Australian (ASX) Stock Market Forum

PCL - Pancontinental Energy

Jump to new
Kenya ready to produce oil ‘now’

Kenya could start producing oil earlier than expected, with the company currently exploring oil saying it’s ready to start production “now” if the road network is improved.

This, according to Tullow Oil chief executive officer, Mr Aidan Heavey would make it possible for transportation of crude oil to Mombasa refinery pending construction of a pipeline.

Experts estimate that it will take three to five years to lay the pipeline and related infrastructure to Mombasa allowing pumping of the crude oil.

Scouting for partners

“If local roads were improved, Tullow could start producing from Kenya now, possibly trucking crude to the refinery in Mombasa,” Mr Heavey told Bloomberg at the side line of the company’s annual general meeting held in London Wednesday.

The company is scouting for partners to finance development of the oil fields in readiness for the production.

“It’s too much for any company, even a major company,” Mr Heavey added.

Tullow Oil and its partner Africa Oil are currently exploring oil in northern Kenya and Ethiopia with result for the first well already termed as commercially viable.

The testing of the Twiga South-1 discovery was completed in February 2013 with a flow rate of 2,812 barrels of oil per day (bopd) was achieved, but according to Tullow, it has the potential to be increased to over 5,000 bopd.

A further five tests are planned over the next month and are expected to lead to an increase in the previous total net pay of 100 metres.

“…the Twiga South-1 well test has confirmed good productivity,” read a statement issued ahead of its AGM. The companies plan to drill 10 more wells.

However, it suspended exploration on its Paipai-1 well in March 2013 after encountering light hydrocarbon shows “pending agreement on future evaluation options.”

Drilling efficiency

The company has contracted a “lighter, more mobile rig has been contracted to start work in September 2013 which will increase drilling efficiency by conducting testing operations and drilling shallow prospects and evaluation wells, the oil explorer said.

Mr Heavey further noted that should a few more wells in Kenya prove significantly productive, a pipeline from its wells in Uganda could be built to go through its wells in Turkana for onward transmission to Mombasa for refining. The pipeline will link the refinery in Uganda to the port of Mombasa.

“Critically, agreement has been reached on a basin commercialisation plan which will include an export pipeline and a refinery sized to meet the local market demand,” Tullow further said.
Raised hopes

Kenya has continued to attract interest following Tullow’s announcement in March last year, it had struck oil in the country raising hopes the country could be holding substantial oil resources.

“The next exploration well is Etuko-1, which is expected to spud within the next two weeks. This well is testing the first prospect in the Basin Flank play, and is more centrally located in the basin compared to Ngamia and Twiga South which were drilled along the basin bounding fault,” the statement added.


http://www.nation.co.ke/business/ne...oil-now/-/1006/1846570/-/13ojlfu/-/index.html
 
RIO DE JANEIRO--Brazilian oil startup HRT Participacoes em Petroleo SA (HRTP3.BR) expects to have results from its first well drilled off the Namibian shore this week, a company executive said Tuesday.

"I think this week we're going to have the results," said Luiz Sguissardi, HRT's governmental affairs manager. Mr. Sguissardi made the comments on the sidelines of Brazil's 11th round auction of oil and natural gas exploration concessions.

HRT started drilling the prospect, dubbed Wingat, in March. The well is currently undergoing further testing that should be completed in coming days and allow the company to make an announcement, Mr. Sguissardi said. "I hope that we will have news," Mr. Sguissardi said.

Namibia is the crown jewel of HRT's portfolio of oil and natural gas exploration blocks. Geologists believe the highly prospective region off Namibia's coast could hold billions of barrels of oil under similar conditions to Brazil's subsalt, where oil was discovered trapped under a thick layer of salt. The two areas were connected millions of years ago.

HRT plans a three-well drilling campaign in West African seas this year. HRT is also in talks to sell an additional stake in its Namibian oil and natural gas exploration blocks, with proceeds earmarked to fund drilling of a fourth well.

Portugal's Galp Energia (GALP.LB) previously acquired a 14% stake in three of HRT's exploration blocks in return for covering a portion of drilling costs. HRT holds operating stakes in 10 blocks and minority shares in two others in the Walvis, Orange and Namibe basins.
 
HRT source rock a good find
Written by Christine-Rita Abankwah on 27 June 2013.

http://www.observer.com.na/8-latest-news/1745-hrt-source-rock-a-good-find

You can liken Brazilian energy company HRT Participacoes em Petroleos’ (HRT) recent oil find to drilling for water on a farm, but finding it in the wrong spot, experts say. It is a good sign of existing water–you just need to find it in the spot where you want it.

Industry experts speaking at this week’s oil and gas seminar co-hosted by Namcor and the Ministry of Mines and Energy, emphasised the need for people to understand the geological aspects of HRT’s recent announcement.

One of the major highlights of the seminar, held in Windhoek, was the presentation on Geology and Geophysics made by James Cheeseman, senior geologist at London-based Tullow Oil. Cheeseman is currently working on the development of large onshore Ugandan oil reserves.

Cheeseman’s presentation provided grounding in petroleum geology and the building blocks of the oil industry; the definition, usage and accumulation into reservoirs were some of the areas he touched on.

“The fact that HRT were able to recover oil from the Wingat-1 well proves the existence of a source rock which has been subjected to the right pressure and temperature conditions to produce oil in an area historically believed to be gas prone.

“This is very encouraging since it has de-risked at least one criteria necessary for a fully working oil system offshore Namibia. We await the results of HRT`s next two planned wells with great interest to see whether they can discover a fully working oil system, together with commercial volumes of oil,” he said.

