Oil & Gas Corporate News
Heritage Oil (LON:HOIL) (Under Review) (HOIL, 436.6p, ? (0.07%)) announces a major gas discovery in the Kurdistan Region of Iraq. Following completion of the deepening and testing of the Miran West-2 well, management estimates that the Miran West structure has P90-P50 gross in-place volumes of gas of between 6.8-9.1TCF and a P10 upside of 12.3 TCF, with 42-71 MMbbl of condensate and 53-75 MMbbl of oil.
Comment: This is a surprise announcement as previously anticipated prospective oil resources in the Lower Cretaceous, identified on the basis of oil shows in the Miran West-1 well, have been proven to be wet gas/condensate. Heritage expects first production in 2015, taking advantage of planned infrastructure for transporting gas to the European markets. Monetisation of those gas resources is therefore more of a risk for the Company and the value significantly less than oil. We would expect the announcement to have a negative impact on the share price and we are placing our recommendation and target price under review, until we assess the magnitude of the impact on our risked NAV.
Afren (LON:AFR) (AFR, 148.6p, ? (1.00%)) issued a trading statement and operations update. The highlights are: net working interest production averaged approximately 14,320boepd in 2010, and is expected to average circa 40,000boepd in 2011 with an exit rate of 55,000boepd; Ebok field development at an advanced stage with Phase 1 and Phase 2 wellhead platforms installed and pipelines in place with first oil targeted for February; Ebok?s 3 phase 1 wells tested at combined rate of 12,500bopd; Okwok field confirmed as a commercial development project; acquisition of OML 26 onshore Nigeria by First Hydrocarbon Nigeria (Afren holds 45% interest in this company); 184mmbbl gross recoverable reserves at the Ogini and Isoko fields with 144mmboe gross contingent and 615mmboe gross prospective upside; acquisition of Black Marlin Energy established core presence in East African rift and coastal basins; full year 2010 capital expenditure of approximately US$410m; forecast capital expenditure in 2011 of approximately US$410m; net debt at 31 December 2010 approximately US$142m; cash at bank approximately US$140m; and up to 9 exploration and appraisal wells planned in 2011 targeting an estimated 600mmboe net resources.
Geopark (LON:GPK) Holdings (GPK, 875p, ? (0.57%)) provided an operations update for 2010. 80% Drilling Success: drilled, completed and put…
