. The overall trend in the medium term has been to the downside for energy-related names, and that trend could continue.

"There's a long history of energy prices overshooting or undershooting any analyst's view of what fair value is, so we may continue to see some downward pressure for a while in the oil markets," said Atlantic Trust Chief Investment Officer David Donabedian. "I think the drop in oil prices is not yet a broad buying opportunity for energy stocks."

Despite the turmoil in energy markets, some Wall Street experts are telling their clients to avoid being fixated on falling oil prices. "We do believe that this is going to be temporary," said Mizuho Securities USA Chief Investment Strategist Carmine Grigoli. "You will have positive effects on the consumer, and production cutbacks are not expected to be enormous or significant that it will alter the economy."

Meanwhile, biotechnology, pharmaceutical and health-care companies overall have traded with more volatility than the overall market, but the trend has been higher prices. Health care is the best performing sector in the S&P 500 this year, with a gain of 26 percent. The Nasdaq Biotechnology Index has gained an even more impressive 37 percent in 2014. Biotechnology stocks are already viewed by many investors as volatile, and small cap stocks in the industry also trade with even more volatility. 

Trading in small cap stocks has been a roller coaster ride, and after all that volatility, the Russell 2000 Index is still just positive by 1 percent for the year. Still, some market technicians, who study historical price patterns, say that small cap stocks are at an inflection point. Greywolf Execution Chief Technical Analyst Mark Newton thinks that if the Russell 2000 can manage to trade above its recent highs, it could lead to a period of outperformance that would accelerate. 

"If the market were to stabilize today and [small caps] rally back up towards and over these highs, it would most likely drive the overall market higher into year-end, as everything would follow small caps," Newton said.

The recent action in small cap energy and biotechnology stocks presents an opportunity for some traders to attempt to use volatility to capture shorter term profits in the final three weeks of 2014. For many investors, the price action may be too much to stomach.

It's also important to note that even if there are elevated levels of volatility, the ability to garner outsized profits in trading small cap stocks is limited. Many of these stocks trade far less frequently than their larger cap cousins. There's a big difference between a stock that trades 200,000 shares a day, as opposed to one that trades 20 million shares daily. 

The bottom line when it comes to small cap energy and biotechnology stocks is that it's traders who are conducting much of the traffic in those markets. Investors may want to spend a good amount of time evaluating their risk tolerance before subjecting themselves to the possibility of outsized losses. Many of the big gainers yesterday are some of the big losers in today's trade.


—CNBC's Gina Francolla contributed to this report. 

http://www.cnbc.com/id/102257245


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## smalltimer

*Eco (Atlantic) Oil & Gas to acquire Pan African Oil in Namibia *

Friday, 26 December 2014 10:16  

Canada-based oil and gas exploration company Eco (Atlantic) Oil and Gas has decided to acquire Pan African Oil in order to solidify its position as an explorer offshore Namibia 

offshorenamibia-cclark395-flickrEco (Atlantic) Oil and Gas is exploring assets offshore Ghana and Namibia. (Image source: CClark395/Flickr) 

According to officials at Eco (Atlantic) Oil and Gas, the agreement would be deemed an “all-share” deal, which would save costs and strengthen its position as a dominant license holder offshore Namibia.

Pan African Oil, an Africa-focused oil and gas explorer, operates two licenses in offshore Namibia, which covers around 13,000 sq km. The company has already completed the first term work commitments for both licenses, and has found a potentially new prospective geological fairway.

The Canadian explorer Eco (Atlantic) Oil and Gas owns and operates four licenses in Namibia, three of which have more than 21.5bn barrels of prospective resources, covering over 28,500 sq km in the Walvis Basin.

However, for the acquisition to be deemed complete, Pan African Oil is yet to grant two-thirds shareholder approval to Eco (Atlantic) Oil and Gas along with a regulatory clearance, added officials from both companies.

The Canadian company decided to explore waters offshore Namibia, which is considered a politically low-risk country. In July 2014, Ghana granted the Eco (Atlantic) Oil and Gas parliamentary ratification to acquire a 50.51 per cent working interest in Deepwater Cape Three Points West Block that lies 15 km south of Tullow Oil’s Jubilee Field.

http://www.oilreviewafrica.com/expl...n-oil-to-enhance-exploration-offshore-namibia


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## smalltimer

*Kenya Govt, firms to face off over new tax on sale of oil blocks *

Tax experts are already raising the red flag over the disparity in the enforcement of the capital gains tax, saying it would choke the growth of Kenya’s nascent petroleum and mining industry. 

By JAMES ANYANZWA
Posted  Saturday, January 3  2015 at  11:06

Companies seeking to raise new capital through the sale of their mining and oil blocks in Kenya will have to contend with new taxation measures that require up to 37.5 per cent of the mark-up to be remitted to the exchequer.

Guidelines for the just reintroduced capital gains tax (CGT) show that the net gain on disposal of interest in immovable property in the mining and petroleum industry will be taxed at 37.5 per cent for foreigners with permanent establishments and 30 per cent for residents.

The assessment, which is almost eight times that for net gains in property ”” land, buildings and investment shares at five per cent ”” is expected to kick off a fresh dispute between the government and prospectors even before the dust on the dispute on royalties settles.

“I do not see why investors in oil and gas should be taxed differently from other people. I think that is a little unfair. Petroleum and mining is still a nascent industry, which we require to succeed. But if you keep taxing these people, there are a lot of other places in the world they can go to get mining licences,” said Nikhil Hira, head of tax practice at Deloitte & Touche, East Africa.

However, National Treasury Cabinet Secretary Henry Rotich last week said the tax rates in the mining and petroleum sector could only be reviewed in the next budget. 

“That is how it is in the law but we are still discussing with the industry, both the mining and petroleum, to see if there are any changes that can be addressed in the next Finance Bill. What we agree will be put in the next Finance Bill (2015/2016),” Mr Rotich told The East African.

Immovable property refers to a mining right, an interest in a petroleum agreement, mining information or petroleum information.The taxable gain, according to the Kenya Revenue Authority is the net gain arising from the disposal of an interest if the interest derives its value from immovable property in Kenya.

“We have to be careful because oil companies take a lot of risk in their exploration activities. While undertaking their drilling work, there is no guarantee they will get anything. Now what is happening is every additional shilling taxed reduces the funds available for them to carry out their exploration,” said Mr Hira.

According to Mr Hira, foreign companies that have registered branches in Kenya will dispose of their interests such as mining licences not necessarily to make a gain but to meet certain statutory requirements and /or to bring on board strategic partners to shore up their capital reserves.

“There is no gain they make in disposal of their interests. They are disposing of them to meet certain government requirements and to bring on board some partners to provide the necessary financial support required in exploration and drilling activities,” he said.

The tax on the net gains from the transfer of land, buildings and marketable securities came into effect on January 1, despite widespread concerns over its impact on stock and bond transactions and the blossoming property market in Kenya.

The government is looking to raise an estimated Ksh7 billion ($76 million) through the new tax measure before the end of the current (2014/2015) fiscal year.

Tax experts at the consultancy firm KPMG say reintroduction of the CGT will broaden Kenya’s tax base, increase revenue collection and align the country with its regional counterparts which all impose a similar tax.

http://www.theeastafrican.co.ke/new...-sector/-/2558/2577158/-/xt7md9z/-/index.html


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## smalltimer

*Look out for in Kenya’s oil and gas sector in 2015*

2015 continues to look promising for the oil and gas sector in Kenya with various planned projects expected to continue while new companies will begin work in the various acreages.

In our radar this January is the planned Badada-1 well in Block 9 located in the Anza basin which is expected to spud with the drilling contracts already awarded to Greatwall which will operate the GW-190 land rig while Aberdeen-based Norwell Engineering will manage the drilling operations.

Also expected this month (January 15th) is an update by joint partners Tullow Oil and Africa Oil in Blocks 10BB and 13T. In focus will be the results from the drilling of Engomo-1 wildcat well location the first test of the North Turkana Basin and results from the Ngamia-5 appraisal well which will help assess reservoir connectivity in the Ngamia field which has been the largest oil discovery to date in the South Lokichar Basin.

Also expected in the updates are the results on the Extended Well Testing in Amosing oil field where production and injection interference testing, involving the Amosing-1 and 2A wells, was to be carried out to help provide dynamic flow characterization of the Amosing stacked reservoirs.

On the seismic front various companies are expected to acquire data in various blocks with CAMAC Energy expected to acquire 2D seismic in blocks Block L1B onshore Kenya, and Block L16 partly onshore and partly offshore Kenya having already awarded contracts to BGP Kenya Limited and Polaris Seismic International Limited respectively.

Results are also expected in Q1 on the 3D seismic survey carried out in the Ekowasan area in Block 10BB in the South Lokichar Basin with acquisition expected to have been complete in December last year. Once the data is interpreted follow up drilling will target better developed reservoir expected between Amosing-1 and Ekosowan-1, further away from the faulting at the basin margin.

In January Australian explorer Far Ltd is also expected to announce an update on farm-outnegotiations in Block L6 with the announcement having been expected in Q4 2015.

Simba Energy has also announced it expects to sign a contract and commence the initial 2D seismic program of up to 400Km in Block 2A in the Q1 of 2015 designed to target drilling locations on prospects and leads in two basins, and also yield volumetric that will support revised resource estimates

http://abdas.org/?sn=look-out-for-in-kenya’s-oil-and-gas-sector-in-2015


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## smalltimer

*Tullow Oil Announces Further Cuts In Exploration Expenditure*

_Posted on 15 January 2015._ 

Tullow Oil has cut further down its exploration expenditure for 2015. This is the second time Tullo is announcing cuts, and the Company announced that this move has been necessitated to enable the explorer “ strengthen the business to adapt to current market conditions.”

Late last year the company materially reduced its 2015 exploration capital expenditure and today announce a further cut to this expenditure to $200 million. “We continue to carry out a review of the business to streamline processes and improve efficiencies which will result in significant long-term cost savings says CEO Aidan Haevey.

Tullow Oils says it has now re-allocated future capital to focus on delivering high-margin oil production in West Africa which will grow significantly to around 100,000 bopd net to Tullow by the end of 2016 and will generate stable, long-term cash flows for the business. The reduced exploration programme will predominately focus on a number of high-impact, low-cost exploration opportunities in East Africa.

“While this is a challenging time for our sector, Tullow is fortunate to benefit from world-class, low-cost and high-margin assets, strong and growing cash flows and a broad, diversified funding position.” Aidan adds.

Meanwhile, the company says the South Lokichar Exploration and Appraisal programme continues with drilling recently completed at the Ngamia-5 and Ngamia-6 wells. In addition, the Amosing wells are being prepared for the first Extended Well Test in Kenya. The frontier exploration programme continues outside of the South Lokichar basin with the result of the Epir-1 well expected later this month. The Engomo-1 well, testing the Turkana West Basin, has commenced drilling, while the Lekep-1 well, testing the Kerio Valley Basin, is expected to be drilled in the second half of 2015 along with multiple appraisal wells in South Lokichar as work progresses on the East Africa development plan

http://oilinkenya.co.ke/tullow-oil-announces-further-cuts-in-exploration-expenditure/


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## smalltimer

*Deloitte Report Into Kenya Oil Industry Calls For Policy Review*

Posted on 19 January 2015. 

Deloitte Report Into Kenya Oil Industry Calls For Policy Review	
Kenya needs to relook its current tax policy stance regarding the upstream oil industry in order to attract foreign investors, a new report by Deloitte East Africa has counseled.

The report titled ‘Kenya’s Petroleum Fiscal Regime Expansive Coverage’, notes that some aspects of the policy, which is generally favourable to FDI, needs to be re-examined to sustain the momentum that is already building in the industry.

Given that Kenya is competing for a limited pool of FDI with neighboring economies including Uganda and Tanzania, the fiscal regime needs to strike a balance between incentives to encourage foreign investments, while ensuring a return for its development agenda.

“An overly generous fiscal regime weakens government returns and can sow seeds of an adverse political backlash for the country yet again a very tough one can stifle the incentives for oil companies to invest in the sector hence reduced FDI,” says Denis Kakembo, the Senior Tax Manager at Deloitte East Africa, and one of the researchers and report authors.

The report singles out farm down transactions, through which oil firms that have struck oil sell a stake in their discovery rights to other firms to split the cost of investing into actual production, as one of the aspects that could be improved to attract foreign investors.

“Not all farm down transactions generate windfall profits. In fact, such farm down transactions present a real opportunity for big oil companies to acquire working interest in the country’s petroleum sector that is originally dominated by smaller oil companies,” the report states in part.

Mr Kakembo adds that these transactions are critical to the industry since smaller oil companies de-risk the geological circumstances of the country in which they discover oil, thus enabling international oil companies to convince their shareholders to invest.

The new report comes against a backdrop of a string of oil discoveries in Kenya by different oil exploration firms. It is expected that commercial production of oil could begin in 2017.

The Deloitte report counsels the government against taking ‘an exceedingly short term view of maximizing revenue collection’ from natural resource projects such as oil finds. It argues that enforcing high and unsuitable taxes may affect investment to the nascent sector.

The report commends Kenya’s petroleum fiscal regime for managing to ‘tread the intricate and complex path of converging government objectives with the international oil companies’.

By Oil In Kenya

http://oilinkenya.co.ke/deloitte-report-into-kenya-oil-industry-calls-for-policy-review/


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## smalltimer

*Falling global oil prices begin to take toll on search work in Kenya*

By IMMACULATE KARAMBU
Wednesday, January 21, 2015 

Swala Energy, an Australian firm prospecting for oil and gas in western Kenya, could exit without drilling a single well in the block as the impact of falling global crude prices takes a toll on its operations.

The firm said it had appointed UK’s FirstEnergy as a financial adviser in preparation for a merger or complete sale of the company.

This comes as falling global crude prices continue to impact negatively on the upstream oil and gas sector, with some exploration firms having already announced plans to reduce their budgets.

“Accordingly, Swala board of directors has appointed FirstEnergy to manage a process with the view of reviewing the company’s options to maximise the long-term value of the company’s potential including a potential merger or sale of the company,” reads a statement sent to the Australian Securities Exchange.

*CUTTING GLOBAL BUDGET*

The announcement comes barely a week after Tullow Oil Plc, which has made discoveries in northern Kenya, said it was cutting its global exploration budget by a third “to adapt to current market conditions.”

Swala Energy is licensed to explore block 12B where it holds an equal stake with Tullow Oil. It also has operations in Tanzania and Zambia.

In October, the firm announced that it would drill the first well in the block during the second half of this year, following successful acquisition of data, which revealed 10 leads indicating a possible presence of oil or gas. The new development could further delay exploration activities in western Kenya.

The World Bank had in the Global Economic Prospects report released earlier this month warned that declining crude oil prices could discourage investment in exploration and development, specifically for new undertakings.

The Australian company is also considering a similar action ”” a farm-down on its assets in the three countries it operates. 

Swala recently shelved a plan to raise Sh378 million that was partly meant to finance its exploration programme in the country due to what it termed as an unfavourable market brought about by the decline in prices of crude oil currently below $50 a barrel.

Block 12B lies within the Nyanza Rift Basin, which is part of the East African Rift System where other discoveries of oil and gas have been made, making it a prime target for acquisition.

“The completion of our seismic survey programmes and the clear indication from them of a large number of significant leads and prospects within our licences make this an opportune time to review the company’s options to maximise value from its portfolio ahead of the planned 2015 drilling campaign,” Chief Executive David Mestres Ridge said.

http://www.nation.co.ke/business/Sw...ces-Kenya/-/996/2597594/-/iwnllq/-/index.html


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## smalltimer

*Pancontinental Oil & Gas Annual Report 2014 *
23 January, 2015

http://pancon.com.au/wp-content/uploads/2015/01/pdf-01567608.pdf


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## smalltimer

*Kenya - Capital Gains Tax could discourage large international oil and gas companies *
Sunday, January 25, 2015

A consultancy firm has warned that capital gains tax could discourage large international oil and gas companies from the local industry even as Kenya prepares for commercial production.

A study of Kenya’s petroleum regulatory environment carried out by Deloitte singled out administration of capital gains tax on farm down transactions as having the potential to slow down exploration.

Farm down refers to the practice by oil and gas companies to sell all or part of their exploration interests to other firms.

Deloitte urges the government to develop guidelines on administration of the tax that ensure it is only applied to the portion of the gains from such transactions that are not meant to be re-invested in exploration and production activities.

FISCAL REGIME DRAWBACK

“The only drawback with the fiscal regime, which has the potential to derail the momentum building, is the unclear tax policy position on farm down transactions. Not all farm down transactions generate windfall profits. They represent a real opportunity for big oil companies to acquire working interest in the country’s petroleum sector originally dominated by smaller oil companies,” reads the report.

International oil and gas exploration companies enter into farm down agreements for various reasons, including fund-raising for future undertakings, and to make profits out of exploration.

The most common such transactions are those involving small-sized exploration firms, which are the original exploration licence holders, selling their interest to large companies, mostly after acquisition of data, which indicates high potential of oil and gas deposits in the specific areas.

Capital gains tax was suspended in 1978 to accelerate growth of the capital markets and real estate sectors, but was re-introduced last year as a move to increase revenue collection by the government.

The tax, which became effective on the January 1, will be applied at the rate of 30 per cent on gains involving sale of rights by resident companies in the extractive sector and 37.5 per cent in similar transactions involving non-resident firms.

Since its re-introduction, the tax has been met with varied reactions, with some analysts and investors expressing fears that it will discourage investment in the local sectors.

