LGO Energy (LGO)

 

Oil, Gas Roundup

Regal Petroleum (LON:RPT) was the sector's biggest faller - down more than 14.6% in late trading - after it issued an update of its operational activities at its Ukrainian gas and condensate fields, which comprise the Mekhediviska-Golotvshinska (MEX-GOL) and Svyrydivske (SV) fields and the Vasyschevskoye (VAS) field, all of which are 100% owned and operated.

Average gas, condensate and LPG production from the MEX-GOL and SV fields for the year ended 31 December 2016 was 157,228 m3/d of gas, 41 m3/d of condensate and 19 m3/d of LPG (1,321 boepd in aggregate) (2015: 144,783 m3/d of gas, 44 m3/d of condensate and 21 m3/d of LPG (1,274 boepd in aggregate)).

On 4 July 2016, Regal acquired LLC Prom-Enerho Produkt ("PEP"), which owns the VAS field. Average gas and condensate production from the VAS field for period from 4 July 2016 to 31 December 2016 was 82,624 m3/d of gas and 6.5 m3/d of condensate (556 boepd in aggregate).

Since July 2015, the Group has been purchasing "wet" gas from Pryrodni Resursy, the operator of the adjacent Lutsenky field, and treating this gas through the Group's gas processing facilities to strip out and sell the liquids.

During 2016, the Group purchased 8,262,121 m3 of "wet" gas and following treatment of this gas, produced 4,929,386 m3 of gas,1,448 m3 of condensate and 11,034 m3 of LPG (87,713 boe in aggregate). This arrangement concluded in December 2016 as a result of Pryrodni Resursy constructing its own facilities.

Drilling of the MEX-109 well is continuing and has reached a depth of 4,785 metres as at 3 January 2017. The well was spudded at the end of July 2016 and is targeting the Visean reservoirs ("B-Sands") in the MEX-GOL field.

The well has a target depth of 5,250 metres, with drilling operations scheduled to be completed by March 2017 and, subject to successful testing, production hook-up by the end of the second quarter of 2017.

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LGO Energy (LON:LGO) says practical preparations for an imminent return to development drilling at the Goudron field in Trinidad are now firmly under way.

The company's local operating subsidiary, Goudron E&P Limited , has received approval from the Petroleum Company of Trinidad and Tobago and the Ministry of Energy and Energy Industries for the first of its planned Mayaro Sandstone infill wells, currently designated H18E G11(5).

That well will be drilled vertically to a total depth of 1,250 feet and is expected to intersect the Mayaro Sandstone oil pay between 650 and 1,050 feet.

GEPL has awarded a drilling contract to Trinidad specialist drilling contractor Sadhna Petroleum Services Company Limited for the drilling for two firm and a number of optional wells on a turnkey drilling basis using a small footprint conventional (rotary table) drilling rig.

Site preparation will be conducted by Sadhna and will commence as soon as practical, after which rig mobilisation and drilling are anticipated to commence without delay. Individual wells are expected to take about 14 days to drill and complete for immediate production.

LGO has also engaged Bedrock Drilling Limited, a UK based specialist drilling engineering company, to provide drilling engineering supervisory support to the drilling programme. Bedrock will provide a site supervisory team during drilling and additional engineering and advisory support to GEPL.

Permission to drill the second Mayaro Sandstone infill well in the program, designated H18E N4, was sought from Petrotrin and the MEEI in December 2016 and approval is expected to be received shortly after which site preparation is expected to commence immediately following the site work at H18E G11(5).

GEPL has outline approval for up to 45 new wells in the Goudron Field and a program of up to 70 infill production wells to the field-wide Mayaro Sandstone oil pay is contemplated, commencing with the current initial well program which will be expanded based on results and the availability of funding.

Chief executive Neil Ritson said: "We are pleased to be able to start 2017 by announcing that the practical preparations for an imminent return to development drilling are now firmly under way and that we can expect drilling of the Mayaro infill programme to get started shortly as announced in December."

