MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING TUESDAY, FEBRUARY 10, 1998 (6)
INTERNATIONAL
COMPANIES
Abacan Resource Corporation (ABC/TSE) announced the successful test results on its Ima #9 well, an offshore development well located on the company's Ima Field in the Niger Delta. The well was drilled to a true vertical depth of 11,400 feet (3,475 meters) and flow tested on a one inch choke at a rate of 2,335 barrels per day of 57 degree API oil and condensate from a single zone. The well has been tied into the Ima Field production facility and has commenced production testing. Ima #9 was drilled on the north Ima Field which was discovered by the Ima #6 well and was completed in the upper "F" sand. After production testing, the lower "F" sand may be completed.
The Ima #9 wellbore was also used to investigate a deep "X" prospect, located at a true vertical depth of 12,940 feet (3,945 meters), identified by 3-D seismic. Upon drilling into this objective, a high pressure regime was encountered which resulted in an underground blowout. For safety and operational reasons, drilling could not continue. The deeper "X" zone was controlled and cemented.
Extensive sample analysis confirmed that new hydrocarbon fluids entered the wellbore from the "X" zone. Commerciality of this potential zone can only be confirmed by further drilling of a new well.
The Company is in the process of entering a claim with their Insurance Underwriters in respect of the underground blowout in the Ima #9 well and anticipates recovery of costs and expenses in this regard.
The Company also announced that drilling has commenced on the Ima #10, a development well, which will be drilled to the north east of the Ima Field.
Doreal Energy Corporation (DOY/ASE) announced that the Mateguefa no. 1 exploration well in Columbia will spud on February 25, 1998. The Mateguefa Prospect and well location is located on a north-south trending, upthrown fault block which is seismically well defined. Multiple objectives are anticipated which include the Oligocene Carbonera sandstones, the Eocene Mirador sandstones and the Cretaceous Guadalupe, Gacheta and Ubaque sandstone intervals. All these objectives have excellent reservoir qualities and are productive in surrounding fields. These intervals also produce in the earlier Cusiana-Cupiagua and Cano Limon discoveries.
The well is expected to drill to a total depth of approximately 10,000 feet with the estimated drilling time to be 20 days. The Mateguefa Prospect is the first of six structural exploration prospects to be tested on the Association Contract. In addition, there are three stratigraphic prospects and one re-entry prospect on the Contract that will be tested in the future.
Joint Venture working interest partners in the Mateguefa no. 1 well and the Tapir Association Contract are Mobil Oil Company (through its ownership of Ampolex Petroleum Ltd.), Doreal Energy Corporation, Seven Seas Petroleum Inc. (GHK), Mohave Oil and Gas Corporation and Heritage Minerals Ltd., Bogota. Heritage is Operator for the group.
Cubacan Exploration Inc. (CCX/ASE) announced that the Oil Drilling Sevices (ODS) Rig No. 1 has arrived on location and spudding of its first test well known as Farola North No. 1 will occur on or about February 10, 1998. Farola North No. 1 is an exploration well being drilled in Block 17 to test two target reservoirs and is anticipated that the drilling of the inital well to a total depth of 2000 meters will take 30 to 45 days. Cubacan is a Calgary based public junior oil and gas company with interests solely in Cuba.
Niko Resources Ltd. (NKO/ASE) through its wholly owned subsidiary Niko Resources Nigeria Ltd., has been novated into offshore Block OPL 226 by Niko's indigenous partner, Solgas Petroleum (Nigeria) Ltd., and the assignment has been consented to by the Nigerian Government. Niko has a 40% working interest and will act as operator of the development. Block OPL 226 is located in shallow waters within the Niger Delta and encompasses 1500 square kilometers (over 375,000 acres). Over 1000 kilometers of 2-D seismic has been shot over the block and three exploration wells have been drilled, all encountered hydrocarbons with pay sections of up to 50 meters thick.
Dr. Emmanuel Egbogah, a Distinguished Member of the Society of Petroleum Engineers, and Vice President of Niko stated "This is a very strategic block and a real success for Niko to receive, particularly in light of the number of major international companies that actively vied for this position. OPL 226 is one of the premier remaining exploration and development blocks in Nigeria. Although 3-D seismic will further delineate the structures, I feel based on current data that this block has the potential to recover up to 500 million barrels of oil".
Niko's Executive Chairman, Edward Sampson, stated "The structure of the deal is attractive; there are no overriding royalties to any party, normal Nigerian royalties are reduced due to the indigenous component and our partner is responsible for their share of development costs".
Niko Resources Ltd. is an international oil and gas company with operations in India, Nigeria, and Canada.