He stressed the importance of patience, when considering the oil find and the factors involved in finding a working oil system.

In geology, a source rock refers to a rock rich in organic matter, which if heated sufficiently, will generate oil or gas.

Asked if it was not perhaps too early to celebrate an oil find, director and CFO for HRT, Martin Davis said, “I don’t think anybody is celebrating it [the oil find]. One of the major finds was the fact that we have a source rock that’s producing oil, because people felt that Namibia was just there to produce gas.

“But we do have source rock which is operating what we call the ‘oil window’ which has actually produced oil– that’s a fact. So obviously, we couldn’t find commercial volumes but actually finding a reservoir is much easier than finding a source rock.

“So even if HRT never find the oil, the fact that we found the source rock means not just us, but all the companies operating offshore have a great chance of finding oil,” he said.

He explained that HRT started drilling on 1 June and had committed to doing up to four wells.

HRT has experienceda series of shake-ups this year, including the resignation of its CEO and other key staff, as well as a drop in its share price following its abandonment of both the Wingat-1 well and another that turned up dry in northern Brazil’s Solimoes Basin.

Earlier reports show that the company’s market value shrank after investors were discouraged by the find of gas instead of oil in the Amazon, also considering the fact that gas sells for less than crude oil, yet is more expensive to transport.

“I can’t speak for HRT but it doesn’t take a genius to know that what they have found in Brazil is mostly gas, and shareholders in any oil and gas company would be looking for the black gold, not gas- that is what the market demands,” Namcor’s Managing Director ObethKandjozesays.

He explains that people would understandably be furious because they want to see more return on their dollar– which is the difference between oil and gas.

“There are more returns on equity, when you find oil rather than when you find gas. Of course, the other additional issue is where do you want to put your money?

“A significant amount of money was raised on the back of both Namibia and Brazil, now for you to split that money and get the returns on your dollar, shareholders will have their preference; I’m not saying that’s what happened, I’m just imagining what the discussions were.

“So Namibia is among the competition for that small cake. So what transpired is a choice between shareholders,” he says.

The oil and gas seminar aimed to educate non-specialist staff in Namibia, who are interested in the oil industry, especially following HRT’s recent oil find.

Led by local and international industry experts, presentation topics ranged from Drilling and Completions and Logging and Petrophysics to Reservoir Engineering and Petroleum Economics. Clara Altobell, international asset manager for Serica Energy, said she felt the seminar had achieved what it meant to.

“The significance is that it’s the first time in Namibia that we have industry people from all around the world that have come here with several years’ experience to impart their knowledge.

“It was open to people who don’t necessarily study geology or engineering, to appreciate what is involved in the industry. It’s an opportunity for people who don’t usually meet to network and talk about the industry,” she said.

Davis said he believed that since the event targeted people who were not familiar with the oil industry, those who were not on the technical side enjoyed gaining an understanding of the business.

“It’s important because we hope that the oil industry is going to play a fundamental role in the development of the economy in Namibia, so the more people that understand the industry, the better,” he said.

Kandjoze added, “The fact that the industry saw it befitting to dig as deep into their pockets as they did to be here, just to engage the public means that they take this country as a serious destination for oil and gas exploration. That is the most important message in my opnion.”

The organisers hosted the seminar with the significant logistical assistance of Serica Energy Plc. There are no immediate plans to repeat the event next year.
 
Tullow strikes new oil deposits in Turkana

By George Omondi

Posted Wednesday, July 3 2013 at 21:16

Kenya’s profile as a potential petroleum producer Wednesday rose a rung higher after British oil explorer, Tullow Plc, announced that it had discovered additional deposits in the Lake Turkana basin.

Tullow said it had returned a 60 per cent overall success rate for its Kenya programme in the first six months of 2013, which included the drilling of nine exploration wells and appraising 11 others.

“Exploration and appraisal across Tullow’s operated acreage in Kenya continues to be very successful,” the company said in its trading and operations update.

The highlight of the company’s activities in Kenya for the six months to June 30 was the discovery of fresh oil deposits with a net pay of more than 40 metres in Etuko-1, some 14 kilometres east of Twiga South-1 in the Lokichar basin.

READ: New oil tests boost chances of striking commercial deposits

Tullow’s partner, Africa Oil, had earlier described Etuko site as one of their most attractive prospects in Kenya, estimating its reserve at 231 million barrels per day.

The company had started its drilling on the block in May 2013, making it the first test in the basin located in South Lockichar, Turkana County.

Wednesday, the British multinational remained positive of prospects in Kenya as it outlined its second half-of-the-year programme which has lined up some 20 exploration sites locally, in Ethiopia, Mozambique, Mauritania, French Guiana and Norway.

“Following recent successes a third rig and a dedicated testing unit have been contracted to support increased exploration and appraisal in Kenya by year-end,” the firm said in a statement.

Tullow’s executives said they had significantly increased their estimate of the resources from both fields after successful flow-testing of Ngamia-1 and Twiga South-1, adjusting potential to over 250 million barrels of oil but warned that this could increase after appraisal.

Early last year, Tullow stirred the local market with the announcement of an oil find in Turkana’s Ngamia-1 exploration block.

Potential

The discovery of 200 metres of oil net pay reignited interest in Kenya’s oil and gas exploration fields especially after US-headquartered Apache Corporation followed suit late last year with announcement of discovery of natural gas pay at Mbawa 1 offshore exploration well.

Apart from the approximately 52 net metres (170 feet) of natural gas pay that the US Corporation encountered in three zones, it said the presence of hydrocarbons in its wells pointed to the areas’ oil potential.

