PCL - Pancontinental Energy

[smalltimer]

More Takeover bids for Eastern Africa
Vancouver’s Vanoil Energy Acquires Avana Petroleum for C$15M
Posted on: December 03, 2012

Vanoil Energy Ltd., a Vancouver-based developer of oil and gas properties in Africa, has acquired British firm Avana Petroleum Ltd. for approximately C$15 million. Vanoil is a portfolio company of Canadian private equity investor Pinetree Capital Corp., which focuses on natural resource sectors.

PRESS RELEASE

Vanoil Agrees Non-Binding Terms To Acquire Avana

Vancouver, British Columbia – November 26, 2012 – Vanoil Energy Ltd. (“Vanoil”) is pleased to announce that it has entered into a non-binding heads of terms to potentially acquire the entire issued and to be issued share capital of Avana Petroleum Limited (“Avana”) from its shareholders (the “Sellers”) on a cash-free debt-free basis (the “Acquisition”).

Highlights:

•Non-binding heads of terms agreed for the Acquisition in a cash-free-debt-free share transaction
•If completed, will deliver a 10% interest in Kenya offshore block L9 with its partners Ophir and FAR Limited and a 25% interest in Seychelles Areas A and B with its partner Afren plc
•Supports Vanoil’s vision of becoming an emerging leader in East African oil and gas exploration
•Brings geological and geopolitical diversification to the existing onshore Vanoil portfolio
•Increases, at completion, Vanoil’s net recoverable mean unrisked prospective resources from 927 million boe to well over two billion boe
•Accelerates Vanoil’s exploration program, with two 3D seismic surveys and at least four drilling events scheduled for 2013 alone

Avana is a privately held Isle of Man company which holds a 10% working interest in Kenya offshore block L9 with its partners Ophir Energy plc (“Ophir”) and FAR Limited. Block L9 is a 5065 km² block located off the coast of Mombasa in the southern waters of Kenya; a region in which all of the neighbouring acreage is held by Total, Anadarko, BG, Apache, PTT and their respective partners. Block L9 lies directly to the south of block L8, on which Apache discovered gas in the Mbawa prospect earlier this year. The results of a 560 km² 3D seismic survey conducted in Q2 2012 suggest that the analogous Mbawa South prospect extends across the border of block L8 into L9, and a second 1536 km² 3D seismic survey conducted by Ophir in Q3 2012 illuminated potential oil prospects in a separate fairway spanning the southern half of block L9 and notably the Simba Graben. Ophir management presentations in October 2012 note that the estimated gross recoverable mean unrisked prospective resources on block L9 are 2.7bbbl/11.8 TCF of natural gas and that drilling will commence in 2013.

Avana also holds a 25% working interest in Seychelles Areas A and B with its partner Afren plc (“Afren”). Areas A and B comprise in excess of 14,000 km² in total and are located on the Seychelles plateau and adjacent zones in the northern waters of the Seychelles in a region where Amoco previously drilled three wells with hydrocarbon shows. Avana and its partner have acquired 8,500km of 2D seismic in the Seychelles (in addition to over 4,000km acquired by other parties over the blocks) and an extensive new 3D seismic survey is scheduled to commence in early 2013. Multiple oil seeps have been observed on Areas A and B, and tar balls of natural origin are abundant throughout the region. In August 2012, Afren’s management noted that the estimated gross recoverable mean unrisked prospective resources on Areas A and B are 2.8 billion boe and that drilling is due to commence in Q4 2013.

It is proposed that the consideration due to the Sellers will be CAD$15,000,000 (approx), satisfied by the issue to the Sellers of common shares in Vanoil. Deferred consideration of up to US$4,000,000 (approx.) may become payable in future, subject to certain conditions being satisfied in connection with the discovery of hydrocarbon on Avana’s offshore blocks. The Acquisition remains subject to the satisfaction of a number of conditions, including agreeing the form of and entering into legally binding documentation, formal acceptance by the Sellers, satisfactory due diligence being carried out, as well as the parties obtaining all necessary corporate and regulatory approvals which may be required.

It is proposed that Sam Malin, CEO of Avana, join the board of Vanoil upon completion of the Acquisition.

The potential Acquisition supports Vanoil’s vision of becoming an emerging leader in East African oil exploration. The underlying acreage to be acquired through Avana represents a complementary addition to Vanoil’s existing portfolio, bringing geological and geopolitical diversification. The combined company will hold blocks in four separate basins, two onshore and two offshore, spanning four of the most prospective hydrocarbon systems in East Africa. At the completion of this transaction, Vanoil’s net recoverable mean unrisked prospective resources will more than double, rising from 927 million boe to well over 2 billion boe. An active exploration program across the portfolio will also yield regular news flow, with two 3D seismic surveys and at least four drilling events scheduled for 2013 alone.

Aaron D’Este commented, “The vision of Vanoil’s Board of Directors is to provide a compelling proposition for investors committed to oil exploration in East Africa. The potential acquisition of Avana represents a very positive step towards this goal. In a single transaction, Vanoil could double its net prospective resources, reduce risk through diversification, and gain a host of well-known joint venture partners with extensive experience across Africa. We are also delighted that Sam Malin has agreed to join the Board of Vanoil upon completion and pleased to note that the share-for-share nature of the deal preserves our cash position. Overall, we are confident that the acquisition of Avana will prove to be a transformational event for Vanoil and its shareholders.”

Sam Malin of Avana commented, “The bringing together of Avana and Vanoil will create a uniquely focused East African exploration company with a wealth of regional experience. The transaction, once complete, will also meet Avana’s objective of providing its shareholders with a listing on an internationally recognised stock exchange.”

About Vanoil Energy Ltd.

Based in Vancouver, Canada, Vanoil is an internationally diversified resource company that has a comprehensive portfolio of oil and gas assets in the African countries of Kenya and Rwanda. In Kenya, Blocks 3A and 3B were acquired in October 2007 through the signing of a Production Sharing Contract with the Government of the Republic of Kenya. Blocks 3A and 3B, which cover 24,912 square kilometers, are part of the vastly under-explored Cretaceous Central African Rift Basin System. The Company is preparing to drill in Q1 2013 its first exploration well on its Kenyan concession. Vanoil’s is also the holder of 1,631 square kilometers of an oil and gas exclusive licence in the East Kivu Graben in Rwanda at the southern extension of the Albertine Graben where Heritage and Tullow Oil made their historic discovery in neighbouring Uganda.

http://www.pehub.com/175473/vanoil-energy-acquires-avana-petroleum/

 

[smalltimer]

Tullow Oil surrender blocks - Kenya

Scramble for oil blocks looms as firms give up sites
By ZEDDY SAMBU - Posted Wednesday, December 5 2012 at 21:54

Kenya faces a scramble for oil exploration blocks as majors led by Tullow Oil surrender five, paving the way for new investors.

Under the production sharing contracts (PSCs), the exploration firm must cede 25 per cent of their licensed acreage should they fail to do work on blocks after two years if the site is onshore or three years for offshore one.

This rule has prompted Tullow Oil to surrender two blocks while Anadarko of US, Afren Plc of UK and Statoil give up a block each.

In recent months, East Africa has been a centre of oil and gas exploration after several big discoveries, including Kenya’s second ever oil find announced by British explorer Tullow Oil and Canadian venture partner Africa Oil last week.

Licensing of the deep water offshore blocks at the Kenya coast has also been enhanced by discoveries along the coastlines of Tanzania and Mozambique.

Now, Kenya plans to gazette and the auction the new blocks that are expected to be snapped by other oil majors as demand for oil blocks in East Africa increases.

“It is prestigious to own huge blocks but the idea was for the oil companies to cede areas they were not presently working on,” said commissioner for petroleum Martin Heya.

“We have sent the maps of the blocks to the Survey of Kenya for re mapping. We are reconstituting and will gazette them into new blocks,” said Mr Heya on telephone.

All of Kenya’s mapped blocks have been awarded. Some of the latest entrants include French oil major Total and Eni of Italy.

Industry consultant Mwendia Nyaga said PSC laws stipulate that companies release one quarter of their acreage over an agreed time frame.

Surrender of the blocks comes at a time that the ministry is planning to switch to bidding rounds to license its oil exploration blocks, moving away from one-on-one negotiations with firms as interest increases following a recent oil discovery.

“Medium-sized companies are asking for these blocks. They should wait until we produce coordinates for the blocks,” said Mr Heya.

Tullow Oil could give up a quarter of its territory in block 10BB, where it made its March oil discovery, as well as a quarter of block 13T. Both are onshore. Anadarko will also surrender parts of its five offshore blocks.

Norwegian oil giant Statoil has suffered a blow after Kenya expelled it from exploring oil for flouting contract terms. The company was among the latest entrants in the Kenya oil search that had attracted more than 24 players by August after it was awarded block L26 in the deep offshore and had planned to start drilling in January.

The Ministry of Energy expects explorers to drill at least a dozen more wells in the next 12 months onshore and offshore.

Kenya aims to take a bigger slice of the profits from its natural resources exploration boom by seeking a 25 per cent stake in the production activities of oil and gas companies operating in the country.