Last year, Africa Oil Corporation of Canada ”” Tullow Oil’s exploration partner ”” announced that it would team up with the Kenya Oil and Gas Association (Koga) an industry lobby, to push for an amendment to reduce the tax.

“Africa Oil, alongside the industry representative body is working closely with all levels of the Kenyan Government to discuss the potential negative impact such a tax policy will have on the development of the still early-stage oil exploration industry. 

“This will include potential barriers to entry for new investors, erosion of present investor confidence and potential delays to exploration and development activity,” chief executive Keith Hill said in response to the Finance Act 2014.

On Thursday last week, Mr Hill said the company was in talks with the government to resolve the remaining tax and fiscal issues this year. Kenya has discovered oil at Lokichar basin estimated at over 600 million barrels, which is above the minimum threshold for commercial exploitation.

http://www.nation.co.ke/business/Ca...te-Report/-/996/2602114/-/og2wmm/-/index.html


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## smalltimer

Thursday, January 29, 2015 - 10:00 -- BY JAMES WAITHAKA 

Australian exploration firm Pancontinental Oil and Gas NL’s sale of a portion of its interest in Block L6 onshore on the Kenyan coast to a third party has shielded it from ongoing exploration expenditure. 

In its 2014 annual report, the firm says it farmed out over half of its previous holding in the block, 24 per cent stake, to Milio International and retains 16 per cent interest from 40 per cent previously. Milio is now the operator of Block L6 onshore with 60 per cent interest. 

Pancontinental’s report discloses that its joint venture partner, FAR Ltd, ceded 36 per cent and now retains 24 per cent. Milio’s initial investments included carrying out a 2D seismic survey of not less than 1,000 square kilometres in late 2014, in which it would free-carry the other two partners. 

It would also incur costs in drilling and testing a well, besides financing processing and interpretation of survey results. In March 2014, the company made the historic discovery of the first ever oil deposits in offshore Kenya on Sunbird-1 well. - 

http://www.the-star.co.ke/news/oil-firm-saves-exploration-costs-after-stake-sale


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## smalltimer

*Exploration stalls in Africa as oil price declines*

by Paul Burkhardt


AFRICA’s oil and gas boom is in jeopardy. The dash for resources that saw explorers invest billions of dollars to tap promising oil fields from Ghana on the west coast to Tanzania on the east, is stalling as the global drop in crude prices pushes drillers to reconsider the high costs of exploration on the continent.

For many drillers, 2014 was already failing to reach the promise seen in 2013 when half of the world’s 10 largest oil and gas finds were made in Africa.

With oil prices dropping below $50 a barrel, analysts say they expect a more concentrated pullout this year.

“Now that we’re at another weak oil price, every company will be reviewing discretionary spending,” said BMO Capital Markets analyst Brendan Warn.

In Africa’s frontier environment, drilling may bring a higher reward, but since most exploration takes place offshore, single wells can cost hundreds of millions of dollars, increasing the industry’s susceptibility to lower oil prices.

Chairman of Global Pacific & Partners (which advises African governments) Duncan Clarke said cuts had already begun. They include “budget cutbacks, asset sales, some corporate consolidations, more farm-outs, slower acreage pick-up, tougher operating conditions, and weaker overall margins for producers,” he said.

Following major discoveries in 2013 in countries including Tanzania and Kenya, the Baker Hughes Rig Count reported 154 rigs in Africa last February, the most since 1983. By December, that had declined to 138.

Ophir Energy, a UK explorer that has made several large finds in Tanzania, ended its 2014 drilling campaign in Gabon in June, after a series of dry holes.

Repsol, Spain’s biggest oil producer, spent almost $100m on a well that missed in offshore Namibia.

Tullow Oil, a British oil company that was among the most active explorers in Africa, said last week it would not drill a single offshore exploration well in the continent this year, as it reduces investment in response to lower prices.

For Africa to revive the momentum of its oil and gas industry, governments needed to look at the terms they offered explorers and adapt them to reflect lower prices, Tullow CEO Aidan Heavey said.

“As more and more companies are pulling back, you’ll see that countries will have to change their terms,” Mr Heavey said last week. “We will be renegotiating our exploration licence terms.”

Tullow has cut its exploration and appraisal budget of $1bn more than two-thirds and will focus on onshore drilling in East Africa, where it has been able to reduce well costs to $7m each.

“It’s going to be the operators who are going to have to control costs,” the head of oil and gas advisory for sub-Saharan Africa at Deloitte & Touche, Claude Illy, said. Exploration would be cut “quite drastically”, he said

The silver lining for companies obligated by lease terms to drill could be lower service costs.

“Exploration in general will receive less funding due to the fall in oil prices,” Chariot Oil & Gas CEO Larry Bottomley said on January 9 in response to questions. “What we have seen, though, is a significant decrease in exploration costs, specifically seismic and drilling, so although there are fewer dollars, those dollars will go further.”

The cost of conducting a 3D seismic survey had dropped to $3,500 a square kilometre from $10,000 a year earlier, Ophir CEO Nick Cooper said in November at an oil convention in Cape Town. Ophir was not available immediately to respond to a request for updated costs.

Drilling service companies such as Milan-based Saipem might see orders drop 30% with oil at less than $80 a barrel, said Sanford C Bernstein analysts in a January 19 research note, and the cost of hiring offshore rigs might fall 40%.

Not all companies have put off plans. “The majority of our current development and near-term exploration drilling is offshore Nigeria, where typically the production costs are a little lower than other exploration areas,” Camac Energy spokesman Lionel McBee said. “In this price environment, we’re not going to be expanding exploration drilling. We’re sticking to our development programme.”

Some projects, such as completing of SA’s first deepwater well, which Total suspended due to technical issues last year, may not be realised for as long as the under-$50 environment lasts. The company did not reply to an e-mail inquiry about drilling plans in SA.A general view shows an oil rig used in drilling at the Ngamia-1 well on Block 10BB, in the Lokichar basin, which is part of the East African Rift System, in Kenya. 

AFRICA’s oil and gas boom is in jeopardy. The dash for resources that saw explorers invest billions of dollars to tap promising oil fields from Ghana on the west coast to Tanzania on the east, is stalling as the global drop in crude prices pushes drillers to reconsider the high costs of exploration on the continent.

For many drillers, 2014 was already failing to reach the promise seen in 2013 when half of the world’s 10 largest oil and gas finds were made in Africa.

With oil prices dropping below $50 a barrel, analysts say they expect a more concentrated pullout this year.

“Now that we’re at another weak oil price, every company will be reviewing discretionary spending,” said BMO Capital Markets analyst Brendan Warn.

In Africa’s frontier environment, drilling may bring a higher reward, but since most exploration takes place offshore, single wells can cost hundreds of millions of dollars, increasing the industry’s susceptibility to lower oil prices.

Chairman of Global Pacific & Partners (which advises African governments) Duncan Clarke said cuts had already begun. They include “budget cutbacks, asset sales, some corporate consolidations, more farm-outs, slower acreage pick-up, tougher operating conditions, and weaker overall margins for producers,” he said.

Following major discoveries in 2013 in countries including Tanzania and Kenya, the Baker Hughes Rig Count reported 154 rigs in Africa last February, the most since 1983. By December, that had declined to 138.

Ophir Energy, a UK explorer that has made several large finds in Tanzania, ended its 2014 drilling campaign in Gabon in June, after a series of dry holes.

Repsol, Spain’s biggest oil producer, spent almost $100m on a well that missed in offshore Namibia.

Tullow Oil, a British oil company that was among the most active explorers in Africa, said last week it would not drill a single offshore exploration well in the continent this year, as it reduces investment in response to lower prices.

For Africa to revive the momentum of its oil and gas industry, governments needed to look at the terms they offered explorers and adapt them to reflect lower prices, Tullow CEO Aidan Heavey said.

“As more and more companies are pulling back, you’ll see that countries will have to change their terms,” Mr Heavey said last week. “We will be renegotiating our exploration licence terms.”

Tullow has cut its exploration and appraisal budget of $1bn more than two-thirds and will focus on onshore drilling in East Africa, where it has been able to reduce well costs to $7m each.

“It’s going to be the operators who are going to have to control costs,” the head of oil and gas advisory for sub-Saharan Africa at Deloitte & Touche, Claude Illy, said. Exploration would be cut “quite drastically”, he said

The silver lining for companies obligated by lease terms to drill could be lower service costs.

“Exploration in general will receive less funding due to the fall in oil prices,” Chariot Oil & Gas CEO Larry Bottomley said on January 9 in response to questions. “What we have seen, though, is a significant decrease in exploration costs, specifically seismic and drilling, so although there are fewer dollars, those dollars will go further.”

The cost of conducting a 3D seismic survey had dropped to $3,500 a square kilometre from $10,000 a year earlier, Ophir CEO Nick Cooper said in November at an oil convention in Cape Town. Ophir was not available immediately to respond to a request for updated costs.

Drilling service companies such as Milan-based Saipem might see orders drop 30% with oil at less than $80 a barrel, said Sanford C Bernstein analysts in a January 19 research note, and the cost of hiring offshore rigs might fall 40%.

Not all companies have put off plans. “The majority of our current development and near-term exploration drilling is offshore Nigeria, where typically the production costs are a little lower than other exploration areas,” Camac Energy spokesman Lionel McBee said. “In this price environment, we’re not going to be expanding exploration drilling. We’re sticking to our development programme.”

Some projects, such as completing of SA’s first deepwater well, which Total suspended due to technical issues last year, may not be realised for as long as the under-$50 environment lasts. The company did not reply to an e-mail inquiry about drilling plans in SA.

http://www.thepromota.co.uk/exploration-stalls-africa-oil-price-declines/


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## smalltimer

*East Africa to witness more auctions of exploration blocks in 2015*

Posted on 14 February 2015. 

East Africa to witness more auctions of exploration blocks in 2015	
Amid growing pressure for transparency and accountability, East Africa is going through a wave of change in the management of exploration and production rights of its newly struck oil and gas resources

EADespite the falling crude prices, Tullow Oil has said they will continue their drilling and production activities in Kenya and Uganda. (Image source: Derek Keats/Flickr)

According to Simon D’ujanga, energy minister of Uganda, the country has approved plans to open up six exploration blocks in Albertine Basin in Uganda for licensing.

“The government plans to invite companies to participate in this licensing round during the first quarter of 2015,” added D’ujanga.

Uganda’s petroleum resource is now estimated to be more than 6.5bn barrels of oil, an upward revision from 3.5bn barrels that was estimated in August 2012.

Tanzania has already received bids for some of the eight oil and gas blocks it offered in its latest competitive bidding round, noted the minister.

“China-based CNOOC and Russia’s state-run Gazprom were among companies that submitted bids for the blocks on offer in the fourth round. Statoil and ExxonMobil, which have made big gas discoveries offshore Tanzania, submitted a joint bid for one of the offshore blocks,” added D’ujanga.

Abu Dhabi state-owned investment fund Mubadala applied for offshore Block 4/2A in Tanzania, which covers an area of 3,630 sq km, while another UAE firm Ras Al Khaimah Gas has submitted a bid for the Lake Tanganyika North Block with a size of 9,670.2 sq km, he revealed.

Martin Heya, head of petroleum at Kenya’s Energy and Petroleum Ministry, said, “Kenya also plans to switch to bidding rounds to license its oil exploration blocks, moving away from one-on-one negotiations with firms, as interest in its economy increases following a recent oil discovery.”

The competitive bidding will be carried out through a proposed law known as the Petroleum (Exploration, Development and Production) Bill, 2015 that is awaiting Parliamentary approval, noted Heya.

“Exploration interest in Kenya has surged since the country announced a three year ago its first oil strike discovery by UK-based explorer Tullow Oil in the country’s north. The country has since recorded multiple discoveries,” added Heya.

Silvana Tordo, analyst at Brandon S Tracy, said that Kenya has mapped out at least eight additional exploration blocks that will be put up for bidding under the proposed laws. Uganda and Kenya are on track to become oil exporters by late 2018 or early 2019, he added.

Source: oilreviewafrica.com

http://oilinkenya.co.ke/east-africa-to-witness-more-auctions-of-exploration-blocks-in-2015/


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## smalltimer

*ASX RELEASE*

_ACQUISITION OF PARTICIPATING INTERESTS – EP104, R1 & L15_

Key Petroleum Limited (“Key” or the “Company”), is pleased to advise that the Company has executed a Sale Agreement to acquire Pancontinental Oil & Gas NL (“Pancontinental”) and FAR Limited’s (”FAR”) interests in Exploration Permit 104, Retention Lease R1 and Production Licence L15 located in the Canning Basin.

http://clients2.weblink.com.au/news/pdf2\01601492.pdf


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## smalltimer

*The link on the previous post has stopped working, so here is the file.*

View attachment KEY buy out.pdf
View attachment KEY buy out.pdf


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## smalltimer

*Exploration slows down in Kenya as rig count falls*

February 27, 2015 

The number of drilling rigs in Kenya is expected to significantly fall in Kenya in 2015 as oil companies cut down on exploration as well as the main players’ ramp up their exploration and appraisal program.

According to Africa Oil a joint partner with Tullow Oil in blocks 10BB, 13T and 10BA the partners had five rigs towards the end of 2014 one in Block 9 where Africa Oil is the operator together with its partner Marathon Oil.

In 2015 as the company concentrates on appraisal and development of the discovered basin in Northern Kenya, the Africa Oil – Tullow partnership has released one of its four rigs.

Later this year, by the end of the second quarter the partners will again release two additional rigs remaining with just one single rig operating in Kenya.

“The focus of the work program in 2014 was drilling out the remaining prospect inventory in the discovered basin in Northern Kenya, appraising existing discoveries, drilling new basin opening wells and progressing the development studies towards project sanction for the discovered basin in Northern Kenya,” says Africa Oil in a statement.

Already the partners have drilled 23 wells in Northern Kenya 17 of which have been successful.

In Ethiopia Africa Oil is also pulling back two rigs from Ethiopia’s South Omo Block and Blocks 7/8.

All is however not lost as a number of other players in other basins are beginning their drilling programmes including Rift Energy, Swala Energy, Bowleven with others  like ERHC starting their program in 2016.

http://www.oilnewskenya.com/?p=2641


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## smalltimer

*FAR just posted a new pesentation:*

 Slide 19-21 shows information about Kenya L6 & L9. 
 Slide 21 is positive about Sunbird. 

View attachment FAR Presentation.pdf


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## smalltimer

CHANGE OF REGISTERED OFFICE AND ADDRESS 

Pancontinental (ASX: PCL) advises that its registered office and principal place of business has changed to: 

*Office Address: 	Level 1, 10 Ord Street, West Perth WA 6005 
Mailing Address: 	PO Box 1154, West Perth WA 6872 
Telephone Number: 	(08) 6363 7090 
Facsimile Number: 	(08) 6363 7099* 

Pancontinental Oil & Gas NL


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## smalltimer

*Kenya oil sector gets boost on US-based firm drilling pledge*

By JOHN GACHIRI
Posted  Sunday, March 8  2015 at  14:44

Kenya’s oil and gas exploration has received a boost after Houston-based Anadarko Petroleum said that it will go ahead with its local drilling programme despite cutting its budget for other markets.

Anadarko said it had to cut its exploration budget by a third due to the falling oil prices which is at a five-year low. The reduction in the exploration budget will mostly affect its US-based blocks but work on its Lamu-based blocks will continue this year.

“In 2015, Anadarko expects to drill nine to 12 deep water exploration/ appraisal wells focusing on play-opening exploration opportunities in Colombia, Kenya and the Gulf of Mexico,” said the company in a statement.

Anadarko did not give a breakdown of how many wells it plans to drill on its five Lamu Basin blocks or how much it has budgeted for the local work but offshore drilling is significantly more expensive than onshore drilling. 

Offshore drilling can cost as much as $150 million (Sh13.56 billion) while an onshore equivalent can requires between $20 million (Sh1.82 billion) and $25 million (Sh2.28 billion).

Analysts say that oil explorers are continuing their searches despite the falling prices on confidence that they will find large deposits.

“BG Group of the UK is planning to drill two offshore wells in its blocks located in Mombasa at a cost of $160 million (Sh14.4 billion). There is consensus among exploration firms that the region still promises strong finds that justify continued investment,” said the 2014 fourth quarter Natural Resources report by Burbidge Capital.

Tullow Oil, Taipan Resources, Simba and ERHC Energy are other explorers that have drilling programmes for 2015.

Continued exploration is also expected to benefit local companies that offer supporting services such as logistics, security and construction.

http://www.businessdailyafrica.com/...boost-/-/539552/2646222/-/96aqly/-/index.html


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## smalltimer

PCL Ann: *Presentation to Africa Oil & Gas Forum*

View attachment 712394_PCL.pdf


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## smalltimer

*PCL Half Yearly Report and Accounts*

View attachment PCL Half Yearly Report.pdf


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## smalltimer

*A Review of Local Content Regulations in the Upstream Oil & Gas Sector in Africa*
King & Wood Mallesons
16 March 2015  

This article was written by Sonal Sejpal, Njeri Wagacha and Sheila Nyayieka(Anjarwalla & Khanna, Kenya, ALN).

