Share Name Share Symbol Market Type Share ISIN Share Description
Oilexco LSE:OIL London Ordinary Share CA6779091033 COM SHS NPV (CDI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 6.90p 0.00p 0.00p - - - 0 06:34:02
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 174.0 59.2 -18.1 - 15.44

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chart trader2000: By Jon Sindreu and Biman Mukherji Crude prices fell Thursday after major oil producers extended output cuts by less than some investors had hoped. The Organization of the Petroleum Exporting Countries on Thursday renewed an agreement to withhold some crude-oil supplies into March 2018, people familiar with the matter said, doubling down on its bet that it can raise prices despite soaring output from American shale producers. Brent crude, the global benchmark, fell more than 1.4% to $53.19 a barrel for June delivery, while West Texas Intermediate dropped around 1.9% to trade at $50.41 a barrel. Thursday's agreement will extend by nine months a deal made at the end of last year to cut oil production. Speculation of how OPEC and other major producers might extend that deal, and whether they would promise deeper cuts, has moved markets throughout the year. The oil price is likely to remain volatile through Thursday, with non-OPEC producers, including Russia, slated to meet with the cartel to decide on their own output levels later in the day. Oil prices had already edged down earlier, reversing gains in Asian trading hours, when Saudi energy minister Khalid al-Falih's said it was "highly likely" this would be the decision of OPEC, which is meeting in Vienna. The Iranian oil minister said earlier that crude priced between $55 and $60 a barrel is right for both OPEC and Iran. But some analysts said that deeper cuts are needed, given the continued glut in oil supply. Michael Poulsen, oil risk manager at Denmark-based Global Risk Management, said that bringing down oil stockpiles to their five-year average would probably require being "a bit more aggressive" in freezing production. However, "if they can keep prices in this range until demand picks up, and not suffer too much, maybe they can push prices to $70 and even $80 in a few years," he added. OM Financial's Stuart Ive said that oil is likely to trade from $50 to $60 a barrel near-term because of the extension. Consultancy Wood Mackenzie said that such a deal leaves its 2017 price forecast of $55 unchanged. Major oil producers, namely Saudi Arabia, have been under pressure from a reduction of oil revenues since prices plummeted in 2014. Crude has traded between $48 and $57 since December of last year, kept in range by concerns about mounting stockpiles but also greater optimism regarding global demand. While oil producers are eager to push prices up by freezing output, staunch competition from U.S. shale producers, which are leaner and faster operations, tends to push prices back down whenever they go above a certain level. Stockpiles have mounted above historical averages.
chart trader2000: By Sarah Kent LONDON-- BP PLC was the latest big oil company to report a sharp increase in profit Tuesday, adding to optimism that the sector may have passed the worst following the dramatic slump in energy prices. The British oil giant said it swung to profit in the first quarter, benefiting from a roughly 60% increase in prices since the first quarter of 2016 and higher production volumes. The results were the latest in a flurry of upbeat earnings from the world's biggest oil companies, several of which have enjoyed their most successful quarter in more than a year. The improvement has left investors hopeful that the sector may be recovering following the tumble in oil prices after the summer of 2014. Last week, Exxon Mobil Corp. reported its best quarter since 2015. Chevron Corp. posted a profit of $2.7 billion, after reporting a loss for 2016 and France's Total SA said its profit surged 77% in the first three months of 2017. Royal Dutch Shell PLC is due to report later this week. BP said Tuesday its replacement cost profit--a number analogous to the net income that U.S. oil companies report--was $1.4 billion in the first quarter, compared with a loss of $485 million in the comparable period a year earlier. The results were some of the company's strongest since it announced a massive $20 billion deal to settle outstanding claims relating to its Gulf of Mexico blowout. The company's share price jumped 2.4% in early London trading as investors reacted positively to the results. The pretax bill for the 2010 disaster that killed 11 workers and spilled millions of barrels of oil into the sea has reached nearly $63 billion, BP said. The payments relating to the spill are expected to total between $4.5 billion and $5.5 billion in 2017, before falling to around $2 billion in 2018. The company reported robust operating cash flow in the first quarter, which is expected to continue to improve. Excluding payments related to the oil spill, the company's cash flow from operations improved to $4.4 billion in the first quarter, helping it maintain a dividend of 10 cents a share. This will reassure investors, who received a jolt in February when the company said it needed oil prices to rise to $60 a barrel to break even. That number is expected to drift closer to $55 a barrel in 2017. Cash flow is also seen strengthening as part of BP's plan to bring on seven new projects this year. The company sees oil trading at $50-$55 a barrel in 2017, likely capped by stronger shale production in the U.S., Chief Financial Officer Brian Gilvary said, despite efforts by the Organization of the Petroleum Exporting Countries to curb output and boost prices.
