Reuters - Red Emperor to drill 300 million barrels in PL in Quarter 3, 2011

[Timur]

God willing this will help many Somalis and allow rebuilding to start. The 300 million barrels will be to start with the first well and will be exported over multi-year stretch. This is out of a total reserve of around 19.9 Billion Barrels at last estimate by independent research, highlighted in the second report.

 

http://af.reuters.com/article/investingNews/idAFJOE75L0JZ20110622

 

LONDON (Reuters) - Red Emperor, an Australian-listed oil explorer which is due to also list on London's junior AIM market on Thursday, said it was confident it would drill a well in Somalia's semi-autonomous Puntland region this year, shrugging off concerns about security in the Horn of Africa.

 

The company is hoping that a London listing will enable it take advantage of local investor interest in companies exploring for oil in historically under-explored East Africa.

 

"The market over here has a really high appetite for the high-risk, high-return nature of this drilling programme," Managing Director Greg Bandy said in an interview on Wednesday.

 

A number of other firms including BG Group and Tullow Oil to Premier Oil and Cove Energy, have acquired interests in licences in countries such as Kenya, Ethiopia and Tanzania in the past 12 months.

 

Red Emperor and its partners in the two Puntland licences, Canada's Africa Oil and Range Resources, plan to drill a prospect of 300 million barrels of recoverable oil in the third quarter of 2011.

 

The well will be the first to be drilled in the area for 20 years, said Bandy, who is confident the drilling will go ahead despite a difficult security situation in Somalia-- a country from where piracy has boomed amid a lack of effective central government.

 

"If it was really easy to drill a well in Puntland it would have been done before now. But we're as close as we've ever been. It's right at the finish line, we think," Bandy said.

 

Red Emperor also has a stake in an exploration property in Georgia, the former Soviet state, where it will drill two wells this year.

 

The company, which is not planning to raise new funds when it lists on AIM, has $14 million of cash, enough to finance its share of the costs for two wells in Georgia and one in Puntland, but will need to raise more cash for further drilling in the Horn of Africa area, it said.

 

"When we've got a more definitive timetable on drilling in Puntland that's probably the likely time when we will look to raise some money," said Bandy.

 

The company is expected to have a market capitalisation of about 32 million pounds upon admission to AIM.

The company completed its first successful well in Georgia this week and is set to move into Puntland sometime in this Quarter-Year. It estimates the reserves in Puntland to be at around 19.9 Billion Barrels.

 

http://www.proactiveinvestors.co.uk/companies/news/30643/red-emperor-and-range-resources-prepare-for-a-potentially-transformational-phase-in-their-development-30643.html

 

Earlier today we heard the Mukhiani-1 well in the former Soviet state of Georgia had been successfully spudded.

 

As the drill-bit began turning it marked the start of an exciting and potentially transformational period for the two AIM-listed companies involved in the project.

 

Range Resources (LON:RRL, ASX:RRS) and Red Emperor Resources (LON:RMP, ASX:RMP) respectively own 40 and 20 per cent of two onshore blocks in the country covering 6,500 square kilometres.

 

The Range/Red Emperor collaboration doesn’t end here. The pair have identical 20 per cent stakes in a high impact exploration project in Puntland, a semi-autonomous region of Somalia.

 

For Range, Georgia fires the starting pistol on a drilling programme that could, if all goes to plan, elevate it to mid-cap respectability.

 

“(It) is entering a potentially transformational phase in its development,” said Edison analyst Peter Dupont in a recent research note.

 

“Over the next four months Range has three high-impact exploration wells scheduled in Puntland and Georgia plus a development well in Texas.

 

“Near-term, Range is very much a play on the outcome of the high impact drilling projects, but investors should not lose sight of the Texas and Trinidad assets, which offer both excellent cash generating and development potential.”

 

For Red Emperor success in Georgia and and Puntland will be key to narrowing the valuation gap between itself and Range.

 

While Range has more bells and whistles – including producing assets in Trinidad and Texas – there is still a very strong case to be made that Red Emperor’s market cap of £38 million should be a little closer to Range’s £230 million price tag than it currently is.

 

“Over the last 18 months Range has really been the darling of the market over here in the UK,” Red Emperor managing director Greg Bandy told Proactive Investors recently.

 

“They have gained a great deal of traction and success, and a lot of the interest has been around the assets (Puntland and Georgia) that we have also got.

 

“We are on AIM because Range has shown there is a large appetite for these assets over here.”

 

In Georgia the Mukhiani-1 well is targeting the Vani-3 prospect, which was estimated to have between 41.7 million and 115.2 million barrels of oil-initially-in-place (P90 - P10).

 

It is expected that Mukhiani-1 will be drilled to a depth of 3,500 metres within 45-55 days. After drilling Mukhiani-1 the rig will move on to spud a second exploration well.

 

Range completed 410 kilometres 2D seismic on the Georgian acreage which revealed its huge potential.

 

From this work the independent consultant RPS Energy identified 68 potential structures containing an estimated 2.045 billion barrels of oil‐in‐place.