It is an exciting time for oil and gas in Africa! The list of oil producing countries in Africa continues to grow. The traditional oil producing countries – Nigeria, Algeria, Angola, Egypt, Sudan and Libya have been joined by new entrants such as Mozambique, Ghana, South Africa, Tanzania, Uganda and Kenya. This has led to renewed interest in the oil and gas industry in the continent as a whole.  In Kenya for example Tullow Oil Plc, and its partner Africa Oil Corporation have discovered an estimated 600 million barrels of oil in the South Lokichar Basin in Northern Kenya.  Prospecting continues in other countries.

The oil finds promise to give the citizens in the various countries a new life line. Further, oil production will create a new stream of foreign exchange earnings for governments and ultimately elevate the standard of living for their citizens.

The onset of resource nationalism in various countries has played a significant role in shaping emerging oil and gas legislation. The current trend is for the people and governments to assert greater control over natural resources located within their territory. Citizens are more aware of their right to benefit from the resources. Most countries are also wary of the “resource curse” deriving from corruption, environmental degradation and leakage of revenues due to tax evasion. This has led to enactment of stringent local content laws governing different minerals and natural resources.  Contractors in Nigeria and Kenya, for example, have had to stop exploration works for periods at a time because of disruption by citizens demanding local participation in exploratory and oil production activities.

In South Africa Broad-Based Black Economic Empowerment laws (“BBBEE”) apply to the oil and gas sector, which is defined as a social or economic strategy, plan, principle, approach or act which is aimed at redressing the results of past or present discrimination based on race, gender or other disability of historically disadvantaged persons in the minerals and petroleum industry, related industries and in the value chain of such industries.

Local content legislation is fairly new in most African countries. In other jurisdictions such as Kenya, it is still in draft form and the substantive terms are yet to be finalized.

It is vital for foreign investors and contractors to adhere to these laws as contravention can lead to significant fines and in some cases revocation or non-renewal of licenses.  It will be interesting to see how the laws are applied and whether they are practically enforced.

In this review, we provide a high level overview of the main local content provisions in the oil and gas industry for the following countries:
◾Kenya
◾Nigeria
◾Zambia
◾Uganda
◾South Africa

more.....    

http://www.kwm.com/en/uk/knowledge/...stream-oil-and-gas-sector-in-africa-20150316#


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## smalltimer

*Anadarko drilling in Kenya’s Block L11A eagerly awaited by other offshore explorers*

March 25, 2015

The plan to drill the Mlima well by Anadarko in Block 11A offshore is being watched closely by partners in other blocks especially as the block is adjacent block L10B which saw the first offshore oil discovery in East Africa at the Sunbird-1 well.

Anadarko on its part will be hoping to turn around its barren luck in offshore Kenya after its unlucky run at the Kubwa well in Block L7 (to the north of L11A) in early 2013 which indicated a working hydrocarbon system.

According to Australian explorer Pancontinental Oil and Gas the results of the drilling will shed light on the geology in the area even as data from Sunbird-1 well continues to be reviewed and interpreted. The company had in August last year said it was considering the drilling of a new well in the block where BG Group is the operator.

“In addition to the permit’s own exploration findings via seismic and drilling, the joint venture is eagerly awaiting the drilling of Anadarko’s Mlima well in the adjacent permit L11B,” the company said in its latest report.

*Block L11A*

The results will also help in determining the way forward in block L10B which recently secured a 12 month extension on the work commitment programme from the Kenyan Ministry of Energy and Petroleum.

BG Group is the Operator in Block L10B with 60 percent interest while Pancontinental holds the remaining 40 percent interest.

http://www.oilnewskenya.com/?p=2748


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## smalltimer

*State Shifts Gears on Deep-sea Oil Exploration as Interest Peaks*

The Government is expanding the scope of oil exploration in the country by creating extra offshore oil exploration blocks off the Lamu coast.A senior Ministry of Energy official said the ministry would soon gazette an additional seven blocks located off the Lamu coast. This will be in addition to the about 15 offshore blocks currently in place in the Lamu region.

"We are mapping out seven new blocks in the Indian ocean off the Lamu coast," said Hudson Andambi, senior principal superintending geologist (petroleum exploration)."Many firms have expressed interest in offshore blocks, which is why we are moving fast to delineate and gazette the new blocks."

There has been increased focus on deep-sea activities in Kenya, even though over 60 years of oil exploratory activities have not yielded commercially viable deposits. But Kenya is still optimistic of striking oil, driven by recent oil finds in Western Uganda and natural gas in Northern Tanzania."There is a high likelihood that there are viable commercial deposits in Kenya, given that the country sits on the same geological province with Tanzania and Uganda," said Andambi."We currently have up to 13 oil companies exploring for oil in 28 blocks, of which 27 blocks have been given to foreign firms and one to the National Oil Corporation (NOCK)."

Four basins :At the moment, there are a total of 38 blocks in the country that are situated in the four basins of Lamu, Anza, Tertiary Rift and Mandera. Different companies have drilled 32 wells in the four basins that are located in Lamu, North Eastern and Northern Kenya areas.Andambi said a number of wells, especially in Lamu Basin and the Anza Basin, had returned promising shows of natural gas and oil, although none had so far had commercially viable deposits. Andambi was speaking in Nairobi at a conference by Tullow Oil. 

The UK-headquartered firm discovered billions of barrels in Uganda around the Lake Albert region, and is currently preparing to begin extraction. The firm has been licenced to explore for oil in five blocks in Kenya.Martin Mugo general manager of Tullow’s operation in Kenya said the firm would begin drilling in the first quarter of next year, beginning with one of its blocks in the Tertiary Rift Basin in Turkana.

Start drilling: The company had planned to start drilling towards end of this year but said logistical challenges – including delay in transportation of drilling equipment to the site – had caused delay.Oil exploration in Kenya been a disappointment for firms prospecting ”” the most recent being China National Offshore Oil Corporation that exited Kenya 2009 after turning little to write home about even after drilling wells that were in excess of five kilometres deep in the Anza Basin in Isiolo.

http://www.kogwg.org/index.php/kogw...on-deep-sea-oil-exploration-as-interest-peaks


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## smalltimer

*ASX ANNOUNCEMENT Pancontinental (ASX: PCL)*
8 April 2015
*Kenya Block L10B*

Pancontinental (ASX: PCL) advises that it has served a notice of withdrawal on BG Kenya L10B Limited (BG), the only remaining participant and operator of Kenya Licence L10B (L10B), from the Joint Operating Agreement with BG and from the PSC governing L10B.

Pancontinental holds a 25% interest in L10B, while BG holds 75%. Licence area L10B lies immediately to the south of area L10A, in which a joint venture also operated by BG Group (50%) drilled the Sunbird-1 oil discovery well in 2014. Pancontinental holds 18.75% in this licence and PTTEP of Thailand holds 31.25%.

Pancontinental believes that it has sufficient exposure to the prospectivity of the area through its 18.75% interest in the adjoining Block L10A. The Blocks have similar geological features that in some cases straddle the permit boundary, while exploration in L10A is more advanced. 

The Company considers that the withdrawal is in the interest of prudent financial management, whilst maintaining a manageable and prospective exploration portfolio.

For and on behalf of
Pancontinental Oil & Gas NL
Barry Rushworth
CEO and Executive Director

http://clients2.weblink.com.au/news/pdf\01614568.pdf


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## smalltimer

*Consensus recommendation* *????????*

As of Apr 03, 2015, the consensus forecast amongst 2 polled investment analysts covering Pancontinental Oil & Gas NL advises that the company will outperform the market. 

This has been the consensus forecast since the sentiment of investment analysts deteriorated on Apr 15, 2013. The previous consensus forecast advised investors to purchase equity in Pancontinental Oil & Gas NL.

*Share price forecast*

The one analyst offering a 12 month price target expects Pancontinental Oil & Gas NL share price to rise to 0.09 in the next year from the last price of 0.011

Read More

http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=PCL:ASX


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## smalltimer

*Exploration activity in Africa undeterred by oil prices  *

Apr 23, 2015 12:00 AM 

Young Okunna, GlobalData's upstream analyst covering Sub-Saharan Africa reported that the current downturn in oil prices has not slowed down in the region. Although several firms have cut back on their global exploration budgets, the region continues to attract activity, led by emerging oil and gas hotspots in Kenya, Tanzania and Uganda in the East African Rift system.

The west coast of Africa is also being actively explored, with great attention to the West African Transform Margin area consisting of Ghana, Guinea, Ivory Coast and spanning to Senegal. Despite current oil prices, these areas have proven attractive due to recent discoveries, high exploration success rates, and relatively low operating costs. Continued activity is further supported by the less significant drop in rig count in comparison to other regions as of February 2015, which indicates significant ongoing drilling operations.

In East Africa, the emerging countries of Kenya and Tanzania have seen companies, such as Tullow Oil focus their exploration objectives onshore. Tullow’s drilling plan focuses on low-risk acreage rather than exploration operations in the capital-intensive offshore. The South Lokichar and West Turkana Basin in onshore Kenya are the focus of these planned exploration drilling operations. A portion of the South Lokichar Basin was recently explored and an estimated reserve of 600 MMboe discovered.

This rift system also spans to the Lake Albertine Rift basin in Uganda, where recently discovered deposits are estimated at 3.5 boe, as well as Tanzania. These major discoveries in East Africa have seen exploration operations continue in the region despite falling oil prices, and the discovery of more reserves is anticipated due to under exportion of the area.

In contrast to the onshore exploration focus of most international oil companies in East Africa, offshore exploration operations are largely planned for the west coast of Africa, as well as the West African Transform Margin. Countries in the Margin, such as Ghana, Guinea, Ivory Coast, and up to Senegal and Mauritania, are being actively explored owing to recent discoveries in offshore Ghana, which have highlighted the area's potential.

With a high exploration success rate of 65%, the Transform Margin is seen as a key exploration area in Africa; hence the initiatives by companies, such as Chevron, Tullow, and Cairn Energy, to explore the region despite low oil prices. Additionally, some mature producers, such as Congo Republic, Cameroon and Gabon, are planning exploration, which in most cases is supported by low operating costs and affordable labor.

The falling price of drilling operations is another reason why exploration activities have continued in the region. Offshore exploration well-drilling costs were previously around US$100 million/well in East Africa and $60–70 million in frontier West Africa, but have fallen due to the drop in oil prices. Operators have also adopted strict cost-control mechanisms to mitigate against unwarranted expenses and therefore maintain these operations.

Sub-Saharan Africa can expect to see substantial investment in its oil and gas resources, as recent discoveries continue to attract companies to explore its vast deposits despite the low oil price environment. Companies currently operating in the region continue to attest to the high exploration success rate. This is backed by the most recent discovery made by Statoil in offshore Tanzania in March 2015, with the drilling of the Mdalasini-1 exploration well, which discovered 1.0–1.8 tcf of gas. The region has shown resilience to falling oil prices, with exploration activities being planned and executed, due to its lower cost environment and supported provided by recent commercially viable discoveries.

http://www.gasandoil.com/news/2015/04/exploration-activity-in-africa-undeterred-by-oil-prices


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## smalltimer

*Quarterly Cash flow Report & Quarterly Activities Report *


http://clients2.weblink.com.au/news/pdf\01621178.pdf

http://clients2.weblink.com.au/news/pdf\01621179.pdf


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## smalltimer

*Kenya proposes rules to require local stake in oil exploration firms*

Thu Apr 30, 2015 9:38am EDT 
By George Obulutsa

NAIROBI, April 30 (Reuters) - Kenya has proposed rules requiring oil exploration firms to give local investors a 5 percent stake and use local suppliers and staff for their services to get a bigger share of earnings from the new sector.

East Africa has become a hot spot for oil and gas exploration in recent years, spurred by new finds, but Kenya has yet to update its legal framework for the sector.

Tullow Oil and Africa Oil have estimated discoveries of 600 million barrels to the northwest of Kenya, and plan to submit their development plans to the government by late 2015 prior to commercial production.

The rules are expected to be passed by parliament by August along with a revised petroleum bill, said Ministry of Petroleum and Energy Principal Secretary Joseph Njoroge.

"It is to encourage utilisation of local resources, equipment, whatever is available locally must take precedence over foreign, mostly the human capital, (which) we have a lot," Njoroge told Reuters.

Oil industry analysts and observers say the law will be a boon for local companies and workers in the near-term, but that there would be need for programmes to expand capacity if Kenyans were to meet all the laid out requirements in the regulations.

The regulations state that within 10 years, oil companies would be required to source 60 to 90 percent of goods and services locally, and 70 to 80 percent of their management staff and the same proportion of technical staff.

"Obviously local suppliers will have a field day if these bills are passed. Because the industry will have to go literally scavenging for any capable supplier," Mwendia Nyaga, a Nairobi-based oil and gas consultant said.

"But even after that is done, I doubt that they will be able to hit the required percentages, so there will still be a big problem," he said referring to a dearth of certain skills, specialised goods and services in the near-term.

Africa Oil said it supported the government's effort to maximise use of local resources, citing it was already offering employment and contracts for goods and services to as many Kenyans as was possible.

"There is much debate still to be had over whether strict Local Content Regulations will actually help or hinder achieving these important shared objectives," Africa Oil said. (Editing by James Macharia/Jeremy Gaunt)

http://www.reuters.com/article/2015/04/30/kenya-energy-idUSL5N0XI4K420150430


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## smalltimer

*US oil prices jump past $US60*
AFP  | 13th. May 2015 

Global oil prices have climbed, getting a boost from a weaker dollar as traders awaited the latest US crude oil inventories report.

US benchmark West Texas Intermediate for June delivery on Tuesday jumped $US1.50, or 2.5 per cent, to close at $US60.75 a barrel on the New York Mercantile Exchange.

Brent North Sea crude for June delivery, a global oil benchmark, advanced to $US66.86 in London, up $US1.95 from Monday's settlement.

Both contracts had dipped on Monday on persistent global oversupply worries.

"Crude oil prices rebounded strongly... supported by a softer US dollar, while investors remained cautious ahead of the release of the weekly oil inventories reports," Sucden brokerage analyst Myrto Sokou said.

The US dollar was trading against the euro at $US1.1221 in the afternoon, down from $US1.1154 late on Monday amid a global bond market sell-off. A weaker greenback tends to make dollar-priced commodities like crude oil more attractive to buyers.

The oil market awaited Wednesday's weekly report on US petroleum inventories from the US Department of Energy for clues about demand in the world's largest consumer of crude oil.

Last week the DoE unexpectedly reported the first decline in commercial crude oil stockpiles in 16 weeks, but still stockpiles, at 487.0 million barrels, remained at their highest level on record for that time of year.

Analysts are expecting another decline in Wednesday's report, with the consensus estimate of a fall of 500,000 barrels in the week ending May 8, according to a Bloomberg News survey.

http://www.businessspectator.com.au/news/2015/5/13/commodities/us-oil-prices-jump-past-us60


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## smalltimer

ASX Companies Announcement Office

*KENYA BLOCK L10A*

Pancontinental Oil & Gas NL (ASX: PCL) (“the Company”) and its L10A joint venture partner PTTEP of Thailand (“PTTEP”) have issued Operator BG Kenya L10A Limited (“BG”) notices of withdrawal from Block L10A in the Lamu Basin offshore Kenya.

Subject to Ministerial consent, Pancontinental’s 18.75% interest and PTTEP’s 31.25% interest will be transferred to the Operator BG who will then be the only remaining participant and hold 100% of the L10A licence.

The Company is committed to the prudent deployment of its resources and as such it has decided to withdraw from the L10A project, given the project’s cost and potential benefit profile with respect to the Company.

Pancontinental will advance and look to grow its African portfolio in the near term, consistent with its continued belief in the high prospectivity of parts of the continent and their future high potential to produce commercial oil and gas.

Pancontinental remains in a unique position, with its remaining asset portfolio in Namibia (EL0037 with Tullow Oil) and Kenya (Block L6 with FAR Limited, Milio International) fully funded for the next phase of exploration commitments.

For and on behalf of
Pancontinental Oil & Gas NL

Barry Rushworth
CEO and Executive Director
ASX ANNOUNCEMENT
1 JUNE 2015


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## smalltimer

*NAMIBIA LICENCE EL 0037*

*P*ancontinental Namibia Pty Ltd, a subsidiary of Pancontinental Oil & Gas NL (ASX: PCL) (“the Company”)and its EL 0037 joint venture partner and Operator Tullow Kudu Limited, a subsidiary of Tullow Oil plc (“Tullow”)have agreed (subject to certain conditions) to amend the farmout agreement between the companies dated 5 September 2013.

Tullow recently requested from Pancontinental an extension to a deadline under the farmout agreement concerning a “drill or withdraw” decision by Tullow, which was to have been made by 11 August 2015.

Pancontinental has agreed to an extension of the deadline to 31 March 2016. The extension will allow the joint venture time to further assess the results of the extensive exploration programme of 3D seismic and geological work that have been carried out to date. Pancontinental is very encouraged by the exploration results of Tullow’s exploration activities within the EL 0037 area.

Since farming-in to the project in 2013, Tullow has so far undertakenexploration work costing approximately US$34 million of the overall estimated farmin programme, with Pancontinental free-carried:

• Led the Joint Venture as Operator;
• Reimbursed past costs and has-
• 100% funded the 3D seismic survey not less than 3,000km²;
• 100% funded the 2D seismic survey not less than 1,000 km²; and
• 100% funded additional costs including mapping historic seismic.

In order to retain its 65% interest Tullow must now fully fund one exploration well at no cost to Pancontinental. Tullow has to date fully carried out the agreed programme and Pancontinental is optimistic that Tullow will continue exploration on the blocks and proceed towards drilling.

