Oil & Gas Corporate News
Max Petroleum (LON:MXP) (BUY, £0.50) ( 20.25p, ? (0.0%)) has now completed drilling the KZN-2 exploration well on the North Kyzylzhar II West Block prospect in Block E. The well reached a total depth of 1,457m without encountering hydrocarbons and will be plugged and abandoned. The Sun ZJ-30 drilling rig will now move back to drill the BOR-2, the first of two appraisal wells to be drilled in Borkyldakty Field discovery over the next few months. The Company is reviewing the results of its tender for a second shallow drilling rig, which, along with the ZJ-30 drilling rig currently under contract from Sun, will be used to drill the remaining post-salt exploration portfolio, as well as additional appraisal and development wells within the Borkyldakty Field.
Comment: The North Kyzylzhar II East and West prospects accounted for an aggregate of 44MMbbls and have now both been tested without success. The two prospects are located on either side of a fault and whereas the KZN-1 well was located on the highest faulted block and encountered strong oil shows, the KZN-2 well located on the down-thrown block did not encounter any hydrocarbons. Clearly that faulted structure is not a valid trap, most likely due to sealing capacity of the fault. In contrast, the trap for the Borkyldakty discovery is a 4-way dip closure. We use a 38% probability of success for the current 12-well drilling programme and although a 1:3 success ratio is below par, it is still early days and 9 wells remain to be drilled. Also we should get some news on the farm-out process on the pre-salt play, which is crucial for the Company. We remain positive on the stock and retain our Buy rating and 50p price target.
Tullow Oil Plc (LON:TLW) (1282p, ? (1.00%)) announced that the Dahoma-1 exploration well in the West Cape Three Points licence encountered water bearing reservoirs. The Dahoma-1 exploration well was drilled 11 kilometres south of Mahogany-3 to explore a down-dip satellite prospect within the southeast Jubilee area, outside of the main Jubilee Unit Area. The rig drilled Dahoma-1 to a total depth of 4,390m in water depths of 1,564 metres and will now move to drill Mahogany-5 to appraise the up-dip oil accumulations eastwards of Mahogany-3. It intersected 30m of good quality sandstone reservoir below a…