The government has since altered its preferred path to the middle income status by adding mining and petroleum as the seventh pillar of the country’s long-term development blueprint, Vision 2030.

The county’s economic planners estimate that it will take two years for explorers such as Tullow to confirm whether the country has e commercial quantity of oil and another five years before production commences.

“We should use this time to build infrastructure and the human capital required for commercial exploitation of oil,” says Vision 2030 director-general Mugo Kibati.

Wednesday, Tullow announced that its flow testing programme at Ngamia-1 in the Lokichar Basin had been successfully completed and found to have a flow rate totalling 3,200 barrels per day (bpd).

The oil is of 25 to 35 degree American Petroleum Institute (API) gravity, sweet waxy and shows no indication of pressure depletion.

“The analysis of the test data from both the Ngamia-1 and Twiga South-1 wells has resulted in the doubling of our previous estimates of net oil pay to 200 metres and 75 metres respectively,” the company said in its update.

It said the oil discovered so far also had an enhanced flow rate potential of around 5,000 bpd per well and significantly increased discovered volumes.

Ekales-1, the next exploration well lined up in the Basin Bounding Fault Play on trend with Ngamia and Twiga-South, will commence drilling in late July 2013.


Link to article:

http://www.businessdailyafrica.com/...39546/1903846/-/item/1/-/mcb2t8z/-/index.html
 
Dry Hole for HRT in Nambia

RESULTS OF MUROMBE - OFFSHORE NAMIBIA

Rio de Janeiro, July 19, 2013 - HRT Participações em Petróleo S.A. (the "Company" or "HRT") (BM&FBOVESPA: HRTP3, TSX-V: HRP) through its wholly-owned subsidiary HRT Walvis Petroleum (Proprietary) Ltd. ("HRT Walvis"), announces that the Murombe-1 (2212/06-1) ("Murombe-1"), the second offshore well in our exploratory drilling campaign has been concluded and is a dry hole. This well was targeting the Murombe Prospect, located in Petroleum Exploration License 23 ("PEL 23"), in the Walvis Basin, offshore Republic of Namibia.

The main objective of the well was to test the resource potential of the Murombe (Barremian Age) basin floor fan turbidites that demonstrate a well-defined amplitude anomaly on 3D seismic PSDM. The drilling plan was to penetrate the top Murombe reservoir and reach total depth (TD) below the reservoir at 5,658 meters, run the wireline logs, conduct sidewall core sampling, acquire fluid samples and abandon the well. A secondary target, the Baobab (Santonian Age) confined channel complex, would also be penetrated.

The Murombe-1 well penetrated the Baobab objective and it contained 36 meters net sand within a 242 meter interval (15% N/G). The average porosity was 19% and the sands were water wet.

The well-developed marine source seen in the Wingat-1 well located 15 kilometers east of Murombe-1 was also present above the deeper Murombe turbidite prospect. Ongoing sample analysis will determine the quality of this source interval.

The Murombe objective was penetrated and petrophysical evaluation of wireline logs indicates that interval consists of non-reservoir facies with low porosity. The well reached at Total Depth of 5,729 meters. The wireline evaluation program included a quad combo tool and rotary sidewall cores.

The Murombe-1 will be completed, considering wireline logging and P&A activities, in a total of 62 days, by the semi-submersible Transocean Marianas (NYSE:RIG).

The Transocean Marianas will move 635 kilometers south to PEL 24 to drill the Moosehead Prospect in the northern Orange Basin after concluding P&A activities at the Murombe-1 location. The Moosehead-1 well will target Barremian carbonates and drill to a total depth of 4,100 meters.

"This well proved that we are still on our learning curve in Namibian basins exploration. Our model was that the Baobab objective would be charged by the Aptian source rocks discovered at Wingat-1 and this did not occur. The Murombe-1 result further proved presence of Aptian source rocks, in the oil window, and poor reservoirs in the Murombe main target. We will now proceed to the Orange Basin to drill our third exploration location - the Moosehead-1 Prospect - in PEL 24," highlighted Milton Romeu Franke, the CEO of HRT.

HRT is the operator of 10 blocks offshore Namibia, contained in four Petroleum Licenses. GALP Energia (NYSE Euronext Lisbon: GALP), with 14% participating interest, is HRT’s partner to drill the first 3 wells of the current exploration campaign.

Last Update on July 19, 2013

http://ir.hrt.com.br/hrt/web/conteudo_en.asp?idioma=1&tipo=32124&conta=44&id=177074
 
BG Group entered Kenya in 2011, acquiring an interest in offshore Blocks L10A and L10B.

E&P

In 2011, BG Group signed Production Sharing Contracts with the government of Kenya for two offshore exploration blocks – L10A and L10B. BG Group is operator on both blocks and holds a 40% equity interest in
Block L10A (Cove Energy 25%, Premier Oil 20%, Pancontinental 15%) and a 45% interest in
Block L10B (Premier Oil 25%, Cove Energy 15%, Pancontinental 15%).

In line with the initial work programme commitment, 2D and 3D seismic data acquisition commenced in late 2011 and will continue to be processed during 2012, with a view to drilling a first exploration well in 2013.