Petroleum exploration licence 0037 (EL 0037) covers 17,295 sq km (4.2 million acres) in water depths extending to 1,800m in the Walvis Basin offshore northern Namibia.

Pancontinental’s exploration team identified the high prospectivity of the licence area and subsequently the Company and co-venturer Paragon Oil & Gas (Pty) Ltd (“Paragon”) were awarded the 0037 Exploration Licence on 28 June 2011 and a corresponding Production Agreement was signed on 4 July 2011 (also effective 28 June 2011).

The following year Pancontinental increased its interest to 95% though a transaction in which it acquired 10% from Paragon. In September 2013, Tullow farmed-in thereby reducing Pancontinental’s interest to a free-carried 30% in exchange for extensive 3D and 2D seismic programmes and one exploration well. In the event that Tullow elects not to drill the well the whole of its interest reverts to Pancontinental.

The free carried activities undertaken by Tullow have no expenditure “caps”. The joint venture led by Tullow has mapped a number of large turbidite “fan” prospects, some of which are interpreted to be at approximately the same stratigraphic level as the oil found in Wingat-1, to the south of EL 0037 and in the same geological system, as well as close vertically to the interpreted oil source rocks. The Company is now looking forward to the further exploration of the area.

http://pancon.com.au/


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## smalltimer

*Tullow Oil’s Namibia offshore farm-in deal extended* 
Monday, 15 June 2015 13:25

*Pancontinental Oil & Gas *has agreed to extend the agreement with Tullow Oil for exploration licence EL 0037 offshore Namibia

Tullow Oil asked for an amendment to the original farm-out agreement that will extend the deadline for Tullow Oil to make a ‘drill or withdraw’ decision. Pancontinental Oil & Gas has agreed to postpone the date from 11 August 2015 to 31 March 2016, giving more time to the joint venture to assess the results of the extensive exploration work that has already been carried out.

So far, Tullow Oil has spent approximately US$34mn on the exploration work since 2013 when the original agreement had been signed. Now, in order to retain its 65 per cent interest in the EL 0037 area, Tullow Oil must fully fund one exploration well on its own, with no cost to Pancontinental Oil & Gas.

Pancontinental Oil & Gas said that it had identified the potential of the licence area and along with co-venturer Paragon Oil & Gas, was awarded EL 0037 in June 2011. The following year, Pancontinental Oil & Gas increased its stake to 95 per cent by acquiring 10 per cent from its partner, leaving only five per cent with Paragon Oil & Gas. In September 2013, Tullow Oil farmed-in, acquiring 65 per cent interest in the offshore project.

In case Tullow Oil fails to drill the well, its entire interest reverts to Pancontinental Oil & Gas, the company added.

http://www.oilreviewafrica.com/expl...-oil-s-namibia-offshore-farm-in-deal-extended


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## smalltimer

*Will Pancontinental's Partner in Namibia sell out ?*

16th. July 2015

The price of Brent crude oil fell below $57 per barrel on Tuesday, following the lifting of economic sanctions on Iran. Oil exports from Iran could rise as much as 60% by the end of this year, which would exacerbate the oversupply situation in the global oil market. Combined with slowing demand growth from Europe and Asia.

Tullow Oil

With oil prices staying low for longer, Tullow Oil (LSE: TLW) is a more attractive investment. The low-cost Africa-focused oil producer has a cash operating cost of just $18.6 per barrel of oil.

Hedging has lessened the impact of falling oil prices on Tullow’s earnings. In 2015, 60% of its share of oil sales had been hedged with an average floor price of around $86 per barrel. But, for 2016 and 2017. only 40% and 20% of production has been hedged.

Shares in Tullow Oil may not have bottomed yet, but the low point should not be far off. On a total cost basis, Tullow’s average production costs are about $38, which makes it one of the lowest cost producers in the sector.

If Tullow falls much further from here, its assets in low cost producing regions would make it a very attractive acquisition target. Its valuation of $19 per barrel for its proven and probable reserves is modestly higher than the sector average, but the quality of its assets is also higher.

Potential suitors go beyond Royal Dutch Shell and BP, with Marathon, Statoil and Total being possible buyers. But, even if Tullow does not find itself a buyer; its relatively modest debt levels and robust cash generation will mean it can fund continued investments in production growth.

http://www.fool.co.uk/investing/201...yal-dutch-shell-plc-bp-plc-or-tullow-oil-plc/


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## smalltimer

*When can we expect Oil to recover ?*

*Oil crash could be 'far worse than 1986', says Morgan Stanley*
Date July 24, 2015

Morgan Stanley has been pretty pessimistic about oil prices in 2015, drawing comparisons to the some of the worst oil slumps of the past three decades. The current downturn could even rival the iconic price crash of 1986, analysts had warned - but definitely no worse.

While for now, it is sticking with its original thesis that prices will improve, Morgan Stanley has revised its worst-case scenario, saying the crash has the potential to be 'far worse than 1986'.

Until recently, confidence in a strong recovery for oil prices - and oil companies - had been pretty high, wrote analysts including Martijn Rats and Haythem Rashed, in a report to investors. That confidence was based on four premises, they said, and only three have proven true.


1. Demand will rise: Check
In theory: The crash in prices that started a year ago should stimulate demand. Cheap oil means cheaper manufacturing, cheaper shipping, more summer road trips.
In practice: Despite a softening Chinese economy, global demand has indeed surged by about 1.6 million barrels a day over last year's average, according to the report.

2. Spending on new oil will fall: Check
In theory: Lower oil prices should force energy companies to cut spending on new oil supplies, and the cost of drilling and pumping should decline.
In practice: Sure enough, since October the number of rigs actively drilling for new oil around the world has declined by about 42 per cent. More than 70,000 oil workers have lost their jobs globally, and in 2015 alone listed oil companies have cut about $US129 billion in capital expenditures.

3. Stock prices remain low: Check
In theory: While oil markets rebalance themselves, stock prices of oil companies should remain cheap, setting the stage for a strong rebound.
In practice: Yep. The oil majors are trading near 35-year lows, using two different methods of valuation.

4. Oil supply will Drop: Uh-oh
In theory: With strong demand for oil and less money for drilling and exploration, the global oil glut should diminish. Let the recovery commence.

In practice: The opposite has happened. While US production has levelled off since June, OPEC has taken up the role of market spoiler. 

For now, Morgan Stanley still believes prices will improve, largely because OPEC doesn't have much more spare capacity to fill and because oil stocks have already been hammered.

But another possibility is that the supply of new oil coming from outside the US might continue to increase as sanctions against Iran dissolve and if the situation in Libya improves, the Morgan Stanley analysts said.
US production could also rise again.

A recovery is less certain than it once was, and the slump could last for three years or more - "far worse than in 1986."

"In that case," they wrote, "there would be little in analysable history that could be a guide" for what's to come.
Bloomberg

http://www.theage.com.au/business/m...1986-says-morgan-stanley-20150723-gijfc8.html


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## smalltimer

*Latest PCL News* can be found at ; http://pancon.com.au/

_Jul 31 Quarterly Cashflow Report 

Jul 31 Quarterly Activities Report 

Jun 12 Namibia Licence EL 0037_

http://pancon.com.au/


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## smalltimer

*East Africa Oil & Gas
Conference Australia
August 2015*

*PANCONTINENTAL*

*Latest NEWS*

http://pancon.com.au/


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## smalltimer

See Pancontinental's recent Reports at ;

*http://pancon.com.au/investor-centre/asx-releases/*

30 October, 2015      - Notice of Annual General Meeting/Proxy Form 
30 October, 2015      - Quarterly Cashflow Report 
30 October, 2015      - Quarterly Activities Report 
30 October, 2015      - Appendix 4G 
30 October, 2015      - Annual Report to shareholders 
30 September, 2015  - Full Year Statutory Accounts 
28 September, 2015  - Offshore Namibia Showing Considerable Potential 
31 August, 2015        - East Africa Oil & Gas Conference Australia


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## smalltimer

*MILIO INTERNATIONAL, PANCONTINENTAL OIL AND GAS PLANNING 2D SEISMIC KENYA’S ONSHORE BLOCK L6*
Posted on : Friday , 6th November 2015 

Kenya's Block L6 operator Dubai based Milio International is in the process of planning for the seismic acquisition  and is currently coordinating with local authorities according to JV partner Pancontinental Oil and Gas.

This is part of a farm-out agreement where Milio negotiated entry into the onshore area of block L6 in Kenya to earn a 60% interest in exchange for a 2D seismic programme of not less than 1,000km², drilling and testing of an onshore well and additional costs such as processing and interpretation with no financial obligation falling to Pancontinental.

“Planning for seismic over the area is ongoing, although operational delays have been experienced,” Pancontinental says in a statement.

It is expected that the seismic will define drillable locations on primary prospects Mamba, Kudu and Boundary Anticline within block L6
 Milio will be hoping to prove studies that a Miocene reef trend, proven to contain oil by Kenya’s first offshore oil discovery Sunbird 1 well in Block L10A, extends to block L6 where the earlier Maridadi-1 well also encountered oil indications.

Far operated offshore part of block L6 is favourably positioned in the Tembo and Maridadi troughs that constitute a hydrocarbon source kitchen. Potential hydrocarbon trapping prospects have been identified in the L6 area as shown in the below image.
 Prospects in the offshore portion of permit L6 are on-trend to Pancontinental’s Sunbird-1 discovery in block L10A, and it is believed that the L6 prospects have access to the same source as prospects in the L10A block.

Source : OIL NEWS KENYA

http://www.expogr.com/kenyaoil/detail_news.php?newsid=2222&pageid=2&t=MILIO INTERNATIONAL, PANCONTINENTAL OIL AND GAS PLANNING 2D SEISMIC KENYA�S ONSHORE BLOCK L6


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## smalltimer

ASX ANNOUNCEMENT
4 DECEMBER 2015

*Pancontinental to raise $2.2 million*

Pancontinental Oil & Gas NL (“Pancontinental”, “the Company”) (ASX CodeCL) is pleased to advise that it has completed a bookbuild for a placement to sophisticated and professional investors to raise up to $1.2 million through the issue of up to 300 million fully paid ordinary shares in the Company (“Shares”) at an issue price of 0.4 cents per Share (“the Placement”).

In addition to the Placement, the Board of Pancontinental has also resolved to offer eligible shareholders the opportunity to participate in a Share Purchase Plan (“SPP”) to raise up to $1 million (see Share Purchase Plan Details below).

Funds raised pursuant to the Placement will be used in conjunction with existing cash, for costs associated with the potential sale of a part interest in Namibia EL0037, other farm out costs, business development and for general working capital purposes and other payables (circa A$400,000 to BG Group).

Commenting on the Placement, Pancontinental CEO Barry Rushworth stated: “The key focus for Pancontinental at the current time is our Offshore Namibian Project – EL0037. Successful 3D and 2D seismic programmes have recently been completed and processed at a cost to farminee Tullow Oil in excess of US$30 million.” “Tullow Oil is itself negotiating with a potential farminee for drilling in EL0037 and by end-March 2016 Tullow Oil needs to exercise its option to drill, following which Pancontinental would be free carried on a well with no caps.”

“Given the quality and the value of the exploration undertaken to date and the considerable potential for oil in a number of prospects, Pancontinental is confident a decision to drill will be forthcoming and this will be of considerable value to PCL’s healthy free carried 30% position in EL0037”. 

“Pancontinental is also seeking to farm down part of its 30% interest for cash. The current Placement and SPP strengthens Pancontinental’s position as we embark on a very important few months for the Company.” Hartleys Limited acted as Broker to the Offer in respect of the Placement and SPP.

Settlement of the placement for up to 177.5 million Shares is scheduled for Friday, 11 December 2015 and is not subject to shareholder approval. This part of the Placement falls within the Company’s existing placement capacity under ASX Listing Rules 7.1 and 7.1A.

Subject to shareholder approval, Directors of Pancontinental have committed to subscribe for $500,000 in the Placement. The Company anticipates that it will seek such shareholder approval at a general meeting in early January 2016.

Share Purchase Plan Details

In order to provide all eligible Shareholders of the Company with the ability to participate in this capital raising, the Company is undertaking a Share Purchase Plan (“SPP”) to raise up to $1 million, with the company reserving the right to raise more than this amount. The SPP will enable eligible shareholders, irrespective of the number of Shares
which they hold in the Company, to purchase up to $15,000 worth of new Shares directly from the Company.
The Company proceeding with the SPP is conditional upon the ASX granting a waiver (which the Company expects will be forthcoming) from the operation of Listing Rules 7.1 and 10.11 so that the issue price of Shares under the SPP can
be at the same price as the Placement (being 0.4 cents per Share). 

If the ASX waiver is not granted, the Company reserves the right not to proceed with the SPP or to proceed with it on amended terms. The Company will inform shareholders of the outcome of the waiver application and the status of the SPP in due course.

ABOUT PANCONTINENTAL

Pancontinental Oil & Gas is listed on the Australian Securities Exchange (ASXCL).Offshore Namibia, Pancontinental has a free-carried 30% interest in Petroleum Exploration Licence 37. The Operator has conducted 2D and 3D seismic surveys and is interpreting the results to decide on a well. A number of high-potential Prospects have been mapped from 3D data. In March 2016 at the latest, the joint venture will know whether or not drilling will proceed within the permit. With less than six months to wait Pancontinental expects a positive outcome for the future exploration potential in the licence.

Should the well proceed Pancontinental will be free carried with no cap. In Kenya, Pancontinental has a 40% interest in the offshore portion of Licence L6 and a 16% free carried interest in the onshore portion of Block L6. Visit Pancontinental’s website for further information at www.pancon.com.au 

Yours sincerely for and on behalf of Pancontinental Oil & Gas NL
Barry Rushworth,
CEO and Director


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## smalltimer

*DISCLOSURE UNDER ASX LISTING RULE 3.10.5A*

Further to the announcement dated 4 December 2015, relating to the Placement of fully paid ordinary shares in Pancontinental Oil & Gas NL (“Pancontinental” or the “Company”), the Company has to date raised $738,000 by the issue of 184,500,000 ordinary shares.

Details of issue under the 10% Placement Facility in Listing Rule 7.1A
(a) Details of the dilution to existing holders of ordinary shares as a result of the issue:

Number of Shares on issue prior to the Placement 1,150,994,096
Placement issue under Listing Rule 7.1 172,649,114 12.93%
Placement issue under Listing Rule 7.1A 11,850,886 0.89%
Number of Shares on issue following the Placement 1,335,494,096

In relation to the portion of shares issued under Listing Rule 7.1A, the percentage of the post-placement capital held (in aggregate) is as follows:

● Pre-placement security holders who did not participate in the placement – 100%;
● Pre-placement security holders who did participate in the placement – 0%; and ● 
    Participants in the placement who were not previously security holders – 100%.

(b) The 11,850,886 shares issued under Listing Rule 7.1A were issued to sophisticated and professional investors.

In addition, the Board of Pancontinental has also resolved to offer eligible shareholders the opportunity to participate in a Share Purchase Plan (“SPP”) to raise up to $1 million. The Company proceeding with the SPP is conditional upon the ASX granting a waiver (which the Company expects will be forthcoming) from the operation of Listing Rules 7.1 and 10.11 so that the issue price of Shares under the SPP can be at the same price as the
Placement (being 0.4 cents per Share).

The above mechanisms were considered to be the most efficient for raising funds at the time.

(c) There were no underwriting arrangements in place for the Placement.

(d) Fees and costs incurred in connection with the issue include share registry and ASX costs as well as a 6%
     commission to Hartleys Limited.

For and on behalf of Pancontinental Oil & Gas NL

V Petrovic
Company Secretary


----------



## smalltimer

*Notice of General Meeting*
9.30am (AWST), Monday, 25 January 2016
The Park Business Centre
45 Ventnor Avenue West Perth, Western Australia 6005

*Share Purchase Plan Offer*
The Offer closes at 5:00pm (AWST) on
22 January 2016.

*See Latest News at;*
http://pancon.com.au/


----------



## smalltimer

A new *Investor Presentation *can be found at  http://pancon.com.au/

or try ;

http://clients2.weblink.com.au/clients/pancon/article.asp?asx=PCL&view=6748729


----------



## smalltimer

*Hyperdynamics sues Tullow, Dana for breach of contract in Guinea*

January 6, 2016

http://www.offshoreenergytoday.com/hyperdynamics-sues-tullow-dana-for-breach-of-contract-in-guinea/


----------



## smalltimer

*RESIGNATION OF DIRECTOR*

The Directors of Pancontinental Oil & Gas NL wish to advise that Non-Executive Director, Anthony Maslin has informed the Company of his resignation as a Director as of today’s date.

See release at : http://clients2.weblink.com.au/clients/pancon/article.asp?asx=PCL&view=6749246


----------



## smalltimer

*SHARE PURCHASE PLAN EXTENSION*

Pancontinental Oil & Gas NL (ASX: PCL) wishes to advise that the closing date for
its Share Purchase Plan (SPP) has been extended by one week to 29 January 2016
from the original closing date of 22 January 2016.

_Read more;_
http://clients2.weblink.com.au/clients/pancon/article.asp?asx=PCL&view=6749726


----------



## smalltimer

*RESULTS OF GENERAL MEETING OF SHAREHOLDERS*

This notice is issued pursuant to ASX Listing Rule 3.13.2. The Company advises that the
resolutions put to the General Meeting of the Company today were passed on a show of
hands. The proxies cast for each resolution were as follows:

http://clients2.weblink.com.au/clients/pancon/article.asp?asx=PCL&view=6750027


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## smalltimer

*Kenya’s Block L6 operator Australia’s Far has said it issued a default notice to it’s partner in the L6 Joint Venture Pancontinental Oil and Gas*

February 1, 2016  

Kenya’s Block L6 operator Australia’s Far has said it issued a default notice to it’s partner in the L6 Joint Venture (Pancontinental Oil and Gas) for continued failure to pay two cash calls from 12 Feb 2015 although the latter has disputed the notices in a new statement.

