Next week the Proactive Investors big top pitches up in both Manchester and London as we showcase another batch of exciting junior companies.

Next week the Proactive Investors big top pitches up in both Manchester and London as we showcase another batch of exciting junior companies.

Next week the Proactive Investors big top pitches up in both Manchester and London as we showcase another batch of exciting junior companies.

New AIM start-up Lekoil (LON:LEK) has raised £32mln and begun trading today. 

Earlier this week the company was unveiled as Afren’s new partner in Nigeria for the OPL310 asset, which is described as being ‘early stage with significant potential’. 

The asset is estimated to have recoverable prospective resources in the order of 128.5mln barrels of oil, with production possible by late 2015 (at the earliest). 

Lekoil will have a 27% economic interest and an indirect 15.43% participating interest in OPL310. 

The company also has interests in Namibia’s Luderitz basin, where it is part of an offshore exploration venture with seismic planned for next year to find drillable prospects. 

It raised gross proceeds of £32mln alongside its listing on AIM, issuing 80mln shares at 40p each.

And on the first morning of trading Lekoil shares are changing hands just below the placing price, at 39p each. This values the company at around £71.3mln. 

Chief executive Lekan Akinyanmi said: "We have been extremely pleased with the positive response from investors in both the UK and the US to the company's plans to take advantage of the undoubted opportunities in Nigeria for indigenous businesses.  

“The Board believes that our transition to the public markets, and the consequent access to a wider pool of capital, represents an obvious next step towards our goal of building a multi-asset exploration, development and production business in Africa.”

USOP has responded to a variety of questions in a bid to satisfy some of the concerns raised by investors, following the completion of the Eblana 1 testing programme.

Range Resources (ASX: RRS) is poised to grow its Trinidad oil production with operations to complete a well that intersected one of the thickest Lower Forest pay sections encountered to date.

The QUN 141 well is currently being completed with logs indicating 160 feet of gross oil pay while drilling is currently underway on the QUN 142 well that directly to east and expected to encounter the same well-developed oil pay.

Further development on the Lower Forest pay includes the evaluation of a possible re-activation of the QUN 16 well, which previously produced up to 145 barrels per day of oil during a one week test.

QUN 16 well was drilled and tested in 1942 and logged thick oil sands that correlate with the Lower Forest reservoirs being completed by the company about half a mile to the west.

Re-activation of the QUN 16 well will be performed using one of the company’s production rigs, which have recently returned to operation following the receipt of necessary approvals.

This has the potential to not only add new reserves and production but also extend the Lower Forest trend to the east of the QUN 16 well and establishing a large area for low-risk infill drilling between the well and the current Lower Forest development at a relatively modest cost.

In addition, Range is expecting several production rigs to be placed back into operation within the week to begin remedial work on up to 20 existing wells, which could increase production by an additional 100 barrels to 150 barrels per day of oil.

Depending on the type of workover required, individual wells are estimated to require an average of 1-2 days to perform the necessary remedial work.

Lower Cruse Formation Drilling

Range continues to make steady progress in drilling the MD 248 well towards its target depth of 6,500 feet.

MD 248 well is currently at a depth of 5,425 feet and had encountered a ‘drilling break’ along with multiple gas shows requiring mud to be conditioned properly.

The shows are encouraging as they are usually associated with oil sands consistent with the Morne Diablo field.

Middle Cruse Formation Drilling

The company is currently preparing a completion procedure designed to maximise recovery from the multiple pay zones encountered by its QUN 135 well in the Lower Forest, Upper Cruse, and Middle Cruse sections.

This could include the possibility of perforating and producing the Upper Cruse pay zone while evaluating potential stimulation of the Middle Cruse.

Range is still assessing the applicability of formation stimulation in QUN 135, including a possible mini hydraulic fracture stimulation, which has been successful in other fields in Trinidad.

If successful, low-cost stimulation technology could lead to higher initial production rates and greater recoveries from the established producing horizons.

Based on historical production rates seen from the Middle Cruse formation, a successful well at this location could potentially have initial production rates of up to 200 barrels to 300 barrels per day of oil, which could be further enhanced with mini-hydraulic fracture stimulation techniques.

Other developments

Range is in the final planning stages of a new development program in the South Quarry field following the recent receipt of approvals for the construction of four initial well pad locations.

Operations will commence with site construction and fabrication of equipment to support the drilling, which is expected to start towards the end of June or early July.

Previous drilling campaigns have yielded higher than average rates and recoveries due to increased geopressure in the area.

Given the proximity to established production, the South Quarry program has a high probability of boosting production, while extending the producing trends and establishing multiple locations for future drilling.

