Rheochem Share Discussion Threads

[bobbyshilling] 08/3/2011 18:47

I bought some today, and this is the way I personally see things here. In Q4 we are going to generate significant cash flow for a company with a market cap of around £32m, viz 2000bopd from Athena. Granted the flow rate decreases, but even so we will have a good solid income from that field for a few years after start up and that is not taking into consideration anything that might be added from further appraisal drilling by IAE. Certainly the cash from the sale of the drilling fluids business is welcome to help get us to the production stage and is a good move by management. We already have previously secured $14m towards Athena developement.

We do of course have the claim situation in October to be finalised, but worse case scenario as far as I can see is it costs us around £9m BUT Zeus are saying that the claim is unlikely to succeed, (rns 28/2). This particular rns by the way is well worth reading again with respect to our UK licences.

14/26b (Thunderball) flowed 34mmscfd gas and 200barrels of condensate. Add to this the Jurassic prospect in the Buzzard sands and that block could be a gem for later on (90%), so good opportunity for future farm out. Note also that block 14/27b was secured as a protection for the up-dip prospects of Thunderball.

3/5 & 10c drilled in 1980 by BP flowed only 1mmscfd but it is now thought that modern technology can increase this flow rate and it is thought that the well was not optimally located and there are big prospects to the north and south of this well.

16/8c(Moby) Logs show 180ft of hydrocarbon bearing sandstone, not tested by Marathon, only 5km from the Kingfisher facilities.

Not to mention the exploration prospects in other licences.

There could be substantial upside here if one is patient and in the politically safe N Sea environment too. I acknowledge that the share price could yet drop further from the current 15p or so, but there seems to be an awful lot on offer for the current market cap.

bs.

[7kiwi] 08/3/2011 17:54

Euclid,

Try contacting IAE now about Triton and Poseidon. My understanding is that they are much less bullish now than they wre then.

They have been trying to farm-out Thunderball and Metis for ages and not got anywhere.

[borchardt] 08/3/2011 17:50

Anything between 13p and 15p would be good because in the medium term these should be significantly higher.
In for a few today and will be buying more whichever way this moves.

[jamesiebabie] 08/3/2011 17:02

Rhu,

It would. Will you get it?

[rhubarbe] 08/3/2011 16:59

14p would be a nice entry point.

[patboy] 08/3/2011 16:42

lots of buys shows as sells on advfn for rhep today my 200 000 buy did not show

[omnitrix] 08/3/2011 16:41

if only...

[jamesiebabie] 08/3/2011 16:37

Ah, the Thuderball. Now that's worth researching imho.

[victor2] 08/3/2011 16:25

only know about 2 both in the city on monday

[zhockey] 08/3/2011 13:24

The thunderball prospect looks interesting.

[ronson333] 08/3/2011 13:17

cheers for that Victor, do you know where??

[victor2] 08/3/2011 11:35

company doing series of presentations 3days next week to new and existing shareholders lets hope they have a good story to tell.

[zhockey] 08/3/2011 09:37

Guys exploring in the North Sea is very expensive, have you factored this in?

[ducatiman] 08/3/2011 08:14

now flat folks. Will be monitoring closely. GL.

[euclid5] 08/3/2011 08:10

The 16/8C Moby field is very good
from pg 6 of the report:

4.1.5 Chance of Success - The 16/8c-13 exploration well (drilled in 1993) proved the existence of hydrocarbons in the Moby structure. The Chance of Success for the Moby Discovery is therefore considered to be 100 %.

4.9 m & 2.2m recov reserves - just Moby field is double the volume of oil we have in the Athena field - giving Rhep - a share of 90% wi = 4.41mmboe
Flipper field gives us 1,980,000 mmboe - total 6,390,000 x $95 /1.60 = £380m in total revenue less capex / tax etc

expecting a nice high NPV on thie field alone

https://www.og.decc.gov.uk/UKpromote/relinqs/P1470.pdf

[rivaldo] 08/3/2011 07:13

RHEP is currently trading at $0.27 mid-price in Australia, i.e around 16.9p.