“Under the terms of the Joint Operating Agreement, FAR has issued a default notice to it’s partner in the L6 Joint Venture (Pancontinental Oil and Gas) for continued failure to pay two cash calls from 12 Feb 2015,” Far told investors in its latest quarterly activities report.

Responding to a statement FAR issued to its shareholders PanContinental Oil and Gas alleges the joint venture had only planned work to be undertaken on block L6 onshore of which civil upheaval and security incidents prevented any appropriate access for petroleum operations to be conducted.

PanContinental Oil and Gas adds that there is still no access to that portion and therefore no work is capable of being carried out on that portion of block L6 and hence there remains no need for the cash call.

PanContinental is also outranged by the default notice claiming that the operator had told the joint venture the majority of the $377, 801 funds to be raised were to be used by FAR’s subsidiary Flow Energy Pty Ltd staff and consultants.

The partner also has an issue with the calculations in which PanContinental claims should the cash calls have been valid share of the 2015 Cash Calls should be US$60,448 based on a 16% share of the “onshore” portion of block L6; not US$113,060 (based on a claimed 40% interest) as claimed by Flow.

“The 2015 Cash Calls issued to Pancontinental were on the basis that Pancontinental’s paying interest was 40%; not 16% without an explanation concerning the status of Milio. No work has been authorised by the joint venture to be carried out on the so called “offshore” portion of block L6 in which Pancontinental does have a 40% paying interest,” Pancontinental Oil and Gas CEO and Executive Director  Barry Rushworth  said in a statement.

The company also claims to have already honored paid US$38,060 (representing a share of fees payable to the Kenyan Ministry which Pancontinental was prepared to pay), thus leaving an amount purportedly owing of US$22,388 (which Pancontinental also disputes).

By letters dated 9 September 2015 Pancontinental wrote to Flow disputing the 2015 Cash Calls as well as the validity of the default notice and calling on Flow to provide it with relevant information.

According to PanContinental FAR is yet to provide a written response to those letters.

Meanwhile the operator says it continued discussions with the Government of Kenya to secure a one year extension to the current Petroleum Sharing Contract to allow exploration activity that has been hindered by recent tensions on ground, to commence. FAR is planning for a 2D seismic survey to commence as soon as possible.

In Block L6 FAR has 24% paying interest, PanContinental 16% and Milio International 60%. Offshore FAR has 60% interest while PanContinental has 40%. FAR has said it will reduce its offshore interest to under 25%. FAR has operatorship in both block L6 onshore and offshore.

http://www.oilnewskenya.com/kenyas-...pancontinental-oil-gas-clash-over-cash-calls/


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## smalltimer

*RESULTS OF THE SHARE PURCHASE PLAN*

 Pancontinental Oil & Gas NL (ASX: PCL) is pleased to announce that it has raised;
Read More at : http://pancon.com.au/


----------



## smalltimer

*Change in substantial holding *

Read More at : http://pancon.com.au/    Latest News link


*Also, some hope out there, we may have hit bottom and the tide may be turning.*


*Oil prices rally on output freeze deal*
Dow Jones newswires  | 
16 Feb, 10:17 PM  | 

Oil prices were higher on Tuesday, as four of the world's largest oil producers, including Saudi Arabia and Russia, agreed to freeze oil production at current levels. 

The oil price, though, quickly retreated from early highs, hit by the fact that the countries, which also include Venezuela and Qatar, are agreeing to freeze production at levels which are already high and these countries will only freeze if others follow. 

April Brent crude on London's ICE Futures exchange rose by 3.14 per cent to $US34.44 a barrel. Its US counterpart, the West Texas Intermediate, was trading up by 1.9 per cent at $US30 a barrel. The price of Brent had earlier risen as high as around 6 per cent. 

On Tuesday, oil ministers from these four countries agreed to freeze output at January levels, but this agreement is contingent on other producers following suit. 

Some investors will be disappointed that it is a freeze and not a cut, but the decision will help speed up price recovery from the second half of the year onward, said Olivier Jakob, an analyst at Switzerland-based Petromatrix. 

"In the next two weeks it will make no difference, but further ahead it will tighten supply and demand", Mr Jakob said. 

Some analysts are skeptical over whether the news will be enough to turn market sentiment toward a commodity whose price has fallen by around 70 per cent since its peak in June 2014. 

Some analysts also believe that the decision to freeze production could actually be deemed bearish news by a market now expecting cuts. 

The four countries combined produced an average of around 23.75 million barrels a day this January which accounted for more than 25 per cent of the total global output. 

These countries have been running at production highs as they protect or expand their market share amid a historic glut of oil triggered by the entry of US shale production. 

Russia produced a post-Soviet record of 10.989 million barrels a day in January, while Saudi Arabia produced 9.95 million barrels. 

The market also faces new oil coming out of Iran, following the lifting of sanctions. 

US shale production has also proved to be resilient, defying hopes that the low crude price would close down oil fields. 

While supply remains high, demand growth in consumers such as China has weakened further. That means that fundamentals remain poor and the market is moving on headlines that promise oil cuts and demand boosts, some analysts say. 

"Volatility is the name of the game at the moment," said Virendra Chauhan, an analyst at Energy Aspects. "You get a 5 per cent rally on the flat price, then you look at the fundamentals and it comes straight back off again," 

http://www.businessspectator.com.au/news/2016/2/16/markets/oil-prices-rally-output-freeze-deal


----------



## smalltimer

*Latest News*
*Mar 18*

Pancontinental raises $700,000 by way of Placement 

See more - http://pancon.com.au/


----------



## smalltimer

ASX ANNOUNCEMENT
1 APRIL 2016


Namibia PEL 0037 – Tullow request extension
On 12 June 2015, Pancontinental Oil & Gas NL (“Pancontinental”, “the Company”) announced that it had agreed with Tullow Kudu Limited, a subsidiary of Tullow Oil (“Tullow”) to extend the date by when Tullow was to elect to withdraw or continue in the Namibian PEL 0037 (“Licence”) joint venture (“Joint Venture”) to 31 March 2016. 

Tullow has now requested a further extension by when Tullow can elect to withdraw or continue in the Licence. Pancontinental has agreed to extend the decision date to 7 April 2016.

A further update will be issued at that time.

For and on behalf of
Pancontinental Oil & Gas NL

Vesna Petrovic
Company Secretary

for more info, see Latest News at ;   http://pancon.com.au/

50% jump in the share price today on this news from $0.004 to $0.006


----------



## smalltimer

*Tullow elects to enter drilling phase of farmin to Namibia PEL 37*
8/4/16

Pancontinental Oil & Gas NL (“Pancontinental”, “the Company”) is pleased to announce that Tullow Kudu Limited, a subsidiary of Tullow Oil (“Tullow”), has elected to continue as a participant in the joint venture in Namibian licence PEL 37 and, as such, is committed to drilling one exploration well subject to identifying a drillable prospect.

To date 4 large turbidite Prospects and 3 large Leads have been mapped in detail. The Prospects have potential for combined Prospective Resources of more than 900 Million Barrels of oil (recoverable).

Read more at Latest News: http://pancon.com.au/


----------



## smalltimer

*Eco Atlantic Notes Tullow Oil's Decision to Enter Drilling Phase on neighbor's Namibia Block 037*

*TORONTO, ONTARIO, April 11th, 2016*, Eco Atlantic Oil & Gas Ltd. (EOG.V) ("Eco Atlantic" or "the Company") is pleased to announce that it was informed by its partner in PEL 30 (“Cooper Block”) offshore Namibia, Tullow Kudu Ltd. (a wholly owned subsidiary of Tullow Oil Plc.) of the latter’s decision to enter into drilling phase on its joint venture block License number 037 together with Pan Continental Oil and Gas NL (Tullow: 65%, Pan Continental: 35%). Block 037 is just south of Eco Atlantic’s Cooper Block, in the Walvis Basin. According to the license terms, the drilling should occur by March 2017.

 Tullow further confirmed its full commitment to further progress the exploration program on the adjacent Cooper Block, with the completion of the interpretation of the recently shot 3D program and to continue its focus on the identified drilling targets.

 In Guyana, Tullow and Eco Atlantic confirmed their intention to accelerate the committed work program on the jointly held Orinduik Block offshore Guyana (Tullow: 60% operator, Eco Atlantic: 40%).

 The companies are aggressively proceeding with a diligent analysis in light of recent discovery in the adjacent block Operated by Exxon Mobil. The recent Liza Discovery by Exxon is currently being appraised by a second well also in close proximity to the Orinduik block.

 Tullow and Eco have agreed on an accelerated work program to include 2D seismic re-processing and interpretation and a design of the 3D seismic program to start immediately after the regional study and 2D interpretation are completed.

Eco Atlantic CEO, Gil Holzman stated: "We are extremely happy with Tullow's decision to enter drilling phase on License 037 and to continue focus their efforts and attention offshore Namibia and especially on our Cooper Block in partnership with AziNam and NAMCOR. We are very excited by what we are seeing based on the 3D interpretation process and are grateful to Tullow for the reassurance of their Namibian commitment and keen interest in the Walvis Basin.” Holzman added: “We are also very happy with the decision on acceleration of our joint program offshore Guyana and are looking forward to the next few months’ activities, research, and interpreted results." 

About Eco Atlantic   

 Eco Atlantic is an oil and gas exploration company focused on the acquisition and development of unique upstream petroleum opportunities around the world. The Company’s objective is to identify technically merited prospective new and developing projects in frontier areas requiring low cost entry. In Namibia through wholly owned subsidiaries, the Company currently holds interests, some carried, in four offshore petroleum licenses in the Walvis and LÃ¼deritz Basins.

 In Ghana, Eco Atlantic also holds and operates an interest in the Deepwater Cape Three Points West Deep Water offshore block, covering 944 square kilometers and in Guyana, Eco Atlantic holds an interest in the 1,800 square kilometer Orinduik offshore block.

 Eco Atlantic enjoys strong local presence in the countries in which it operates and has a longstanding relationship with the energy and oil and gas sectors throughout Africa and other maturing exploration plays internationally.

Forward Looking Statements

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expects” and similar expressions. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with oil and gas production and exploration, marketing and transportation; retention of and ability to attract Company personnel, regulatory approvals, loss of markets; volatility of commodity prices; currency and interest rate fluctuations; imprecision of reserve estimates; environmental risks; competition; inability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to income tax, environmental laws and regulatory matters. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Eco Atlantic believes in light of the experience of its officers and directors, current conditions, expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because Eco Atlantic can give no assurance that they will prove to be correct. The forward-looking statements contained in this press release are made as of the date hereof and Eco Atlantic undertakes no obligation to update publicly or revise any forward- looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

For More Information on Eco Atlantic Contact:

 Gil Holzman                                                   
 President and Chief Executive Officer                       
gil@ecooilandgas.com 
 Tel: +972.508884529                                     

Alan Friedman
 Executive Vice President
alan@ecooilandgas.com
 Tel: +1.416.250.1955

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Read More at : http://ecooilandgas.com/news/index.php?&content_id=116


----------



## smalltimer

*Latest News*
Apr 29

Quarterly Activities Report
Quarterly Cash flow Report


http://pancon.com.au/


----------



## smalltimer

*Will The Failed OPEC Talks Sink Premier Oil Plc, Tullow Oil Plc & Petrofac Ltd?*
By Ian Pierce | Fool.co.uk – Tue, Apr 19, 2016 09:40 BST

The breakdown of the latest OPEC talks in Doha hasn't yet sent crude prices tumbling too far. However, if the nascent recovery in crude prices peters out, certain small producers could be in a heap of trouble.

Last week's news that first oil had been tapped at Premier Oil's (LSE: PMO) North Sea Solan field will be of great solace to the highly-indebted independent producer. The oil from Solan and the recently acquired North Sea assets of German utility E.ON will be critical to cash flow for the highly-indebted company. Year-end 2015 net debt stood at $2.2bn and there's some worry that the company will fail to meet a late June test of its debt covenants, which could be devastating for the firm.

The CEO has said that if oil is at $35/bbl the firm will be unlikely to meet those commitments, which could necessitate further debt restructuring. While Premier's opex costs are relatively low at $16/bbl, it desperately needs a strong rebound in crude prices due to an astounding 75% gearing ratio. Debt of this level and significant, and growing, operations in the relatively expensive North Sea mean Premier needs crude prices to rebound quickly and significantly.

Falling debt

West African producer Tullow Oil (LSE: TLW) also has a major new asset due to come on-line in 2016, the TEN Field off the coast of Ghana. Tullow is in a similar position as Premier, with high debt racked up for major new projects conceived when crude prices were much higher than they are now. Yet, Tullow is still in better shape than Premier with a gearing ratio of 56% and opex costs of $15.1/bbl in 2015.

This debt level is still high, but Tullow's break-even prices of $30-$40/bbl for West African fields show why analysts are expecting the firm to eke out a small profit in 2016. Furthermore, the low-cost assets from the TEN Field will add significantly to the bottom line come 2017 as production plateaus quickly and capital spending falls swiftly. With shares trading at a relatively modest 14 times 2017 earnings and debt levels set to come down, Tullow looks like a more attractive proposition than Premier Oil to me.

Worth diving in?

Oil services provider Petrofac (LSE: PFC) may not exactly cheer the breakdown in OPEC talks, but with many of its main customers now determined to maximize production the firm's order book has hit a record $20.7bn. Profits slumped from $581m to $9m in 2015 but this was largely due to branching out with the disastrously expensive lump sum Laggan-Tormore project the company has vowed never to try again.

Despite margins decreasing due to customers squeezing suppliers across the board, Petrofac still brought net debt down from $733m to $686m during 2015 for a gearing ratio of 56%. Freed from the anchor that was the Laggan-Tormore contract, analysts are expecting earnings to rebound significantly in 2016 and once again cover the 5.3% yielding dividend 1.85 times. With shares trading at a low 10 times forward earnings, decreasing debt levels and increasing revenue, Petrofac looks like a tempting way to gain exposure to the oil & gas industry at a low point in the cycle.

Of course, investing in an oil services company whose main customers are Middle Eastern national oil companies isn't without risks. For investors who are seeking growth shares but are more risk-averse, I recommend reading the Motley Fool's latest free report, A Top Growth Share.

This classic British brand's shares have already gone up in value 250% over the past five years, but the Motley Fool's crack analysts think the company has the potential to triple again over the next decade.

To discover this company for yourself, follow this link for your free, no obligation copy of the report.

Ian Pierce has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Petrofac. The Motley Fool UK has recommended Tullow Oil. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Click on Link;

https://uk.finance.yahoo.com/news/f...vbgNHQgRwb3MDMARyZWdpb24DR0IEc3ltYm9sA1BGQy5M


----------



## smalltimer

Not about Pancontinental, but Oil in General and Drillers ramping up, or not.

Tom Ward: *The 'dirty little secret' about $50 oil*
Tom DiChristopher | @tdichristopher 

Chesapeake Energy co-founder Tom Ward said Friday that oil prices need to recover to about $75 a barrel in order for most drillers to ramp up production. 

Crude futures have recently approached $50 a barrel after rebounding more than 80 percent from this year's lows in the mid-$20 range. Some worry those prices will incentivize high-cost U.S. oil producers to put more rigs to work, worsening a global supply glut and putting off a sustainable price recovery. 

U.S. oil production has fallen from a high of nearly 9.7 million barrels per day last year to about 8.8 million barrels per day.

But $50 is not high enough to elicit a production response, said Ward, who is now chairman and CEO of Tapstone Energy. That is because the capital markets are essentially closed to drillers, and drillers need to outspend cash flow to increase production, he said. 

"In our business, the dirty little secret is you can't really spend within cash flow and grow production," he told CNBC's "Squawk Box." 

U.S. oil and gas companies deferred a total of $380 billion in capital projects through the end of 2015 due to low oil prices, according to consultancy Wood Mackenzie. Ward said the effects of that falling spending shows up on a lag. 

"Whenever you make a decision to stop drilling, it takes a number of months or years in order for that decision to actually impact the market," he said. 

Once the oil market rebalances and prices reach a level sufficient to invest in new projects, it will take some time before capital markets open back up, Ward said.

http://www.cnbc.com/2016/05/20/the-dirty-little-secret-about-50-oil-tom-ward.html


----------



## smalltimer

*Latest News

14th. of June 2016 - Investor Presentation*
Follow link at : http://pancon.com.au/


----------



## smalltimer

*Tullow Announces $300M Bond Offer*

by  Andreas Exarheas - Rigzone Staff - Wednesday, July 06, 2016

Tullow Oil plc has announced the launch of an offering of $300 million of convertible bonds, due 2021, which will be used for general corporate purposes and to fund capital investment in the group’s assets in West and East Africa.

The bonds will be issued by Tullow Oil (Jersey) Ltd, a wholly-owned subsidiary of the company incorporated in Jersey but tax resident in the UK, and will be guaranteed by the company and certain subsidiaries of the company. The bonds, which will be convertible into fully paid ordinary shares of the company, are expected to carry a coupon of between 5.875 percent and 6.625 percent per annum payable semi-annually in arrears on January 12 and July 12 in each year, with the first interest payment date being January 12, 2017.