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

At present, most of the contracts with oil explorers give state-owned National Oil Corporation of Kenya a 10 per cent stake in the production business once commercial quantities of oil or gas are found. This means that the parastatal contributes 10 per cent of production costs and receives 10 per cent of profit

http://www.businessdailyafrica.com/...sites-/-/539550/1637556/-/nhm7hr/-/index.html

 

[smalltimer]

Majors court kingpin Eni on Mozambique gas bonanza

By: Reuters
11th December 2012

MILAN - A year after Eni announced the largest discovery in its exploration history, a giant gas find in Mozambique, rival oil companies are falling over each other to get a piece of the action.

"It was clear from the start it was a major discovery that changed the ball game," a source close to the Milan-based company told Reuters.

And the find is getting bigger by the day, drawing interest from some of the world's largest energy players, many of which are coming late to the party in the world's most prolific area for new discoveries.

"Eni is in early talks with a few large players like Shell and Exxon, and, interestingly, a few large LNG buyers that could cover production and help speed final investment decisions," a source familiar with the matter said.

The Maputo government says the Rovuma field, home to the prospects discovered by Eni and Houston-based Anadarko off Mozambique's northern coast, boasts an estimated 150-trillion cubic feet (tcf) of gas.

Energy consultancy Wood Mackenzie classifies it as one of the world's biggest three gas basins.

The giant gas fields have showcased a part of the world some are calling the new Middle East. The pickings are so rich that East Africa's "new frontier" is now expanding north past Tanzania to Kenya, Ethiopia and even war-ravaged Somalia.

But it's Mozambique that has captured the imagination. Its deep waters are already peppered with rigs, and shiny new liquefied natural gas (LNG) plants will soon dot the coast to feed gas-starved Asian markets.

Four of the five largest oil and gas discoveries in the world this year have been made off Mozambique, including three by Eni, according to Wood Mackenzie.

"We reckon Eni and Anadarko are sitting on 85 tcf of recoverable gas, enough for multiple LNG trains, and we're probably only at the half-way stage," says Martin Kelly, head of the consultant's Sub-Sahara Upstream Research team.

The two LNG trains scheduled to be built in a first phase will liquefy 10-million tons a year, enough to meet almost 10% of gas demand in Japan, one of the biggest Asian markets.

"There's going to be a lot of competition and jostling for position and Eni with its size and experience could be a kingpin," says Kelly.

WAKE-UP CALL

Most of the world's big energy players have been late in waking up to East Africa and are now faced with the choice of either splashing out on new concessions or buying into operations that gambled on big finds.

France's Total, a deepwater specialist, recently bought into a Rovuma venture led by Malaysia's Petronas, while Shell lost out to Thailand's PTT in a $1.9-billion bid for Cove Energy, a partner of Anadarko in Mozambique.

"I remember this used to be a counter-consensus exploration play until the big finds came in last year. Just goes to show you can have all the right skills and a big budget and still miss the train," Bernstein energy analyst Rob West said.

Eni, Africa's biggest foreign operator, has 70 percent of the Mamba field it operates with Galp Energia, Korea's KOGAS and Mozambique's state-owned ENH in the Rovuma basin.

The field lies close to the Prosperidade acreage operated by Anadarko and junior partner Cove.

Both operators insist they won't know how much gas they've got until appraisal is complete next year. But already they are gearing up to sell down stakes to fund big investment plans and limit country risk in one of the poorest parts of the world.

Eni, which sees a long-term need for 10-12 LNG trains, has slapped a ballpark number on investments of around $50 billion.

Anadarko, with no LNG credentials of its own, is looking to sell a third of its 36.5 percent stake, while Eni is expected to sell off at least 20 percent of its holding for cash or assets.

"One option Eni is playing with is the idea of creating two sub-blocks - selling a majority stake in one and keeping a majority in the other," a source close to the situation said.

Milan broker Mediobanca says that, based on the Cove deal, Eni's 70 percent stake in Mamba field is worth $17.2 billion.

CHINA SUPPLY CHAIN

Mozambique's remoteness and lack of infrastructure means heavy spending will be needed on roads, railways and ports even before the new and expensive LNG terminals are built to liquefy the first gas expected in 2018-2019.

Finding skilled workforce will also be a challenge.

"If I were Eni I'd be looking at the emerging national oil companies. The Chinese can provide a supply chain and help boost returns," Banco Santander oil analyst Jason Kenney said.

Former BP head Tony Haywood has said a key benefit of his group's teaming up with China's CNPC in Iraq was access to the Chinese supply chain. China can deliver just about anything cheaper than elsewhere and not just rigs.

Together with India, Beijing is targeting Africa for natural resources to fuel its economy, and bypassing the volatile Middle East for energy supplies is particularly appealing.

Yet one banana skin for Eni could be what in the industry is known as "unitisation".

A lot of the gas discovered is thought to be one enormous field straddling the prospects of Eni and Anadarko. Eni has said a third of its 75 tcf of gas is exclusively within its block, while the rest is in a communicating area.

What that means is the two will have to sit down with the Maputo government to decide who is in charge and agree a plan to bring the gas to shore and build LNG plants and infrastructure.

"The challenge is that all of these projects have a lot of participants, and just coordinating between the operators and the participants within one consortium is probably quite a challenge," said Anne Fruhauf, director for Africa energy at consulting firm Horizon Client Access.

Talks are already under way, and while Eni and Anadarko claim relations are good, some are concerned the spoils at stake could create trouble.

"I've heard that Eni wasn't keen on working with Anadarko at all," one industry source said.

Edited by: Reuters

http://www.engineeringnews.co.za/ar...gpin-eni-on-mozambique-gas-bonanza-2012-12-11

 

[smalltimer]

13/12/2012 Morning Note

Pancontinental (PCL) – Is it too Obvious?

Sometimes we cannot see the forest for the trees. In the case of PCL, we believe that the market has focused too much on the detail (or lack thereof) in relation to the Mbawa discovery well drilled a few months ago. The available detail being a small gas discovery at one of several prospective horizons when the expectation was large oil. The bigger picture that has been missed, in our view, is:

• This is a first up discovery in virgin territory and the first ever discovery offshore Kenya

• Reservoir quality is excellent

• Type II kerogen source rock mature for generation of gas and oil. This means that oil has been generated in the system and now the Apache led joint venture is tasked with determining where it is

• The deeper horizon was not intersected meaning that prospectivity at this level remains

The upshot of all of this is that a worst case scenario will be discovery of significant quantities of gas offshore Kenya over the next two years, with an upside case that includes oil. Majors and internationally renowned explorers such as Apache, Tullow, BG and Anadarko all believe in the oil story based on interpretation of likely differences in maturity of the source rock offshore Kenya vs that offshore Tanzania and Mozambique where large gas discoveries have been made with stunning success in recent years.

Given that drilling is about to commence again offshore Kenya we would expect that once this news penetrates the market, the share price should start to appreciate. Anadarko has announced, via the Kenyan Ministry of Energy, that it will be drilling two wells in blocks adjacent to PCL’s interests offshore Kenya, commencing in December. BG and Apache also have plans to drill multiple wells in 2013, for which PCL will have direct exposure through its ownership in blocks L8, L10A and L10B. A farm-out of PCL’s L6 block could also provide a catalyst.

Additionally, HRT will be drilling a well in a permit adjacent to PCL’s acreage offshore Namibia, where analysis has detected a strong incidence of surface seeps. This will is scheduled for spud in February 2013. Recent drilling offshore Namibia has not yielded commercial results; however, this well will be the first in the Walvis Basin, where the source rock is thought to be in the oil window in present day.

It is also likely that we will see an independent certified update on prospective resources across all or part of the portfolio. This has been an effective value creator for many other junior explorers.

PCL has cash at bank of A$39m so is fully funded for the forward work program and with an Enterprise Value of A$55m, it is comparatively cheap to other explorers that do not have proof through drilling of an active petroleum system, seal and reservoir. Risk has been decreased (but is still present – this is exploration after all), the upside remains intact and the share price has declined. This, in our view, defines the opportunity.

We do not officially cover PCL so there is no recommendation or price target but we would be surprised if the share price did not double over the next few months on speculation alone. Given that we believe that additional discoveries are likely offshore Kenya, we also can see a strong likelihood of a sharply higher share price by this time next year.

Disclosure: the analyst has a beneficial interest in the shares of PCL

http://www.argonaut.com/news/morning-notes/844-13-12-2012-morning-note.html

"we also can see a strong likelihood of a sharply higher share price by this time next year"
It would have to just to get back to the level of the last share placement level !!!!

 

[smalltimer]

THE EAST AFRICAN

Kenya unveils new oil and gas licensing rules

By KENNEDY SENELWA Special Correspondent
Posted Saturday, December 15 2012 at 17:19

Kenya has announced new rules that will sharply increase licensing fees and introduce tough penalties for non-adherence to exploration schedules.

The changes include higher royalties and taxes, and revocation of mining and exploration licences of companies that do not keep to their exploration schedules.

The Ministry of Energy hopes to introduce the regulations under the reviewed Petroleum Exploration and Production Act by mid 2013, ushering in licensing bid rounds to award oil and gas exploration areas to prospecting firms.