Blocks L10A and L10B together cover an area of more than 10 400 square kilometres in the southern portion of the Lamu Basin, located in water depths ranging from around 200 metres to in excess of 1 900 metres.

http://www.bg-group.com/OurBusiness/WhereWeOperate/Pages/Kenya.aspx

It seems that Aussie Bulls now thinks that it is time to get in again ?

http://www.aussiebulls.com/SignalPage.aspx?lang=en&Ticker=PCL.AX
 
500,000 Barrels of Oil Per Day

Tyler Laundon - August 1, 2013

A rare and exciting event occurred in the oil market yesterday…

One of the world’s most promising new oil basins - in the East African country of Kenya - clearly holds enough oil to make commercial production possible.

This will be the first ever oil production in the country, with estimates topping 250,000 barrels of oil per day within the next five years.

That means Kenya could increase sub-Saharan African oil output by 8%, and make up for the last three years of decreased supply from Nigeria, according to Reuters.

Two companies are largely responsible for this success: Tullow Oil (OTC: TUWOY) and its partner Africa Oil (OTC: AOIFF). Tullow now estimates that Kenya’s oil resource tops 300 million barrels.

That’s enough to justify a pipeline tie-in with Tullow’s projects in neighboring Uganda, which together could bring at least 500,000 barrels a day to the Kenyan coast.

The relative speed with which commercial quantities of oil have been discovered in Kenya is impressive. Just two years ago Africa Oil and Tullow had a dream and some cash…but no wells had been drilled.

Now that dream has become a reality, both for these companies and for shareholders.

After recommending shares of Africa oil two years ago, I’ve been closely watching events unfold in Kenya. I recommended Africa Oil to 100% Letter subscribers back in January 2011 when shares sold for $1.85. They have since soared by 320% to trade at $7.82.

While I’m personally sitting on a nice profit in the stock, I have no intention of selling. These are still early days in Kenya as its oil industry is barely in the incubation stage.

Over the last couple of years the companies have drilled five wells in the Lokichar Basin, in the northeast part of the country. Three of these wells hit pay-dirt, and collectively make commercial quantities of oil production possible by surpassing the 250,000 barrels per day threshold.

The latest, the Etuko-1 well, is what tipped the scales toward commercial viability when 90 meters of oil were discovered.

There is little doubt that East Africa is one of the hottest oil-exploration regions of the world, and M&A activity is picking up as companies try to secure rights to the best properties. Tullow and Africa Oil are right in the thick of it, driving the country toward its first ever domestic production which could be just two years away.

This will most likely be achieved by moving the oil by road or rail, given that pipeline infrastructure – which is considerably more complicated - is likely five years away.

That’s because Kenya, Ethiopia, Uganda (and let’s throw in Somalia too) currently lack the infrastructure to allow for commercial-scale oil production. To make that dream possible there are at least a few more years of cross-border negotiations and development.

A slide from Tullow's investor presentation shows proposed development options for the region (see below image). You can see how a pipeline (or multiple pipelines) could go directly from Lake Albert in Uganda to multiple locations along the coast of Kenya, picking up oil along the way.

The scenario I believe is most likely at the moment is the pipeline to Lamu for export. This is an increasingly likely route given these latest drill results.

What’s more exciting than surpassing commercial thresholds, however, is that these latest discoveries could just be the tip of the iceberg.

There are more than two dozen prospective sedimentary basins in the entire East Africa Region, spreading over Kenya, Uganda, Ethiopia and Somalia. Tullow and Africa Oil have rights to a good portion of this acreage. And the companies have already selected 90 additional drilling prospects.

That’s a lot of potential drilling catalysts for investors to keep an eye on. And just one reason why I believe there are still gains to be made investing in the region.

I’ve recently put together a detailed investment report on the entire region. The report explains all of the details of oil drilling in East Africa, including my investment analysis of the top companies. The most exciting thing you’ll discover in my report is details on a new company that’s preparing to drill its first well in the region. This stock could be the “next” Africa Oil. You can get all the details by clicking here now.

Good investing, Tyler Laundon - Newport, Rhode Island

http://www.wyattresearch.com/article/500000-barrels-of-oil-per-day/30134
 
Acquisition and merger deals sweep Kenya oil industry By JOINT REPORT The EastAfrican

posted Saturday, August 3 2013 at 13:06

Kenya’s recent successes in oil exploration are triggering a new round of mergers and acquisitions in the lucrative but high-risk business as the new finds reshape company strategies.

Junior exploration firms ”” companies that do exploration in the hope that a positive find will tempt shareholders to invest more in them or make them an acquisition target ”” are excepted to become prime targets for multinationals seeking a foothold in the country before commercial production of crude oil and natural gas starts.

Over the past three months, at least four deals have been closed and another three are expected in the coming months, making this the busiest year in Kenya’s exploration business.

The country’s risk profile has been greatly reduced by last week’s announcement by Tullow Oil and partner Africa Oil that their find was commercially viable as well as the discovery of gas by Apache Corporation in offshore exploration area L 8 in September last year.

Tullow estimates it has discovered about 300 million barrels of oil.

Elsewhere in Kenya, in the Anza Basin in Block 10A, the Paipai-1 well was drilled in March and encountered light hydrocarbon shows while drilling. The well has been suspended and will be tested in the future.

Interest in offshore Kenya is likely to be raised as Anadarko Petroleum Corporation has high expectations of making a discovery in the Kiboko well being drilled in exploration area L11B in the Lamu basin.

The discoveries confirm the existence of hydrocarbon deposits and offer a deeper understanding of the region’s geological features as well as reducing the risks of hitting dry wells by multinationals

IFC investment

Early July, the International Finance Corporation, the private investment arm of the World Bank, said it was investing $60 million in a new UK-based company, Delonex Energy, as part of a $600 million equity line to be used for oil and gas exploration in the East African region.