The initial conversion price is expected to be set at a premium of between 30 percent and 35 percent above the volume weighted average price of an ordinary share on the London Stock Exchange between opening and closing of the market on July 6, 2016, converted at the prevailing USD:GBP spot rate.

Unless previously converted or redeemed, or purchased and cancelled, the bonds will be redeemed at par on July 12, 2021. Settlement and delivery of the bonds is expected to take place on or about July 12, 2016.

“The proposed convertible bond issue will further diversify Tullow Oil’s sources of funding and give the company access to a new investor base. As per our most recent trading statement, our focus will continue to be on strengthening the balance sheet and deleveraging the business,” said Ian Springett, chief financial officer of Tullow Oil, in a statement sent to Rigzone.

Following Tullow’s announcement, FirstEnergy described market reaction to the development as “neutral” and stated that the conversion price is well about the oil and gas advisory firm’s ReNAV for Tullow.

http://www.rigzone.com/news/oil_gas/a/145470/Tullow_Announces_300M_Bond_Offer


----------



## smalltimer

*Status of oil and gas exploration projects Namibia*
Business | 2016-07-08Page no: 22

GABRIEL WIMMERTH 

IS IT possible and necessary to construct an oil and gas refinery in Namibia? Twenty-six years after independence, Namibia does not have its own oil and gas refinery.

Too many EPL's on oil and gas have been dished out by the government. The ministry of mines and energy and some Namibians benefited from these EPL's by selling them to the next investor, who then claimed to have all the necessary technological and engineering capabilities, but to date nothing has happened. What is going on?

There are private oil and gas companies along our western coastline, exploring and drilling by applying different types of technologies, but they have been unsuccessful for more than 20 years, and it does not make any sense.
Namibia currently has managed to find gas off its southern coastline, the Kudu Gas Field. 

This field is now lying idle, without anything being carried out. Ministers in this industry come and go, and each and everyone is telling us another good story, that in the next two to five years the project will kick off. I really have doubts about the Kudu Gas Field. The porosity of this gas field is around 12%.

Then we had private companies like HRT, Chariot Oil and Gas, Chevron, Sasol, Norsk Hydro and also the Russians, Sintezneftegas Namiiba, Arcadia, Enigma, Pancontinental, Ranger, Sasol, Shell, BHP, Petrobras, BP (now Puma), trying their luck to find oil in Namibia since the tenure of former Presidents Sam Nujoma and Hifikepunye Pohamba, but without any success. 

The HRT got hold of indications of hydrocarbons, a teaspoon sample of hydrocarbons, which positively indicated the presence of crude oil. Here again, quick bucks were made by certain individuals, and nothing happened to date. 

There are several other companies continuously exploring and drilling along the western coastline for oil and gas. But they do not get any samples of oil or gas. The ministry of energy can provide us with companies, which have been busy along our coastline trying to explore for oil or gas for the past 20 years, and if they have not been successful, give them a red ticket. Let them pack up and go. I also believe the EPL's have a time limit. A non-performer must be disqualified immediately.

It has been stated that the age-equivalent sedimentary rock make-up on the Namibian side is thinner than that on the Brazilian side. On the Namibian side, the upper cretaceous sequences are very thick, which suggest an early maturation for the lower cretaceous rocks as compared to the Brazilian side. The continental rift developed asymmetrically between Brazil and Namibia as the Pelotas Basin is characterised by proximal rifts in shallow water, and a wide and very thick rift in deep waters on the African side. There must be oil and gas in Namibia too.

The construction of an oil and gas refinery will cost N$75 billion for a 50 000 to 100 00 barrels-a-day refinery. Does Namibia as a country have such financial capacity? Not at all.

Namibia as a country is strategically located, and Walvis Bay is one of the leading ports in the world, known for its economical and safety performance. Yes, this is the best location, for an oil and gas refinery, for the southern African region. 

*POLITICS*

This is sometimes the critical factor, which plays a vital role in any decision-making. Let us communicate regionally with Angola, as it possesses crude oil. So, the best thing will be to construct a refinery close to the Angolan border or coastline. 

So, the question is: Why still selling or providing EPL's in this industry? Stop them all, and let us concentrate on Angola. Namibia might fork out US$5 billion from the national budget, or private companies and local businessmen will grab the opportunity. We are going to rely on investors and international companies on this project. 

There are 13 refineries in Brazil, a country with 210 million people, compared to SADC, which has a population of 277 million people. South Africa has the majority of 55 million inhabitants, and the country has six oil and gas refineries. Does Namibia, with a population of 2,4 million people, need to construct a refinery? I guess the answer to this is: Yes, we do need to construct a refinery, as this will elevate us on the industrial scale, on par with the rest of Africa and the world.

http://www.namibian.com.na/Status-of-oil-and-gas-exploration-projects/42744/read


----------



## smalltimer

See Latest News : _*Africa Oil & Gas Conference Australia *_

http://pancon.com.au/


----------



## smalltimer

*Latest News*


Full Year Statutory Accounts


----------



## smalltimer

October 6 2016 - 5:42AM 
Mark Shenk

http://www.theage.com.au/business/e...es-fall-for-a-fifth-week-20161005-grvwel.html

*Oil rallies as US inventories fall for a fifth week *

Oil climbed, approaching $US50 a barrel in New York, after government data showed that US crude stockpiles dropped last week.

Inventories slipped 2.98 million barrels in the week ended September 30, according to the Energy Information Administration. That contrasts with the 1.5 million barrel increase forecast by analysts surveyed by Bloomberg and a 7.6 million decrease reported on Tuesday by the industry-funded American Petroleum Institute. Production and imports slipped for a second week as refineries idled units for seasonal maintenance.

*US crude supplies fell to 499.7 million in the week ended September 30, the lowest level since January, according to EIA data.* 

"This is the fifth-straight weekly decline in crude supplies, which is very supportive," said Chip Hodge, who oversees a $US12 billion natural-resource bond portfolio as senior managing director at John Hancock in Boston. "It's good to see crude supplies come off, especially given how high they've been recently."

Oil has advanced more than 10 per cent since the Organisation of Petroleum Exporting Countries agreed last week to cut production for the first time in eight years. OPEC, which pumped at a record in September, will decide on quotas for the group's members at an official meeting in Vienna on November 30. Hurricane Matthew is heading for the US and may disrupt East Coast fuel shipments.

West Texas Intermediate for November delivery rose $US1.14, or 2.3 per cent, to $US49.83 a barrel at 1.54pm on the New York Mercantile Exchange. Prices reached $US49.95, the highest since June 29. Total volume traded was 17 per cent above the 100-day average.

Brent for December settlement increased $US1.03, or 2 per cent, to $US51.90 a barrel on the London-based ICE Futures Europe exchange. The contract reached $US52.09, the highest since June 10. The global benchmark was at a $US1.50 premium to WTI for December delivery.

US crude supplies fell to 499.7 million in the week ended September 30, the lowest level since January, according to EIA data. Inventories reached 543.4 million barrels in the week ended April 29, the highest since 1929. Stockpiles remain at the highest seasonal level in more than 20 years.

Crude imports slipped by 1.6 per cent to 7.71 million barrels a day last week. Production decreased 0.4 per cent to 8.47 million barrels a day.

Refineries cut operating rates by 1.8 percentage point to 88.3 per cent of capacity, the lowest level since April. Plants usually cut back on operations in September and October after the peak-demand driving season comes to an end.

Stockpiles of distillate fuel, a category that includes diesel and heating oil, dropped 2.36 million barrels, the biggest decline since May. Gasoline supplies rose 222,0000 barrels to 227.4 million.

Diesel futures for November delivery advanced 2 per cent to $US1.5856 a gallon after touching $US1.5923, the highest since October 2015.

An agreement among OPEC and non-OPEC states to limit oil production could slash global supply by 1.2 million barrels a day and add as much as $US15 to prices, said Venezuelan Oil Minister Eulogio Del Pino. OPEC would collectively cut output by 700,000 barrels a day under the accord hashed out last week in Algiers, while non-OPEC states would reduce production by another 500,000 barrels a day, he said in an emailed statement on Tuesday.


http://www.theage.com.au/business/e...es-fall-for-a-fifth-week-20161005-grvwel.html


----------



## smalltimer

http://www.theage.com.au/business/e...n-on-russia-saudi-pledge-20161010-grz9lt.html

*Oil reaches year high in London on Russia, Saudi pledge *

Nayla Razzouk, Grant Smith and Elena Mazneva
October 11 2016 - 5:55AM 

Saudi Arabia and Russia, the world's two largest crude oil producers, said they're ready to cooperate to limit output, helping send prices to a one-year high in London.

Russia is willing to join OPEC's efforts to stabilise the market, which would require either a freeze or a cut, President Vladimir Putin said on Monday at the World Energy Congress in Istanbul. Many producers outside the group have expressed a willingness to cooperate on output caps, said Saudi Arabia's Energy and Industry Minister Khalid Al-Falih, who added that he was "optimistic" there'll be a deal that could lift prices as high as $US60 by year-end.

Brent prices reached a one-year high of $US53.73 a barrel in London. Both Saudi Arabia's Al-Falih and BP chief Bob Dudley said that oil prices of about $US60 a barrel by year-end are possible.

Coordinated output curbs by Russia and the Organisation of Petroleum Exporting Countries, who together pump about half the world's oil, could boost fuel prices for consumers and revive the fortunes of a battered energy industry. While Putin's comments are the firmest indication yet that such an agreement is possible, Russia is still pumping at record levels and has stopped short of a commitment to pull back. OPEC members also have many hurdles to overcome before implementing their first cuts in eight years.

"It's a little bit early to start celebrating an agreement," Tord Lien, Norway's Petroleum and Energy Minister, said in an interview with Bloomberg TV on Monday. "They have made great progress, and this could end up in an agreement that will materialise around Christmas and the first quarter of next year."

Ministers from some of the largest oil-producing nations are gathering in Turkey this week to discuss ways to end a two-year supply glut. With benchmark Brent crude trading at about $US53 a barrel - less than half its price in mid-2014 - countries including Saudi Arabia remain under severe economic pressure, prompting last month's surprise reversal of its policy of pumping without constraints.

OPEC agreed in principle on September 28 in Algiers to limit output to a range of 32.5 million to 33 million barrels a day, compared with production last month of about 33.75 million. While the deal has helped lift crude prices by about 15 per cent, precise details of who would make the cuts or whether producers outside the group would join weren't finalised.

An OPEC committee will work on the details of how to share the burden of cuts and present its proposals at a formal November 30 meeting in Vienna. Ministers from some group members, including Saudi Arabia and Algeria, will meet with non-OPEC nations including Russia and Azerbaijan in Istanbul on Wednesday to discuss wider cooperation.

"Russia is ready to join in joint measures to limit output and calls on other oil exporters to do the same," Putin said. "In the current situation, we think that a freeze or even a cut in oil production is probably the only proper decision to preserve stability in the global energy market."

So far this month, Russia has pumped crude and and a light oil called condensate at a rate of 11.2 million barrels a day, according to preliminary data from the Energy Ministry's CDU-TEK unit. If that continued for the whole month, it would set a post-Soviet record, beating September's 11.1 million barrels a day. Russia would prefer to freeze its output at current levels rather than make reductions, Energy Minister Alexander Novak said earlier on Monday in Istanbul.

For the Algiers production deal to work, Saudi Arabia would need to make some cuts. The kingdom pumped 10.58 million barrels of crude a day in September, just shy of its July record of 10.66 million, according to data compiled by Bloomberg.

Brent prices reached a one-year high of $US53.73 a barrel in London. Both Saudi Arabia's Al-Falih and Bob Dudley, the chief executive officer of BP, said that oil prices of about $US60 a barrel by year-end are possible.

While traders have clearly welcomed the comments from Saudi Arabia and Russia, "caution may be the best practice", Naeem Aslam, chief market analyst at ThinkMarkets UK Ltd, said by email. "If history tells us anything, it is that these major oil players also have the habit to not respect the agreed agreement."

http://www.theage.com.au/business/e...n-on-russia-saudi-pledge-20161010-grz9lt.html


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## smalltimer

Are Drillers going back to Work ?, we can only hope so.....
A *bit* of action in PCL Share trading this week as well......
It may take a bit more to get the deep water guys going again though.

**********************************************************

http://www.rigzone.com/news/oil_gas...l_Rig_Count_Extends_Recovery_Amid_Crude_Rally

*Baker Hughes: US Oil Rig Count Extends Recovery Amid Crude Rally*

by  Reuters
Friday, October 07, 2016

The number of rigs drilling for oil in the United States rose this week, extending one of its best recoveries with no cuts for 15 straight weeks, with analysts expecting more additions after crude prices climbed back over $50 a barrel.

Drillers added three oil rigs in the week to Oct. 7, bringing the total count up to 428, the most since February, but still below the 605 rigs seen a year ago, according to energy services firm Baker Hughes Inc on Friday.

That 15-week streak of not cutting rigs was the third longest since 1987, following 19 weeks in 2011 and 17 weeks in ended in 2010.

The oil rig count plunged from a record high of 1,609 in October 2014 to a six-year low of 316 in May after crude collapsed from over $107 a barrel in June 2014 to near $26 in Feb. 2016 in the biggest price rout in a generation due to a global oil glut.

But after crude briefly climbed over $50 a barrel in June, drillers have added 112 oil rigs. Analysts said prices over $50 would prompt energy firms to return to the well pad.

U.S. crude futures this week climbed over $50 a barrel to four-month highs, spurred by ongoing talks of an OPEC production cut. Prices on Friday eased to just below $50 on profit-taking from the nearly 15-percent rally since the group announced plans to reduce output on Sept. 28.

Looking ahead, analysts forecast the rig count would jump higher in 2017 and 2018 when prices were expected to rise with publicly-traded energy firms planning to spend more on drilling to increase production.

Futures for calendar 2017 were trading at about $53 a barrel, while calendar 2018 was around $54.

Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast total oil and natural gas rig count would average 498 in 2016, 656 in 2017 and 866 in 2018.

That compares with an average of 482 oil and gas rigs active so far this year, according to Baker Hughes data. That compares with an average of 978 oil and gas rigs active in 2015.

(Reporting by Scott DiSavino; Editing by Marguerita Choy)

http://www.rigzone.com/news/oil_gas...l_Rig_Count_Extends_Recovery_Amid_Crude_Rally

*********************************************************

http://www.bbc.com/news/business-37610287

*Oil price lifted by Russia backing Opec production freeze*

10 October 2016

Russia has said it will support a proposal by Opec to freeze oil production in order to reverse the slump in global prices.

The move lifted the price of oil, with Brent crude hitting a one-year high. "Russia is ready to accede to joint measures to reduce [oil] production, and is calling on other oil exporters to do so," said Russian President Vladimir Putin. 

"We support the recent Opec initiative to set production limits," he added.

In late afternoon Brent Crude oil was trading up by 2.5% at $53.21 a barrel, just off the $53.73 high hit earlier on Monday.

Speaking at the World Energy Congress in Istanbul, Mr Putin said that oil prices had "more than halved" in two years due to surplus production, provoking a "cycle of decreasing investment".

He said that if the trends persisted, they would give way to oil shortages and "new, unpredictable price hikes".

He expects to reach an agreement to support a cut at Opec's next meeting in November, he said.

"Of course, this will also cool down speculative activities and help avoid new price fluctuations," he said.

In September, members of the The Organisation of the Petroleum Exporting Countries (Opec) voted to cut production for the first time in eight years.

The group's 14 members produce about a third of the world's oil and have been hit hard by falling prices, as has Russia.

Opec aims to agree to cut around 700,000 barrels per day at its policy meeting on 30 November in Vienna, bringing its output to 32.5-33 million barrels per day.

In September, Opec ministers agreed to cut oil production for the first time in eight years but some analysts have questioned whether all of its members will stick to the agreement. 

Differences between Iran and its regional rival, Saudi Arabia, have thwarted efforts to reach a deal in the past, and Russia's latest intervention may have little impact, said John Hall, chairman at Alfaenergy group

"Russia and Opec have not worked well in the past, and while Vladimir Putin promising joint measures is welcome, whether he sticks to it is another matter," he said. 

"You've also got to see the wider context: Saudi Arabia and Iran are in a proxy war in Yemen. It is still very doubtful they can come to an agreement whether Russia supports a cut or not."

However, John Kilduff, partner at New York energy hedge fund Again Capital, told the Reuters News Agency: "Putin coming out to say Russia will be part of the initiative has added another layer of credence to the speculation there will be a coordinated cut.

"At some point, the market will call them on it and say 'show us the cuts'."

In his speech Mr Putin also criticised unilateral sanctions, suggesting the US had blocked the expansion of more oil pipelines from Russia to Europe.

"The authorities in certain countries have been telling businesses to close profitable projects, refuse to buy fuel supplied via the shortest possible routes and at attractive prices," he said.

"Such actions do nothing to increase the stability of global energy system and also of the global economy as a whole."

http://www.bbc.com/news/business-37610287


----------



## smalltimer

*Becoming a Substantial Holder*

See : http://pancon.com.au/

See :* LATEST NEWS*

***********************************************
Share Price up 25% today to $ 0:005, then back down to $ 0:004 on the close.

10,960,001 shares changing hands in 28 trades for the day. 
Looks like that there is a bit of life in the stock again. Its been a while.