 

Puntland, meanwhile, could be of a different order of magnitude again.

 

The exploration area is 40,000 square kilomttres in total and focuses on the highly prospective Dharoor and Nugaal valleys, which potentially contain 19.9 billion barrels of oil in-place. The pair’s joint venture partner and operator is Africa Oil Corp. (CVE:AOI).

 

Drilling here is expected to get underway at some point this quarter with a two-well exploratory programme planned.

 

It is thought the first well will be on the Dharoor Block about 120 kilometres west of the Indian Ocean shoreline and roughly 200 kilometres south-east of the principal Gulf of Aden port of Boosaaso.

 

It is expected to be relatively deep at 4,000-5,000 metres and will target the Upper Jurassic horizons.

 

Reflecting the depth, gross drilling costs will be substantial at about US$25 million. So both companies will need to look closely at their financing options.

 

“If we get some definitive news on the drilling timetable and a rig being mobilised then we probably hit the market to cover this cost,” Red Emperor’s Bandy revealed recently.

 

That said, the company has around A$14 million in the bank, which will fund the imminent two-well programme in Georgia with probably enough left over to meet the costs of the first Puntland well.

 

“We don’t want to drill three wells with no cash in the bank afterwards,” added Red Emperor’s executive consultant Tony King.

 

“We want to be fully buffered with some cash underpinning the business. We’ve got that at the moment.”

 

The reaction to today’s news was somewhat muted with shares in Range up 1.12 pence at 56 pence, and Red Emperor off 0.12 pence at 26.88 pence.

 

However the importance of today’s release shouldn’t be under-estimated.

[NASSIR]

October 11, 2006 (CXM -- TSXV)...Canmex Minerals Corporation ("Canmex" or "the Company") is pleased to announce that it has signed a non-binding Memorandum of Understanding ("MOU") to acquire an 80% interest in licenses covering the highly prospective Nogal and Al Medo/Darin basins in the state of Puntland in northern Somalia. The Nogal and Al Medo/Darin basins are considered world-class exploration plays with a petroleum system identical to and formerly contiguous with those within the Republic of Yemen. Please see attached map.

 

The Yemeni basins, after 20 years of exploration and development drilling, are known to contain in excess of nine billion barrels of oil equivalent reserves with current production of over 400,000 barrels of oil per day. Most production has been from Lower Cretaceous Qishn sandstone reservoirs sourced by Upper Jurassic Madbi Shales. In Yemen, between 1994 and 2006, there was an average discovery size of 96 MMBOE recoverable reserves with a discovery success rate of 23%.

 

Somalia, part of the same land mass as Yemen prior to rifting in the Gulf of Aden, is a virtually unexplored territory, with only 60 wildcats in some 580,000 km² of sedimentary basins, 11 oil and gas discoveries, and a wildcat success rate that is comparable with the best oil provinces in the world. Mature, oil-prone source-rocks combined with multiple reservoir rocks and structures occur in a variety of geological settings. The sedimentary basins within the acreage covered under the MOU are identical to the productive oil basins of Yemen.

 

The MOU has been signed with Range Resources Ltd. ("Range"), a public company listed on the Australian Stock Exchange. Canmex and Range are at arm's length. Pursuant to the MOU, Canmex has the right to acquire an 80% interest in the licenses and operatorship thereof in exchange for: (i) the financial commitment over an initial four year period of US$50 million in exploration expenditures; and (ii) the payment to Range of an additional US$3.5 million upon commencement of commercial production. Completion of the transactions contemplated in the MOU is conditional upon: (i) the successful completion of technical and legal due diligence by Canmex; (ii) negotiation and finalization of definitive binding agreements between Canmex and Range, including a Joint Operating Agreement and binding agreements among Canmex and Range and the Ministry of Energy of Puntland, including a Production Sharing Agreement; and (iii) all requisite governmental, regulatory and other consents including those required in Puntland and the Somali Republic.

 

The acreage that is covered by the MOU is currently licensed to Range under a Contract of Work (CoW) issued under the authority of the Puntland State Government and includes both hydrocarbon and mineral rights. The Transitional Federal Government ("TFG") of Somalia recognizes the State of Puntland and has recently endorsed the Range CoW and the proposed Range/Canmex partnership. Discussions have commenced with the Puntland State Government to agree upon terms for a Production Sharing Agreement over the Nogal and Al Medo Basin hydrocarbon concessions.

 

Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans. Actual results may differ materially from those projected by management.

 

ON BEHALF OF THE BOARD

"J. Cameron Bailey"

Director

 

For further information, please contact:

Sophia Shane, Corporate Development (604) 689-7842

 

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

 

View Map

[Timur]

Somalia's future looks bright, I pray this oil becomes some sort of relief.

[NASSIR]

Successful spud for Range Resources and Red Emperor

Thu, 14/07/2011 - 09:46 | Fiona Bond

 

Joint venture partners Range Resources*(RRL) and Red Emperor Resources*(RMP) have successfully spudded the Mukhiani 1 well in Georgia.

