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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Elixir Pet. | LSE:ELP | London | Ordinary Share | AU000000EXR1 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.625 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number : 3089A Elixir Petroleum Ltd 31 July 2008 Elixir Petroleum Limited (AIM : ELP) 31 July 2008 QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 JUNE 2007 HIGHLIGHTS * Production receipts received in the quarter of $2.1 million * Pompano Well ž2 drilled and completed and brought onto production with Well ž1 * Initiated and completed 1,222 km2 3D seismic data acquisition program over Block SL-4 offshore Sierra Leone * Applications submitted for three new licences in the UKCS 25th Seaward Licensing Round * Farm out activities continue on several UK North Sea licences * Raised $7.5 million via an issue of new shares * Current cash on hand of $10.6 million COMMENT AND OUTLOOK Elixir was very active in the June 2008 quarter with progress being made across all areas of our business. We were particularly pleased to bring onto production a further well at Pompano and to successfully complete only the second 3D seismic survey undertaken offshore the Republic of Sierra Leone. We have benefited from rising commodity prices in the US through our production, with both oil and gas prices up approximately 45% for the quarter. Increasing revenues from production and funds raised from the rights issue and placement undertaken in June mean Elixir is well funded to pursue opportunities within and outside its portfolio. We look forward to a busy second half of 2008. STRATEGY Elixir is an internationally focused upstream oil and gas company with a diversified portfolio of offshore petroleum interests across the exploration, appraisal, development and production lifecycle. Elixir's business strategy is to acquire interests in exploration licences with high impact potential, to work up prospects internally and to farm these out to industry to drill, typically on a full carry basis. Complementing this exploration strategy is the addition of lower risk oil and gas development projects with appraisal upside located in the shallow waters of the Gulf of Mexico. These projects typically demonstrate a short cycle time to production and provide cashflow for the Elixir Group. The Board of Elixir considers it important to remain flexible in the pursuit of new business opportunities which are judged to be complementary to its existing business activities and able to deliver superior growth in shareholder value. DEVELOPMENT AND PRODUCTION Gulf of Mexico Project Name: High Island Project (Block 268A) Location: High Island Area, Offshore Texas, USA Ownership: 30% Working Interest (22.5% Net Revenue Interest) Operator: Peregrine Oil and Gas, LP Wells A-1 and A-2 at High Island discovered gas and condensate pay in two separate accumulations, with each well currently only producing from the lower of the two reservoir zones. In the three month period to 30 June 2008, the following production results at High Island were achieved: High Island 268-A Gas Production Oil Production Total Jun Qtr Total Mar Qtr Avg Daily Jun Qtr Avg Daily Mar Qtr Change (%) Total Jun Qtr (Bbls) Total Mar Qtr (Bbls) Avg Daily Jun Qtr Avg Daily Mar Qtr Change (%) (MMscf) (MMscf) (MMscf/d) (MMscf/d) (Bbls/d) (Bbls/d) Project (100%) 442.1 568 4.9 6.2 (21%) 19,331 30,373 212 338 (37%) Elixir (30% WI) 132.6 170.4 1.5 1.9 (21%) 5,799 9,112 64 100 (37%) There were just over 4 days downtime during this period, giving an average uptime of 95.4%. There were no safety incidents reported in the period. Production of gas and condensate from Well A-2 remains relatively stable, although the well is exhibiting a slow, natural decline in production over time, which is in accordance with expectations. Production from Well A-1 continues with small volumes of gas and steady water and condensate rates. An intervention in late May carried out a series of wireline logs and also opened the shallower sleeves on the same sand. Following the activity, there was little change in production. The logs indicated that the reservoir was in vertical communication and that it had already been largely drained by the production to date. A further program of investigation was devised and a second intervention took place in late June. The objective was to close the lower sleeve in order to reduce the amount of water being produced, which would assist in maximising the recovery and rate of production of the remaining reserves at the crest of the reservoir. Unfortunately, difficulties were encountered during the wireline run to close the sleeve and the operation was postponed. A further intervention is being planned and will take place in the near term. Ultimately, Well A-1 will be recompleted and produced from the shallower 6,000ft sand that is presently cased off, but was fully logged when the well was originally drilled. In the normal course, a lag of two months is experienced from the month of production to receipt of sales proceeds. Accordingly, receipts in the quarter were