----------



## smalltimer

*See Pancontinental's Website *

http://pancon.com.au/

LATEST News for ;

*Annual Report to Shareholders - 28th. Oct
Notice of Annual General Meeting - 28th. Oct*


----------



## smalltimer

*See Pancontinental's Website *

http://pancon.com.au/

 LATEST News for ;


Quarterly Cash Flow Report - 31st. Oct
Quarterly Activities Report - 31st. Oct


----------



## smalltimer

*Tullow, partners assess offshore Namibia drilling prospects*

10/31/2016 

WEST PERTH, Australia – Tullow Oil has completed much of the agreed work program for the EL 0037 permit in the Walvis basin offshore Namibia, according to partner Pancontinental Oil & Gas.

This included acquiring 3,000 sq km (1,158 sq mi) of 3D seismic; 1,000 km (621 mi) of 2D seismic; processing, interpretation, and mapping.

The partners are now determining which prospects will be high graded for a drilling campaign. The main prospects mapped on 3D data are Cormorant, Albatross, Seagull and Gannet North and South, all in the northern blocks of the license and on trend to Namibia’s first offshore oil discovery.

Combined prospective resources are 915 MMbbl of oil recoverable. 

There may be additional potential in three leads and extensive not yet covered by 3D seismic. 

http://www.offshore-mag.com/article...sess-offshore-namibia-drilling-prospects.html


----------



## smalltimer

*Namibia due to award four offshore exploration licences*
14 Oct 2016 00:00 GMT Updated 12 Oct 2016 07:31 GMT

NAMIBIA is set to award four offshore exploration licences before the end of the year, with a trio of players set to share the spoils, writes Eoin O’Cinneide.

A further two licences are under a process of evaluation. The southern African nation is also gearing up for a 2D onshore survey and a 3D offshore survey, with a 3D multi-client survey likely to be announced by the end of the year.

State player Namcor is keeping the lid on expected winners of fresh acreage, but it is understood that one player is set to be awarded two blocks, with two others getting one each.

The exploration terms would be four years, with one commitment well and a requirement to shoot 3D seismic.

*No exploration wells are planned off Namibia before the end of the year. Anglo-Irish independent Tullow Oil is set to drill a wildcat on its licence PEL 37, perhaps next year.*

http://www.upstreamonline.com/hardc...e-to-award-four-offshore-exploration-licences


----------



## smalltimer

*See Latest News : Investor Presentation
November 2016 *

http://pancon.com.au/


----------



## smalltimer

*See Latest News : *

30 Nov - Annual General Meeting Presentation
30 Nov - Chairman's Address to Shareholders
30 Nov - Africa Energy Corp. Farms-In to Namibia PEL 37

http://pancon.com.au/


----------



## smalltimer

*See Latest News : *

30 Nov - Results of Meeting
30 Nov - Annual General Meeting Presentation
30 Nov - Chairman's Address to Meeting

http://pancon.com.au/


----------



## smalltimer

*Kenya pins prosperity hopes on oil*

Release date: 9 December 2016 

Kenya is eager to make its entry into the oil export business in 2017. It plans to start on a small scale, producing almost a million barrels over a period of two years. 

There is concern, however, that plans are premature and profits will be hard to come by. 

The promise of petrodollars has generated high expectations, especially in Turkana - the arid north-western region of Kenya where the oil was discovered. 

The BBC's Nancy Kacungira went to Turkana to find out more for Africa Business Report.

http://www.bbc.co.uk/programmes/p04kscdj


----------



## smalltimer

*Appointment of Executive Director*
9 Dec 2016

Pancontinental Oil & Gas NL (ASXCL) is pleased to announce that its Company Secretary and Accountant, Mrs Vesna Petrovic has been appointed to the Board as Executive Director, effective today.

Mrs Petrovic joined Pancontinental in 2008 and has been Company Secretary since 2010. During her professional career she has had public listed company experience in numerous companies, particularly those who hold interests in Africa.

The current Pancontinental Board has a good mix of technical, operations, commercial, strategic and governance skills, which place the Company in a strong position to deliver on its strategic plan going forward.

Yours sincerely for and on behalf of
*Pancontinental Oil & Gas NL*

Ernie Myers
Executive Finance Director
www.pancon.com.au

Head Office – Level 1, 10 Ord Street, West Perth, Western Australia 6005
Postal Address - PO Box 1154, West Perth, Western Australia 6872
Telephone +61 8 6363 7090 Facsimile +61 8 6363 7099
ACN 003 029 543


----------



## smalltimer

On 16 December, Pancontinental Namibia (‘Pancontinental’) received a purported cash call from Tullow in the amount of US $552,897 claiming to represent 35% of the following costs allegedly incurred by Tullow in the 2014, 2015 and 2016 calendar years:

See More;

*See Latest News : *

19th. Dec 2016 - *Namibia PEL 37 *

http://pancon.com.au/


----------



## smalltimer

*Pancontinental challenges Tullow’s PEL 37 cash call *
Monday, 19 December 2016 - 11:09  

(Ecofin Agency) - Pancontinental Namibia on Monday announced that it has received a cash call claim in the amount of $552,897 from Tullow Oil. The claim, which was received on Friday, December 16, 2016, arises from alleged costs sustained by Tullow during the operatorship of the Namibian licence, PEL 37.

Tullow claims the amount which stands at $552,897 represents 35% of operatorship costs supposedly incurred by the company during the 2014, 2015 and 2016 calendar years. The costs includes common exploration costs, exploration licence management, Tullow’s local office costs, and non-project general exploration costs, Offshore Energy Today reports.

According to Pancontinental, the claim by Tullow was made in line with an amendment to the joint venture accounts, stemming from an internal review of costs sustained since 2014. Pancontinental added that it would seek full and complete details from Tullow concerning the issue.

The Namibian licence PEL 37 has the potential for joint prospective resources of over 900 million barrels of oil recoverable. Tullow operates the licence, with a drilling campaign required to commence by March 27, 2017.

Anita Fatunji

http://www.ecofinagency.com/compani...tinental-challenges-tullow-s-pel-37-cash-call


----------



## smalltimer

*Freeze output at 32.5 million barrels per day*
Friday, 23 December 2016 - 10:46

A committee set up by the Organization of Petroleum Exporting Countries (OPEC) to monitor the compliance of members and non-OPEC members with the global pact to cut oil output, are to meet at the beginning or in H1 of January, according to Kuwait's oil minister.

“_We will meet in January with OPEC and non-OPEC countries and we will coordinate over the method in which (compliance with) the cut will be implemented. I personally think that the announcements coming from Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Iraq, and Russia are all encouraging signs that they will abide by the cut and hopefully other countries will follow suit_,” Essam Abdul Mohsen Al-Marzouq, Kuwait’s oil minister, told _Reuters_ on the sidelines of a meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC) in Cairo.

The monitoring committee includes Algeria, Kuwait, Venezuela, and two participating non-OPEC countries, chaired by Kuwait and assisted by the OPEC Secretariat, is to closely monitor the implementation of and compliance with this Agreement and reports to the Conference.

OPEC at the end of November, in Vienna decided to reduce oil production by 1.2 million barrels per day and freeze output at 32.5 million barrels per day.

http://www.ecofinagency.com/public-...t-first-half-of-january-kuwait-s-oil-minister

The decision was supported by 11 non-OPEC countries, including Russia, which concluded their first deal since 2001 on December 10, 2016, with the organization to reduce their production by about 558,000 barrels per day from January 1, 2016 so as to ease a global oversupply after over two years of low prices.

_*Anita Fatunji*_


----------



## smalltimer

*See an Up-date on ;
Namibia PEL 37

*
In December 2016, Pancontinental Oil & Gas NL on behalf of its subsidiary Pancontinental
Namibia Pty Ltd (“Pancontinental”, “the Company”) announced that it had received a cash
call from Tullow Oil (“Tullow”) in the amount of US $552,897

Go to;

http://pancon.com.au/

See Latest News.


----------



## smalltimer

*Pancontinental pays Tullow’s cash call despite contesting it*
*Pancontinental Oil & Gas will pay a cash call made in December by Tullow Oil regarding the management costs of a licence offshore Namibia.*

The company has previously disputed the claim, and is still disputing it, however it said on Thursday, the structure of the Joint Operating Agreement requires payment of the cash call first in order to avoid a possible default situation, and then resolution of any disputes later.

To remind, Tullow in December 2016 sent a cash call of $552,897 to Pancontinental for administration and other “non-exploration” costs in respect of operations in licence PEL 37, Namibia for the years 2014 through to 2016.

Pancontinental has expressed belief Tullow doesn’t not have the right to make such a cash call under the terms of the free carry with Tullow and has reserved its rights regarding the matter.

However, for the reasons mentioned above, Pancontinental has offered a staged payment plan which Tullow has accepted.

“Payments are to be made without prejudice to the Company’s right to contest the cash call and the Company is considering its position on the matter,” Pancontinental said.
*No prior consultation

To remind, in its statement in December, Pancontinental had said the cash claim was related to “regarding common exploration costs, exploration license management, Tullow’s local office costs, and non-project general exploration.”

At the time, Pancontinetnal said the claim by Tullow had been made based on an adjustment to the joint venture accounts resulting from an internal review of costs incurred since 2014. Thus, Tullow believes it gives the company the right to issue the cash call.

“This claimed adjustment was made without any prior consultation with Pancontinental,” the Pancontinental said in December, adding that “the items, if accurate, are covered by the free carry as defined in the Tullow Farmout Agreement dated September 6, 2013,” and the cash call is invalid.

Namibian license PEL 37 4 best estimate has the potential for combined prospective resources of more than 900 million barrels of oil recoverable. Tullow is the operator of the license, with a drilling campaign required to begin by March 27, 2017.

PEL 37 covers three adjacent blocks over some 17,000 sq km in the blocks in the central Walvis Basin offshore Namibia.

Offshore Energy Today Staff

http://www.offshoreenergytoday.com/pancontinental-pays-tullows-cash-call-despite-contesting-it/
*


----------



## smalltimer

*http://clients2.weblink.com.au/news/pdf_2\01820018.pdf
http://pancon.com.au/  (click on LATEST News)

MARKET RELEASE*

16 January 2017

*Pancontinental Oil & Gas NL

TRADING HALT*

The securities of Pancontinental Oil & Gas NL (the “Company”) will be placed in
Trading Halt Session State at the request of the Company, pending the release
of an announcement by the Company. Unless ASX decides otherwise, the
securities will remain in Trading Halt Session State until the earlier of the
commencement of normal trading on Wednesday 18 January 2017 or when
the announcement is released to the market.

*REQUEST FOR TRADING HALT
*
Pancontinental Oil & Gas NL (“Pancontinental”) requests an immediate trading
halt in respect of its securities.

In accordance with Listing Rule 17.1:

(a) Pancontinental is seeking the trading halt pending the making of an
announcement to the market in relation to a capital raising;

(b) Pancontinental is seeking the trading halt to assist in maintaining an
orderly market in the trading of the company’s securities and managing
its disclosure obligations;

(c) Pancontinental requests the trading halt until the earlier of the
commencement of trading on Wednesday 18 January 2017 or
Pancontinental releasing an announcement to the market concerning
the capital raising; and

(d) Pancontinental is not aware of any reason why the trading halt should
not be granted.

For and on behalf of

*Pancontinental Oil & Gas NL
Vesna Petrovic
Company Secretary

http://clients2.weblink.com.au/news/pdf_2\01820018.pdf
http://pancon.com.au/  (click on LATEST News)*


----------



## smalltimer

*For more detail - See Latest News Link at : http://pancon.com.au/

Namibia PEL 37

*
Pancontinental refers to the ASX releases dated 30 November 2016 headed “Africa Energy
Corp. Farms into Namibia PEL37” (“AEC” Farmin Release”), its announcement headed
“Namibia PEL37” released on 19 December 2016 concerning Tullow’s purported cash calls
(“Tullow Cash Call Release”) and Pancontinental’s release dated 5 January 2017 concerning
Tullow’s acceptance of a staged payment plan of Tullow’s purported cash calls.

On 16 January 2017 Pancontinental received advice from Africa Energy Corp. (“AEC”) that it
wanted to restructure the AEC Farmin Agreement reported in the AEC Farmin Release, to
accommodate the issue raised by Tullow’s purported cash calls referred to in the Tullow Cash
Call Release. The restructure proposed by AEC is to reduce the upfront payment of US$1.7
million by an amount that takes into account the likely exposure of AEC (bearing in mind
that its Participating Interest will be 10%) to cash calls that may be issued by Tullow for
expenditures allegedly incurred but which may not be covered by the Carry referred to in the
Tullow Farmin Agreement with Pancontinental.

Pancontinental is confident of reaching a sensible outcome with AEC in the near term, and
will report the outcome of those negotiations when completed.

For and on behalf of

*Pancontinental Oil & Gas NL
Ernie Myers
Executive Finance Director

For more detail - See Latest News Link at : http://pancon.com.au/*


----------



## smalltimer

*PANCONTINENTAL TO RAISE $1.0 MILLION
*
Pancontinental Oil & Gas NL (“Pancontinental” “the Company”) (ASX Code: PCL) is pleased to advise that it has completed a bookbuild for a placement to sophisticated and professional investors to raise up to $1.0 million through the issue of up to 333 million fully paid ordinary shares in the Company (“Shares”) at an issue price of* 0.3 cents per Share* (“the Placement”).

Funds raised pursuant to the Placement will be used to pay Tullow Oil in respect of costs for Namibia PEL 37 for the years 2014 to 2016 (circa A$600k remaining – see announcement 5 January 2017*), further exploration costs in respect to Namibia PEL 37 and for general working capital.

* Pancontinental has reserved its right in respect of the payment and is considering its position in respect of resolving the matter (see ASX Announcement 5 January 2017).

The key focus for Pancontinental at the current time is the Offshore Namibian Project PEL 37. Successful 3D and 2D seismic programmes have recently been completed and processed at a cost to Tullow Oil of in excess of US$30 million.

As announced on 30 November 2016, Pancontinental agreed to assign a 10% interest in the project to Africa Energy Corp. in exchange for staged payments totalling US $6.5 million (approximately AU $8.6 million), subject to certain conditions. Should Tullow Oil elect to commit to drilling, Pancontinental would be free carried on a well with no caps.

Given the quality and the value of the exploration undertaken to date and the considerable potential for oil in a numbers of prospects, Pancontinental is confident a decision to drill will be forthcoming which will be of considerable value to PCL’s healthy free carried position in PEL 37.

Hartleys Limited acted as Broker to the Offer in respect of the Placement. The Company also received support from the UK via Peel Hunt.Settlement of the placement for up to 333 million Shares is scheduled for Friday, 27

January 2017 and is not subject to shareholder approval. This part of the Placement falls within the Company’s existing placement capacity under Listing Rules 7.1. Subject to shareholder approval, Directors of Pancontinental have collectively committed to subscribe for $230,000 in the Placement. The Company will seek shareholder approval for the placement to Directors at a general meeting to be held in late February 2017.

*ASX ANNOUNCEMENT

18 JANUARY 2017
*


*ABOUT PANCONTINENTAL
*
Pancontinental Oil & Gas is listed on the Australian Securities Exchange (ASX: PCL). Offshore Namibia, Pancontinental has a free carried 30% interest (reducing to 20% after Africa Energy Corp. farmout) in Petroleum Exploration Licence 37. The Operator has conducted a 2D and 3D seismic survey and is interpreting the results to decide on a well.

As announced on 30 November 2016, Pancontinental agreed to assign a 10% interest in the project to Africa Energy Corp. in exchange for staged payments totalling US $6.5 million (approximately AU $8.6 million), subject to certain conditions.

Should the well proceed Pancontinental will be free carried with no cap. In Kenya Pancontinental has a 40% interest in the offshore portion of Licence L6 and a 16% free carried interest in the onshore portion of Block L6. *Visit Pancontinental’s website for further information at www.pancon.com.au/*

For and on behalf of

*Pancontinental Oil & Gas NL*
V Petrovic
Company Secretary


----------



## smalltimer

*PCL Q*uarterly Cashflow Report
See Latest News at ;
http://pancon.com.au/


----------



## smalltimer

*TULLOW O&G 2016 results Conference Call (02/09/2017)* 
ANGUS McCOSS on Namibia (minute 31:21) 

http://www.tullowoil.com/investors/results-reports-and-presentations/2016-half-year-results-registration 

"We’ve also got some great positions already in our portfolio in Mauritania and Namibia which should be working up. These low-cost material plays, meanwhile our new ventures team has been busy adding and working on adding new licenses based on these light-oil plays, so in-short, some very exciting transformational exploration opportunities, coming up."


----------



## smalltimer

Nice activity today the 0.004 sells taken out. Will we see 0.005 by the end of the day.
Must be a General Meeting coming up ?


----------



## smalltimer

*Notice of General Meeting
9.30am (AWST), Wednesday, 15 March 2017
The Park Business Centre
45 Ventnor Avenue
West Perth, Western Australia 6005

See LATEST NEWS ;
http://pancon.com.au/*


----------



## smalltimer

February 28 2017 - 7:25AM 
*Money managers bet on oil to rise *

*Mark Shenk*
http://www.theage.com.au/business/energy/money-managers-bet-on-oil-to-rise-20170227-gumois.html

Oil has been bound to the tightest price range in more than a decade, and yet hedge funds have never been so confident it will eventually rally.

Money managers boosted their bets on rising West Texas Intermediate prices to a record on speculation that the Organisation of Petroleum Exporting Countries and its partners will manage to ease a global supply glut. America's crude producers, which are increasing output, aren't so sure. They've been hedging against price declines for this year and 2018.   

