I hope you guys are enjoying the MMT dividend, which appeared in my account today. Meanwhile, here's an article on CEN.
Coastal Energy Piles On The Barrels in Thailand With 45 Per Cent Increase In 2P Reserves
oilbarrel.com
Shares in Coastal Energy jumped 45 pence, or nearly five per cent, after the Houston-headquartered E&P revealed the impact of its drilling successes of 2012 on its reserve base. The reserves report, prepared by RPS Energy, shows that offshore 1P reserves increased 30 per cent to 81 million barrels, with 2P reserves leaping 60 per cent to 127.7 million barrels. When its onshore gas reserves are included, the 1P number rises to 87.9 million barrels of oil equivalent and the 2P number gains 45 per cent to 149 million boe, with a pre-tax NPV10 of US$5.6 billion and a post-tax number of US$2.5 billion. Coastal, which is dual listed on the TSX, has a market cap in London of £980 million.
The bulk of the reserves lie in the Bua Ban North oilfield, one of Coastal’s offshore oil discoveries in the Gulf of Thailand. Proven reserves on the field increased by 29 per cent to 72 million and 2P reserves by 60 per cent to 108 million, largely as core samples showed the water saturation to be 25 per cent, less than then 40 per cent used to calculated the original reserves estimates. Appraisal drilling earlier this year also added to the reserves tally on the field, with the company now looking to hire a second rig to further drill out the field. Despite the need for increased water injection for pressure support on the western flank of the field, CEO Randy Bartley said Bua Ban North continues to “surprise to the upside”.
At the smaller Bua Ban South oilfield, the company expects to convert many of the 15 million barrels of possible reserves into 1P and 2P categories following production testing. And the Songkhla A and Bua Ban Main fields have also increased as the company has got a better handle on reservoir performance as they continue to produce. In all, the company’s offshore fields are producing some 22,500 bpd.
And there’s much more to play for on this acreage. The company, which has 3P reserves of 186.5 million boe and prospective resources of 285 million boe, is preparing to spud the Songkhla J Buried Hill prospect this week. The exploration well will test a pre-Tertiary target some 2.5 km north of the discovery well at Songkhla H.
The company has two onshore gas fields, which get little attention compared to the offshore oilfields. The Sinphuhorm field has been producing for some time and now, following a successful sidetrack earlier this year, the possible 60 BCF Dong Mun field is being readied for development once a gas sales agreement is secured.
It was a very positive update from the company, demonstrating how its continuous drilling campaign across the acreage yields quickly delivers real gains. The last reserves report was issued in March with an effective date of December 2011, so in a little over six months the dual-listed company has booked 30 per cent more proven barrels on its offshore acreage. While the Thai tax take is harsh, particularly at higher oil prices, this remains a very solid business – those post-tax NPV numbers still point to a US$2.5 billion valuation.
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