 

Along with fellow joint venture partner, Strait Oil and Gas, the trio will drill the well to a depth of 3,500 metres over the next 45-55 days.

 

Mukhiani 1 is targeting a prospect with a mean estimate of undiscovered oil in place of 115 million barrels with 46 million barrels attributable to Range's 40% interest and 23 million barrels attributable to Red Emperor's 20% interest.

 

The well marks the first of an anticipated three to four high-impact exploration wells to be drilled this year across Range Resource's Georgian, Puntland, Texan and Trinidadian exploration assets.

 

Range's executive director Peter Landau hailed the spudding a "significant milestone" for the company.

 

"It is our maiden well spud as an operator and the culmination of a significant amount of appraisal work completed by Strait's operations team," he said.

 

The recently completed geochemical helium survey undertaken by Range confirmed the suitability of the first drill location with oil exploration and development prospectivity complementing earlier seismic work carried out on the target, the company said.

 

The well also marks a significant development in Red Emperor's development, having made its debut on the AIM market just last month.

 

Director Greg Bandy said: "This is a significant milestone as it is our maiden well and the first of three to four high-impact exploration wells expected to be drilled on the company's projects this year.

 

"After being admitted to AIM last month, we are delighted to be able to provide the market with a significant news flow so soon after listing."

 

Following the successful completion of the Mukhiani 1 well, the rig will move on to spud the second exploration wells as part of the two-well drilling programme in Georgia.

[NASSIR]

Timur;734579 wrote:

Somalia's future looks bright, I pray this oil becomes some sort of relief.

It will. But the grand plan to spud has to be put off to ensure the settlement of outstanding issues , not to mention strengthening local institutions.

[Jacaylbaro]

Outstanding issues ,, eh ??

[Xaaji Xunjuf]

Well thats very good news

[genius pauper.]

positivity is ringing in my ears from the elite

[Timur]

NASSIR;734582 wrote:

It will. But the grand plan to spud has to be put off to ensure the settlement of outstanding issues , not to mention strengthening local institutions.

Thankfully, the oustanding issues are mostly outside of the drilling regions. 100% of the Dharoor basin block is inside Puntland while 60% of the Nugaal basin block is inside Puntland. The first wells will be in safe Dharoor which will allow some much-needed cash flow to come in.

 

I think the Atam issue should be resolved peacefully and that is being worked on, the occupied Sool and Cayn will rejoin Puntland peacefully, and the clan issues will be resolved with monetary incentives. The Khaleej states were in far worse condition than modern Puntland when oil sprang up and look at their state of peace today. Money makes angry men happy, that's for sure.

 

300 million barrels in just one quarter is an insane amount of money, roughly in the league of $28 billion at current market prices - that would do wonders for Puntland and the rest of the nation.

[A_Khadar]

Too much corruption and misapproperiation in p/l and entire somalia so I am not very hopeful that this will make much different in the daily lives of somalis.

[Taleexi]

NASSIR;734582 wrote:

It will. But the grand plan to spud has to be put off to ensure the settlement of outstanding issues , not to mention strengthening local institutions.

Add to this: Will exploration of oil in the said regions solve their problems? Strong institutions plus transparent government are prerequisite for stability of the region short of them will be a replica of Nigeria Delta, Katanga of Kongo and other resourceful areas yet remain to be underdeveloped for decades.

[Qandalawi]

Drill out. Drill out the black gold. We all need it. Stop the negativity, no Nigeria or Congo scenario instead use Kuwait, Saudi and the gulf states as examples.

 

It's progress if you ask, its better to have it than not. Carab calool kuusan ayaan iska noqon lahayn, Somalida isdilaysaana shiishada sida loo cabo aya iska baran lahaayeen.

[xiinfaniin]

This, if it ever materializes, will be a game changer indeed. Question is: will it ever come to fruition?

 

Game changer in terms of resetting current geopolitical equation to our advantage, hence making the settlement of Somali conflict that much closer.

 

With an income of 15 billion usd, a year, I am not worried a bit about the alleged corruptions (corruption is inherently human, and exists everywhere), drill this thing out where ever it is found Puntland, Somaliland, Benaadir and other places and you would find me rejoicing for the sheer fact Somalis would at last have something to defend and guard. Something that is practically precious. Something that the world can not do without.

 

But I must admit I am still unreasonably cynic about this oil thing in Somalia. Time, Allah willing, will tell.

[NASSIR]

Drill baby drill.

 

Timur, Dharoor valley is nothing but a different name for Al Mado aka Calmadow basin. It has been adopted after the Maakhir rejection of the shady deals btw Range Resources, Ltd. and Puntland.

I agree they have now retreated for exploration to the far Eastern end of that Basin, not where it's highly prospective saxib.

 

Check this map and educate yourself

 

Taleexi, well said!

[Xaaji Xunjuf]

There is lots of oil indications in Somaliland aswell thats nice