fangorn2: Why the Market for Fossil Fuels Is All Burnt Out Here is an early section of this interesting article by Jillian Ambrose for The Telegraph: If Helm is to be believed the oil market downturn is only getting started. The latest collapse is the harbinger of a global energy revolution which could spell the end-game for fossil fuels. These theories were laughable less than a decade ago when oil prices grazed highs of more than $140 a barrel. But the burn out of the oil industry is approaching quicker than was first thought, and the most senior leaders within the industry are beginning to take note. In the past, the International Energy Agency (IEA) has faced down criticism that its global energy market forecasts have overestimated the role of oil and underplayed the boom in renewable energy sources. But last month the tone changed. The agency warned oil and gas companies that failing to adapt to the climate policy shift away from fossil fuels and towards cleaner energy would leave a total of $1 trillion in oil assets and $300bn in natural gas assets stranded. For oil companies who heed Helm’s advice, the route ahead is a ruthless harvest-and-exit strategy. This would mean an aggressive slashing of capital expenditure, pumping of remaining oil reserves while keeping costs to the floor and paying out very high dividends. “They’d never do it because no company board would contemplate running a smaller company tomorrow than today. It’s not in the zeitgeist of the corporate world we’re in, but that’s what they should do,” Helm says. BP and Royal Dutch Shell are slowly shifting from oil to gas and making even more tentative steps in the direction of low-carbon energy. But Helm is not entirely convinced that oil companies have grasped the speed with which the industry is undergoing irrevocable change. “As the oil price fell, at each point, oil executives said that the price would go back up again,” says Helm. “What the oil companies did was borrow to pay their dividends on the assumption that this is a temporary problem. It’s my view that it is permanent,” he adds. For a start, there is scant precedent for the price highs of recent decades. Between 1900 to the late Sixties oil prices fluctuated in a range between $15 a barrel to just above $30 a barrel – even through two world wars, population growth and a revolution in transport and industry. It was geopolitical events which caused oil prices to surge by more than $100 a barrel following the Middle East oil embargoes of the late sixties and early seventies. They collapsed back to $20 by the Eighties. So, what drove oil prices to the heady levels of $140 a barrel just less than 10 years ago? “China,” says Helm, barely missing a beat. “If you look at both the rapid growth in emissions and the rapid growth of oil, fossil fuel and all commodity prices, it was while China was doubling its economy every seven years. This is a phenomenal rate. David Fuller's view Oil prices spiked above $140 a barrel in 2008 because of supply reductions from OPEC countries, not least due to regional wars. This has never been fully recognised as a huge factor in what is generally remembered as the credit crisis recession which followed. In 2009 OPEC lowered production once again, leading to a move back above $120 a barrel two years later. By 2014 subsidised renewables were gradually eroding the market for crude oil. However, the really big change was the US development of fracking technology, leading to a surge in the production of crude oil and natural gas. We should always remember these two adages, particularly with commodities: 1) the cure for high prices is high prices. These lower demand somewhat but the bigger overall influence is an increase in supply. Conversely, the cure for low prices is low prices. Demand increases somewhat when prices are lower but more importantly, supply is eventually reduced. How have these adages influenced commodity prices in recent years and what can we expect over the lengthy medium term?
fangorn2: Race to Bottom on Costs May Cause Oil to Choke on Supplies Here is the opening of this topical article by Bloomberg: Houston hosted two events this week: the nation’s largest energy conference and the town’s famous rodeo. They have more in common than you’d think. In both cases, the key for top performers is how efficiently they perform. For cowboys, it means tightly controlling every muscle to stick on a bucking bronco. For energy executives, it means controlling every cost to lower the break-even price and survive what’s been a wild ride on the oil market. When companies can lower the price at which they break-even, it means they can approve more projects and produce more oil, keeping dividends safe and investors happy. The risk: By drilling up their share price, they can also end up drilling down the price of oil. Welcome to 2017, the year after a two-year market rout made companies more efficient. At the CERAWeek by IHS Markit conference this week, fears of too much supply were palpable. "Everyone is driving break-even prices down," Deborah Byers, head of U.S. oil and gas at consultants Ernst & Young LLP in Houston, said in an interview at the meeting, the largest annual gathering of industry executives in the world. "It isn’t just shale companies; it’s everyone, from deep-water to conventional." As the conference was ongoing, those fears took physical form as West Texas Intermediate, the U.S. crude benchmark, plunged 9.1 percent this week, closing below the key $50-a-barrel level for the first time this year. It settled at $48.49 on Friday. The slump came as Scott Sheffield, chairman of Pioneer Natural Resources Co., said prices could fall to $40 if OPEC doesn’t extend its existing agreement to cut production. Shale billionaire Harold Hamm, the CEO of Continental Resources Inc., warned undisciplined growth could "kill" the oil market. The buzzword was efficiency. In panel discussions and keynote speeches, executive after executive tried to outdo rivals in announcing their low break-even prices. Eldar Saetre, head of the Norwegian oil giant Statoil ASA, told delegates that break even for his company’s next generation of projects had fallen from $70-plus to "well below" $30 a barrel. David Fuller's view Analysis of the international oil market today is simple, albeit very different from what the industry has experienced in earlier decades. Thanks to technology, oil companies around the world can now produce more crude at $50 a barrel than the global economy can consume. Furthermore, the average cost of production is still declining and is likely to be considerably lower ten to twenty years from now. The world will never run out of oil, even when the global economy is booming with the help of cheaper energy prices. This is not because the supply of oil in the ground is infinite, which it is not. Instead, the world is approaching peak oil demand within the next decade, because other forms of energy continue to become more competitive, thanks to technology, and they cause less pollution. The only way oil prices can move considerably higher than today’s levels for both Brent and WTI crude, is if production is sharply curtailed, for one reason or another. While theoretically possible, this is unlikely beyond the short term, if at all.
