Encouraging signs of recovery this week. Time to come out from behind the sofa look at the portfolio again?

What a recovery for Gulf Keystone following the excellent news about the Shaikan-2 well. I think that SP would be Mid 200’s if it wasn’t for the current situation in the middle East…

 

Gulf Keystone is pleased to announce the results of the previously reported well test at the Shaikan-2 Appraisal Well drilled approximately nine km to the south-east of the Shaikan-1 discovery well.

Shaikan-2 has achieved short term, indicated rates of 10,144 barrels of oil per day (bopd) and a stabilised flow rate of 8,064 bopd of 26 degree API oil and 2.44 mmscf/d of gas (Gas Oil Ratio of 302 scf/bbl) on a 2″ choke at a 250 psi flowing wellhead pressure. Given the Shaikan-2 well test conditions, as well as the successful well stimulation’s at Shaikan-1 & 3, the Company anticipates that sustained rates in excess of 10,000 bopd could also potentially be achievable at Shaikan-2.

The Shaikan-2 flow rates are consistent with the Shaikan-1 & 3 rates but with higher quality oil and more associated gas, both of which can lead to an enhanced recovery rate. The oil gravity of 26 degrees API is significantly better (lighter) than Shaikan-1 & 3, both of which are currently producing 18 degree API oil from the upper sections of the Jurassic at the Company’s Extended Well Test facility.

The Shaikan-2 well test was conducted in a 44 meter interval (1792m to 1836m) in the upper section of the Jurassic age formation. Following this test, normal drilling operations will  recommence and the Company anticipates that further Shaikan-2 drilling will follow the Shaikan-1 geological sequence, i.e. through multiple, potential Jurassic and Triassic reservoirs before reaching TD at the bottom of the Triassic or into the top of the Permian, depending on well results.

The Company has a 75 percent working interest in the Shaikan block and is partnered with the MOL subsidiary, Kalegran Ltd., and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively.

 

Xcite have also recovered very well this week. –  This was very predictable! I really should have bought some more but everything in the portfolio looks artificially low right now and I simply couldn’t choose what to get out of. – My strategy is now to make use of any delays in news. There is a strong possibility that news may not come out this month as suggested by the BOD. Any delays should give some good buy in opportunities.

Encore are also showing signs of a come back. Results from the sidetrack could easily be out before the end of March and news about Cladham is due on the 9th April. So some change in SP will inevitably be seen over the next few weeks. Could be a good buying opportunity?

Berkeley Mineral – BMR have shown resilience over the last few weeks bucking the downward trend in the sector. Some really big buys in today suggesting some news may be on the way.

Bowleven are also looking very strong this week. SP has recovered from 320p to 370p. On March 18th it was announced that drilling had commenced on the Sapele-2 well which is an appraisal well for Sapele-1. I am holding…

Both Ascent and Avanti continue to disappoint. Avanti directors bought in a couple of weeks ago at 500p… I do not understand these drops. It seems the market does not have any confidence…?
Ithaca Energy are holding their own this week despite a drop of 20% in the production forecast for Q1. Full year forecasts remain unchanged. This provided some nice buy opportunities this week

Matra are up a little today. Despite being fairly volatile on a daily basis the overall trend is upwards. Matra still look comparably cheap considering their potential. I am looking forward to the next update.
It’s a bit of a relief to be able to publish a positive post. – Let’s hope the weeks rise continues! – Good luck all.

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