Energy Permanent Secretary Patrick Nyoike said the ministry has already filed the rules on competitive bidding for gazetting and the first round will be held in June 2013 after the creation of new exploration areas.

Acreage will now be awarded to the highest bidder who offers the best terms to the government and agrees to pay requisite fees. This exercise will be carried out publicly, replacing the current system where exploration rights are issued on a first-come first-serve basis.

“The amount of money paid to the government as a one-off commitment fee per exploration area by a prospecting firm before signing of production sharing contracts (PSCs) will be raised from $300,000 to $1 million to discourage speculators,” said Mr Nyoike in an interview.

“Bank guarantees, annual training fees for civil servants involved in petroleum activities and terms for new PSCs will be reviewed upwards as Kenya is no longer a frontier exploration area,” said Mr Nyoike.

Joining ranks

By introducing competitive bidding, Kenya will join the ranks of countries like Tanzania that already have the system. Uganda plans to have a bidding process as well.

With Kenya becoming a hot spot for oil, gas and mineral exploration, the country has in the past three years attracted millions of dollars in foreign investments.

Kenya also wants all foreign mining companies to cede 35 per cent shares to local investors and institutions. The rule, expected to be effected by March 2013, has triggered opposition from executives in mining firms doing business in the country.

It comes as Australian consulting firm Hartleys projects that drilling activity will significantly increase offshore Kenya, with up to 10 wells expected in 2013.

In September, US-based oil and gas explorer Apache said it had struck 50 metres of net gas pay in Block L8, operated jointly with Origin Oil and Gas, which owns 20 per cent of the block, while Tullow and Pancontinental own 15 per cent each. Tullow has also found oil in two wells in northern Kenya.

Oil executives attending the Economist’s East Africa Summit in Kigali on December 7 cited government unpredictability as the biggest threat to doing business in the region.

They argued that uncertainty surrounded the issue of whether explorers would enjoy revenues in the event of commercial oil and gas production and what amounts governments would set aside for them.

“The biggest threat to business is governments changing the goal posts. In our game, everything is a risk. Tax regimes and laws are changing overnight. To us, this is as risky as drilling a dry well,” said Tim O’Hanlon, Tullow Oil’s vice president for African business.

“Sanctity of contracts is the only fixed point in a moving world ”” if it changes after you have taken the risk, that’s the nightmare scenario. We are worried about windfall taxes and governments raiding the industry,” he added.

The government has also resolved to start imposing capital gains tax when licensed firms transfer rights and interests of a PSC for an exploration area to third parties for monetary gain.

Already, Kenya has declined to approve the transfer of the oil and gas exploration interests of Cove Energy Plc to a Thai state-owned company over a tax dispute.

The Ministry of Energy said the approval will only be granted after Cove pays Kenya tax on proceeds realised from sale of seven offshore exploration areas to Thailand’s PTT Exploration and Production Public Company Ltd (PTTEP).

Kenya is seeking at least Ksh3 billion ($35.7 million) in tax from Cove over the sale. PTTEP in August agreed to acquire Cove’s 15 per cent stake in five exploration areas. Cove was also to cede 25 per cent and 15 per cent interest in two more blocks. The deal was valued at $1.8 billion.

The ministry will also be harmonising the Petroleum Exploration and Production Act with sections relating to fees and charges payable to county councils by prospecting firms under the Local Government Act.

Kenya plans to raise the royalties on gold and diamond mining from three to five, and 10 per cent respectively of the minerals’ gross value.

Some analysts said changes in mining and exploration laws as well as prolonged contract negotiations could scare away firms planning to invest in the oil and gas business in the region. “The biggest worry among businesses is whether the laws are going to be made in an orderly and systematic way.

The new 35 per cent ownership requirement in Kenya for example is impractical,” said John Ngumi, Standard Bank’s head of coverage and investment banking for East Africa. “Government unpredictability has become a big issue in East Africa,” he added.

Mr Nyoike said the Act will provide for sharing of revenues with counties, besides compensation and resettlement of property owners affected by the development of production facilities.

“The ministry is committed to fast tracking the review of relevant petroleum statutes to make them conform to industry best practices,” said Mr Nyoike.

What it means

With the proposed laws, the Ministry of Energy will require a 50 per cent bank guarantee upfront and a 50 per cent parent guarantee by major oil companies. Small firms will provide 100 per cent bank guarantee to ensure well drilling and other programmes are carried out on time.

Hydrocarbons Management Consultants, an industry consultancy, said small firms that fail to meet work obligations will forfeit the guarantees to the government, meaning in future the sector is likely to be dominated by financially well endowed majors.

“As the industry develops, small firms are really going to feel the squeeze of raising capital to comply with work requirements or surrender acreage for award to competitors,” said Robert Shisoka Hydrocarbons’ lead consultant.

Smaller explorers with material acreage positions offshore Kenya are increasingly becoming targets for big companies, pointing to the likelihood of a fresh round of mergers and acquisitions in the lucrative oil exploration business.

Kenya’s Ministry of Energy is currently developing natural gas terms, which BG Group is waiting for in order to drill an exploration well in 2013 in offshore acreage L10A, and L10B in Lamu basin.

Kenya also wants to improve the content of local companies providing goods and services to exploration firms. Tullow Oil in 2011 spent $23.6 million on local suppliers, representing 23 per cent of its overall spending in Kenya.

“A key part of our business is in supporting development of Kenyan contractors and suppliers and ensuring as many jobs as possible are filled by local people,” said Tom Gray supply chain manager Tullow Oil Kenya

http://www.theeastafrican.co.ke/new.../2558/1644652/-/item/0/-/u52btcz/-/index.html

 

[systematic]

I have this as an extremely poor stock, only worth a short! You are diligent in following it by the looks! You must have a special interest in it?

 

[Miner]

I have this as an extremely poor stock, only worth a short! You are diligent in following it by the looks! You must have a special interest in it?

Dear Systematic

Interesting comments. I am sure we all have some interests on stocks directly or indirectly when putting post.
I have noticed ST has been consistent to bat in favour of PCL with factual information and minimum comments of his (assuming ST is a He) own.

So please tell your story - why do you think PCL a poor stock and against what benchmark ? What is your interest on PCL ?

My personal opinion PCL Apache connection is going to be a constructive partnership notwithstanding exploration is always a speculation.

My interest - I am a holder of PCL and did not sell even the price went sky rocketing because of the value I see with PCL stock.

Good part is after a long time some one other than ST commented PCL thread even it was raising concerns on his posting.

Thanks

 

[systematic]

Dear Systematic

Interesting comments. I am sure we all have some interests on stocks directly or indirectly when putting post.
I have noticed ST has been consistent to bat in favour of PCL with factual information and minimum comments of his (assuming ST is a He) own.

So please tell your story - why do you think PCL a poor stock and against what benchmark ? What is your interest on PCL ?

My personal opinion PCL Apache connection is going to be a constructive partnership notwithstanding exploration is always a speculation.

My interest - I am a holder of PCL and did not sell even the price went sky rocketing because of the value I see with PCL stock.

Good part is after a long time some one other than ST commented PCL thread even it was raising concerns on his posting.

Thanks

Oh I was just surfing the recent posts on stocks, took a look at this one and made the comment - all good.
I just noted that ST was being diligent in following it and wondered if they had a particular reason or story to share. I have no interest in PCL, and have never owned it (just for disclosure).

My benchmark / personal opinion simply came from my value and momentum ratings on this stock. Essentially that means I just don't think it's shown any strength and I think it's expensive is all.

 

[smalltimer]

Hi Guys, (Systematic & Miner)

Sorry that I did not get back to you earlier but busy with Christmas stuff etc.

Yes I do hold PCL shares, why would I be interested in PCL otherwise? PCL is the only stock that I own and post about. Currently holding around 3mil shares but try and buy/sell with the ups and downs. Not to make money as such at the moment but trying to build up my holdings for the long term. I’ve been working in the Oil Game for over 30 years working mainly on Offshore Platforms, but nothing to do with Pancontinental.

I got interested in this stock back in October 2010 while I was working in Singapore and a few of the guys on my job were talking about it. Got in at around 3.5 cents at that time and have followed the highs and lows since.

I try and post articles that show and highlight the Pro’s and Con’s of the stock and I think if you look back on my postings you will see that. It is hard enough out there with the Extra fast electronic trading, the BOT’s not to mention the Brokers that take us for a ride and the high commission fees we have to pay in Australia to trade, and to top it off, if we make a buck, Tax on our profits, without people only posting good news trying to bump the stock up for their own gains. I find a lot of that on the HOTCOPPER PCL forum.

This is a high risk stock, no two ways about that, but if it ever comes off, the gains will be 10 fold plus. This stock is not for someone to invest their retirement savings in, but if you have a bit of spare cash, I like their holdings and what they are up to, also what is going on in East Africa in general. The potential is certainly there. The trick is (as Kenny Rogers put it) you have to know when to hold them and know when to fold them. No one can tell you when those times come, it is up to you.

All the best guys and a Merry Christmas/Happy New Year to all.