chart trader2000: By Sarah Kent LONDON -- In June, oil giant BP PLC announced what it deemed an "important" new discovery in Egypt. It turned out to be a modest natural-gas find that didn't even rank in the top 50 discoveries since 2012. The fact that BP and its partner Eni Spa hailed it as a major success is a sign of the times for the oil industry. For years, big oil and gas companies poured ballooning sums into seeking mammoth reserves in difficult locations. But their recent record was spotty, and a dearth of major finds was followed by the oil-price slump that began in 2014. It prompted companies to cut costs and shift away from expensive, high-risk exploration. World-wide, oil-exploration spending last year was the lowest since 2007. There's been less conventional oil and gas (as opposed to resources contained in shale or oil sands) discovered in the past 2 1/2 years than in 2012 alone, according to Edinburgh-based consultancy Wood Mackenzie. And oil companies will likely show continued pressure on exploration budgets when they report their third-quarter earnings over the coming week, say analysts. Some in the industry say the decline in exploration spending will eventually contribute to an oil drought -- and spiking crude prices. Saudi Arabia's energy minister Khalid al-Falih told an oil conference in London this month that the underinvestment caused by weak oil prices over the past two years will result in "a period of shortage of supply." Others say it is the new normal, in which giants like BP and Royal Dutch Shell PLC will increasingly focus their exploration on less risky and more easily accessible reserves -- and spend some of the money they used to use for exploration to buy already-discovered resources from smaller companies. Today's frugal period comes after oil companies boosted exploration spending in the 2000s amid high prices and rising Asian demand. Drilling tested fresh ocean depths and under Arctic ice in a search for new barrels, as output from easy-to-reach fields declined. But as spending increased, success didn't. Leaving aside unconventional resources, annual volumes of oil and gas discovered have declined successively since 2010, according to data from Wood Mackenzie. While big companies were drilling dry holes, small companies pumped increasing amounts of shale oil, which helped spark the 2014 oil-price crash. Big companies responded with big cuts. BP, Eni and their peers cut exploration spending by 35% in 2015 compared with 2013, Wood Mackenzie's data show. Many projects now focus on lower-risk, lower-reward prospects as companies hope for incremental gains near existing infrastructure that they can bring online quickly and cheaply. "We have pared back exploration and are focusing our efforts on adding barrels with short-cycle time," BP's head of exploration and production Bernard Looney said in a presentation earlier this year published on the company's website. BP has cut exploration spending from $3.5 billion in 2013 to around $1 billion this year. And Eni -- one of the past decade's most successful big explorers -- has a target to discover 1.6 billion barrels between 2016 and 2019 at a cost of $2.30 a barrel. That comes after Eni found 11.9 billion barrels at a unit cost of $1.20 per barrel over the past eight years. It is a major shift for big oil companies that designed their exploration strategies to find enough conventional oil and gas to replace all the barrels they pump every year, says Andrew Latham, Wood Mackenzie's vice president of exploration research. Now, their conventional exploration seems "designed to add about 50%" of what they produce, forcing them to rely on unconventional resources like shale and acquisitions of other companies' resources to maintain output, Mr. Latham said. Shell, for example, bought BG Group for roughly $50 billion earlier this year, refilling its reserves. It also cut its exploration budget in half this year, retreating from Alaska's Arctic after drilling one of the most expensive dry holes of 2015. Now "we rely less on exploration," Shell's Chief Financial Officer Simon Henry said in June. There have been isolated big finds in recent years. Eni last year discovered giant gas reserves off Egypt and Exxon found oil off Guyana. But the big companies have increasingly opted for smaller projects. Wood Mackenzie says that despite the big cost cuts, the number of exploration wells completed last year fell by only 11% compared with the average of the last four years. That is because companies are drilling more efficient wells aimed at more modest, low-risk gains, rather than big, risky ones in new provinces, Wood Mackenzie says. Shell's exploration chief, Ceri Powell, said the company has lowered the average time it takes to start production from a new discovery near existing infrastructure from 18 months two years ago to less than 12 months now. "Some frontier exploration near infrastructure is acceptable, but really big, long-term infrastructure, deep water frontier is probably not on the cards for us," BP CEO Bob Dudley said last week. Earlier this month, BP walked away from a major exploration prospect offshore Australia following pushback from environmental activists. The company cited budget constraints.