First Oil Plc has acquired a 30 per cent interest of Bowleven’s exploration rights in onshore exploration area 11B in north-western Kenya jointly owned by Adamantine Energy.

Simba Energy in May signed a memorandum of understanding for Ajax Exploration to acquire 66 per cent in area 2A near Mandera town in north-eastern Kenya.

ERHC Energy Inc has signed a letter of intent for a multinational to acquire part of the firm’s interest in area 11A near Lodwar town to expedite exploration work that requires a well to be drilled by 2015.

FAR Ltd and Pancontinental Oil and Gas are seeking to sell part of their exploration rights to a block offshore area L6 to raise funds for well drilling by 2014.

To illustrate the risk, considering that in 2007, Woodside spent $100 million to drill Kenya’s first offshore well on the L5 block situated in the Lamu basin, but the well turned out to be dry.

Apache found gas on the block adjacent to Woodside’s.

Kenya has for a long time been seen as a frontier exploration field as there was no commercial discovery of oil, which made oil companies wary.

For example, Citigroup estimates that the discovery of oil in the Ngamia and Twiga South wells doubled the chances of striking oil in the Lokichar basin from 15-20 per cent to approximately 40-50 per cent.

Interest in Kenya’s offshore areas is likely to be raised by Anadarko Petroleum Corporation making a discovery of either oil or gas in Kiboko well, currently being drilled in acreage L11B in the expansive Lamu basin.

“We are drilling Kiboko prospect, designed to test multiple cretaceous sands. While we are early in our exploration programme, we remain very optimistic about the potential this area holds,” said Anadarko’s spokesman Brian Cain.

Anadarko started on April 19 sinking on Kiboko prospect a well expected to reach a depth of 3,000 metres in acreage L11B. The firm had encountered non-commercial oil shows in Kubwa well in area L 7.

Anadarko’s capital expenditure on the two wells is over $250 million.

Tullow and Africa Oil’s announcement marks yet another milestone for Kenya, which is emerging as a hot spot for oil and gas exploration, as well as other minerals like gold and rare earths.

On July 19, mineral explorer Cortec announced it had found rare earths deposits worth $62.4 billion, raising Kenya’s profile as a potential producer.

Mrima Hill, in the coastal county of Kwale, has one of the top five rare earth deposits in the world. The area also has niobium deposits estimated to be worth $35 billion, Cortec said.

The main challenge for Tullow and other oil marketers will be how to evacuate the oil, considering that the country lacks the requisite infrastructure required to lift the oil to the country’s port for export.

Tullow has indicated that it would look at lifting the oil and gas through rail and roads as it awaits an agreement with the government on building a pipeline.

“Resources discovered to date are of a scale that the partnership will initiate discussions with the government of Kenya and other relevant stakeholders to consider development options. These discussions include consideration of a ‘start-up phase’ oil production system with potential to deliver significant production rates with oil export via road or rail in advance of a full-scale pipeline development,” said Tullow in its 2013 half year results.

At least 15 wells will be drilled in Kenya in the next 12 to 18 months, which could further “de-risk” the country and increase its appeal among oil majors.

Taipan Resources Corporation, which wholly owns exploration area 2B, is among junior exploration firms in Kenya that are likely to form joint ventures with international companies, according to industry players.

Others are A-Z Petroleum, which has a 100 per cent stake in exploration area L1A and L3 as well as Imara Energy Corporation, and Rift Energy Corporation that wholly owns acreage L19 and L20.

“We welcome First Oil as a strategic partner in our early stage exploration activities in East Africa and look forward to working with the team in this exciting emerging area,” said Bowleven’s chief executive Kevin Hart.

First Oil, which has since inception in April 2001 developed into the largest private company producing oil and gas in the North Sea in Britain, may also contribute up to $3.6 million to Bowleven’s new investments in East Africa.

ERHC’s chief executive Peter Ntephe said negotiations are currently being held with the integrated company involved in exploration and refining as well as distribution and marketing of petroleum products.

Any agreement reached on sale and acquisition of a portion of exploration rights of acreage 11A near Lodwar town will be subject to approvals of the boards of the two firms and the Kenyan government.

The Simba Energy and Ajax deal requires Ajax to commit to fund exploration work including drilling one well, representing gross investment of up to $36.5 million and pay Simba up to $3.1 million for past expenses incurred on the acreage.

Simba’s managing director for operations, Hassan Hassan, said the MOU with Ajax provides an attractive valuation marker for the asset and delivers required funding for the upcoming exploration campaign.

Simba anticipates it will receive government approval later this year.

Ajax’s associate, GeoDynamics Worldwide, in 2012 conducted a seismic survey that identified potential areas with deposits for oil and gas in acreage 2A.

“We now intend to apply our suite of technologies with the aim of speeding up the exploration phase, and drill our first well in late 2014,” said Ajax chairman Andrew Shrager.

Pancontinental has a 15 per cent interest in offshore acreage L8 owned by Apache among others. Pancontinental’s interest in area L8 may reduce to 10 per cent if Tullow acquires a five per cent stake from the Australian firm.

Kennedy Senelwa and Peterson Thiong’o

http://mobile.theeastafrican.co.ke/.../-/format/xhtml/item/0/-/2s9t7hz/-/index.html
 
Firm confident of major Namibia oil find
Published August 15, 2013

WINDHOEK (AFP) – Finding large quantities of oil in Namibia is only "a matter of time" the head of Brazilian oil firm HRT said on Thursday, playing down lacklustre initial drilling results.

The chief executive of HRT, Milton Franke, told AFP he was confident Namibia would become the latest in a string of major Africa crude producers, despite around a dozen exploratory wells largely coming up dry.