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

Eni-Anadarko African LNG Plant to Be World’s Second-Largest
By Eduard Gismatullin & Yuriy Humber - Dec 21, 2012 7:48 AM

Italy’s largest oil company and Anadarko will coordinate development of gas fields and cooperate in the construction of the plant in the Cabo Delgado province of northern Mozambique, which could have an eventual capacity of about 50 million tons a year, The Woodlands, Texas-based company said today in a statement. That would make it the largest LNG plant outside Qatar, the world’s biggest exporter of the fuel.

Mozambique’s offshore fields may hold as much as 250 trillion cubic feet of gas, enough to meet world consumption for more than two years, according to national oil company Empresa Nacional de Hidrocarbonetos. Companies such as Royal Dutch Shell Plc (RDSA) and Total SA (FP) have indicated an interest in joining projects in East Africa, while both Anadarko and Eni have said they may sell some of their assets in Mozambique to cut costs.

The agreement will “lead to a unitization agreement to further facilitate the efficient development of the common resources, as well as the independent reservoirs on both blocks, enabling enhanced economies of scale through shared infrastructure and facilities,” Anadarko Chief Executive Officer Al Walker said in the statement.

Mozambique is competing with neighbor Tanzania to produce East Africa’s first LNG. Statoil ASA (STL) and Exxon Mobil Corp. (XOM) today announced the third gas discovery in the Lavani-2 well off Tanzania.

Africa Rises

“If the recent discoveries of natural gas are confirmed, Mozambique will rank fourth in the world for natural-gas reserves -- behind Russia, Iran and Qatar,” Marin Katusa, an analyst at Casey Research LLC, wrote in a report released this week. “It’s not far-fetched to imagine that Africa -- not the Middle East -- will be the most important energy producer for the world in 2040 or even 2030.”

Eni and Anadarko will have “separate yet coordinated offshore activities,” in both Area 4, operated by Eni, and Area 1, operated by Anadarko, the Italian company said in a separate statement. They “will jointly plan and construct common onshore LNG liquefaction facilities.”

BG Group Plc (BG/), which also explores for gas in Tanzania, may join forces with the Statoil-led venture to build a unified LNG plant in the African nation. At the same time, Petroleo Brasileiro SA (PETR4) of Brazil plans to sell its assets in Tanzania where it explores with Shell.

Awarded Contracts

Anadarko and Eni awarded front-end engineering and design contracts for both onshore LNG construction and offshore installation, the U.S. explorer said. Technip SA (TEC), a venture between Subsea 7 SA (SUBC) and Saipem SpA (SPM), and McDermott International Inc. (MDR) together with Allseas USA Inc. will design the offshore infrastructure.

The LNG engineering will focus on production units, also called trains, with a 5 million-ton-a-year capacity, according to Anadarko. The plant’s gas supply will be split evenly between the Anadarko-led project and Eni’s development, Mitsui & Co. (8031), a partner in Anadarko’s project said today in a statement.

Bechtel Group Inc. and ventures between JGC Corp. (1963) and Fluor Corp. (FLR), and Chicago Bridge & Iron Co. and Chiyoda Corp. (6366), will design the LNG plant, according to Anadarko.

The Eni-led venture holds about 23 trillion cubic feet of gas “exclusively” in its Area 4, the company said Dec. 5. The Rome-based company in October said it has been examining plans for a separate development of this resource, including a possible floating LNG plant or a compressed natural gas facility for exports to neighbor countries.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net Yuriy Humber in Tokyo at yhumber@bloomberg.net

http://www.bloomberg.com/news/2012-...rld-s-second-largest-lng-plant-in-africa.html
Good luck with your trading. ST (yes male )

 

[smalltimer]

Oil and Gas: East Africa’s race to get ready

The reserves already discovered will make East Africa one of the next gas frontiers. Companies are waiting for policymakers to determine priorities and incentives before they can settle on investment plans.

Fast forward to 2020. The deep waters off the coasts of Tanzania and Mozambique are teeming with rigs: drilling, extracting and transporting gas from the Mafia and Rovuma basins. Shiny new liquefied natural gas (LNG) plants, where the gas is cooled before being shipped to markets in Asia, are dotted up and down the coast.

But just as oil majors such as Royal Dutch Shell, BG Group and Petrobras are looking to buy stakes in the gas fields, the region’s governments are still un- decided about the policy regimes they want. Nothing is set in stone. Final investment decisions, even for the most advanced of the new developments – such as US firm Anadarko’s planned LNG plant in Mozambique – are due next year. Political wrangles could derail those plans at any time.

The scale of the finds so far – and their position close to gas- hungry Asian markets – is attracting big money. In July, Thailand’s state-owned PTT Eploration and Production beat back a bid from Shell to buy Cove Energy – an Irish company with an 8.5% stake in Mozambique’s Rovuma area 1 block – for $1.9bn in August. Looking to cash in, Indian telecoms tycoon Venugopal Dhoot, whose Videocon Industries owns 10% of the same block, is now eagerly searching for a buyer.

Frontier Zone Spreads

Since March, Italy’s Eni has been trying to bring in a partner to take 20% of its 70% stake in Rovuma Basin’s Area 4. In August, Eni upped its estimates for the size of the field to 2trn m3 of gas. Although Shell and BP are reported to be sniffing around, an analyst close to the matter told The Africa Report that Eni is now looking for an emerging market partner. Early September also brought the first signs that the gas boom could stretch into Kenyan waters. Tullow and Australia’s Pancontinental announced they had encounters gas, though not the oil they sought.

Inaugurating a new 107.5MW power station in July at Ressano Garcia, Mozambique’s President Armando Guebuza said coal and gas finds would become “preponderant factors” in the country’s industrialisation. He has also called for patience. In its medium-term gas market report, the International Energy Agency (IEA) says gas production from Africa, excluding Algeria and Egypt, will increase from 62bn m3 per year in 2011 to 94bn m3 by 2017. Little of this growth is likely to come from East Africa, where even the most optimistic estimates do not predict production starting before 2018.

Companies with stakes in the new gas finds are doing feasibility studies and working out the cost of constructing liquefied natural gas (LNG) plants, known as trains. A recent surge in the cost of several ambitious Australian LNG projects is pushing analysts to talk up East Africa as a cheaper alternative. Companies are also scouting around for offtake agreements. Anne-Sophie Corbeau, a senior gas analyst at the IEA, believes final investment decisions will not be reached “without some longterm contracts attached, at least covering half or two-thirds of production”. So far,there are none.

35% Expansion of domestic gas use in Africa from 2011 to 2017, according to the IEA’s projections

At this stage, timing is everything, says Nicolas Bonnefoy, a partner at law firm Ashurst who specialises in gas policy. “If the underlying governing regime were not to be ready in time, it may work as a deterrent for investment in a particular country,” he says.

In Tanzania, there is already confusion over a fourth licensing round for nine offshore blocks that was scheduled to begin in September. The energy ministry instructed the Tanzania Petroleum Development Corporation (TPDC) to cancel it and wait until parliament can ratify a new gas policy in October.

If Tanzanian politicians succeed in their plans, power plants will be prioritised. In July, mines minister Sospeter Muhongo said the government would invest $598m in gas-powered electricity plants in 2012-2013 to alleviate power shortages. Marné Beukes, energy analyst for sub-Saharan Africa at IHS Energy, thinks Tanzania is “definitely going to increase its royalties”, which currently stand at 5% for deepwater finds, and establish signature bonuses for future contracts.

In the current environment, producers and public entities are already in conflict. Orca Exploration, the first company to operate a gas-to-electricity operation from the Songo Songo fields, is mired in a dispute with the government over arrears and the destination of gas supplies.

The Chama cha Demokrasia na Maendeleo party has voiced concerns that the lack of gas legislation will mean that Tanzania’s age of gas could bring a new wave of corruption. Deputy leader Zitto Kabwe told parliament in June that he has evidence that money from the sale of gas licences between 2004 and 2006 ended up in Swiss bank accounts. He is calling on a moratorium on new licences until the gas masterplan is finalised.

Political Pauses

Politics has already intruded into offshore exploration. Shell is still waiting to begin exploration on four offshore blocks it won in 2002 off the coast of Zanzibar. A dispute between the island and the mainland over revenue sharing has led to a stalemate. A Shell spokesman told The Africa Report there was no progress on negotiations over the blocks.

There is also uncertainty about whether the Tanzanian government will invest in the construction of an LNG plant. Charles Mwijage, a parliamentarian from the ruling Chama cha Mapinduzi party, says that the government’s contribu- tion to an LNG plant “depends on the economic quantity of the gas discovery”.

Some promising policy ideas are emerging, including signs the TPDC wants to persuade gas explorers – notably BG Group and Statoil – to team up to build a single LNG train. A spokesman from Statoil, which found 253bn m3 of gas with part- ners ExxonMobil in Tanzania’s off- shore block 2, said it had a “sound dialogue” on this possibility and was “currently in the early phase of evaluating the concept selection for a possible LNG plant.”

$175m Tax received by Mozambique government after sale of Cove Energy to Thailand’s PTTEP

In Mozambique, the government held a public discussion in early September on the Norwegian government and World Bank-funded Petroleum Governance Initiative’s recommendations for a natural gas masterplan. The study indicated that the government could earn $5.2bn per year from gas by 2026, with enough gas to support 10 LNG trains.

