Australian (ASX) Stock Market Forum

PCL - Pancontinental Energy

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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 !
Click to expand...

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

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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.

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

DeepSea Metro 1.jpg

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.”
 
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.

imageChart.axd
 
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.
 
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...
 
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.
 
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
 
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/
 
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.
 
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.’
 
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
 
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.
 
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
 
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
 
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:banghead:
 
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