chart trader2000: By Sarah Kent and Kevin Baxter LONDON -- The prospect of rising oil prices has the global energy industry considering a strategy that has been unthinkable for much of a two-year-long market slump: Making new investments. Big oil companies are moving ahead with new spending again, says BP PLC Chief Executive Bob Dudley on the sidelines of the Oil and Money conference here. The British oil company he heads has taken final investment decisions on a handful of projects this year and is expected to approve more in 2017, he said. "Investments are back," Mr. Dudley said. "But it's only going to be the very best." Mr. Dudley's comments highlight a pervasive sentiment among oil-industry executives and government officials that there is light at the end of the tunnel, as they grope through one of the industry's darkest moments. For the past two years, the industry has been roiled by oil prices that collapsed to less than $50 a barrel from 2014 highs of $114 a barrel, and never recovering to those previous highs. Now, with the Organization of the Petroleum Exporting Countries promising a modest output cut and prices generally on the rise, executives and industry leaders say they have a sense of guarded hope as oil prices hover around $50 to $52 a barrel. Mr. Dudley predicted an oil price of between $50 and $60 a barrel in 2017, compared with prices that have ranged between $28 a barrel and $53 this year. Ali Moshiri, president of African and Latin America Exploration and Production at Chevron Corp., said U.S. shale producers would invest again if prices rise to $60 a barrel. "The phenomenon of shale oil is real and when prices rise to $60 a barrel you will see the level of active rigs rise. This is inevitable," Mr. Moshiri said during a panel discussion. A rising oil price would allow the energy industry to make needed investments, restore some of the tens of thousands of jobs cut in the past two years and stem some of the economic pain rippling through oil-dependent economies from Venezuela to Saudi Arabia. Cuts by OPEC, the 14-nation cartel that controls more than a third of the world's crude production, would amount to about 1% to 2% of its 33.2 million barrels a day of production and help draw down the vast oversupply of oil that has flooded world markets. But OPEC and other oil producers must be careful, said Fatih Birol, the executive director of the International Energy Agency, in an interview here. Pushing prices too high would boost U.S. oil output, stop rapid declines in production in countries like China and Colombia and put a brake on fragile oil demand, he said. Oil-industry investment declined in 2015 and 2016 and is likely to fall again in 2017 unless there is a sea change -- the first time in recorded history that energy investment would decline for three straight years, Mr. Birol said. John B. Hess, chief executive of the New York-based oil company Hess Corp., warned that without new investments, the world's balance of supply and demand would turn quickly from a glut of oil today to a shortage of petroleum in the future. "We're not investing enough ensure that oil supply keeps up with demand, 2018, 2019, 2020," he said. ConocoPhillips Chief Executive Ryan Lance said the recent rise in prices wouldn't be enough for companies to start spending money again on massive long-term projects. "Prices are still pretty low to justify significant investments," Mr. Lance said. Ian Taylor, the chief executive of the world's largest independent oil trader, Switzerland-based Vitol Group, said the oil-market's supply and demand balance would remain out of whack for the next year. His price prediction for October 2017? $54.99, compared with about $52 in recent days. --Sarah McFarlane contributed to this article.
chart trader2000: Hello Share Swiggers. If you have shares in producing oil firms you might want to consider hanging onto them. And if you have spare cash you might research a few likely companies with a view to a bit more investment. The reason is that the price of Brent crude oil is going up again. It is tickling $50 a barrel as I write. It was there a few months ago when the price level caused some excitement. Quite a few oil companies nudged up on the news, including Shell (RDSA) and BP (BP.). A lot of rejoicing went on then in the Stacey household as I hold far too many shares in both companies. But then the oil price fell nearer to $40 dollars again - and Shell, BP and a lot of other big oilers began to suffer once more. But now oil share prices have been easing forward again. And in my view, this time the value of Brent crude will continue to put on weight. I am indebted to ADVFN for a few facts about Brent crude oil. Brent is a special kind of light oil used to make petrol, marine gas and diesel. Crude oil supplies 40% of the world’s needs. The biggest customer is the USA which gobbles up 20 million barrels a day. China is the second largest consumer of crude oil only taking 8 million barrels a day. And I bet you’ve always wanted to know this - a barrel of crude contains 42 gallons of the amber nectar. Oil shares have let us all down in the last few years. But they have been a big profit maker for share shifters like us before that. The big companies tend to pay juicy dividends too. And it looks to me as though the price of oil will go on rising now, as world surpluses begin to be mopped up. So I'm not selling any oil shares any time now. But you must make your own decision. Oil prices are never stable for long. - See more at: hxxp://
