In its preliminary results, Petrel Resources (LON:PET) said it is better placed today than it has been for some years and will see a continued focus on Iraq with growing activities in Africa. After resolving all the outstanding issues, in relation to the Subba and Luhais oilfield, with its Iraqi partner Makham, development work recommenced in May.
"We have re-started work in Iraq: Petrel was a pioneer in Iraqi oil and the only western company to have worked continuously in Iraq since 1999”, Petrel MD David Horgan commented. “The Petrel-Makman Joint Venture has reactivated work on the Subba & Luhais EPC contract following a hiatus due to circumstances outside our control. This should facilitate other projects, with exploring Western Desert Block 6 our priority”.
In April, the company announced that it had resolved the issues surrounding the Subba and Luhais oil field development, and following its re-start in May, the project is expected to come into production.
“There is clarity in our position in Iraq. We will support Makman as they complete Subba and Luhais. We are ready to commence field work on Block 6 once title is ratified. When an Iraqi government is formed and an oil policy agreed, we will make strenuous attempts to obtain one or more oil fields. But we cannot wait indefinitely in hope”, Petrel stated.
While the Iraqi operation is getting ‘back-on-track’, the company simultaneously returned its attention to African oil exploration, with a 30% ground-floor stake in the Ghana Block 2A – which includes 1,500km2 of onshore and shallow offshore Tano Basin. Petrel noted that approximately 1.3bn barrels have recently been discovered by Tullow/Kosmos in the Tano Basin.
Elsewhere, in Ghana, Petrel together with partners Hydrocarbon Exploration (HyEx) and Persian Gold (LON:PNG) - who recently proposed to merge to create Clontarf Resources – negotiated a 1,500km2 concession which has been signed and is currently awaiting ratification from Ghana’s cabinet and parliament.
The Tano concession will be exploration through a joint venture with Petrel, HyEx and Persian Gold each holding a 30% interest, with the remaining 10% being held by local interests. The company noted that negotiations are ongoing to revise certain terms and conditions in the existing agreement, but in the meantime, data processing and interpretation is underway.
In response to this morning’s results, London-based stockbroker Astaire Securities highlighted that “the balance sheet now looks much healthier and the new Ghanaian block should provide some additional excitement for investors going forward”.
Disclosure: The author holds no positions in the company