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Fox-Davies Daily Newsflash including Circle Oil, Victoria Oil & Gas and Leed Petroleum

Circle Oil (NYSE:COP) Circle Oil Plc announced that the Al-Amir SE-5 appraisal well has been successfully drilled and production tested in the Al-Amir Development Lease in the onshore North West Gemsa Concession in Egypt. The Kareem Formation Sandstones under test flowed 42oAPI oil at sustained average rates of 6,150 bopd and 6.9 MMscfd of gas using a 64/64" choke and at 4,300 bopd and 4.9 MMscfd of gas using a 48/64" choke from the upper of the two identified pay zones. The well, which is the fourth appraisal well to be drilled in the Al-Amir SE discovery area, has been completed and production tested and will now be prepared for production. Log result interpretations indicate that the total net thickness of the two pay zones is approximately 36.5 feet. The upper pay zone identified in the Kareem Shagar Sandstone is 19 feet thick. The lower pay zone in the Kareem Rahmi Sandstone is 17.5 feet. A full technical evaluation of all the results is underway to assist in development planning and is a precursor to continuing further assessment of the resource potential. These results will also assist in delineating the extent of the reservoir in the area. An assessment of reserves has not yet been completed. The drilling rig will now move to commence drilling the Al-Amir SE-6 well which is the fifth appraisal well in the Al-Amir SE discovery area. The primary target is again the Kareem Formation. This well is being drilled to delineate the downdip Oil Water Contact which is required for technical reasons. The North West Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).

Comment: Another successful well for Circle Oil, although this one actually exceeded expectation as the Company was looking for an oil-water contact and hasn’t found it. Success in Al-Amir SE-5 means that the field is larger than initially anticipated and the third-party assessment of reserves, when published in the course of this year, will be more positive than it would have been otherwise. We remain very positive on the stock.


Victoria Oil & Gas (VOG) Victoria Oil & Gas Plc announced preliminary results from testing operations at Well La-105 at its Logbaba gas and condensate project in Douala, Cameroon. Well La-105, the first well drilled by VOG at Logbaba, was completed to a depth of 8,700 feet in early January. Commencing on 22 February, mul tiple pay zones were tested over a period of two weeks at depths between 7,005 - 8,500 feet. Over the testing period, various zones of La-105 flowed at rates between 11 - 56 MMscf/d of natural gas and 210 - 1,000 b/d of condensate. Flowing wellhead pressures varied between 2,750-4,552 psi. The theoretical Absolute Open Flow (AOF) capacity for the well is 90 MMscf/d. The gas is sweet, with a high calorific value and the condensate has an API gravity of 47oAPI. The test covered horizons of the Lower Logbaba formation, which had not been tested before, and the Upper Logbaba D sands. The Upper Logbaba A through C sands, although indicated as the best quality hydrocarbon-bearing sands encountered in the well logs, were not tested as the well indicated more than sufficient production capacity to meet initial gas demand of 8 MMscf/d. The Upper Logbaba A - C sands will be perforated and added to the complet ion interval when required for production. Analysis of the pressure transient and production log data is underway and fluid pressure-volume-temperature (PVT) samples taken at the test separator are being sent to the laboratory for further study. When the Company has completed its full interpretation of the test results, including those from well La-106, and integrated the results of the passive seismic spectroscopy survey conducted last year with the new well data and the limited 2D reflection seismic shot over the field by Elf, it will pass its findings over to independent reserve auditors for a reassessment of the 104 billion cubic feet proven plus probable reserves estimate made in 2008. Completion of the VOG interpretation is anticipated by early Q2 2010, with the independent review estimated to take a further 4 - 6 weeks. An extension to the current Logbaba exploration permit has been granted by the Cameroon Ministry of Industry, Mines and Technological Development unti l 20 August 2010. This extension will allow the Company to complete the drilling and testing of well La-106 and submit the full field development programme. 

Comment: La-105 has much greater deliverability than we anticipated when compared to the previous Elf wells. Part of the reason is that far more effective logging and completion technology, than available in the 1950s, are being used. There also appears to be additional productive potential in the well that could be realised by hydraulic fracture stimulation of some of the lower quality reservoir sands. More data is needed before being able to design and implement a stimulation programme, but in the longer term this could add significantly to the Logbaba reserves. This result is at the high end of expectation in terms of product ivity and confirms that Victoria Oil&Gas will be able to satisfy market demand without having to draw heavily on either of the two producer wells La-105 and -106. We are confident that La-106 will be an even better well and we would be very surprised if the forthcoming third party evaluation did not come in higher than the 2008 assessment carried out on a more limited and lower quality dataset. The next step for the Company is to investigate the exploration potential of the whole block and in particular, circumstances and funding permitting, test the positive passive seismic anomaly located some 5km north of Logbaba.


Leed Petroleum Plc (NYSE:LDP) Leed Petroleum Plc announced that the evaluation of its recently drilled A-6 well at Ship Shoal Block 201 in the Gulf of Mexico is complete and has tested at a restricted rate of 10.4 MMcfd and 423 bopd. The A-6 well reached its total depth of 13,341 feet on 17 February 2010. Electric line logs confirmed that the well encountered 65 feet of true vertical thickness pay in its primary objective. Independ ent reservoir auditing firm, Collarini Associates of Houston, Texas, attributes net 2P reserves of 1.3 MMboe to the reservoir (84 % natural gas). Net proved reserves are 5.615Bcf of natural gas and 171,000bbl of condensate together with net incremental probable reserves of 0.951Bcf of natural gas and 29,000bbl of condensate. On 4 March 2010, the well was flow tested after initial clean up for 6 hours at a stabilised gross rate of 10.4MMcfd and 423bopd with minimal completion fluid production on a 29/64 choke at a flowing tubing pressure of 2519 psi. The Company has a 100% working interest and an 80.2% net revenue interest in the well. The Ship Shoal 201 A-6 well was drilled from the recently acquired Ship Shoal 202 "A" platform, which will enable the rapid commencement of production, which is expected to occur during Q2 2010. Drilling and completion operations were finished ahead of schedule and within the $9.8m budget allocated for the well.

www.proactiveinvestors.co.uk/companies/news/14180/fox-davies-daily-newsflash-including-circle-oil-victoria-oil-gas-and-leed-petroleum--14180.html


Disclosure: The author holds no positions in the company