o1lman: Chairman´s Statement We are pleased to announce the Company's Results for the year ended 31 December 2015. 2015 was another busy year for the Company with significant cost reductions delivered early to help preserve the Company's cash position, a broadening of the Company's asset base through opportunistic low cost acquisitions, a focus on executing the OBA pipeline, a strategically important regional asset and ongoing capital discipline. Particular progress was made in 2015 with the OBA pipeline which is expected to be operational shortly. Early in 2015, in the face of the rapidly falling oil price, the Company revised its operating activity plan to fit the lower oil price environment and to ensure its healthy balance sheet and track record of excellent capital discipline was maintained. The Board took a conservative view (at the time) of oil prices, assuming WTI oil prices of $48 per barrel for the year. In that context the Board conducted a review of the 2015 plan, with the aim of minimising the use of high cost transportation until such time as the OBA pipeline to Ecuador was operational, and / or a return to a higher oil price, thus protecting the Company's balance sheet and highly valuable reserve base. In short, production from higher cost pads in the Platanillo field was stopped and more volume was sent through the lower cost Orito pipeline, with trucking to Rio Loro halted. Strategy The Company's strategy is to ensure the lowest cost profitable production from the Platanillo field, to increase 1P and 2P reserves and to diversify the Company's production base through both continuing exploration on current assets and pursuing opportunistic and attractive, low cost acquisitions. The objective is to broaden its drilling opportunities from solely Platanillo, leading to production from more than one oil field while creating attractive and extensive running room in a balanced and diversified portfolio. In line with this strategy, in June 2015 Petro Dorado South America SA ("PDSA"), a subsidiary of Petro Dorado Energy Ltd ("PDEL") was acquired. We paid a total of $8.4 million, compromising of $6 million of Amerisur stock and the replacement of $2.4 million of deposits to support cash guarantees. Post period end, the Company acquired Platino Energy (Barbados) Ltd ("Platino"), a private company, from COG Energy ("COG") for a total consideration of $7 million satisfied in shares. These recent acquisitions will help deliver a diversified production base and in turn allow us to reach our goal faster than we would have been able to without the oil price fall and associated consequential difficulties felt by over indebted oil companies operating in the Putumayo. In both cases much work has been done to de-risk the journey to diversified production. The OBA pipeline, now in the final stages of construction, will allow us to operate and produce oil at a vastly lower cost to rivals and is no doubt the key to unlocking the potential from the Putumayo. Whilst Amerisur produces solely from one oil field the Board is unlikely to recommend payment of a dividend and for the year ended 31st December 2015 no dividend payment will be made. Returns to shareholders however are discussed regularly by the Board and firmly remain a goal. I was pleased to note that despite the constraints of the Company's work programme in 2015 in the interests of capital discipline, the executive managed to increase reserves slightly during the period, a testament to their exceptional abilities and their knowledge of the Platanillo field. Board, Corporate Governance and People During the year all our staff, the vast majority of which are located in Bogota in Colombia, worked tirelessly to reduce costs, increase the efficiency of our existing assets, grow our asset base and deliver the OBA pipeline, a transformational project for the Company providing significantly improved economics. I would personally like to thank them for their hard work and dedication in challenging market conditions. The Company recognises the importance of good corporate governance and the Company's direction of travel in that regard is positive. In January 2015, Stephen Foss was appointed Senior Independent Non-Executive Director. Mr Foss has over 30 years of experience in the capital markets industry, having spent his career in Australia, Canada and the UK. He previously led the Royal Bank of Canada's International Equities business for Europe and Australasia, prior to joining its global investment banking division in February 2011 to concentrate on senior client coverage, Sovereign Wealth Funds and origination in the natural resources sector. After graduating with a Bachelor of Arts with Honours from the University of Western Ontario, Mr Foss began his career at the Sydney Stock Exchange and subsequently held a number of senior management positions with another global investment bank. Mr Foss chairs the Remuneration Committee and sits as a member of the Audit Committee. In addition, there have been a number of remuneration changes during the year. The Remuneration Committee is now fully independent. Following consultation with shareholders on its remuneration during the first half of 2015, the Committee appointed h2glenfern Remuneration Advisory to carry out a review of its board remuneration policies. This was followed, at the beginning of 2016, by further consultation with shareholders after which the Remuneration Committee made a number of changes to its remuneration policy. The key area where changes are to be made is in relation to long-term incentives and given the low oil price environment, executive pay levels have been largely frozen. During the year, Dr. Douglas Ellenor, Non-Executive Director of the Company, renounced all of his 300,000 options over new ordinary shares at 0.1p each which he held under the Company's 2013 LTIP scheme. As of 31 December 2015, Dr. Ellenor had zero LTIP share options in the Company. In addition, on 10 December 2015 Jade Oil & Gas Consulting, which Dr. Ellenor is a shareholder and a Director, terminated its Technical Consulting Services agreement with Amerisur Resources. As a result Dr. Ellenor is deemed an independent Director under the UK Corporate Governance Code of the Financial Reporting Council which sets out the best practice and as a result Amerisur Resources has a total of three independent Non-Executive Directors. The Company's achievements were recognized last year when Amerisur won "Best Oil & Gas PLC" at the 2015 UK Stock Market Awards. The awards, which celebrate the best of UK PLC and recognize companies which have created shareholder value, were held on Thursday 26 March 2015. The other nominees for the category of "Best Oil & Gas PLC" included; BP, Shell, Sound Oil and Premier Oil. Governments The Governments of both Colombia and Ecuador have shown great foresight in agreeing to the building and commissioning of the OBA pipeline. Bi-lateral infrastructure projects between two countries are extremely complicated as the building of the Channel Tunnel between the UK and France demonstrated. Both President Correa and President Santos have shown visionary leadership, and both