HRT discovered some oil in a Walvis Basin well off Namibia's Skeleton Coast earlier this year but not in commercial volumes.

"HRT believes that finding oil in Namibia is a matter of time. Both basins, Walvis and Orange, have good source rocks, in the oil generation window," he said.

Drilling at HRT's third test well is now underway, with results expected in mid-October, he added.

Franke said they had learned from experience in Brazil that patience is needed.

"We see that in Campos Basin the first commercial oil discovery came with the drilling of the ninth well. Today it is the largest producer of the country."

Similarly, in Brazil's Santos Basin around 50 wells were drilled before major energy discoveries, he said.

In Namibia offshore exploration began in the late 1960's and resulted in major gas finds, but so far no oil.

But there are high hopes that Namibia could replicate crude discoveries in neighbouring Angola to the north, Africa's second-biggest producer of crude, after Nigeria.

"There is much work to do in Namibian basins exploration. If it is not HRT that will come up with the first oil discovery, it will be another major or independent oil company."

The company operates 10 offshore blocks in Namibia and its exploratory drilling programme is worth around $200 million.

Franke became CEO in May, after serving as the firm's production director and working with Brazilian state-backed oil major Petrobras.

Other companies with exploration licenses in Namibia include Spain's Repsol and Petrobras.

http://www.foxnews.com/world/2013/08/15/firm-confident-major-namibia-oil-find/#ixzz2c7A4gBjn
 
Kenya From Nowhere Plans East Africa’s First Oil Exports
By Eduard Gismatullin
August 19, 2013

Kenya is headed to become the first oil exporter in East Africa, moving in less than five years from being a have-not nation to the regional leader in cutting reliance on foreign energy suppliers such Royal Dutch Shell Plc.

After Tullow Oil Plc (TLW) discovered oil last year, Kenya is set to start shipments in 2016, overtaking neighboring Uganda, where Tullow found crude more than seven years ago. The U.K. explorer plans to start pumping in Kenya as soon as next year, Chief Operating Officer Paul McDade said in an interview. Kenya’s deposits may top 10 billion barrels, according to the company, more than three times the U.K.’s remaining reserves.

Exports will underpin Kenya’s shilling currency and are being pushed by a government that wants a lead on Uganda and Democratic Republic of Congo, whose East African resources in recent years attracted explorers such as China’s Cnooc Ltd. (883) and France’s Total SA. (FP) Most oil companies traditionally had focused on the African powerhouses of Nigeria and Angola to the west, and Libya and Egypt on the Mediterranean.

Oil will allow Kenya to “diversify export earnings and act as a catalyst for infrastructural spending, especially on the transport network,” Phumulele Mbiyo, regional head of macroeconomic research at Nairobi-based CfC Stanbic Bank Ltd., a unit of Standard Bank Group Ltd., said in an interview. “The shilling is expected to benefit from inflows of foreign exchange and reduced spending on fuel imports.”

Kenya imports all its fuel, almost 80,000 barrels of oil a day at a cost of more than $8 million a day, according to U.S. government data. It relies on exports such as coffee and tea to support the balance of trade in a $37 billion economy, East Africa’s largest.

Viable Rate

Tullow estimates it’s found more than 300 million barrels of oil equivalent resources after making three discoveries in Kenya’s South Lokichar Basin. In February, Twiga became the first well in Kenya to produce oil at a commercially viable rate and has the potential produce 5,000 barrels a day.

Vivo Energy, a Shell joint venture with Vitol Group, as well as Total and KenolKobil Ltd. are the biggest suppliers of crude and petroleum products to the nation. Kenya Petroleum Refineries Ltd., the nation’s sole refinery, half-owned by Essar Energy Plc (ESSR), only refined crude from Abu Dhabi last year.

The discoveries have been made in the remote and underdeveloped Turkana region in the northwestern part of Kenya’s Rift Valley. Shipments will initially be made by truck or train for refining in Mombasa or exports. Once more fields are discovered and developed a pipeline can be built.

Bullish Idea

Kenya oil exports are “a very bullish idea, because Turkana is one of the least developed parts of Kenya,” Clare Allenson, an analyst at Eurasia Group, said in a phone interview. “This is definitely worth watching to see how” it will progress.

Tullow and partner Africa Oil Corp. (AOI) plan to spend at least a year exploring for further deposits. They have two drilling rigs in Kenya and expect to secure one more later this year.

The Kenyan government wants things to go faster.

“They are not drilling enough wells,” Kenyan Petroleum Commissioner Martin Heya said in phone interview from Nairobi. “Uganda drilled a long time ago, but it’s possible that we can produce earlier than anybody else. We shall be happy.”

Tullow is facing delays in Uganda, where the government and oil companies are negotiating the terms of production after 1.7 billion barrels of oil were discovered. Oil from landlocked Uganda will eventually be exported through Kenya.

Local Refinery

Ugandan President Yoweri Museveni’s government has delayed the $10 billion investment planned by Tullow and its partners, Total and Cnooc, to tap the Lake Albert fields. The sides need to agree on the size of a local refinery and an export pipeline, which is likely to cross Kenya in 2018.

“Uganda missed the boat and Kenya will become the oil-sector hub,” John Small, the chief executive officer of the Eastern Africa Association, said in an interview. “It only makes real commercial sense to cooperate and have linked pipeline network” in the region.

In Kenya, Tullow and Africa Oil still have to submit their field development plan to the Kenyan government. Eventually, a pipeline will be built from the fields to a terminal on the Indian Ocean coast, McDade said.

