Oil & Gas Corporate News
Max Petroleum (LON:MXP) (BUY, £0.50) (MXP, 25p, ? (12.36%)) announced today that the UTS-1 exploration well on the Uytas prospect in Block A has reached total depth of 827m. Electric logs and oil shows observed while drilling indicate potential pay zones in the well, including 8m of estimated net oil pay in the Jurassic formation at 331-339m depth, and 6m of estimated net oil pay in the Triassic section at 785-800m depth. As previously announced, electric logs and pressure data also indicate an estimated 16m of net oil pay in the shallower Cretaceous section as part of a potentially significant 86m oil column at a depth of 60-146m. The Company expects to commence testing the well in approximately one month using a workover rig upon receipt of the required government approvals. After running production casing in the well, the ZJ-30 drilling rig will move on to drill the Sekir West prospect in Block A.
Comment: Excellent news for the Company, confirming the integrity of the trap at deeper levels. This is the second post-salt discovery of the current exploration campaign and it validates the extensive technical work undertaken by the Company. The investment story hinges on the ability of Max Petroleum to continue some level of success in the post-salt play but mainly on its ability to test the pre-salt play. We expect Max to achieve this by a farm down of interest in that play or, failing that, by an equity issue.
Afren (LON:AFR) (AFR, 129.2p, ? (0.62%)) published an Interim Management Statement for the period July-October 2010. The period was characterised by stable net production of 16,101boepd and a number of asset and corporate transactions, i.e. acquisition of a 45% interest in OML 26 from Shell and of Black Marlin Energy. The Ebok development is progressing, with first oil expected by year end and the Okwok appraisal is ongoing with 35 ft of good quality pay encountered in the D2 reservoir. Exploration drilling on OML 115 is now scheduled for early 2011 at the 60MMbbl Ufon prospect while infill drilling at the Okoro field by year end is expected to add incremental gross rates of 3,000-5,000bopd. Finally a multi well exploration campaign has been defined through to end 2012 in East Africa on the back of…