governments have worked closely to create this major project. Amerisur is proud to play its part. Post balance sheet Post balance sheet, the Company raised $35 million of new equity capital following a roadshow to inform shareholders where the Company was with the OBA pipeline. It was clear from both shareholders and prospective investors that there was support for an acceleration of the 2016 activity programme to take advantage of lower drilling costs to increase reserves, and production to increase flows through the OBA pipeline which is expected to reduce cash opex per barrel from approximately $27 to $15. Due to the support from institutional investors, the Company was able to raise the capital we wanted to expand more rapidly. Outlook With the OBA pipeline now in the final stages of construction and due to be operating in May, the economics of the Company's production improve dramatically, with cash operating costs per barrel anticipated to reduce significantly over a period of time as production gradually ramps up. The lower opex costs will enable us to increase production from the Platanillo field despite the low oil price environment, which, following the advice received from Schlumberger in a report commissioned by Amerisur, will be done carefully and responsibly so as to preserve the long term integrity of the reservoir. The new capital raised in March has enabled us to accelerate the 2016 activity plan to increase reserves and production. We are proceeding with: social consultations and environmental licensing for a Long Term Test ("LTT") and further wells in Coati together with a 3D seismic programme on the Coati license to optimise drilling locations and further define the potential of the field; two step out wells drilled from Platanillo Pad 2N; a well on Put-8 from the Platanillo West pad; a development well on Coati; a Put-8 South N sand anomaly well and two further Platanillo infill wells.
o1lman: Range Resources Limited (‘Range’ or ‘the Company’) 22 February 2016 Strategy and 2016 work programme update Range is pleased to provide its strategy and work programme update for 2016. A detailed operations presentation has been published by the Company and is available on the Company's website at: hxxp:// Highlights · Most active onshore work programme in Trinidad for 2016 amongst independents; · Largest scale waterflood projects in recent times in Trinidad commenced; · Five high impact wells to spud this year; · The Company revises its production guidance with stabilised production goal from current work programme of 2,500 barrels of oil per day (bopd) by the end of 2017; · Fully funded work programme; · Strong cash position of US$22 million; and · Range continues to seek suitable value enhancing production and / or development acquisitions. Strategy Despite the current challenging commodity price environment, the Company's strategy remains the growth of its current production opportunities in Trinidad while maintaining maximum operating efficiency. Execution of Range's growth strategy is underpinned by ongoing large scale work programme, combined with substantial reductions in operating, general and administrative costs. Work programme update Given the current volatility in oil prices and slower than anticipated availability of the new drilling rigs, the Company has completed a review of its 2016 work programme, and has selected the most attractive wells based on anticipated production and economic returns. The Company has identified implementation of its waterflood projects as the highest priority, and expediting these will be key for Range's operations. As a result, a minimum of two projects are planned for water injection and production for the year. Waterflood is a more cost efficient way to grow production in the current oil price environment. This method of oil recovery, whilst not new to Trinidad oilfields, has not been practiced by an independent onshore operator in decades. Texaco used this technique successfully in parts of the Beach Marcelle field and the nearby Navette field in the 1950 / 1960s. Range is the first operator to re-introduce this method recently onshore Trinidad. The Company revises its production guidance with a stabilised production goal from the current work programme of 2,500 bopd by the end of 2017. This supersedes the previous production guidance given. The average production year to date in Trinidad is approximately 570 bopd. Waterflood projects 1. Morne Diablo expansion The Morne Diablo expansion is an extension of the existing successful pilot scheme. As previously announced, the government approvals are in place, and water injection of 150 barrels of water per day (bwpd) commenced in December 2015. There are currently approximately 130 wells in the area approved for waterflooding, therefore no new wells will need to be drilled. The initial waterflood plan involves the use of up to 14 injectors and 14 producers, with 3 of these wells converted to injectors so far. More wells will be converted to injectors and producers as the project develops. Range currently uses water from its existing operations as the water source for the project. In addition, the Company plans to use produced water from Petrotrin's existing operations going forward (subject to Petrotrin's approval), which will increase water injection to 3,000 bwpd. This produced water is considered as a waste by-product of the oil and gas industry and has to be treated before being released into the ocean and other waterways. Reinjection of produced water is an environmentally friendly solution, as it significantly reduces the quantities of produced water being discharged into the ocean and waterways, thereby, reducing the risk of pollutants in the environment. The original oil-in-place in the expansion area is estimated at 6.5 million barrels of oil (mmbbls), of which 1.3 mmbbls (20%) has been produced by primary depletion. Waterflooding is estimated by the Company to recover another 0.6 mmbbls over the next 8 years. With injection already underway, first production as a result of waterflooding is expected to commence in 2H 2016. Average production over the 8-year period referred to above is expected to be approximately 200 bopd, with peak production estimated at approximately 250 bopd. 2. Beach Marcelle South East block Beach Marcelle is Range's flagship