The gas finds in Mozambique – of some 2.8trn m3 – are already yielding rewards for the state, which announced it received $175m by applying a 12.8% tax on profits on the Cove sale. Beukes says the government is keeping its thinking “close to its chest” and suggests that state-owned Empresa Nacional de Hidrocarbonetos (ENH), could look to increase its stakes to as much as 40% in new gas finds. ENH currently has 10-15% stakes that are carried through the exploration phase by the developers.

Without state-owned gas monoliths like those of Algeria and Qatar driving the pace of development, coordination will be key to East Africa’s gas policy regimes. Domestically, question marks remain over whether governments will incentivise companies to team up or to build pipelines. The mechanics of local gas markets will also determine investment decisions. Internationally, gas prices are still a big unknown. The South African cabinet’s decision in early September to lift a moratorium on fracking for shale gas in the Karoo could also alter plans to target South Africa for exports.

However, perhaps the biggest test for the region will be meeting the needs for qualified gas engineers and technicians come 2018. With Uganda’s oil finds and exploration heating up along the Rift Valley into Kenya and Ethiopia, East Africa must act fast to provide the companies with a well-trained cohort – or miss out on jobs

http://abdas.org/?sn=oil-and-gas-east-africas-race-to-get-ready

 

[systematic]

Hi Guys, (Systematic & Miner)

Sorry that I did not get back to you earlier but busy with Christmas stuff etc.

Yes I do hold PCL shares, why would I be interested in PCL otherwise? PCL is the only stock that I own and post about. Currently holding around 3mil shares but try and buy/sell with the ups and downs. Not to make money as such at the moment but trying to build up my holdings for the long term. I’ve been working in the Oil Game for over 30 years working mainly on Offshore Platforms, but nothing to do with Pancontinental.

I got interested in this stock back in October 2010 while I was working in Singapore and a few of the guys on my job were talking about it. Got in at around 3.5 cents at that time and have followed the highs and lows since.

I try and post articles that show and highlight the Pro’s and Con’s of the stock and I think if you look back on my postings you will see that. It is hard enough out there with the Extra fast electronic trading, the BOT’s not to mention the Brokers that take us for a ride and the high commission fees we have to pay in Australia to trade, and to top it off, if we make a buck, Tax on our profits, without people only posting good news trying to bump the stock up for their own gains. I find a lot of that on the HOTCOPPER PCL forum.

This is a high risk stock, no two ways about that, but if it ever comes off, the gains will be 10 fold plus. This stock is not for someone to invest their retirement savings in, but if you have a bit of spare cash, I like their holdings and what they are up to, also what is going on in East Africa in general. The potential is certainly there. The trick is (as Kenny Rogers put it) you have to know when to hold them and know when to fold them. No one can tell you when those times come, it is up to you.

All the best guys and a Merry Christmas/Happy New Year to all.

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

Thank you, I enjoyed reading that. Yes it can be a lot of fun following a stock very closely. Was in the mining game myself and not only observed a 20-bagger (for some, it was a 50-bagger), but also enjoyed following the various tips that would go around. One guy I knew...worked in services to mines and travelled about the country a lot. Every now and then - when he believed the "good thing" going around actually sounded like a good thing, would put down the equivalent of a few months wages. He'd done well over time. One time he got a ten bagger or somesuch and bought a house somewhere in QLD (can't remember where). Nice result from a single trade! The characters that you meet make it worthwhile, that's for sure!

 

[smalltimer]

Kenya: Oil Expectations Rise in 2013
By Solomon Kirimi, 28 December 2012

Kenya has no confirmed oil deposits yet but the year 2012 will remain the best for Kenya's quest to join the league of oil producers.

For a country which a year ago had no reason to think of ever becoming an oil producer, two wells at appraisal stage in Northern Kenya and gas finds at the coast is exciting.

It all started on March 26th of 2012, with the announcement that Ngamia-1 oil well in Lokichar area of Turkana in the Rift Basin had 20 metres of net oil pay.

Tullow Oil made the announcement that the Ngamia-1 exploration well, located in Block 10BB, had then been drilled to a depth of 1,041 metres, within which light waxy crude was discovered.

"This is an excellent start to our major exploration campaign in the East African rift basins and to make a good oil discovery in our first well is beyond our expectations and bodes well for the material programme ahead of us," said Tullow Exploration Director Angus McCoss, We look forward to further success as seismic and drilling activities continue to gather pace."

Two months later the Ngamia-1 well encountered oil and gas shows over a gross interval of 140 metres from a depth of 1,800 metres to 1,940 metres.

"God can not be so unfair to give our neighbor oil and gas and leave Kenya with nothing," energy minister Kiraitu Murungi said in reference to oil discoveries in Uganda, huge gas deposit find in Tanzania and the already oil producing Sudan.

The discoveries by Tullow suddenly the interest in exploration of in Kenya were revived just over a half a year after being dampened by the exit of Chinese explorer CNOOC from Isiolo in October 2012 after finding just traces of gas.

The Isiolo Boghal-1 well in block 9 well was plugged and abandoned because the gas was deemed to be of no commercial value.

"If the gas was of commercial value, Kenya would have received a lot of interest for exploration blocks," The then discouraged Energy permanent secretary Patrick Nyoike said.

CNOOC had sunk $26 million (Sh2.2 billion) to drill the well to a depth of 5,085 metres and quit before reaching 5,556 metres initial target.

CNOOC partner in the initial venture African Oil have now partnered with Marathon Oil to re-open the well following the successes by Tullow oil up north.

The lucky streak by Tullow oil followed them offshore to Mbawa1 in Lamu basin where 50 metres of net gas pay was found.

Tullow is a minor shareholder in the block L8 with Amerca's Apache corporation, Austalia's Pancontinental. Although the gas find was not of commercial value and was plugged, this increased the appetite for explorers with prospects looking good for presence of oil and gas of the Kenyan coast.

Tullow Oil's good run of results followed them to Twiga South-1 exploration well in Block 13T where in late November they encountered oil, confirming a rush announcement by partners Africa Oil Corp on October 26 2012.

Tullow Oil plc announced that the Twiga South-1 exploration well drilling had encountered 30 metres of net oil pay. A further potential of a gross interval of 796 metres net pay is to be assessed before being declared.

The finds have now moved Kenya from a high risk exploration country to high value target for world majors looking for a piece of the action in a region promising to be latest exploration frontier.

http://allafrica.com/stories/201212281070.html

 

[smalltimer]

East Africa:
Energy Boom At Risk
Posted December 30th, 2012
by Editor in AllAfrica

As giant oil and gas discoveries have some of the world’s biggest energy firms jostling for space in East Africa, the fate of one gas producer offers them a cautionary tale.

After investing $160 million in Tanzania, an offshoot of Canada’s Orca Exploration (ORCb.V) is close to paralysis because of unpaid bills and quarrels with authorities over terms.

Its story highlights some of the obstacles facing much bigger players as they negotiate with governments that are learning the game as they go along and are keen to both bring investment quickly and make sure they do not get cheated long term.

The speed with which East African countries adapt could determine whether their region lives up to its reputation as the latest great oil and gas frontier, with big implications for global energy flows as well as regional economies.

On the face of it, relations between Orca’s PanAfrican Tanzania and authorities in the East African country should work to everyone’s benefit.

Its gas generates half Tanzania’s electricity, saving it an estimated $1 billion a year on oil imports. When it started producing gas in 2004, it was hailed locally as just the sort of investment one of the world’s poorest countries needed.

But things started to unravel in 2011 when a government audit led a parliamentary committee to accuse PanAfrican of cheating it out of $20m in revenues. Meanwhile, state power firm TANESCO, its biggest customer, stopped paying for gas.

Threats that went as far as criminal charges were quietly dropped when it turned out the missing funds were due to an accounting error, but then a new discrepancy was announced.

Although the parliamentary committee behind the accusations was disbanded and itself accused of corruption, the government said it still wanted to negotiate with PanAfrican on how gas revenue was shared, among other things.

Last month, Orca told shareholders the company still hadn’t reached an agreement with the country’s Minister of Energy and Mines and that it might need extra funding as things drag on.

One of the government negotiators, Gabriel Bujulu, principal petroleum engineer at the Tanzania Petroleum Development Corporation said simply: “It is premature to expect that a solution will not be attained.”

Both Orca and PanAfrican declined further comment.

“NEW MIDDLE EAST”:

Changes to terms by governments seeking more money are nothing new for resource companies, but no matter how well-intentioned, they scare executives and investors.

“As discoveries are made and it becomes clear the size of the prize you can start to see political pressures to change the terms after the fact,” said GH Securities analyst John Malone, who studies East Africa’s energy sector.

Recent gas finds off Tanzania and Mozambique have led to predictions the region could become the third largest exporter of natural gas on the planet.

It could have 28 billion barrels of oil, 440 trillion cubic feet (12 trillion cubic meters) of natural gas and 14 billion barrels of natural gas liquids, according to a recent assessment by the US Geological Survey.

Back of the envelope calculations at today’s prices suggest the prize from oil and gas alone could be more than $9 trillion.

“We are becoming the new Middle East,” proclaimed Kenya’s energy minister Kiraitu Murungi after it licensed all its production blocks and began turning would-be investors away.