for production in the months of February 2008 to April 2008. Sales receipts for these months totalled US$1,804,195. The average price realised for the sale of gas produced in these months was US$9.01/Mcf, and for oil was US$104.57/Bbl. Project Name: Pompano Gas Project (Block 446-L SE/4) Location: Brazos Area, Offshore Texas, USA Ownership: 25% Working Interest (18.125% Net Revenue Interest) Operator: AnaTexas Offshore Inc. The Pompano gas field lies in the Gulf of Mexico, in Brazos Block 446-L SE/4, which is approximately 90 miles southwest of Houston, Texas. The first well on Pompano, SL103229ž1 ("Well ž1"), was directionally drilled from a new caisson installed adjacent to the field's existing "B" satellite platform. The second well, SL 103320ž1 ("Well ž2") was drilled during the quarter from a caisson adjacent to the existing main processing facility, the "A" platform. Well ž2 was drilled in a southerly direction from the "A" platform. The well penetrated a number of proved reserve targets and tested some upside potential in deeper overpressured horizons. The well was eventually completed over two horizons and commenced production on 1 May 2008. The well is now contributing 70% of the total field output which at the end of the reporting period was approximately 14 MMscf/d. The well was deepened to encounter two deeper exploration targets in the F and G sands. The penetration of these sands at this location was sub-optimal, being significantly down-dip of the interpreted structural crest, however Well ž2 provided a low cost opportunity to encounter these sands for the first time within the Pompano lease area. Unfortunately the two sands were found to have poor sand development and to be water wet in this location. In mid-May 2008, Elixir announced the results of an independent reserves review of the first two Pompano wells, which is summarised below. 1P - Proven 2P - Probable 3P - Possible Gas (Bcf) Oil (Bbls) Gas (Bcf) Oil (Bbls) Gas (Bcf) Oil (Bbls) Project (100% WI) 12.6 34,732 17.1 48,207 23.8 74,617 Elixir (18.0875% NRI) 2.3 6,282 3.1 8,719 4.3 13,496 Following the success of the first two wells, Elixir announced that a drilling rig had been contracted to drill at least the third development well on Pompano, with an option acquired to drill a fourth. The timing of Well ž3 is dependent on the progress of operations on preceding third party wells, but is presently estimated as early to mid-September 2008. In the three month period to 30 June 2008, the following production results were achieved at Pompano: PompanoField - Gas Production Oil Production Brazos Block 446-L Total Jun Qtr Total Mar Qtr Avg Daily Jun Qtr Avg Daily Mar Qtr Change (%) Total Jun Qtr (Bbls) Total Mar Qtr (Bbls) Avg Daily Jun Qtr Avg Daily Mar Qtr Change (%) (MMscf) (MMscf) (MMscf/d) (MMscf/d) (Bbls/d) (Bbls/d) Project (100%) 902.5 130.0 9.9 5.7 694% 3,237 240.0 35.6 10.4 135% Elixir (25% WI) 225.6 32.5 2.5 1.4 694% 809 60.0 8.9 2.6 135% There were approximately five and a half days downtime during this period, giving an average uptime of 94%. There were no safety incidents reported in the period. First receipts from sales of gas and condensate were received in May 2008. Total receipts in the quarter from sales were approximately US$188,027. The average price realised for the sale of gas produced in these months from Pompano was US$8.66/Mcf, and for oil was US$104.19/Bbl. Project Name: Red Fish Prospect (Block 479-L N/2 and NE/4) Location: Brazos Area, Offshore Texas, USA Ownership: 25% Working Interest (18.125% Net Revenue Interest) Operator: AnaTexas Offshore Inc. Together with the other Pompano joint venture partners, Elixir participated in an offshore Lease Round in early April 2008. The Pompano joint venture submitted the highest apparent bid for the lease containing the Red Fish prospect which lies directly south of Pompano on the western side of the main fault bisecting the Pompano field. The joint venture purchased additional 3D seismic data over the prospect in the quarter and the operator has undertaken further interpretation in the period. It is expected that the Red Fish prospect will contribute additional low risk drilling targets in the near future. APPRAISAL UK North Sea Project Name: Mulle Prospect (Block 211/22b) Location: Northern UK North Sea Ownership: 40% Working Interest Operator: DNO (UK) Limited During the drilling of the Jaguar well in early 2006 significant hydrocarbon shows were encountered in the Brent Formation. Subsequent technical work has indicated the potential for oil entrapment up-dip of the Jaguar well location. This up-dip accumulation, which was penetrated by a discovery well drilled in the 1970's, has been named Mulle by the joint venture. The Mulle accumulation lies on the south-western extension of the Osprey ridge and is adjacent to the proposed Causeway oil field development which has achieved flow rates from an appraisal well of up to 14,500 barrels of oil per day on test. During the quarter the operator of Block 211/22b published a resource estimate for the Mulle accumulation which is set out below: Mulle Field P90 P50 P10 (Project 