NAFTEX Energy Corp. (NFTX/CDN) announced that further to its news release of February 3, 1998 it has now closed the sale of its 5% interest in the East Shabwa Contract Area in the Yemen Arab Republic to Comeco Petroleum Inc. and has received an overall consideration of US$9.21 million (Cdn$13.20 million).
This cash places the Company in a strong financial position to pursue an aggressive development and exploration program on its West Esh El Mallaha (WEEM) Concession in Egypt.
Following its successful discoveries during its initial exploration program on the WEEM Concession the Company, in conjunction with its joint venture partner, will proceed to explore the remaining 85% of the area that appears to contain all of the elements of a petroliferous basin and preparations are underway to drill a minimum of two appraisal wells and two exploratory wells.
The two exploratory wells are planned on separate structures, identified by existing seismic, that lie between the Rabeh and Rabeh East structures and the Seagull Hurghada Block discoveries. The two appraisal wells are step-outs to the Rabeh-1 Well and, if successful, will be expediently tied-in as producers. Tenders are also being sought for a 200 square kilometre 3D seismic survey and up to 500 kilometres of 2D seismic to cover the remaining 85% of the WEEM Concession Area, which remains, essentially unexplored.
Production from the Rabeh-1 Well on the WEEM Concession commenced February 2, providing the Company with immediate cashflow. This cashflow in conjunction with the proceed from the sale of the Company's East Shabwa interest should provide more than adequate funding for the Company's financial commitment to the WEEM project over the remaining three year term of the exploration phase on the Concession.
A total of 54,047,191 common shares of the Company is presently issued and outstanding.
Petrolex Energy Corp. (PXV/TSE) announced that it has reached agreement with Adair International Oil and Gas, Inc. to sell the Company's interests in its non-core oil and gas exploration licenses in Colombia. The Company has agreed to sell its 15% carried interest in the Maracas Association Contract and its 70% working interest in the Los Toches Association Contract to Adair International for a total purchase price of US$5 million, of which US$2.5 million is payable in cash and US$2.5 million is payable by way of an interest bearing unsecured convertible debenture. The purchase is scheduled to close within 60 days and is subject to Adair International completing its current financing.
The disposition of these interests will now allow the Company to focus exclusively on developing its principal asset, the Rubiales Oilfield.
Discussions regarding the required pipeline are now well advanced and it is anticipated that a final proposal to build a line from Rubiales to connect with existing export infrastructure will be received by the Company in March and that agreements should be finalized within the second quarter. It is expected that the line will have an initial capacity of 50,000 bopd and will have the ability to be upgraded to 100,000 bopd in the future and that the line will be built, owned and operated by a third party and the Company will be charged a throughput tariff thereby significantly reducing the amount of capital that the Company will need to provide. Additionally, an outline proposal for blending, transportation and marketing facilities for Rubiales crude has been received and final negotiations are expected to be held in the near future.
The likely outcome of all these plans and proposals is that, with the exception of field development, the costs for pipeline, blending, transportation and marketing facilities will have been laid off to third parties resulting in a 70% to 75% reduction in the Company's capital budget to bring the field to production at the initial rate of 50,000 bopd by the year 2000.
Carpatsky Petroleum Inc. (KPY-ASE) announced the spudding of its sixth development well in Rudovsko Krasnozavodsky gas condensate field in Ukraine. Well # 100K is drilling ahead below 1,219 meters toward a proposed TD of 5,500 meters.
Three other wells in the same field are simultaneously being drilled. Well #104 is currently at 5,252 meters with a total depth target of 5,820 meters. Well #109 is at 4,599 meters with a target of 5,200 meters and well #111 is at 4,552 meters with a target of 5,200 meters.
Two wells in the field, #102 and #106 have already been drilled to total depth, 5,792 meters and 5,150 meters respectively. Production casing has been set in those two wells and they are awaiting completion. Electric logs indicate 114 feet (34.8 meters) of net effective pay in well #102 and 115 feet (35.06 meters) in well #106. Torch Energy Advisors, Inc., which provides Carpatsky with technical, financial and management services on a contractual basis, is preparing the completion procedures for these two wells. The aim is to have them on production by the end of the second quarter. A 15,000 pound/sq. inch wellhead is now being assembled under Torch's direction in Houston, and will be airlifted to Ukraine to be used in the completion of the deeper well, #102. Other equipment, including perforating guns and charges will follow.