First, East African countries have to bring in the investment – convincing energy firms they are safe for the billions of dollars needed in light of other risks from political instability onshore to Somali piracy off the coast.

The scale of future projects would be in a different league to Orca’s operations.

Companies with at least a stake in East African concessions include many of the world’s biggest private energy firms, including ExxonMobil (XOM.N), Royal Dutch Shell (RDSa.L), Italy’s ENI (ENI.MI), France’s Total SA (TOTF.PA).

None of the officials, executives and industry analysts that Reuters spoke to expected East African states to pursue all-out energy industry nationalisation. Most thought there was a good chance they could move the goalposts.

That could scare other firms off, said Duncan Clarke, chairman of oil and gas consulting firm Global Pacific Partners.

“There’s 150 countries they can be working in,” Clarke said.

The trials of Britain’s Tullow Oil (TLW.L), whipsawed by government demands in Tanzania’s neighbour Uganda, make for another lesson for energy firms.

First, it had to pay an unexpected $300 million tax bill after its acquisition of rights. Now, it is at odds with the government over the size and economic feasibility of a refinery Ugandan officials want to process at least some of the crude.

All Uganda wants to do is secure the best deal for its people, Ugandan energy minister Irene Muloni told Reuters.

UNPREPARED:

Although quick deals might get the money moving, there is a greater risk they will not give a country all it wants or raise accusations of corruption.

“We are not prepared for an expansion of exploration,” Tanzanian opposition parliamentarian Kabwe Zuberi Zitto wrote on his blog, calling for a 10-year moratorium on issuing new exploration licenses.

Although officials in Mozambique say they are confident of their policy, critics say the latest 17-page petroleum law does not protect its economic or environmental interests well enough.

“They need to negotiate harder. They shouldn’t be selling out,” said Jenik Radon of Columbia School of International and Public Affairs, who has been advising the government.

Donors have urged both Mozambique and Tanzania to hold off on licensing more blocks for exploration until contracts are made transparent and better terms have been put in place.

Tanzania has enlisted help from Trinidad and Tobago – held up as an example of how a small country can get the best deal for its gas.

With elections over the next three years in both Tanzania and Mozambique, governments are also likely to feel pressure for more populist moves to squeeze foreign companies.

But regardless of the possible tangles for the world’s oil firms, there will be many ready to take a chance, said Keith Hill, whose Africa Oil Cop. (AOI.V) is exploring in Kenya and the politically unstable Hon of Africa.

“No guts, no glory,” he said.

http://afragenesis.net/east-africa-energy-boom-at-risk/

 

[smalltimer]

$18.5m rights issue to fund oil projects

By KENNEDY SENELWA Special Correspondent
Posted Saturday, January 5 2013 at 15:51

US-based ERHC Energy has kicked off a rights issue to raise about $18.5 million to fund its oil and gas operations in African countries like Kenya.

Executives at ERHC Energy ”” a publicly traded firm with largely Nigerian ownership ”” said the money raised through the offer that kicked off last week will fund a survey to define the geology of exploration area 11A in north western Kenya as well as work activities in Chad.

The main surface of acreage 11A located on the Lotikipi plain is similar to the Abu Gabra Rift basins of southern Sudan, which are established petroleum provinces, suggesting high oil and gas prospects.

“Kenya is at the intersection of two major rift systems ”” the Cretaceous Central African rift and the Tertiary East Africa rift ”” and we are very excited that our block’s location enables us to exploit the high potential for hydrocarbons in the region,” said ERHC exploration manager Gertjan van Mechelen.

The offer which opened on December 28 closes on January 31. The company is offering 246,486,285 shares each at $0.075

International firms exploring for oil in East Africa have been on a capital raising spree over the past six months including bringing in new partners.

Each shareholder is entitled to buy one share for every three ERHC stocks held.

In November, Ophir Energy began identifying a partner to drill oil and gas wells along the coast of East Africa, while Vanoil Energy planned to raise at least $30 million to fund exploration works in Kenya.

Kenya ushered in 2013 with two oil and gas wells expected to be sunk in Lamu in a fresh round of drilling activity which is projected to significantly increase in the next 12 months.

Anadarko Petroleum Corporation said it would sink two oil and gas offshore wells in Lamu, on the Coast of Kenya this January.

Kenya expects the drilling of eight more wells later in the year as BG Group, Afren Plc, Ophir Energy, Africa Oil Corporation and Vanoil Energy among other firms intensify their search for hydrocarbons in what oil and gas experts said could greatly transform global energy flows.

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

More discoveries

Firms are expected to increase investment as competition in Kenya, Uganda, Tanzania and Mozambique for acreage tightens on the back of discoveries.

Kenya’s status of frontier exploration area changed this year with the discovery of oil in Turkana county and gas offshore in Mbawa well.

http://www.theeastafrican.co.ke/bus...jects--/-/2560/1658246/-/hpivsxz/-/index.html

 

[smalltimer]

Kenya set to auction five oil, gas blocks as new rules take effect

By KENNEDY SENELWA Special Correspondent
Posted Saturday, January 5 2013 at 18:14

In Summary

• Ministry of Energy will in the coming weeks publish the new three offshore and two onshore acreages in the Kenya Gazette upon completion of the demarcation of exploration areas surrendered by two licensed companies ”” Anadarko and Tullow.
• The five new blocks will increase Kenya’s exploration areas to 51 from the current 46 and the auction is expected to trigger a fresh jostle among oil exploration majors keen to tap into Kenya’s oil and gas business.
• Kenya will pocket at least Ksh425 million ($5 million) from the sale of the five blocks. l

This year starts off with good news for oil explorers: Kenya will in the next two weeks gazette five new crude oil and gas exploration areas to be offered to prospecting firms through competitive bidding.

The blocks fell vacant following the announcement late last year of new rules requiring exploration firms to cede 25 per cent of their licensed acreage if they failed to work on the sites in the stipulated time.
Energy Permanent Secretary Patrick Nyoike said the Ministry of Energy will in the coming weeks publish the new three offshore and two onshore acreages in the Kenya Gazette upon completion of the demarcation of exploration areas surrendered by two licensed companies ”” Anadarko and Tullow.

Anadarko Petroleum Corporation gave up offshore areas L5 and L7 in Lamu basin while Tullow Oil Plc surrendered area 10BB and 13T in northwestern Kenya. The demarcation is being undertaken by the Survey Department.

The five new blocks will increase Kenya’s exploration areas to 51 from the current 46 and the auction is expected to trigger a fresh jostle among oil exploration majors keen to tap into Kenya’s oil and gas business, which has in the past year attracted huge interest among explorers following two finds. Of the 46, only one is yet to be leased out after negotiations for a production sharing contract between Kenya and Statoil of Norway failed in December.
With the Ministry of Energy’s one off fee of $1 million per exploration area, Kenya will pocket at least Ksh425 million ($5 million) from the sale of the five blocks.

According to Mwendia Nyaga, the lead consultant of Oil & Energy Services, the amount would be “in addition to other charges. But in open bidding the amount could be less or more.”

It will be the first time Kenya will be allocating oil and gas blocks through an auction, one of the changes introduced in the new rules requiring that acreage is awarded to the highest bidder who offers the best terms to the government and agrees to pay requisite fees.

The auction will be publicly done, replacing the current system where exploration rights are issued on first come first serve basis.

The regulations, being rolled out this year, sharply increase licensing fees and introduce tough penalties on exploration schedules.

Other changes include more royalties, increased taxes and revoking of mining and exploration licences of companies that do not keep to their exploration schedule, as the country sought a bigger slice of the profits from a boom in the oil, gas and minerals exploration business.
According to Nyoike, “Firms are expected to retain portions of acreage deemed most valuable to them and surrender 25 per cent of original contract area at or before end of the initial exploration period of three years.”

Licensed firms must also surrender obligations of 25 per cent of remaining contract area at or before the end of first additional exploration period of two years under PSCs signed with the Kenyan government.
Mr Nyoike said the five new areas will be offered to prospecting firms in first half of 2013 through competitive licensing bid round for acreage to be awarded to highest bidder who offers the best terms to the government.

http://www.theeastafrican.co.ke/new...n-blocks/-/2558/1658320/-/qg3yhp/-/index.html

 

[smalltimer]

Nice little kick today...

 

[smalltimer]

Kenyan Oil, Hot and Getting Hotter:

Interview with Taipan’s Maxwell Birley
By James Stafford, Mon 14 January 2013 23:21

Kenya has become the hottest oil and gas venue in East Africa since big discoveries were made in the country’s virgin oilfields last April. All eyes are on Kenya in 2013 to see how quickly and economically they can develop those discoveries into production.

Nairobi based Taipan Resources Inc. (TPN-TSXV; TAIPF-PINK) is the 4th largest acreage owner in Kenya, and is getting ready to carry out seismic on Block 2B. They recently attracted Maxwell Birley as CEO. Mr. Birley has been instrumental in discovering more than 2 billion barrels of oil equivalent in his 30-year career””much of it in Africa and Asia.