100%) ( ( ( MMBb MMBb MMBb ls) ls) ls) Oil in Place 16 57 111 Contingent Recoverable Resource 4 17 36 On a most likely outcome basis, this equates to almost 7 million barrels of contingent recoverable oil resource net to Elixir, given its current 40% interest in Block 211/22b. An appraisal well and testing program for the Mulle accumulation was designed during the quarter. The objective of the appraisal program is to further define the areal extent of the reservoir, to identify oil/water contacts and to test reservoir deliverability. The joint venture has agreed to invite partners into the project to participate in the proposed appraisal program. To this end, an online data room is being prepared which will be opened shortly for a select group of invitees. Synergies are being considered with respect to the Causeway development, planning for which is at an advanced stage. EXPLORATION UK North Sea Project Name: Leopard Prospect (Block 211/18b) Location: Northern UK North Sea Ownership: 56% Working Interest Operator: Elixir Petroleum Limited Block 211/18b (Licence P1381) is a traditional licence awarded in the 23rd Seaward Licensing Round in December 2005. The interest holders in P1381 are Elixir (56%), RWE Dea UK SNS Limited (30%) and Sosina Exploration Ltd (14%). Under the terms of a farm-in agreement finalised with RWE in August 2007, RWE will be contributing on a promoted basis to the cost of drilling an exploration well on the Leopard prospect which lies within the block. Efforts to secure another farminee in order to largely cover Elixir's and Sosina's cost exposures in the proposed Leopard well are ongoing with several companies currently assessing the opportunity. Testing of 3D seismic data relating to a site survey was initiated during the quarter, a requirement prior to drilling operations commencing. In the event a full site survey is required, discussions have also been initiated with contractors on the availability of survey boats for the second half of 2008. The availability of suitable drilling rigs has tightened over recent months with now limited availability for opportunistic wells slots in late 2008. However, provided the Leopard farmout can be concluded in the near term, we remain hopeful that the Leopard well could be drilled prior to the end of 2008, but more likely during 2009 having made commitment to the well during 2008. Project Name: Bobcat Prospect (Block 21/16b) Location: Central UK North Sea Ownership: 40% Working Interest Operator: Elixir Petroleum Limited Good progress was made on Block 21/16b during the quarter with an online data room opening in late June. Several companies immediately requested access to the data and are currently in the data room. State-of-the-art fluid inclusion studies of a number of wells already drilled in the area have demonstrated the movement of hydrocarbons through the area and proved a hydrocarbon migration pathway across the block. The studies have also revealed that a historic well drilled on the block that was formerly thought to be a dry hole, in fact contained hydrocarbon shows and provides additional support for the Bobcat prospect. Project Name: Fat Cat Prospect (Block 13/25) Location: Central UK North Sea Ownership: 12.5% Working Interest Operator: Petro-Canada Block 13/25 (Licence P1404) is a promote licence that was awarded in the 23rd Seaward Licensing Round in December 2005. The initial approval of the merger of Block 13/25 with the adjacent Block 13/24d was achieved in late 2007, with Petro-Canada assuming operatorship of the merged block. The relinquishment of part of the northern section of 13/25 was also approved at the same time. At the conclusion of the quarter the licensees of the two blocks received the Deed of Variation from the UK Regulator, which confirms the change in the terms of the two merged licences and approves the forward work program. The Deed is currently being signed by all parties and will be lodged with the Regulator shortly. In the meantime, high resolution 2D data has been acquired over Blocks 13/25 and 13/24 by Petro-Canada and the 2D seismic data has been processed. The operator is finalising its preliminary interpretation of the data set, with the results scheduled to be discussed by the joint venture in August. Project Name: 25th Seaward Licensing Round Location: Northern UK North Sea Ownership: TBD Operator: TBD In late May, Elixir submitted three licence applications in the 25th Seaward Licensing Round in respect of blocks located in the Northern sector of the UK North Sea. These applications represent a further progression of the company's exploration strategy which is designed to obtain access to high quality exploration prospect on a low cost basis and to mature and realize the potential of these prospects quickly. It is anticipated that the UK Regulator will announce licence awards late in Q4, 2008. West Africa - Sierra Leone Project Name: Block SL-4 Location: Offshore Sierra Leone Ownership: 35% (comprising 15% Working Interest, and 20% Optional Interest) Operator: Elixir Petroleum (UK) Limited An interest in Block SL-4 was assigned to Elixir on 20 February 