Nautical Petroleum Share Discussion Threads

[uklurker] 07/2/2012 13:08

Thanks for that article Hay.

[haydock] 07/2/2012 11:45

Oilbarrel



February 07, 2012

Nautical Petroleum's Deal on Kraken Should See It Carried Into Production With A 25 Per Cent Holding



The regular turnover of licence interests continues at Nautical Petroleum as the company's active portfolio management continues to ensure new money is injected into its more prospective assets, and farm-ins are taken in other more embryonic assets with similar potential. With its larger assets having been assembled in the UK North Sea, Nautical has not only stuck to what it knows best, but ensured other economies can be enjoyed from having geographically closer assets.


Nautical's big news of the New Year came on January 24 when it was announced that it had agreed a 25 per cent farm out with EnQuest Plc on several North Sea Blocks. Blocks 9/2b and 9/2c, containing the Kraken discovery, are the major beneficiaries with between US$150 and US$240 million in carry agreed. The consideration is based on an assessment of gross 2P reserves in the two blocks by a competent person, with a minimum of US$150 million payable on 2P reserves of up to 100 mmbo, and a pro-rated carry increase of up to US$90 million for 2P reserves of 166 mmbo or more. The current 2C resource on the Kraken field is 160 mmbo and provided by Gaffney Cline & Associates in July 2011. This was however prior to the successful testing of the 9/02b-5z horizontal well which flowed at a peak stabilised rate of 4,550 bopd for a total of 6,000 bbls.

Upon the satisfaction of the third partner (First Oil at 30 per cent) and the DECC (Department of Energy and Climate Change), EnQuest will control 45 per cent and assume operatorship, while also gaining a 10 per cent interest in Blocks 9/6a & 9/7b and 15 per cent interest in Blocks 3/22a & 3/26. The final piece of business saw EnQuest being given the option to earn a 45 per cent interest in Nautical's 100 per cent owned 9/1a block which hosts the Ketos discovery. EnQuest's option would require it to pay up to 90 per cent of the costs of drilling up to two appraisal wells, with the first well capped at US$15 million gross and the second capped at US$20 million gross.

The agreement with EnQuest on Blocks 9/2b and 9/2c should be enough to see Kraken into production with Nautical fully carried and maintaining a 25 per cent interest. CEO Steve Jenkins confirmed that the company can "...move toward Field Development Plan approval in Q4, 2012 and first oil in 2015".

Where the EnQuest deal brought money in for a 25 per cent reduction in equity on a clear development project, an agreement with First Oil Expro on February 2nd, will see Nautical earning a 25 per cent interest of its own in the far more embryonic North Sea 3/27a block containing the Hydra prospect. As a former operator of the block, Nautical exercised an option held with current operator and 100 per cent owner First Oil who have identified targets in both the Tertiary and Jurassic levels. Licence commitments involve the collection of 250 kilometres of 2D and 100 square kilometres of 3D seismic, as well as the drilling of a well by January 10, 2015.

Also topping up the exploration portion of Naucial's portfolio was the award of a 20 per cent interest in Blocks 12/16b and 12/17b (Inner Moray Firth, UK North Sea) as part of the 26th Seaward Licensing Round, the negotiation of a 10 per cent interest in three blocks in the English Channel, and the acquisition of a 15 per cent interest in the onshore PEDL118 and PEDL203 licences located in Nottinghamshire.

Beginning in familiar North Sea territory, and Nautical has been partnered with First Oil (operator), North Sea Energy and EnCore Oil on Blocks 12/16b and 12/17b which oblige the partners to shoot 2D seismic and make a decision to drill a well or drop the licence within 4 years.

The three licences off the Dorset coast in the English Channel are Blocks 97/14, 97/15 and 98/11 and require partners InfraStrata (operator), Corfe Energy and eCorp Oil & Gas to obtain and reprocess 2D seismic, in addition to drilling a well or dropping the licence within 2 years.

Finally Nautical's wholly owned subsidiary Nautical Petroleum AG took a 15 per cent interest in the contiguous onshore PEDL118 and PEDL203 licences located in Nottinghamshire from Egdon Resources. Nautical is required to pay £200,000 in cash and contribute £150,000 towards Egdon's costs of the next well to be drilled on either licence. PEDL203 contains the Kirklington oil field where Kirklington-3z produced 15-20 bopd when drilled back in 2010, and while the field holds all the necessary production consents and approvals, it is currently shut-in pending the development of Dukes Wood-1. PEDL118 hosts the Eakring-Dukes Wood oil field where Dukes Wood-1 was drilled and tested around the same time as Kirklington-3z and produced 20 bopd on test from the Ashover Grit reservoir. Egdon plans to jointly develop Kirklington-3z and Dukes Wood-1, while there are other targets within PEDL118, such as Eakring North, where additional wells are likely to be drilled in the future.

Conspicuous by its absence is Catcher (Blocks 28/9 & 28/10c) which along with Kraken represent the two big assets for Nautical after the sale of the majority of its stake in Mariner to Statoil in November. There is a huge amount of work occurring on Catcher with the field development plan top of the list, but with Premier Oil's (35 per cent interest in Catcher) acquisition of Encore Oil (operator and 15 per cent interest) in January still fresh, publically printable news has been scarce. Regardless, development sanctioning is still scheduled for the fourth quarter of this year, with Nautical having supplied geoscience and engineering experience to the joint development team.