“For the Kenyan economy it’s going to be a major step forward,” Africa Oil Chief Executive Officer Keith Hill said in a phone interview. “Once the export pipeline is completed they will have a significant influx of capital coming in from oil export revenues.”


http://www.businessweek.com/news/20...-plans-east-africa-s-first-oil-exports-energy

Also , check out Hartley's last PCL report at;

http://www.pancon.com.au/investor-centre/broker-reports/reports/230713.pdf
 
Very interesting trading over the past week starting with a sell down in the first four days and ending with the announcement of the farmout agreement on Friday.

Last weeks Trade.jpg
 
BG Group to spend $160m on oil wells
By KENNEDY SENELWA Special Correspondent

posted Saturday, September 14 2013 at 12:57
UK oil explorer BG Group will next year spend Ksh13.9 billion ($160 million) to drill two offshore wells for crude oil and natural gas in Kenya, its executives said.

The London Stock Exchange-listed firm expects to move a rig from Tanzania and sink two wells in exploration area L10A and L10B near Mombasa in January 2014. Drilling of the two wells is expected to take about six months.

“The current plan is to relocate Deepsea Metro-1 drillship from Tanzania to Kenya in the first quarter of 2014,” said BG’s external communications manager Mark Todd.

The first well will be in shallow waters with depths of 500 to 700 metres at least 20 kilometres from shore. The second well will be in the deep sea at depths of 1,000 to 1,600 metres over 110 kilometres from shore.

Drilling activity is expected to intensify in the final quarter of this year and early next year with brightening prospects of oil and gas.

On September 3, Africa Oil ”” a Canadian company prospecting for petroleum in northern Kenya ”” raised five-fold the estimated deposits in the Lokichar basin, affirming a recent report by British exploration firm Tullow Oil.

In a released statement, Africa Oil said that northern Kenya has commercially viable oil and gas reserves. The firm is an exploration partnership with Tullow Oil in some of the wells with fuel deposits in northern Kenya.

Mr Todd said BG Group believes Kenya has the potential to discover either crude oil or natural gas in acreage L10A and L10B as various companies have discovered fossil fuel deposits in other exploration areas in the country.

BG owns 40 per cent of acreage L10A and 45 per cent of acreage L10B.

http://mobile.theeastafrican.co.ke/Business/-/433844/1992376/-/format/xhtml/-/vgsr8a/-/index.html
 
PCL Took another 14 1/2 % hit in early trade today.
Best of luck guys, but it seems that it may fall further before it gets better.

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

KENYA L8 CLARIFICATION
10 October 2013

Pancontinental notes media reports that Bob Dye, Apache's senior vice president of corporate affairs, has stated that Apache is withdrawing from the L8 licence, offshore Kenya.

Apache has not yet given written notification of its withdrawal to the L8 Joint Venture participants under Article 13.1(A) of the L8 Joint Operating Agreement (“JOA”), nor has it given written notice of its resignation as Operator under the JOA. Withdrawal from the JOA requires 60 days’ written notice, and resignation as Operator requires 90 days’ notice; however Pancontinental expects Apache to give these notices shortly.

The media report of Apache’s withdrawal from L8 (its only venture in Sub-Saharan Africa) follows other Apache divestments around the globe, including Apache’s divestment of projects in the Gulf of Mexico (announced 18 July 2013), in Alberta, Canada (announced 15 August 2013) and in Egypt (announced 1 September 2013).The series of withdrawals are consistent with Apache’s announcement in May 2013 that it planned to divest $4 billion in assets by year-end 2013.

The L8 Joint Venture will discuss the best way forward and determine the new operator of the Licence after it has been formally notified by Apache of its intention to withdraw.

Subject to ministerial consent Pancontinental expects to increase its interest in the L8 licence on a pro-rata basis, at no material cost.

The current participants in the L8 licence are -

Apache Corporation 50% Origin Energy Limited (ASX: ORG) 20%
Pancontinental Oil & Gas NL (ASX: PCL) 15%
Tullow Oil plc 15%

Pancontinental considers, while it is unfortunate to see Apache’s strategic withdrawal, that this provides an opportunity to increase its interest in what it regards as a very worthwhile exploration area offshore East Africa.

Kenya L8 Licence Potential Including L8, Pancontinental holds interests in four licences over 20,000 sq km offshore Kenya.

L8 contains numerous Prospects and Leads to pursue for oil and Pancontinental is now looking forward to a new Operator and a re-formed Joint Venture.

Following the Mbawa 1 gas discovery, it is interpreted that there is a major, deeper opportunity to discover oil in strata that have not yet been tested in L8. A number of Prospects have been mapped out as potential future drilling targets to test this concept.

Pancontinental continues to regard Kenya as one of the best and most stable business environments in Sub-Saharan Africa.

About Pancontinental Oil & Gas NL

Pancontinental Oil & Gas NL is an independent oil and gas exploration company listed on the Australian Securities Exchange (ASX: PCL).

Pancontinental’s focus is on exploring for oil in new frontiers in Africa and surrounding regions and it currently holds interests in four licences over 20,000 square kilometres in East Africa offshore Kenya, and the EL0037 licence over 17,000 square kilometres offshore Namibia.

Pancontinental is one of the few small-cap junior companies amongst an increasing number of much larger companies offshore East Africa and Namibia.