2008. At that time, Elixir was also approved as operator of the licence. Block SL-4 comprises an area of 4,429 km2 lying in water depths from 100m to over 3,500m offshore Sierra Leone, West Africa. As the operator of Block SL-4, Elixir engaged a leading seismic acquisition contractor in late March to undertake a 1,222 km2 3D seismic survey of the Block on behalf of the joint venture. The 3D survey was designed to better define and mature the large number of significant leads and play types identified from 2D seismic data acquired over Block SL-4 in 2003. The vessel conducting the survey completed data acquisition on Block SL-4 on 6 June 2008, which was in accordance with expectation. The 3D seismic field data tapes were received by the seismic processing contractor's office in the UK in late June. Processing parameters have now been set and the processing sequence has been initiated. Approximately 10% of the survey has been processed and it is anticipated that the full sequence will be completed by Q4, 2008. Detailed interpretation of the data will immediately commence by Elixir's UK based exploration team on receipt of the fully processed dataset. The undertaking of the 3D seismic survey satisfies the agreed minimum work program for the First Exploration Period under the Petroleum Agreement governing Block SL-4. Elixir will be required to contribute during the coming quarter approximately US$1.5m to the cost of the 3D survey and can elect to issue fully paid ordinary shares in Elixir to the value of approximately US$2.0m in order to exercise the option over an additional 20% interest in the project that it holds (taking its total WI to 35%). MINERAL ASSETS Elixir continues to market the seven mineral asset licences it holds in the Northern Territory and South Australia and is in discussion with several parties with respect to a possible sale or farm-out of the licence interests. FINANCIAL SUMMARY At the end of the June 2008 quarter, Elixir held cash on hand of approximately $10.6 million. On 29 May 2008, Elixir announced a fundraising involving the placement of new shares and an underwritten rights issue to raise up to $14.5 million before costs. Due to adverse market conditions resulting in significant declines in relevant ASX indices just prior to the close of the offer in late June, in accordance with its terms of engagement, the underwriter elected to terminate the underwriting arrangements. As a result of this termination and the limited take-up of the rights issue by shareholders during these market conditions, the total funds raised amounted to $7.52 million before costs. Notwithstanding this, Elixir is well funded to meet all of its known commitments and to pursue opportunities both inside and outside its existing portfolio of interests. In the period under review shareholders approved the establishment of the Elixir Employee Share Option Plan for the incentivisation of the Company's management. Pursuant to the terms of that approval and the rules of the Plan, unlisted options in the Company will be issued and allotted to directors and employees in the coming quarter. Please find attached the Company's Appendix 5B for the 3 month period to 30 June 2008. REPORTING SCHEDULE Elixir Petroleum's proposed reporting schedule for the remainder of the 2008 calendar year is as follows: Item Expected Date Quarterly Activities Report for Quarter ended 30 Thursday, 31 July 2008 June 2008 Full Year Financial Report Thursday, 28 August 2008 2008 Annual Report and Notice of Meeting Thursday, 23 October 2008 Quarterly Activities Report for Quarter ended 30 Wednesday, 29 October 2008 September 2008 2008 Annual General Meeting Monday, 24 November 2008 For further information, please visit the Company's website at www.elixirpetroleum.com, or contact: Elixir Petroleum Limited Blue Oar Securities Plc Alex Neuling Jerry Keen / Olly Cairns Tel: (+61) 8 9440 2650 Tel: (+44) 207 448 4400 / (+61) 8 6430 1631 Conduit PR Jonathan Charles / Sarah Alexander Tel: (+44) 207 429 6666 Information contained in this report with respect to the High Island and Pompano Projects and the Red Fish Prospect, was compiled by Elixir or from material provided by the project operators and reviewed by I L Lusted, BSc (Hons),SPE , who has had more than 15 years experience in the practice of petroleum engineering. Mr Lusted consents to the inclusion in this report of the information in the form and context in which it appears. Information contained in this report with respect to the UK North Sea Projects and Block SL-4 offshore Sierra Leone, was compiled by Elixir or from material provided by the project operators and reviewed by the Elixir's Exploration Director, Iain Knott, BSc,MSc, FGS, AAPG, who has had more than 25 years experience in the practice of geology, including more than 5 years experience in petroleum geology. Mr Knott consents to the inclusion in this report of the information in the form and context in which it appears. This information is provided by RNS The company news service from the London Stock Exchange END MSCGCGDRIBXGGIB
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