The movement of pieces within Nautical's portfolio is an ongoing process for a company aiming to limit its own spending while maintaining meaningful interests in eventual producers. Having seen its share price trend down over the last 12 months, positive development and reserve news at Catcher and Kraken respectively will ensure the share price pick-up in the last month is maintained.

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[steelwatch] 03/2/2012 11:18

bugs - hope so :o)

[bugsmoney] 03/2/2012 11:11

I expect they will sell them for several times the price :-)

[steelwatch] 03/2/2012 10:26

Nope. Quite modest by some standards considering what has been achieved.

[leedskier] 03/2/2012 09:58

No-one can complain about this ...



The options are to subscribe for new ordinary shares in the Company and the exercise price is 323.25 pence per ordinary share, being the closing price of the shares on 2 February 2012. The options have been granted for nil consideration.

[steelwatch] 02/2/2012 14:02

Frustrated, yes. Bored, never.

[leedskier] 02/2/2012 13:59

I kind of guessed.


I have often wondered if the SETS traders who play with these AIM shares, this and BLVN and RRR, being but three examples, get as bored doing it as we do watching them?

[steelwatch] 02/2/2012 11:09

leeds - it's been another bad winter. Not the best time to venture into stormy waters.

[leedskier] 02/2/2012 10:57

Are the waters calmer now?

[steelwatch] 02/2/2012 08:52

Long term holders will recall Hydra was relinquished following this:




(old map not showing Ketos)

[steelwatch] 02/2/2012 08:47

For immediate release 2 February 2012

Nautical Petroleum plc

("Nautical" or the "Company")

Acquisition of 25% Interest in North Sea Block 3/27a

Nautical Petroleum plc (AIM: NPE) announces it has entered into an agreement with First Oil Expro Limited to acquire a 25% interest in UK Petroleum Exploration and Development Licence P1756, North Sea Block 3/27a, which contains the Hydra prospect.

Nautical was previously the operator of Block 3/27a, and has exercised an option to farm-in to the block with First Oil Expo Limited.

The licence commitment, to be completed by 10 January 2015, is the acquisition of 250km of 2D and 100km(2) of 3D seismic plus a well to be drilled at the discretion of the participants.

First Oil Expro Limited, the operator, currently hold a 100% interest in P1756. The transfer of interest is subject to completion of due diligence and approval by the Department of Energy and Climate Change.

Steve Jenkins, Nautical Chief Executive Officer, commented:

"We are delighted to be returning to this block. We have extensive knowledge of it and look forward to further investigating, with First Oil Expro, its prospectivity at both the Tertiary and Jurassic levels,"

[steelwatch] 28/1/2012 10:23

Company Name/ Field Name/ Well Number/ Activity/ DECC Number/ Date Rec'd/ Which PON 15

Encore........Carnaby..... ..28/9-E.. Exploration..PON15B/625/0....23/12/2011.....PON15B

[lanaken] 25/1/2012 17:31

Interesting to see the PMO view on Catcher in a presentation after they wrapped up the Encore deal.



The figures given are net to PMO thus multiply by 15/50 or 0.3.

repo

[steelwatch] 25/1/2012 16:22

Tempus comment in the Thunderer today. He thinks NPE came out best on the deal, with ENQ just behind in second place and the tax payer in third place.

[hectorp] 25/1/2012 12:14

Indeed so! time to start adding here.

[leedskier] 25/1/2012 12:05

Good. I wondered if it would.

[steelwatch] 25/1/2012 11:41

Meanwhile, we may see that gap closed...(edit) just has!

[steelwatch] 25/1/2012 11:40

HE - a rig is earmarked for Carnaby - Sedco 711. Q1 slated, but may be delayed due to winter storms pushing schedules back throughout the NS.

[horndean eagle] 25/1/2012 11:35

Not sure 30% upside is on the cards over the next few months. Exploration success may help but generally it is now a long long wait until production starts. Also hold Sterling Resources which is close to production. Not that the share price is showing signs of elation over that.

[hectorp] 25/1/2012 09:46

I only managed to buy a few yesterday but will attempt to stick through the day or two of minor profit-taking that you do get after a good run.
That seems to be about 60% retrace from the high of yesterday. Good enough for me, in for some more here. Looking personally for 30% upside over a few months - that may do me .

[lucky_punter] 25/1/2012 04:46

movements---
AIM quoted Nautical Petroleum (LON:NPE) shares advanced over 8 per cent today as it agreed to sell a 25 per cent stake in the Kraken oilfield to EnQuest (LON:ENQ).
The deal may be worth as much as US$240 million to Nautical as EnQuest will cover costs of the oilfield development.

[lucky_punter] 25/1/2012 04:44

AIM quoted Nautical Petroleum (LON:NPE) has agreed to sell a 25 per cent stake in the Kraken oilfield to EnQuest (LON:ENQ).
The deal may be worth as much as US$240 million to Nautical as EnQuest will cover costs

[lanaken] 24/1/2012 21:05

Great thread here with some NAV calcs which are approaching double the current shreprice.



Recommended to those considering an investment/adding/even shorting;-)

repo

[bwanabanana] 24/1/2012 17:17

I dont see them selling catcher. Although a small percentage, their mariner costs could be over 100mm $. I see them selling next to pay for the catcher development

Bwana