[omnitrix] 07/3/2011 22:40

good find and very interesting indeed

7.1 mmboe with 40-100% CoS in 2 prospects

[euclid5] 07/3/2011 21:43

info re the 16/8C Moby field - This report makes interesting reading re:

https://www.og.decc.gov.uk/UKpromote/relinqs/P1470.pdf

[euclid5] 07/3/2011 21:20

More info re Licence 13/16b

https://www.og.decc.gov.uk/UKpromote/relinqs/P1401.pdf

[euclid5] 07/3/2011 21:10

Hi 7 Kiwi

don't think so see link below:



The Wimbledon deal also brings some exploration upside to the table. Rheochem is excited by the opportunities this presents but does not plan to expose investors to high risk, high cost wildcatting. It has a 10 per cent carried interest in the Triton and Poseidon prospects, which have the potential to hold reserves measured in the hundreds of millions of barrels. Operator Ithaca Energy recently shot 3D data over the acreage and plans to drill an exploration well here in 2007.

"We have a 10 per cent carried interest so we do not have to cough up any money on exploration and geological risk," said Gardner. "With Wimbledon's 100 per cent blocks, we will be looking for a partner and would plan to retain a significant interest as long as we do not have to commit any company funds to pure exploration."

_______________________________________________________________________________

Triton and Poseidon

WOGL has a 10% carried interest in the licences covering the blocks 13/16b, 13/17 and 13/18 which contain the majority of the Triton and Poseidon leads.

These leads were described by Ithaca in their 12 July 2006 release to the London Stock exchange as follows:

"Triton and Poseidon are the two largest 2D seismic mapped leads in Ithaca's portfolio and are of a highly attractive stratigraphic play type, with the large upside potential within the prospective Upper Jurassic Buzzard and Lower Cretaceous fairways. Independent consulting firm Gaffney Cline and Associates ('GCA'), in its report for the company's recent public offering, has ascribed gross unrisked recoverable Prospective Resources of between 50 to 500 million barrels of oil with a best estimate of 150 million barrels to Triton and gross unrisked recoverable Prospective Resources of between 50 to 400 million barrels of oil with a best estimate of 100 million barrels to Poseidon."

Ithaca recently completed an extensive 3D seismic group shoot covering the licences it holds on blocks 13/16b, 13/17 and 13/18 to reduce the uncertainty and mitigate risks associated with these leads.

Subject to the results of the data interpretation and rig availability, Ithaca has stated that it plans to drill a well on one of the blocks containing these leads in 2007.

_______________________________________________________________________________

5th September 2006

Rheochem Plc - Acquisition of Wimbledon Oil & Gas Ltd

News Item - Conduit PR

Assets include 10 North Sea licence blocks across the UK Continental shelf- approximate area: 2,000 km2 Licences include Athena oil discovery and a further 19 hydrocarbon prospects/leads Rheochem today announces that the Company has, in conjunction with Pacific International Management ("PIM"), agreed to acquire Wimbledon Oil and Gas Limited ("WOGL") for the consideration of £7.31 million. Post completion Rheochem's 100% owned subsidiary Lochard Energy Ltd ('LEL") will own one third of the issued shares in WOGL and the remaining two thirds will be owned by PIM.

On completion Rheochem will pay to the sellers of Wimbledon the sum of £2,436,667 being £774,667 in cash and Rheochem shares to the value of £1,662,000. The number of shares to be issued will be the average of the closing mid price for Rheochem shares for the five days prior to the day prior to completion. The shares will be admitted to trading on AIM at completion. The remaining £4, 873,333 will be paid in cash by PIM.

Rheochem will manage WOGL post completion on behalf of PIM. Completion is expected to take place on or around 15th September 2006.

This is the second oilfield acquisition for Rheochem's subsidiary LEL and the directors believe it is consistent with the Company's strategy of participating in oil and gas projects with significant upside potential that are at or near development. Rheochem believes it can offer substantial technical input into these projects by utilising the experience built up in its oilfield services divisions over the past 17 years.

LEL also owns a 55% working interest on 12 wells within the Blackwell Lease in Texas that are expected to put on production over the next three months.

Commenting today Haydn Gardner, CEO, of Rheochem said: "Rheochem has been providing services to the oil exploration sector since 1988. With this second agreement to take direct participation within an oil & gas asset we will work with our partners, using our significant in-house expertise, to successfully realise value from development projects."