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Oilex (LON:OEX) has cancelled 1.5 million unlisted options due to cessation of employment.

These comprised:

- 500,000 unlisted options with an exercise price of $0.25 and an expiry date of 27 June 2017

- 500,000 unlisted options with an exercise price of $0.25 and an expiry date of 5 August 2017

- 500,000 unlisted options with an exercise price of $0.35 and an expiry date of 5 August 2018

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Range Resources (LON:RRL) said that, as a result of the continued well workover programme, commencement of waterflood production at the Morne Diablo project, as well as development drilling, the exit production rate for 2016 exceeded 800 bopd.

Range said it was also pleased to announce that the GY 681 well located in the Beach Marcelle field that spudded on 1 December 2016 was successfully drilled ahead of schedule and reached a total depth of 4,395 feet on 22 December 2016.

"The well was originally planned to be drilled to 4,500 feet, however it was decided not to drill below 4,395 feet as the main target (Lower Gros Morne formation) had been encountered at this depth and drilling of the additional footage would have contributed to an increase in drilling cost with little to no benefit," it added.

"The initial log evaluations on the well are encouraging with an estimated net pay of approximately 150 feet in the Lower Gros Morne sand (primary target) and an additional 80 feet in the upper zone of the well.

"Production testing of the well will commence during early January 2017 to determine the producing potential of the well. Any success with the well is expected to open up other development opportunities for that reservoir and add to the geological knowledge of the area. The relevant approval requests have been submitted to the regulatory bodies in Trinidad.

"The GY 681 well is the last well from the five-well campaign drilled during 2016. Given the Company's continued focus on waterflood projects, drilling of any further developments wells during 2017 will be evaluated in due course.

"Range is also pleased to advise that following completion of a production testing programme, the QUN 160 development well drilled in November 2016 has been put on production on 1 December 2016 and has continued to flow at an average stabilised rate of 35 bopd, having initially flowed at 66 bopd. The well is flowing on a restricted choke size of 6/32 inches.

"Separately, the Company is pleased to advise that production commenced at the Morne Diablo waterflood project on schedule during Q4 2016, with current production of approximately 60 bopd, which includes production from both the expansion and pilot waterflood schemes."

HIGHLIGHTS:

- The exit production rate for 2016 in Trinidad has exceeded 800 barrels of oil per day ("bopd"), a 40% increase from exit rate for 2015;

- The GY 681 well successfully drilled in December 2016 with encouraging log evaluations indicating over 230 feet of an estimated net pay. Production testing to commence this month;

- The QUN 160 well drilled in November 2016 has been put on production; and

- Production at the Morne Diablo waterflood project has commenced on schedule during Q4 2016.

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The sector's biggest riser was Europa Oil & Gas (LON:EOG) - up by more than 23.6% in late trading.

At 4:18pm:

(LON:AUR) Aurum Mining PLC share price was +1p at 6.68p

(LON:BOR) Borders Southern Petroleum PLC share price was +0.02p at 3.04p

(LON:CHAR) Chariot Oil Gas Ltd share price was -0.18p at 7.77p

(LON:ENQ) EnQuest Plc share price was -0.12p at 45.38p

(LON:EOG) Europa Oil Gas Holdings PLC share price was +1p at 5.75p

(LON:GKP) Gulf Keystone Petroleum share price was +6.25p at 136.25p

(LON:GPX) Gulfsands Petroleum PLC share price was -0.63p at 8.88p

(LON:INDI) Indus Gas Ltd share price was +0.13p at 382.63p

(LON:LGO) LGO Energy PLC share price was -0p at 0.11p

(LON:OEX) Oilex Ltd share price was 0p at 0.4p

(LON:PET) Petrel Resources PLC share price was 0p at 5.5p

(LON:RKH) Rockhopper Exploration PLC share price was +0.25p at 22.75p

(LON:RPT) Regal Petroleum PLC share price was -0.55p at 3.2p

(LON:RRL) Range Resources Ltd share price was +0.07p at 0.43p