In an exclusive interview with Oilprice.com, Taipan CEO Maxwell Birley discusses:

• Why Kenya is the hottest venue in East Africa
• Why 2013 will be a stellar year for Kenya
• Why the regulatory environment remains attractive
• Why Kenya outranks its neighbours
• Why infrastructure will be in place in time for commercial activity
• Why this venue is good for the juniors
• Why the Somalia security risk remains low
• What Taipan is really chasing

Oilprice.com: There were some major discoveries in Kenya last year. Could you give me some colour on these discoveries that has the market thinking Kenya is now one of the hottest exploration spots on earth?

Maxwell Birley: There are a couple””or 2 billion--reasons actually. First, two recent discoveries by Tullow in the Tertiary Lokichar basin of Kenya are in similar geological settings as the discoveries also made by Tullow in the Albertine Basin in Uganda, just to the west.

Uganda has over 2 billion barrels, and the discoveries are similar enough that one could assume the eventual size of the resources in the Lokichar basin could be in the billions of barrels range as well.

There are also other Tertiary basins in Kenya that are attractive. Based on geochemical work we recently did it’s possible that the eventual hydrocarbon resource size for the whole of Kenya could be much higher than this.

Being specific the unrisked prospective resources for Taipan’s acreage in Kenya is 530 million barrels. We also believe that this estimate will likely increase to approximately 1.0 billion on completion of our studies.
These estimates are for only 2 blocks in Kenya, if this is reasonably extrapolated to other blocks across the country one can easily forecast very significant hydrocarbon resource sizes indeed.

Oilprice.com: What’s the easiest and most challenging thing about working with the Kenyan government and in the Kenyan political climate?

Maxwell Birley: The Ministry of Energy is always ready for a meeting. They listen to our concerns and take the appropriate action. They quickly follow up and give us the support that we need with other Ministries. In the field the local administration is also very helpful. We have regular meetings to make sure our work continues without a hitch.

With regard to the political climate, there is an election coming up in March 2013. We’re making arrangements so that we do not have a slowdown in seismic operations during that period. The last elections in 2007 were associated with some “geographically limited” security issues, however these were located far from our areas of operation, so we are not expecting the elections to have much impact on our operations.

Oilprice.com: The Kenyan government is reviewing its oil and gas regulations. Among the suggested amendments is one that would see the National Oil Corporation (NOC) get a 25% interest in oil properties that foreign firms are operating in Kenya, but this would put the government in a precarious position vis-à-vis attracting investors. How do you see this playing out in the end?

Maxwell Birley: The government is reviewing the terms that shall apply for licences/contracts that will be granted in the future. Oil companies will review all the terms on offer at the time of bid submission and compare them to the attractiveness of the acreage.

Oilprice.com: In November last year, Kenya expelled Norwegian Statoil, after revoking its exploration license. Is Nairobi increasingly ‘policing’ exploration, and what will this mean for investors in the near/medium term?

Maxwell Birley: One of the main functions of the Ministry is to regulate the companies undertaking exploration activities in Kenya. We feel confident, as in many other countries where we have worked, that if you carry out your commitments in the timeframe of the PSC then your license is 100% secure. If we decide to go into the next phases of exploration on Block 2B we can continue to explore for hydrocarbons on the block for another 4.5 years without concerns to the validity of our contract.

Oilprice.com: How does the industry view the financial terms offered by Nairobi in oil and gas?

Maxwell Birley: We believe the terms are reasonably attractive, at least for an oil discovery. The reason that only a few exploration wells were drilled in the past was due to the lack of exploration success””and this was driven by the lack of understanding by the oil companies of the basins. It wasn’t because of financial terms offered by the government.

Now that a discovery has been made and our knowledge is increasing, we are going to see a significant increase in drilling activity and therefore reserve additions to the country.

Related Article: What Would Falling Oil Prices do to Russia's Geopolitical Ambitions?

Oilprice.com: Is Kenya becoming more a game for the majors rather than the juniors, and do you think we will see more joint ventures in the near future?

Maxwell Birley: In our opinion there is a place for small companies at every stage of the development of an oil province. But it’s definitely good news for those juniors with large land positions already in the country. The early movers--i.e. the companies like Taipan that acquired their acreage before the oil was discovered””will benefit from the recent oil discoveries. Most of the more prospective acreage has now been leased and therefore the competition for land is increasing.

As large volumes of oil are discovered, the large independent and Majors will start to notice the country more and more. The Majors””due to their size and complexity””tend to be exploration risk averse and prefer to concentrate on large, lower-risk developments.

Oilprice.com: How would you like to see Nairobi interact with the energy sector moving forward? And how does Kenya compare with other venues in the region like Ethiopia, Tanzania, and Sudan?

Maxwell Birley: There is no doubt that Nairobi is a premium location for business, tourism and families. This is illustrated by the fact that many multi-nationals operating in the sub-Sarahan African region have their head offices in Nairobi. Regarding interaction, it is the oil industry that will need to develop an active and well respected industry body so that broad industry issues can be discussed at the higher levels.

Oilprice.com: Kenya is clearly the East African leader in oil infrastructure, and is now starting the Lamu Port-South Sudan-Ethiopia Transit corridor (LAPSSET) project. But it will cost $25 billion for the roads, the 1200 km pipeline and 120,000 barrel-per-day refinery. How feasible do think this project is and why? Is it feasible in the timeframe projected by Nairobi?

Maxwell Birley: The resources in Uganda and to some extend south Sudan must be exported. A pipeline through Kenya seems to be the most feasible.

Regarding the time line, having 2.5 billion barrels sitting in the ground just west of Kenya in Uganda is a really strong motivation to build the pipeline quickly. In South Sudan I think they started pumping oil back up north again now, but I think they will want to go through Kenya in the near future.

Whether it’s LAPSSET or the Tullow consortium someone is going to build a pipeline through Kenya to the coast in the next few years. We think the pipeline will be located within 175 kilometres from our acreage. The pipeline will be good for everybody in the region but it should be particularly positive for us.

So when we make a discovery on Block 2B, the pipeline will be in the construction phase. In the interim we’ll truck the oil by bowser the early production from the fields. Then, depending on the size of any discoveries, we’ll build a connecting pipeline into the pipeline from Uganda. I think we’re in a very fortunate position now.

Oilprice.com: In terms of exploration what are the ‘sweet spots’ in Kenya?

Maxwell Birley: Definitely the Anza Basin. Currently, the proven sweet spots are in the Tertiary sediments of the rift basins of Uganda and Kenya. More specifically to Kenya in the Lokichar Basin as proven by the Ngamia and Twiga wells by Africa Oil.

These basins form part of the larger East African Rift system. This is a very extensive rift system and many new plays will be discovered in the next few years. The Anza Basin is the largest of these East African rift basins and 10 times the size of Uganda’s Albertine Basin and Kenya’s Lokichar Basin. This rift contains Jurassic, Cretaceous and Tertiary sediments.

Taipan is exploring for oil in the south eastern end of the Anza basin. Located on block 2B we have proven more than 9,500 feet of Tertiary section on the block. From the geochemical modelling we have undertaken we see the same oil source rocks in the Anza Basin that are present in the Lokichar basin, which are highly likely to be mature for oil generation on Block 2B. In addition we also believe that more oil discoveries will be made in the Cretaceous and Jurassic basins if you can find favourable places to drill.

Oilprice.com: What has Taipan’s proprietary technical work in Block 2B in the Anza Basin demonstrated so far?

Maxwell Birley: The Anza basin has proven oil-prone Cretaceous source that in places is potentially in the gas window (Bogal gas discovery), however our technical work has also demonstrated that the basin has an active Tertiary lacustrine (lake) oil source that is in the oil window. Consequently, the Anza basin has an excellent chance of being a much more significant oil producing basin than the small rift basins that have so far been discovered.

Oilprice.com: And that’s what you’re really chasing here””with these roughly 10 million acres in the Anza Basin””the tertiary play...

Maxwell Birley: Agreed. What we’re primarily chasing in Block 2B is the same Tertiary oil play that Tullow inherited originally in Uganda. The discoveries there were the main reason Africa Oil and Tullow drilled the Ngamia and Twiga oil wells in Kenya””which have also been very successful. Of course, don’t overlook the fact we also have a secondary Cretaceous oil play in the block, that appears to be broadly analogous to the Cretaceous plays present in the Muglad Melut basins of southern Sudan and is the main focus of exploration efforts in Block 10A, operated by Africa Oil Corp. Regarding the rest of our acreage, in Block 1 for example where we have a 20% interest in a 31,781 Km² block we are chasing older Cretaceous, Jurassic and Permo-Triassic plays. The block is located in an extension of the successful Ogaden Basin of Ethiopia and Somalia. We think the block will be very prospective as it is surrounded by oil seeps and a well that recovered oil on test.

The 2 blocks combined makes us the 4th largest acreage holder in Kenya. In terms of near-term drilling and catalysts in the region, we have Tertiary, Cretaceous and Jurassic plays on Block 1 and Block 2B that will be drilled in the next 12 to 18 months.

Oilprice.com: Tell us what 2013 will look like for exploration in Kenya?

Maxwell Birley: Ten exploration wells should be drilled in Kenya in 2013. Based on the previous success rate it is expected that a significant number of these will be discoveries. Tullow will continue drilling wells on Blocks 10BB and 13T on the west side of the country to find more oil in that string of pearls.

