Stratic Energy Corp (LON:SE), the Canadian oil and gas company, announced today a business update and its outlook for 2010. Stratic is involved in the production, development and exploration of hydrocarbons, operating principally in Italy and the North Sea. On the 25th January 2010, the Company reported that the drilling at the Al Tayr well in Syria had been completed. Today they provided a detailed update on all operations.
Business Update
In 2009, the West Don well reportedly produced 1.89 million barrels, equivalent to 5,151 barrels per day and ahead of November estimates. Operational stability has improved with the two producing wells responding to gas lift and issues around the water injection process resolved. Operator Petrofac is planning a drilling campaign on the neighbouring Don Southwest field and the Company expects that a third production well will also be drilled in the southern sector of the West Don field.
The Crawford field continues to progress towards field development plan submission and project sanction, which is expected by mid year 2010, with the possibility of development activity commencing early in 2011.
The Al Tayr 101 well, drilled on its operated Block 17 concession in Syria, was plugged and abandoned following an unsuccessful test but the Company will be evaluating further opportunities in Syria. In a short drilling programme late in 2009, two exploration wells, West Ayazli and East Akkaya in Turkey were drilled. The West Ayazli well drilled to a total depth of 2,545 meters after encountering gas. The East Akkaya drill did not reveal any gas.
Stratic ended 2009 with net debt of $106.5 million, of which $6 million was cash and $48 million was bank debt and $64.5 million convertible loans. Going forward, Stratic anticipates generating approximately $35 million of production revenue in 2010. Expenditure is estimated at $10 million for UK and Syria projects, and a further $10 million earmarked for exploration in new areas.
Strategy and Outlook
Stratic’s strategy over the last few years has been to build a production-based business in the North Sea and Italy, by accessing existing discoveries and advancing those discoveries through further appraisal, development and ultimately into production. By its nature, such a strategy is very capital intensive. Given the changed macro-economic environment, debt levels and the difficulty in financing North Sea development projects, management have now set out a new strategy.
The approach going forward will be …