Pancontinental’s website is www.pancon.com.au/

Yours sincerely for and on behalf of Pancontinental Oil & Gas NL

Barry Rushworth, CEO and Director

The summary report on the oil and gas projects is based on information compiled by Mr R B Rushworth, BSc, MAAPG, MPESGB, MPESA, Chief Executive Officer of Pancontinental Oil & Gas NL. Mr Rushworth has the relevant degree in geology and has been practising petroleum geology for more than 30 years. Mr Rushworth is a Director of Pancontinental Oil & Gas NL and has consented in writing to the inclusion of the information stated in the form and context in which it appears.
 
Apache Corp abandons hunt for hydrocarbons in Kenya

American explorer Apache Corp has abandoned its hunt for hydrocarbons in Kenya, a hotspot in the race for new oil and gas deposits, after finding only non-commercial quantities of gas in its sole Kenyan interest.

Bob Dye, senior vice president of corporate affairs at Apache, said the company was relinquishing its 50 per cent stake in Kenya's offshore L8 Block where it partnered with Britain's Tullow Oil and Australia's Pancontinental Oil and Gas.

"We determined that other areas in our worldwide portfolio provided better opportunities for future capital investments," Dye told Reuters in an email late on Tuesday.

Dye said Apache had informed the Kenyan government of the move on Sept. 27. The decision, he said, was not influenced by a militant attack on a Nairobi shopping mall a week earlier which killed at least 67 people.

The attack, the worst on Kenyan soil since the 1998 U.S. Embassy bombing carried out by al Qaeda, has raised questions over the security of oil and gas exploration facilities.

Commercially viable oil discoveries in Kenya, along with oil struck in Uganda and gas finds offshore Tanzania and Mozambique, underlines east Africa's potential to become a major oil and gas producing region in the next five years.

Other companies that own exploration blocks or are prospecting for oil and gas in on the Kenyan coastline include FAR Limited which is listed on the Australian Stock Exchange.

In June this year, FAR Limited and Pancontinental announced that they are seeking to sell part of their exploration rights on a block off the coast of Kenya, to raise funds that will be used in drilling.

FAR Limited owns 60 per cent of block L6, which has three prospects; Tembo, Kifaru and Kifaru West, while the remaining 40 per cent of the joint venture is owned by Pancontinental.

FAR, in disclosures contained in its latest annual report for the period ended December 2012 said that the combined prospective resources for the L6 block have been assessed at 3.7 billion barrels of oil or 10.2 trillion cubic feet of gas.

The company said that Tembo, Kifaru and Kifaru West have prospective resources of; 327, 178 and 130 million barrels of oil respectively or 807, 517 and 388 billion cubic feet of gas.

The cost of prospecting and drilling can run into millions of dollars and chances of striking oil or gas are usually low.

FAR Limited had assessed the chances of a discovery of the three prospects to be 21 per cent, 19 per cent and 18 per cent respectively

http://www.businessdailyafrica.com/...Kenya/-/539546/2025030/-/4m7kcrz/-/index.html
 
British oil firm in talent hunt ahead of drilling

British oil and gas giant BG-Group has stepped up recruitment of senior managers for its Kenyan operation ahead of an expected drilling of off-shore exploratory wells later in the year.

The company, based in Reading, UK, said it plans to drill two wells at its South Coast blocks to determine whether they have commercially viable oil deposits.

Among the positions that the company seeks to fill include those of a policy adviser, lead accountant and a legal expert tasked with linking up with the government on issues such as tax and regulations once the oil exploration kicks off.

“BG Group plans to drill key exploration wells, and its first Kenya well is scheduled to spud around the end of the year,” said BG-Group chief executive Chris Finlayson in the company’s annual report.

Each well is expected to take between 60 to 80 days to drill.

Kenya has witnessed increased oil exploration activity in the wake of the discovery of commercially viable crude deposits in Turkana by another UK firm, Tullow Oil.

BG Group plans to spend Sh13.7 billion ($160 million) in drilling for oil and gas at the exploration blocks L10A and L10B located East of Mombasa island, in which it holds 40 and 45 per cent stakes respectively.

Other rights holders on block L10A are Cove Energy (25 per cent), Premier Oil (20 per cent) and Pancontinental (15 per cent). Cove Energy and Pancontinental each hold 15 per cent in L10B with Premier Oil owning 25 per cent.

“Acquisition and processing of 2D and 3D seismic data has identified significant prospect in multiple gas and oil prone plays,” said BG-Group in its 2013 exploration activities appraisal.

Following the sinking of the first two wells, the company will move into the second phase of its exploration with a third well in 2015, it said in a projection of operations and strategy that was released in September

BG-Group also has operations in four other African countries in Tanzania, Egypt, Madagascar and Tunisia.

The government has also started to lay the groundwork for the commercial exploitation of Kenya’s oil reserves.

It has already moved to recruit an audit firm to monitor financial records of oil and gas exploration companies operating in Kenya, a key step towards commercial exploitation of the resource.

In August, the government through the National Oil Corporation of Kenya issued a call for expressions of interest from audit firms to carry out the work. The audit reports will be necessary when determining compensation to be paid to oil firms to cover their costs of exploration.

Only last month, Tullow made its fourth consecutive wildcat discovery, at the Ekales-1 well in Block 13T in Turkana County, and is now testing the commercial viability of its finds.

While the find is being tested for productivity, reservoir volumes are expected to be more than 50 million barrels gross recoverable oil.

In its July update, Tullow announced that Ngamia-1 and Twiga South-1 wells on additional study yielded a net oil pay of 200 metres and 75 metres respectively or double the previous estimates, with a combined potential of producing 250 million barrels of oil.

http://www.businessdailyafrica.com/...02/-/view/printVersion/-/agma0dz/-/index.html
 
Top