For more information:

Haydn Gardner, CEO Rheochem [phone] begin_of_the_skype_highlighting [phone] end_of_the_skype_highlighting

Laurence Read / Leesa Peters Conduit PR [phone] begin_of_the_skype_highlighting [phone] end_of_the_skype_highlighting

Olly Cairns Corporate Synergy Plc [phone] begin_of_the_skype_highlighting [phone] end_of_the_skype_highlighting

OVERVIEW OF WOGL

WOGL has an interest in ten licence blocks (two partial blocks) located across the central North Sea Basin of the UK Continental shelf covering an area of approximately 2,000 km2. These are comprised of 4 traditional blocks with a 10% interest and 6 Promote blocks with a 100% operated interest.

The licence blocks include the Athena oil discovery and a further 19 prospects and leads in a variety of hydrocarbon plays.

Athena

WOGL has a 10% interest in licence P.1293 covering this discovery. The operator and 90% owner is Ithaca Energy.

The Athena discovery is on block 14/18b and is located immediately west of the Claymore and Scapa fields and therefore close to existing infrastructure. It has been independently reviewed by Gaffney Cline Associates and considered a probable development with low to mid case gross reserves estimated around 24.4 MMbbl oil. (2.4 MMbbl to WOGL)

Drilling of the next appraisal well on Athena is expected to begin by mid September 2006 and if successful Ithaca expects to put the field on production by 3rd quarter 2008.

Triton and Poseidon

WOGL has a 10% carried interest in the licences covering the blocks 13/16b, 13/17 and 13/18 which contain the majority of the Triton and Poseidon leads.

These leads were described by Ithaca in their 12 July 2006 release to the London Stock exchange as follows:

"Triton and Poseidon are the two largest 2D seismic mapped leads in Ithaca's portfolio and are of a highly attractive stratigraphic play type, with the large upside potential within the prospective Upper Jurassic Buzzard and Lower Cretaceous fairways. Independent consulting firm Gaffney Cline and Associates ('GCA'), in its report for the company's recent public offering, has ascribed gross unrisked recoverable Prospective Resources of between 50 to 500 million barrels of oil with a best estimate of 150 million barrels to Triton and gross unrisked recoverable Prospective Resources of between 50 to 400 million barrels of oil with a best estimate of 100 million barrels to Poseidon."

Ithaca recently completed an extensive 3D seismic group shoot covering the licences it holds on blocks 13/16b, 13/17 and 13/18 to reduce the uncertainty and mitigate risks associated with these leads.

Subject to the results of the data interpretation and rig availability, Ithaca has stated that it plans to drill a well on one of the blocks containing these leads in 2007.

Other Assets

WOGL was awarded the following Promote licences in the 23rd UK Seaward Licensing rounds and has a 100% interest:

P.1289 covering block 14/11 P.1393 covering blocks 12/15, 13/11, 13/12 & 13/13 P.1396 covering block 17/7

A Promote Licence gives the company 2 years from date of issue to attract technical, environmental and financial capacity to complete an agreed work program which includes the requirement to drill a well within the following 2 years. These Promote licences will expire on 22/12/2007 if an acceptable work program is not agreed.

The Consideration

On completion Rheochem will pay to the sellers of Wimbledon the sum of £2,436,667 being £774,667 in cash and Rheochem shares to the value of £1,662,000. The number of shares to be issued will be the average of the closing mid price for Rheochem shares for the five days prior to the day prior to completion. The shares will be admitted to trading on AIM at completion. The remaining £4, 873,333 will be paid in cash by PIM.

END


Laurence Read Conduit PR Ltd 3rd Floor 76 Cannon Street London EC4N 6AE United Kingdom Direct: [phone] begin_of_the_skype_highlighting [phone] end_of_the_skype_highlighting Office: [phone] begin_of_the_skype_highlighting [phone] end_of_the_skype_highlighting Mob: [phone] begin_of_the_skype_highlighting [phone] end_of_the_skype_highlighting Fax: [phone] [e-mail]

[euclid5] 07/3/2011 13:19

7 Kiwi

not sure will check my notes tonight when i get in

it was the field that ithaca had 90% WI in - so assume they lost the licence after 2008 meltdown

i believe they have some excellent fields (RHEP) & will have to carry out siesmics to farm down their 9 90% wi -

