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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
 
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 !
 
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 !
Click to expand...

Hi Smalltimer,

Well it closed at 5c (up just over 6% on the day) on a whopping 10 million shares trading hands.

Regards
PB
 
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
 
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
 
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)
 
PCL - Pancontinental Oil & Gas

Kenya Discovers Oil, Natural Gas In LamuMarch 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.
 
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
 
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
 
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 Lüderitz 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
 
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
 
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
 
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.
 
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
 
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 Ogooué 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
 
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
 
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.
 
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
 
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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