Oil has traded above $US50 a barrel since OPEC and 11 other countries started trimming supply on January 1, which has in turn helped fuel a revival in US shale drilling. American explorers have almost doubled the number of rigs targeting oil since May, according to Baker Hughes. The mixed signals have locked WTI in its narrowest range since 2003 this month.

"I'm looking for prices to rise this year, but not above $US60, and the reason for the ceiling is the tremendous resilience of US shale," Tamar Essner, a New York-based energy analyst at Nasdaq Inc, said by telephone. "The market is very one-sided right now, which makes me nervous because that often precedes a reversal."

Hedge funds boosted their net-long position on WTI, or the difference between bets on a price increase and wagers on a decline, by 6 per cent in the week ended February 21, US Commodity Futures Trading Commission data show. WTI rose 1.6 per cent to $US54.06 a barrel in the report week, and closed at $US54.05 overnight.

"I'm perplexed to see the ongoing accumulation of length in a market that's not rewarding it with higher prices," Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by telephone. "This shows implied faith that the market will tighten in the future and that will push prices higher."

OPEC and its partners achieved 86 per cent of their agreed cuts last month, the organisation said last week. The group's Joint Technical Committee concluded that producers "are on the right track towards full conformity" with supply cuts.

They will probably need to keep output low once the accord expires in June in order to clear the glut, according to Total chief executive officer Patrick Pouyanne and Citigroup's head of commodities research, Ed Morse.

US crude inventories climbed to 518.7 million barrels in the week ended February 17, the highest level in weekly data going back to 1982, according to the Energy Information Administration. Production rose to 9 million barrels a day in the period, the highest since April.

As stockpiles mount, producers are increasingly seeking protection against a price reversal. Their net-short position keeps getting closer to the record bearish stance reached in April of last year.

"Producers know the market as well as anyone," Bob Yawger, director of the futures division at Mizuho Securities USA in New York, said. "They're worried about the deal holding for more than six months. It's more likely than not that the market will tank if the deal's not extended or there's extreme cheating."

As for hedge funds, their net-long position in WTI increased by 23,299 futures and options to 413,637, the most in data going back to 2006. Longs rose 4.6 per cent to an all-time high, while shorts slipped 7.5 per cent to the lowest since July 2014.

"The hedge funds have piled on bullish positions," Yawger said. "The downside is that someday, if it looks like the OPEC deal is coming apart, the market can fall apart very quickly."

Speculators' wagers on Brent crude, the international benchmark traded in London, also reached a record. Their net-long positions advanced by 26,210 contracts to 507,609, data from ICE Futures Europe showed.

http://www.theage.com.au/business/energy/money-managers-bet-on-oil-to-rise-20170227-gumois.html


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## smalltimer

Pancontinental Latest News, Results of General Meeting, see;

http://pancon.com.au/


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## smalltimer

*Tullow Oil makes $750 million cash call to reduce debt*
Reuters News Desk    18/03/2017                                                       

*By Arathy S Nair*

Britain's Tullow Oil Plc (TLW.L) plans a rights issue to raise about 607 million pounds to cut its $4.8 billion debt burden and make investments in drilling and exploration in Latin America and Africa.

Tullow, whose founder and long-serving chief executive Aidan Heavey will hand over to Chief Operating Officer Paul McDade in April, was hit hard by the collapse in oil prices in 2014 just as it was investing heavily in an oil project off Ghana.

Under the terms of the 25 for 49 rights issue, Tullow said on Friday it will issue 466.9 million shares at 130 pence each, a 45.2 percent discount to Thursday's close.

Some analysts said they were surprised by the move and Tullow's shares were down 13.7 percent at 204.9 pence at 0833 GMT.

"The ... rights issue comes as a surprise to us and possibly indicates banks were not as supportive to RBL refinancing as we were expecting," Jefferies analyst Mark Wilson said.

Tullow, which had tightened its investment budget to $500 million this year, from $900 million in 2016, had net debt of about $4.8 billion as of Dec. 31.

The company said it would use the proceeds from the rights issue, which is being underwritten by Barclays, JPMorgan and other banks, for investments in new drilling opportunities and further exploration and appraisal programmes in offshore Ghana.

The company said it also plans to invest in more exploration and appraisal activity in Kenya and fund drilling projects in Africa and South America.

Tullow also said that CNOOC Uganda Ltd had exercised its pre-emption rights to buy 50 percent of the interests in Uganda which are being transferred to Total.

Total (TOTF.PA) agreed in January to buy most of Tullow's stake in a Uganda project, jointly owned by Total, Tullow, and China's CNOOC (0883.HK), for $900 million.

The terms of the CNOOC's agreement will be the same as agreed between Tullow and Total, Tullow said.

(Reporting by Arathy S Nair in Bengaluru; Editing by Jason Neely and Alexander Smith)

http://oilpro.com/post/30504/tullow-oil-makes-750-million-cash-call-to-reduce-debt


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## smalltimer

*
Namibia PEL 37

*
Pancontinental Oil & Gas (“Pancontinental”) refers to the ASX release dated 30 November
2016 headed “Africa Energy Corp. Farms into Namibia PEL37” (“AEC Farmin Release”)
concerning an agreement between Africa Energy Corp. (“AEC”) and Pancontinental under
which AEC, subject to certain conditions, would farmin to Pancontinental’s 30% interest in
Namibian offshore exploration licence PEL 37 (“AEC Farmin Agreement”).

On 16 January 2017, Pancontinental received advice from AEC that it (AEC) wished to
restructure the AEC Farmin Agreement reported in the AEC Farmin Release.

Unfortunately Pancontinental and AEC have not been able to conclude a mutually satisfactory
revised agreement within the given period for negotiation and consequently the agreement
referred to in the AEC Farmin Release has lapsed.

See   http://pancon.com.au/     Latest News for more details


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## smalltimer

*Africa Energy pulls the plug on Namibian block farm-in*
*1st. April 2017

http://www.offshoreenergytoday.com/africa-energy-pulls-the-plug-on-namibian-block-farm-in/
*




PEL 37; Image source: Africa Energy

*Canadian oil and gas exploration company Africa Energy Corp. has terminated a farm-out agreement with a subsidiary of Pancontinental Oil & Gas to acquire a 10% participating interest in Petroleum Exploration License 37 offshore Namibia (PEL 37).*

To remind, the two companies entered the farm-out agreement on November 29, 2016.

Under the terms of the agreement and similar to the terms of Pancontinental’s participating interest, the company’s participating interest share of all joint venture costs, including the drilling of the first exploration well on PEL 37, was supposed to be fully carried through the current exploration period by a joint venture partner.

Africa Energy has agreed to pay Pancontinental $1.7 million at the close of the farm-out agreement, and an additional $4.8 million upon spud of the first exploration well.

Africa Energy said on Thursday that it exercised its right to terminate the agreement as a result of due diligence procedures performed by the company which identified discrepancies in respect of certain agreed commercial terms of the transaction.

In a separate announcement on Friday, Pancontinental said that Africa Energy reached out to the company on January 16, 2017, wanting to restructure the agreement. However, since the duo failed to conclude a mutually satisfactory revised agreement within the given period for negotiation, the farm-in agreement has lapsed.

Since the deal was not completed, Pancontinental still holds a 30 percent equity interest in PEL 37. The other partners in the PEL are Tullow with 65 percent interest and the operatorship and Paragon Oil & Gas with the remaining five percent.

http://www.offshoreenergytoday.com/africa-energy-pulls-the-plug-on-namibian-block-farm-in/

Offshore Energy Today Staff


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## smalltimer

*Stock price is currently crashing, down to 0.002 at time of posting

ASX ANNOUNCEMENT

4 APRIL 2017

Namibia PEL 37

*
Under the Farmout Agreement between Tullow Kudu Limited, (now Tullow Namibia Limited)
(“Tullow”) and Pancontinental Namibia Pty Ltd (“Pancon”) dated 5 September 2013, the
drilling of the first exploration well was to commence no later than 27 March 2017 provided
a drillable prospect had been identified from the 2D and 3D seismic surveys. Although Pancon
considers that a drillable prospect has been identified within PEL-37, Tullow considers that
further work is required to identify a drillable prospect.

Pancon has sought an update from Tullow on the current status of that ongoing work and
will report on that update when it is received, which Tullow has informed Pancon will be,
during the first half of 2017.

For and on behalf of

*Pancontinental Oil & Gas NL
Barry Rushworth
CEO & Executive Director
*


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## smalltimer

MARKET RELEASE

6 April 2017

*Pancontinental Oil & Gas NL*

 TRADING HALT

The securities of Pancontinental Oil & Gas NL (the “Company”) will be placed in Trading Halt Session State at the request of the Company, pending the release of an announcement by the Company. Unless ASX decides otherwise, the securities will remain in Trading Halt Session State until the earlier of the commencement of normal trading on Monday 10 April 2017 or when the announcement is released to the market.

Security Code: PCL

Dawn James

*Adviser, Listings Compliance (Perth)*

*REQUEST FOR TRADING HALT*

 Pancontinental Oil & Gas NL (“Pancontinental”) requests an immediate trading halt in respect of its securities.

In accordance with Listing Rule 17.1:

(a) Pancontinental is seeking the trading halt pending the making of an
announcement to the market in relation to a capital raising;

(b) Pancontinental is seeking the trading halt to assist in maintaining an
orderly market in the trading of the company’s securities and managing
its disclosure obligations;

(c) Pancontinental requests the trading halt until the earlier of the
commencement of trading on Monday 10 April 2017 or Pancontinental
releasing an announcement to the market concerning the capital
raising; and

(d) Pancontinental is not aware of any reason why the trading halt should
not be granted.

For and on behalf of

*Pancontinental Oil & Gas NL
Vesna Petrovic
Company Secretary*

*ASX ANNOUNCEMENT*

*6 APRIL 2017*

*Head Office – Level One, 10 Ord Street, West Perth, Western Australia 6005
Postal Address - PO Box 1154, West Perth, Western Australia 6872
Telephone +61 8 6363 7090 Facsimile +61 8 6363 7099
ACN 003*


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## smalltimer

http://www.investorvillage.com/smbd.asp?mb=67&mn=126631&pt=msg&mid=17036278
5th. April 2017 11:27:22 AM  *



*

*Tullow stalls Namibian well (Well, they maybe worse shape than HDYN! )*

UK-based oil company Tullow Oil and the Australian oil company Pancontinental Oil & Gas don’t see eye to eye when it comes to a decision about drilling an exploration well in PEL 37 offshore Namibia.

Tullow farmed into Pancontinental’s PEL 37 license in September 2013 taking 65% interest as well as operatorship of the license. Pancontinental kept 30% interest and the remaining 5% is held by Paragon Oil & Gas.

Under the farm-out agreement from 2013, the drilling of the first exploration well was to start no later than March 27, 2017, provided a drillable prospect had been identified from the 2D and 3D seismic surveys.

Pancontinental said on Tuesday it considers that a drillable prospect has been identified within PEL 37, however, Tullow considers that further work is required to identify the prospect.

Pancontinental added it has sought an update from Tullow on the current status of that ongoing work and will report on that update when it is received, which Tullow has informed Pancontinental will be, during the first half of 2017.

The Australian company’s attempt to farm-out part of its interest in the license offshore Namibia to Africa Energy Corp. recently fell through.

According to data on Pancontinental’s website, prospective resources at PEL 37 license, which covers 17,295 sq km, are estimated at 8.7 billion barrels of oil.

Offshore Energy Today Staff

http://www.investorvillage.com/smbd.asp?mb=67&mn=126631&pt=msg&mid=17036278


(Emphasis is mine.  I don't know for COS for this field but if Tullow has to balk on this one too, they may be in a bigger financial jam than it first appeared.  It also adds to HDYN's case, because Tullow's backing of Fatala was due to totally financial reasons, not the concession itself.)


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## smalltimer

*
Pancontinental to raise up to $1.83 million

Pancontinental Oil & Gas NL (“Pancontinental”, “the Company”) (ASX Code: PCL) is pleased to advise that it has completed a bookbuild for a placement to sophisticated and professional investors to raise up to $600,000 through the issue of up to 300 million fully paid ordinary shares in the Company (“Shares”) at an issue price of 0.2 cents per Share (“the Placement”). The Placement is being undertaken at a circa 20% discount to Pancontinental’s 5 day VWAP.

In addition to the Placement, the Board of Pancontinental has also resolved to offer eligible shareholders the opportunity to participate in a Share Purchase Plan (“SPP”) to raise up to $1.23 million (see Share Purchase Plan Details below). The issue price of shares under the SPP will be at $0.002 per share, the same issue price as the Placement.

Funds raised pursuant to the Placement and SPP will be used in conjunction with existing cash, primarily for minimal costs associated with Licence Area PEL 37 offshore Namibia, other new venture costs (if any) and for general working capital purposes and other payables.

Commenting on the Placement and SPP, Pancontinental CEO Barry Rushworth commented:

“Pancontinental’s 30% interest in Offshore Namibian Project – PEL 37 is a significant and valuable asset. Successful 3D and 2D seismic programmes have been completed at a cost to farminee Tullow Oil in excess of US$30 million. The Project is a game changer for Pancontinental” 

“While the oil exploration industry has experienced some immense challenges over recent years, Pancontinental is seeing some real greenshoots of increasing interest in our highly attractive exploration acreage.” 

“In our view, and the views of others, our Namibian block is amongst the top of oil exploration opportunities globally. We are confident we will unlock this value for our shareholders from PEL 37 shortly and through other exploration assets we are looking at securing.” 

Settlement of the Placement for up to 200 million Shares is scheduled forTuesday, 18 April 2016 and is not subject to shareholder approval. This part of the Placement falls within the Company’s existing placement capacity under ASX Listing Rules 7.1. Subject to shareholder approval, Directors of Pancontinental have committed to subscribe for up to $200,000 in the Placement. The Company anticipates that it will seek such shareholder approval at a general meeting in May 2017.

Share Purchase Plan Details 

In order to provide all eligible Shareholders of the Company with the ability to participate in this capital raising, the Company is undertaking a Share Purchase Plan (“SPP”) to raise up to $1.23 million on a first come first served basis.

The SPP will enable eligible shareholders, irrespective of the number of shares which they hold in the Company, to purchase up to $15,000 worth of new Shares directly from the Company.

Eligible Shareholders will receive further information in relation to the Share Purchase Plan shortly.

ABOUT PANCONTINENTAL

Pancontinental Oil & Gas is listed on the Australian Securities Exchange (ASXCL). Offshore Namibia, Pancontinental has a free-carried 30% interest in Petroleum Exploration Licence 37 (PEL 37). The Operator has conducted 2D and 3D seismic surveys and is interpreting the results to decide on a well. A number of highpotential Prospects have been mapped from 3D data.

Visit Pancontinental’s website for further information at  www.pancon.com.au

Yours sincerely for and on behalf of Pancontinental Oil & Gas NL
Barry Rushworth,
CEO and Director
www.pancon.com.au
Head Office – Level 1, 10 Ord Street, West Perth, Western Australia 6005
Postal Address - PO Box 1154, West Perth, Western Australia 6872
Telephone +61 8 6363 7090 Facsimile +61 8 6363 7099
ACN 003 029 543
*


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## smalltimer

PCL 28th April Quarterly Activities Report
See Latest News - http://pancon.com.au/


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## smalltimer

Looks like they are having a hard time selling this at this time.
Things are looking grim. Very little feedback from Pancontinental
over the past months, and what appears to be a very poor management
structure. Still collecting pay with nothing to show. No point writing any
more, last posting unless they can get their act together.
**********************************************


SHARE PURCHASE PLAN EXTENSION

*
Pancontinental Oil & Gas NL (ASX: PCL) wishes to advise that the closing date for
its Share Purchase Plan (SPP) has been extended by two weeks to 16 May 2017
from the original closing date of 2 May 2017.

The Company has received a number of enquiries from shareholders in relation to
the SPP offer. The two week extension to the original closing date of the SPP allows
more adequate opportunity for the Company’s shareholders to participate in the
SPP due to the Easter break and Anzac Day.

Under the SPP, each Eligible Shareholder is entitled to apply for parcels of new fully
paid ordinary shares (Shares) ranging from a minimum of $1,000 up to a maximum
of $15,000 without incurring brokerage or transaction costs. The issue price of
Shares under the SPP is A$0.002 per Share.

Shareholders wishing to participate in the SPP should apply either by completing
the Application Form mailed to shareholders as instructed and returning it to the
address indicated on the Application Form, together with appropriate payment for
the number of Shares applied for under the SPP, or by making payment directly
by BPAY® in accordance with the details on the Application Form.

Applications and payment must be received by 5pm (AWST) on 16 May 2017.

The allotment date and despatch of holding statements for Shares subscribed for
under the SPP will now be on or around 23 May 2017. No other changes have been
made to the terms and conditions of the SPP as set out in the SPP information
booklet dated 18 April 2017.

*For and on behalf of


Pancontinental Oil & Gas NL
Vesna Petrovic
Company Secretary*


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## barney

PEL 37 Well to be finally Spudded in September if all goes to plan … The Market is speculating on some success with PCL share price moving up steadily last 2 months.

I tried to get the last of the 0.008 yesterday but missed by about 15 seconds ….. Will watch from the sidelines now.


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## smalltimer

Good Luck Barney. Not long now and we will all know.


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## System

On September 27th, 2021, Pancontinental Oil & Gas NL changed its name to Pancontinental Energy NL.
.


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