[ronson333] 07/3/2011 09:48

March 07, 2011

Rheochem Sells Muds Business For A$45 Million To Fund Athena Development

When oil services group Rheochem plc moved upstream in 2006, its new E&P assets were seen as a useful buffer against the boom-and-bust cycles of the contracting industry

. In truth, however, the fledgling upstream business, Zeus Petroleum, formed when Rheochem and a Swiss investment group bought cash-strapped North Sea oil junior Wimbledon Oil & Gas Limited, proved something of a liability as its key asset, a 10 per cent stake in the marginal Athena oilfield in the North Sea, was stalled as the industry absorbed the oil price shocks of 2008 and 2009.

Last year, however, Athena took flight as operator Ithaca Energy greenlit the development. Suddenly, Rheochem's upstream business, restructured early in 2010 to become a wholly-owned subsidiary, began to look much more credible:

when Athena comes online in Q4 2011, it will be holding 10 per cent of a 22,000 bpd oilfield, not to be sniffed at when oil prices are north of US$100 a barrel.

First, however, Rheochem needs to fund its share of the development costs.

It secured a US$14 million loan facility from Gemini II oil and gas fund in August, leaving a further US$14 million to be found.

Options detailed in the interims released last month included an equity raising, further debt or a trade sale of its oil services business.

Last week, it was the latter option that prevailed.

The company, which is listed on AIM and the ASX, announced it was selling its drilling fluids business to NYSE-quoted Newpark Resources for A$45 million (about £28 million), of which A$23.75 million will be upfront with the rest paid in installments based on the business' performance.

Newpark, a Texas-based international contracting group with 2010 revenues of US$710 million, will acquire the Rheochem name, with Rheochem changing its name to Lochard Energy Group.

The sale includes all the drilling fluids business, including the drilling fluids blending plant in Dampier, Western Australia and the subsidiaries in New Zealand, Indonesia and India.

In 2008/2009 the drilling fluids business reported EBITDA of A$6.1 million, shrinking to A$3.6 million last year as severe flooding in Queensland, New South Wales and South Australia, its key markets, hampered drilling activity.

This, of course, leaves something of a revenue gap for the new look Lochard Energy Group until the Athena field comes onstream towards the end of this year.

At that point, however, the company expects the first revenue from its share of production – around 2,000 bpd net - will be more than A$60 million compared with the A$20.4 million revenue received from the drilling fluids business in 2009/2010.

This does leave the company somewhat dependent on this one project being a success and shareholders will no doubt keep a watchful eye on all announcement from Athena operator Ithaca Energy.

Further down the line, there's a portfolio of exploration and appraisal assets in the North Sea.

The revenues from Athena production should provide funding to explore these 10 North Sea blocks, which include a number of gas discoveries that merit further attention.

In these blocks, awarded last year in the UK's 26th offshore licensing round, Lochard Energy holds a 90 per cent interest.

Rheochem's chief executive Haydn Gardner said the disposal, which is dependent on shareholder approval, "unlocks significant value for shareholders and allows us to meet our commitments on the Athena field".

On release of the announcement on Friday, shares in the £37.75 million market cap company gained four per cent on AIM in morning trading to stand at 15.75 pence.

[7kiwi] 07/3/2011 08:36

Euclid,

Is that Metis you are referring to?

[rivaldo] 07/3/2011 08:35

We know that RHEP will have an operational update out imminently - this could provide a big near-term share price trigger:



"The Company will be issuing an operational update shortly, to provide the market and shareholders with a deeper insight into the existing exploration, appraisal and production portfolio already contained within the business. We are confident in the potential of the portfolio to generate significant opportunities as we progress the assets through the value chain.""

[euclid5] 07/3/2011 08:33

could we get a small broker update / Note on Rhep on the basis of changing there business strategy after selling their oil fluid business - perhaps appear in IC / shares mag

personally alot of people will be calculating their 6 month profit in June 2012 for their share of Athena field cash income

i read last night that Ithaca carried out some 3D siesmic's on Rhep's other field13/16B 17 will have to see if they had results from this

one thing I noticed in the CPR for this field was the COS was a low 7% - not good to me as a high risk field - unless they can increase the CoS to the mid 20s

needs a lot more analysing & past history investigating on their fields