waterflood project, with 63% (14 mmbbls) of Range's total 2P reserves in Trinidad found in the block. As announced on 13 January 2016, government approvals were received in December 2015, and the project implementation is underway. Beach Marcelle has been split into a number of individual "projects", based on the fault blocks within the field. The South East block is the largest of the projects and will be the first to be waterflooded. The initial limited injection plan of the block comprises 6 injector wells, 3 observation wells and 5 water source wells. The Company will need to drill two new injector wells as part of this plan. The other wells for the limited plan are already in place. Rig 2 has been moved to the South East block to commence workover operations on the four injector wells. The additional wells to complete the full scheme for the South East block will be finalised later in 2016. Currently there is very limited production from the reservoir. At the start of the injection, the production wells will remain shut-in to allow re-pressurization of the reservoir. This will be monitored via observation wells which will then be converted to production wells. To minimise capex, existing field infrastructure and wells will be utilised where possible. The Company will initially use water from shallow aquifer wells as its water source, supplemented by produced water as the waterflood progresses. The original oil-in-place in the South East block is estimated by the Company at 37.5 mmbbls, of which 6.2 mmbbls (17%) has been produced by primary depletion. Waterflooding is estimated by the Company to recover another 4.8 mmbbls over the next 8 years. Injection is expected to commence in Q2 2016 with first production anticipated during Q4 2016. Average production over the 8-year period referred to above is expected to be approximately 1,600 bopd, with production estimated over the plateau period of three years of 2,000 bopd. The other blocks on Beach Marcelle project (North East and South West blocks) will be waterflooded from 2017 onwards. 3. Additional Morne Diablo areas The Company has identified additional areas around the previously drilled development wells in Morne Diablo field which could be suitable for waterflooding. Subject to approvals, one of these areas may be waterflooded during 2016. Further details will be published once approvals are in place and plans have been finalised. New drilling Management has reviewed the previous drilling schedule and has prioritised a number of wells based on risk and economic returns. As a result, the following wells are planned for drilling during 2016: Well Location Development / Exploration Depth (feet) MD 51-1 Morne Diablo Development 4,200 LD 3 Morne Diablo Development 3,000 QUN 158R Morne Diablo Development 2,150 GY 218 SE Beach Marcelle Development 4,535 Canari North Guayaguayare Exploration 5,000 The four development wells are designed to explore the potential of out-step drilling and to test deeper horizons of the fields. The QUN 158R well will also be drilled to establish the waterflooding potential. The Canari North well is a committed exploration well on the Guayaguayare licence. The wells will be drilled by RRDSL, a wholly owned subsidiary of LandOcean Energy Services Co., Ltd (LandOcean) using the four new rigs and rig 8, subject to certification of the new rigs by the government and approvals relating to the previously completed mast repairs on rig 8. 2016 capex budget The capex budget for 2016 is estimated at approximately US$26 million, with the majority of the budget allocated to waterflood projects. The major components of the capex spend include the following activities: Activity Capex (US$ m) Morne Diablo waterflood 3.5 Beach Marcelle waterflood 13.5 Drilling 5 new wells (4 development and 1 exploration) 9.2 TOTAL 26.2 Strong financial position Range remains in a strong financial position from which to fund its work programme in Trinidad. As of 31 December 2015 (the date of its latest published results), the Company had a cash position of approximately US$22 million (unaudited). Range and LandOcean continue to progress with finalising the terms for the US$50 million trade financing package with Sinosure and it is expected that this will be completed in the coming months. The delay in finalising the financing has not impacted on any of the Company's plans and Range is pleased to advise that LandOcean has confirmed that pending completion of the Sinosure facility, LandOcean will provide Range with credit terms of 720 days for all work undertaken as part of purchase order 2 of US$50 million (which included the capex detailed above for the waterflood and drilling programme). This is in addition to the existing credit facility with LandOcean for drilling services provided. Range is therefore fully funded for its exploration, development and waterflood programme and has significant financial flexibility to consider any potential acquisition opportunities in accordance with its strategy. Attractive financial returns Despite the low oil price environment, Trinidad operating netbacks continue to be attractive and at a level which justifies further investment. Assuming an average oil price for 2016 of US$ 40 / barrel, the netback (in US$ per barrel) for current and projected production is estimated by the Company as follows: US$ per barrel Current production (~600 bopd) Projected production (2,500 bopd) Revenue 40.0 40.0 Royalties 11.0 11.0 Operating costs 20.3 12.9 Operating netback per barrel 8.7 16.1 Notes: (i) Oil price is based on assumed average oil price for 2016, (ii) operating costs are an average per barrel over field life for Trinidad producing fields and (iii) operating netback is on a pre-taxation basis Acquisition strategy In line with the growth strategy of the Company to create value for shareholders, and to provide Range with additional production and revenue, the Board continues to evaluate potential acquisitions of high quality assets at attractive valuations. The Company has witnessed an increase in the available attractive opportunities in recent months, and given Range's strong cash position, the Company is well positioned to take advantage of this opportune environment for acquirers, as well as continuing to accelerate its 2016 work programme. Further updates will be provided as appropriate.
