Proactive Weekly Oil & Gas highlights: 88 Energy, UK Oil & Gas, Cabot Energy, Echo Energy ...

Project updates, management changes and funding efforts kept investors engaged this week.

At the time of reading, 88 Energy Ltd will likely be drilling the Winx-1 exploration well in Alaska.

On Friday morning the explorer issued a statement telling investors it is on schedule to spud the Winx-1 before the end of the day.

The explorer said in a statement that the drill rig arrived on site as planned last week, rig-up operations have gone smoothly and final preparations are underway before the spud. Regular investor updates are planned as drilling operations progress, it added.

Winx-1 is targeting multiple objectives for some 400mln barrels of gross prospective resources, which is 144mln net to 88 Energy.

On Thursday, UK Oil & Gas PLC revealed that it had again increased its stake in the Horse Hill oil project, this time in a transaction with fellow junior market stakeholder Doriemus.

It is acquiring a 6% interest in the Horse Hill Developments Limited (HHDL) vehicle which in turn holds 65% of the Horse Hill project. Subsequently, UKOG will own 77.9% of HHDL and therefore 50.635% of Horse Hill.

Also on Thursday, Cabot Energy PLC told investors that it would use a new moratorium on Italian exploration activities as an opportunity to evaluate its future strategy in the country.

Italy earlier this week introduced a pause of up to 18 months on all work on oil and gas exploration permits or applications to allow a review as part of the ‘Plan for Sustainable Energy Transition of Suitable Areas’ (PTESAI) bill.

It aims to reach consensus, politically, over the country’s approach to onshore and offshore oil and gas activities, and, if a consensus is not reached within a total of 24 months the moratorium will be lifted.

Previously during the week, on Tuesday, Cabot conditionally raised £2.08mln with a share sale to existing major shareholders, High Power Petroleum and City Financial Investment Company.

It intends to raise a further £770,000 through an additional share sale to other qualifying shareholders.

As part of the fundraising process, the company proposes to reorganize its capital, by consolidating the number of shares in issue (on a 100:1 basis). Accordingly, the company intends to issue new shares at a price of 10p each (Monday’s closing price was 0.44p).

“The proposals outlined today deliver the short-term capital required to safeguard Cabot Energy's future,” said James Dewar, Cabot’s interim non-executive chairman.

Elsewhere Anglo African Oil & Gas PLC this week told investors it plans to start production in April from the TLP-103C well, at the Tilapia licence in the Republic of the Congo.

The company, in a statement, explained that it aims to begin production from TLP-103C’s upper reservoirs through comingling the R2 and the Mengo intervals, through a double completion in the well.

It anticipates an initial aggregated flow rate in excess of 1,500 barrels of oil per day over the first 14-18 months. On that basis it expects to generate some US$1mln of cash flow per month, and, Anglo said that the operation will still breakeven even with an oil price down to US$20 per barrel.

The completion work will be funded from existing cash resources, Anglo noted.

Meanwhile, Echo Energy Plc told investors it has completed the stimulation programme for the EMS-1001 well at the Fracción C licence, onshore Argentina.

Initial results indicate that the EMS-1001 location is not commercial, and, no further testing is planned. The well was mechanically stimulated through a 4m perforated interval in the Tobifera formation.

After the completion of clean-up operations, the well produced only a mix of stimulation fluid and water, at an average flow rate of 465 barrels per day, and, no interpreted hydrocarbons were present. Echo said the results suggest the interpreted hydrocarbons present in the section are not mobile.

“The disappointing results of the EMS 1001 stimulation have demonstrated the challenges of working in a new volcaniclastic play,” said Martin Hull, Echo managing director.

Source: Proactive Investors