Also we shall shortly get the results of the Paipai-1 well which is currently drilling in northern part of the Anza Basin. The well is testing Cretaceous & Jurassic plays, with a potential 121 million barrels. Other wells including Sabisa and Kinyonga also expected to be drilled in 2013.

Oilprice.com: For Kenya, a discovery at Paipai-1 would prove that oil discoveries of Sudan extend into Kenya. What would it mean for Taipan?

Maxwell Birley: There have already been Cretaceous gas discoveries in Kenya. Taipan believes that if you can find the Cretaceous that has not been buried too deep it will be prospective for oil. However we think the Paipai well is very high risk as it seems likely to be a recent tectonic inversion structure and therefore may be breached by recent faulting. We think we can find on Block 2B Cretaceous structures that are oil prone that have not been breached by recent faulting. So if that well does come in then it is going to be good news for the Anza Basin in general, but if dry it will not write off the Cretaceous potential in our block. Having said that I should point out that this is not our main focus at this time.

Oilprice.com: What about other prospects, like the Kinyonga well?

Maxwell Birley: Kinyonga is the next big prospect that is going to be drilled by Africa Oil Corp. and that is very meaningful for us. Kinyonga, which is on Block 9, will be located relatively close to our block, is both Tertiary and Cretaceous prospect. It has an unrisked resource estimate of 320 million barrels prospective, and it is one of the largest prospects in Africa Oil’s portfolio of drilling targets. Africa Oil also has another prospect called Pundamilia which is even closer to our block. This prospect has a unrisked resource Best estimate of 402 million barrels and a High estimate of 952 million barrels which I believe is the largest prospect in Africa Oil’s portfolio.

Oilprice.com: And what is the status of Kinoyonga?

Maxwell Birley: The timeline Africa Oil report for Kinoyonga is the 2nd half of 2013.

Oilprice.com: That would be a pretty big corollary for Taipan ….

Maxwell Birley: I think that even prior to getting those drilling results; investors are going to become more aware that the Tertiary play extends into our block. This was proven by the Hothori well which encountered 9500 ft. of Tertiary sediments. Better than this based on seismic data we estimate that in parts of the block there could be greater than 15,000 feet of Tertiary sediments.

Oilprice.com: What can we expect from Taipan over the next six months?

Maxwell Birley: Taipan has contracted BGP to acquire up to 800 kms of 2D seismic survey and Arkex to acquire a block wide FTG survey both over Block 2B. The seismic will commence recording in January 2013 and the FTG in February. Both surveys will be completed and interpreted prior to the 1st June deadline to complete the work. We expect to enter the first additional exploration period and are planning on drilling a well late 2013 early 2014.

Taipan has a 20% interest in Block 1 where Afren has recorded 1900 kms of seismic data. After the seismic has been processed and interpreted the company will commence preparations for well to be drilled in late 2013/early 2014.

Oilprice.com: What do you expect to learn from this North Eastern data?

Maxwell Birley: We will be acquiring world class seismic data with an extremely high fold in Block 2B. We may record data with fold as high as 540 (other operators in Kenya usually only record at 60 fold). We will do this so that we get excellent signal to noise ratio and seismic data improvement. This will then enable us to predict with some certainty the areas that have high shale to sand ratios. This in turn will indicate where the Tertiary lakes sediments were deposited. This will dramatically increase the chances of drilling a successful oil well.

Oilprice.com: Let’s close off then with a note on security and Taipan’s potential concerns in that area...

Maxwell Birley: Our acreage is in a remote region with very few inhabitants. We always take the appropriate health and safety precautions for example we’ve carried out detailed security risk assessments and we have visited the areas on a number of occasions. We work with other operators and security companies to ensure we have good local information.

To mitigate the risk, we have 50 to 60 armed police on the seismic crew to supply physical security. More importantly we have excellent support from the government and local authorities. We are in the process of undertaking some CSR water projects so that local people benefit from our activities. We also have a team from the area that is in the field communicating continuously to ensure that the local community understands what we are doing and observes the benefits of working with Taipan.

So in summary, we take it all pretty seriously. There are risks, however, it’s a place where you can work, so we’re being very respectful and careful to nurture successful relationships.

Oilprice.com: Has Kenya’s intervention in Somalia had any impact on exploration in the border area?

Maxwell Birley: Yes, it has ensured that oil companies can undertake their work in relatively safe conditions.

Oilprice.com: Mr. Birley, best of luck. Thank you for your time and we will check in with you later in the year. For those readers interested in finding out more about Taipan Resources please visit their webpage: http://www.taipanresources.com/

http://oilprice.com/Interviews/Keny...er-Interview-with-Taipans-Maxwell-Birley.html

 

[moron]

Can anyone suggest a site one can go to for imformation on Anadarkos drill hole in progress ?
Followers of PCL will be aware that Anardarkos ground ajoins PCL offshore Kenya.


Moron

 

[CapnBirdseye]

It's unlikely that we will get anything from Anadarko until after the well is completed, they are big enough not to need to - it's unlikely to be a company maker. The best we can hope for is something from PTT, but that is unlikely also. I think we will have to sit it out until the end.

 

[smalltimer]

Kenya sets tough terms for next oil acreage licensing round
28 January 2013 | Companies, International, Interviews

Kenya’s Prime Minister Raila Odinga is set to contest for the Presidency in March. Oil revenue will be key to the success of the incoming government’s programmes.
Any oil company intending to acquire an oil exploration licence in Kenya will have to present audited – accounts showing a minimum cash balance of at least one hundred million dollars. Successful bidders will be required to part with a signature bonus of one million dollars, as well as spend at least half a million dollars on “Community Development Projects” in Kenya every year. The oil companies will also have to spend a minimum of 200,000 dollars per year on training Kenyans to equip them with skills for the oil and gas industry.

Speaking to Oil in Uganda in an exclusive interview in Nairobi last week, Kenya’s Commissioner for Petroleum Energy, Martin Mwaisakenyi Heya, revealed that Kenya had decided to take measures to discourage smaller oil companies from entering its oil and gas sector.
“We are no longer a frontier country. We want companies with money. We have had a lot of challenges with small companies with them (failing) executing their work programme,” said Mr. Heya.

Without giving examples, he explained that inadequately capitalised oil companies had tended not to accomplish exploration schedules agreed with the government due to lack of funds.

More blocks available

Mr. Heya told Oil in Uganda that some of the exploration blocks have been sub-divided into smaller units, while others have been relinquished by the current operators, creating eight new blocks, in addition to the two previously unlicensed blocks. Forty four out of the total forty six blocks are under license. “The blocks were big”, said Mr. Heya. “Now we are making them smaller and smaller.”

By law, oil companies in Kenya are required to relinquish 25 percent of their acreage after the expiry of the first exploration period, and another 25 percent at the end of the second period. The initial exploration period lasts two years for onshore activity, and three years for offshore work. Two additional periods, of two years each, are allowed for both onshore and offshore oil exploration activities. If a company finds oil, it then has the right to develop the oil field. If it doesn’t find oil within the specified time frame, it has to relinquish the exploration licence.

Mr. Heya added that given the “phenomenal interest” oil companies have shown in Kenya, the government would simply invite bids and evaluate them on a case by case basis. “People will just apply, submit and we evaluate. The person who has given us good terms will get the block”, he revealed. “It is not a real road show, we do not want to waste our money (on marketing the blocks)”.

Last March, when Tullow made an apparently promising oil discovery in Kenya, some observers feared that Kenya and Uganda might become involved in a ‘race to the bottom’, competing to offer international oil companies favourable terms, to attract them to prospect. Kenya’s apparent determination to weed out small players and to demand significant social investments seems to indicate that this race to the bottom will not happen.

Cost Recovery and Profit Oil Split

The new terms will require oil companies to recover sixty percent in ‘cost oil’for crude produced both off shore and onshore. The ‘profit oil’ will be split between the government of Kenya and the oil company starting at a fifty-fifty percentage for production of 0-30,000 barrels of crude oil per day (BOD) onshore, but eventually rising in favour of the government. At peak production of more than 100,000 BOD, the government’s share will be 78 percent against the oil companies’ 22 percent. The same percentages apply for offshore production, starting at the minimum of 40,000 BOD to the peak at 120,000 BOD.

Mwendia Nyaga, the Chief Executive of Oil and Energy Services Ltd, a leading petroleum consultancy in the region, told Oil in Uganda by telephone from Nairobi that these terms are fair to the oil companies. “The world average is 67 percent [for the government],” he said. “Unless world oil prices fall to less than fifty dollars per barrel, 22 percent [share] for the oil companies is okay”. He added that in some countries like Nigeria and Libya “The government take is very big.”

Natural gas development

Mr. Martin Heya also told Oil in Uganda that Kenya had embarked on a programme to develop terms for the exploitation of natural gas. “Most of our PSCs (Production Sharing Contracts) are oil based but some companies think that their blocks are gas blocks. So we have formed a tax force with the help of the World Bank to formulate gas terms,” he revealed.
Report by CM

http://www.oilinuganda.org/features...rms-for-next-oil-acreage-licensing-round.html