o1lman: Nostra Terra Oil and Gas Company plc ("Nostra Terra" or the "Company") Permian Basin Acquisition Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, is pleased to announce the acquisition of producing assets in the Permian Basin of New Mexico from Alamo Resources II, LLC. Highlights -- Significant increase in production and reserves o Total proved (1P) reserves 2,655 Mbbl of oil and 553 MMcf gas as at 1 October 2015, 1,648 Mboe attributable to NTOG -- Permian Basin with stacked pay -- Shallow (2,000') conventional oil -- Lifting cost approximately $17 per barrel -- Significant amount of upside available from proven (1P) reserves not currently producing (currently less than 20% producing) -- 100% Operated, 100% Held By Production o 2,880 gross (2,732 net) acres o NTOG will be the operator o Operator fully controls development pace and costs -- Steady, predictable PDP production base o 55 active vertical producing wells and 12 active injector wells o Nov 2015 average production of 122 bopd gross (92 bopd net) o Shallow declines -- Total Net Proven (1P) Reserves of 2.7 million boe (99% oil), 1.65 million attributable to NTOG o Multiple low cost, low risk optimization opportunities o 6 behind-pipe recompletions/re-stimulations/workovers/return-to-production cases o 3 water flood projects in various stages of development surrounded by successful analogs o 54 PUD vertical locations with EURs ranging from 31 to 43 Mbo/well Acquisition Nostra Terra has agreed to pay US$3.0 million to acquire a 60% WI in producing assets located in the Permian Basin. US$2.7 million is due by 31 March 2016 ("Closing") and an additional US$0.3 million is due one year after the anniversary of Closing, payable in cash or shares in Nostra Terra at the discretion of Nostra Terra. Nostra Terra anticipates financing the acquisition with a debt facility covering all the acquisition cost. The net cash flow in the current oil price environment will service the debt while excess cash may be reinvested. The assets generated turnover of approximately $1.80 million for the year ended 31 July 2015, with a profit before tax of approximately $0.25 million, (which included $1.02 million non-recurring expenses). Nostra Terra's working interest of 60% would give a pro forma turnover of approximately $1.08 million revenue and profit before tax of approximately $0.15 million at current oil prices. Reserves Total net proven reserves (1P) of 2,747 Mboe (2,655 Mbbl of oil and 553 MMcf gas) as at 1 October 2015, 1,648 Mboe attributable to NTOG -- Net proven and developed producing reserves ('PDP') estimated at 424 Mbbl of oil and 347 MMcf gas as at 1 October 2015. -- Net proven developed non-producing reserves ('PDNP') estimated at 447 Mbbl of oil and 140 MMcf gas as at 1 October 2015. -- Net proven undeveloped reserves ('PUDS') estimated at 1,784 Mbbl of oil and 66 MMcf gas as at 1 October 2015. Permian Basin The Permian Basin is one of the premier oil and gas producing regions of the United States. Straddling New Mexico and Texas, the Permian Basin is approximately 240 miles wide and 300 miles long. In June 2014 the Permian Basin was estimated to be the world's second largest oil field in terms of total recoverable resource, with at least 75 billion barrels of oil equivalent present. In January 2016, the US Energy Information Administration (EIA) estimated that the Permian Basin's crude oil production amounted to just over 2m barrels a day in December 2015, a 0.7% gain on November, but a 12% rise over December 2014. Of the seven most prolific oil and gas producing regions of the United States the Permian Basin is the only one which has continued to increase production on a quarter by quarter basis since the start of 2015. The EIA calculates that the average Permian Basin rig added production of 412 bpd in December 2015, an 80% rise since December 2014. Although the active rig count has fallen from 548 in December 2014 to 212 in December 2015, oil production has grown sharply in the same period from around 1.75m bpd to around 2m bpd. Reflecting industry interest in the Permian Basin, Chevron put a number of large scale US oil and gas projects on hold in January, choosing instead to focus its efforts on development of its Permian licenses. When explaining the rationale for its change in strategy, Chevron said the Permian Basin has proven to be the most cost efficient basin within the United States. Matt Lofgran, Chief Executive Officer of Nostra Terra, commented: "We're excited about the acquisition of these assets in the Permian Basin, one of the most prolific basins in the world. The leases will add significantly to our production, revenues, and reserves. While we will add over 1.6 million barrels of proven reserves, less than 20% of that is currently producing, providing scope for significant improvement. The leases are 100% operated and 100% HBP (not at risk of expiring), meaning Nostra Terra will be the in full control of the development pace. The industry is facing a difficult time with low oil prices which most in the industry believe to be temporary. This creates an opportunity-rich environment where assets such as these can be acquired at much better prices than previously. By having the stable production base we're able to use debt to acquire producing assets where net cash flow can service the debt while still providing free cash flow to the Company. We are actively pursuing additional opportunities to continue our growth, some of which are in advanced negotiations." Further updates will be made in due course. Tom Ervin, consultant to Nostra Terra, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr. Ervin is a Geologist, a member of SIPES, and the Dallas Acquisition and Divestitures and Mergers group.
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