Leslie C. Texas, President and CEO of Carpatsky, stated that: "The strengthening of our technical, financial and management capabilities by the addition of Torch Energy Advisors, Inc. to our team, and our progress in the development of the Rudovsko Krasnozavodsky field, gives me confidence that Carpatsky will now realize the underlying net asset values and cash flow potentials from our Ukrainian projects. It also gives us the green light to pursue additional large Ukrainian projects, two of which are currently being reviewed and evaluated."
GHP Exploration Corporation (GHPX.U/CDN) announced the signing of a Memorandum of Understanding with Alliance International Petroleum Inc.whereby GHP shall farm-in to Alliance's 100% owned Central Sinai Concession, Block G. Under the terms of the Memorandum of Understanding, which is subject to execution of a definitive agreement and the approval of the Company's Board of Directors, GHP will earn a 25% working interest in the Concession.
The Block G concession consists of 4.5 million acres on the Sinai Peninsula bordering the eastern bank of the Gulf of Suez for more thin 100 km. Of particular interest are the portions of Block G that lie along the coastal area within the highly productive Gulf of Suez basin. This area is proven productive in three fields discovered by Shell using gravity techniques between 1946 and 1948. These fields, although within the confines of Block G, are excluded and held by the Egyptian General Petroleum Company (EGPC). Cumulative production from these fields is in excess of 100 million barrels of oil from shallow Miocene and Eocene formations at depths ranging from 2,000 feet to 4,000 feet. Additional potential also occurs from Carboniferous and Cretaceous age reservoirs that are currently producing 40,000 and 125,000 barrels of oil per day approximately 4 kilometers and 8 kilometers offshore in the Gulf of Suez.
In 1998 the joint venture partners plan to acquire 3-D seismic data over previously identified prospects and reprocess 2-D seismic along with some gravity/ magnetics and aeromag survey analysis. The first exploratory well is planned to be drilled during the first quarter of 1999.
GHP engages in the exploration for and development and production of crude oil and natural gas in the United States and Internationally with operations and interests in acreage in the Gulf of Mexico, onshore Texas, Utah and in Tunisia. The Company currently has 17.7 million common shares outstanding.
COUNTRIES
Columbia
Leftist rebels blew up Colombia's second-biggest oil pipeline for the seventh time this year, spilling thousands of barrels of crude oil into nearby waters, state oil company Ecopetrol said on Monday. An Ecopetrol spokesman said at least 15,000 barrels of oil had spilled into a river and marshes around the site of the latest blast, which occurred Sunday near the town of Villanueva, in northeast Norte de Santander province.
Heavy rains have hampered efforts to contain the spill, which Ecopetrol said may have totaled as much as 30,000 barrels - twice the initial estimate.
"The spill is estimated at 15,000 barrels of crude which flowed into the El Carmen river and a nearby swamp causing an ecological disaster," the Ecopetrol spokesman told Reuters. "But until we can get into the area; we don't know exactly how bad things are. The real amount spilled could be between 20,000 and 30,000 barrels."
Ecopetrol blamed the blast on the National Liberation Army, a Cuban-inspired force set up in the mid-1960s that specializes in attacks on Colombia's oil infrastructure.
The rebel army, which is the country's second-largest and is led by a former Roman Catholic priest from Spain, is fiercely opposed to what it considers to be excessive foreign involvement in the Colombian oil industry.
There was no word from the group, which rarely comments on its activities, about the latest blast.
Ecopetrol was unable to say when the pipeline might resume operation. All pumping operations were suspended along the 460-mile pipeline, which runs from the Cano Limon oil field in northeast Arauca province to the Caribbean coast terminal at Covenas.
But a spokesman for U.S. oil giant, Occidental Petroleum Corp., said production levels were normal at the 170,000 barrel per day Cano Limon field which it operates.
Once emergency teams reach the area they will try to contain the oil spill with floating barriers and detergents, the Ecopetrol spokesman said. At least 35,000 barrels of crude have been spilled this year as a result of pipeline bombings.
Authorities allege the ELN last year dynamited the 230,000 barrel a day pipeline a record 65 times, causing $14 million damage and more than $85.6 million in lost production.
Since it came into operation in late 1985, the Cano Limon-Covenas line has been blasted 508 times and more than 1.7 million barrels of crude have been spilled. Repair costs have been estimated at $238 million and the value of lost output is put at more than $1.5 billion.
EARNINGS
Pioneer Natural Resources Company (PXD/NYSE)
Message 3395500
British Petroleum Company P.L.C.
Message 3395416
FINANCING
Amber Energy Inc. (AMB/TSE)
Message 3395604
Redeco Energy Inc. (re/ase)
Message 3395291
Wainoco Oil Corporation (NYSE/WOL)
Message 3395500
Tanganyika Oil Company Ltd. (TYK/VSE)
Message 3396140
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