Range has also received environmental approvals to proceed with the deepening of six wells at its Beach Marcelle licence.

It will now mobilise a production rig to test and prepare existing well bores in anticipation of deepening those wells to recover Proved Undeveloped Reserves, estimated at up to 90,000 barrels of oil per well at costs significantly lower than drilling and completing new wells.

New Technology

Range continues to evaluate exploration, drilling, completion, and production technology to maximize recovery of oil and gas from its producing areas at the lowest cost possible.

This includes mini-fraccing as well as horizontal drilling, which could increase initial production rates by between 5 and 10 times in suitable reservoirs.

Guatemala

Range associate Citation Resources (ASX: CTR) is preparing to test the two most prospective oil bearing reservoir units at the Atzam-4 well in Guatemala.

Flow testing of the C13 and C14 carbonates, which demonstrated strong oil shows during drilling, is expected to start within two weeks.

Some potential pay zones in the C16 and C17 sections will also be tested.

Citation had made the decision to test the two units instead of carrying out further testing of the Lower C17/Upper C18 carbonates that had experienced unexpected gas production following a technical review.

In addition, the operator plans to install a gas separator on the electrical submersible pump for further evaluation of the oil production potential from Lower C17/Upper C18 after testing of C13 and C14 is completed.

These had produced oil at an initial rate of 50 barrels per day with limited ESP performance due to gas production.

Ralph E Davis and Associates (RED) have estimated that Atzam-4 holds Probable Reserves of 2.3 million barrels of oil based on the results of the logging and the analytical work completed by Schlumberger.

Range has a 19.9% strategic interest in Citation, which holds 70% in Latin American Resources (LAR), as well as a direct 10% interest in LAR.

LAR in turns holds between 80% and 100% in the two oil and gas development and exploration blocks in Guatemala.

Analysis

Range Resources continues to make progress in its goal of increasing oil production from its Trinidad operations and looks set to pen in a marked production increase in the short term.

With the proposed merger with International Petroleum, this will place the combined company in an even stronger position with strong production, reserves and exploration upside.

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Italy focused Sound Oil (LON:SOU) moved closer to drilling its flagship Nervesa appraisal well.

It confirmed that the drill rig for the programme has now been released from its prior contract in the Netherlands and it has left the site.

The rig will now be mobilised to Italy.

It is expected that drilling will start at Nervesa early next month. First results could then be available sometime in July, assuming a 30 day drill programme.

Speaking with Proactive Investors yesterday chief executive James Parsons said “In the success case, compared to our (current) market cap, Nervesa is a massive asset and whatever we find it would be very exciting for our shareholders.”

Sound yesterday announced ‘first gas’ from the Rapagnano field. Production began on Wednesday, and it delivers the group’s first revenues since its 2005 listing.

Rapagnano is modest in size - it will generate around €400,000 per year, after operating costs – but bringing it online is a significant milestone as it helps towards covering costs and could in the future unlock further capital via debt finance.

Petroceltic says it is close to reaching a binding agreement with a second farm-in partner, but it is now awaiting partner and regulatory approvals.

Afren (LON:AFRE) had its 'buy' target repeated on Thursday by City firm Investec, after the oil and gas producer reported  what the broker called a "strong" first quarter  interim management statement.

Analyst Brian Gallagher said drilling results from the Ogo prospect in the Benin basin, offshore Nigeria, are expected to be the next near-term catalyst.

Earlier this week the firm announced a US$50mln farmdown on the OPL 310 licence, where Ogo lies, in which Afren will receive a total carry of up to US$50 million in respect of the exploration well currently being drilled and a planned side-track well.

Gallagher sees the firm's valuation as "undemanding" with latent optionality outside of Nigeria.   He targets a price of 160p for the shares.

Shares in the firm lifted over 3% today to 139.20p as it reported a year-on-year increase of 14% in net production principally from the Ebok and Okoro fields, offshore Nigeria in the three months to March 2013.

It said it was firmly on track for 2013 production guidance of between 40,000 to 47,000 boepd.

Osman Shahenshah, CEO, said: "Afren continues to deliver strong production from our greenfield developments offshore Nigeria.  

"Following the successful start to our 2013 E&A programme on Okwok, offshore Nigeria, and Simrit in the Kurdistan region of Iraq, we are currently drilling the West African Transform margin on OPL310 offshore Nigeria."

He added the group remained in a strong financial position supported by a growing production base.

Tethys Petroleum (TSE:TPL) announced it had signed a Protocol of Intent with the Uzbek State oil and gas company, Uzbekneftegaz (UNG) for exploration work in the North Ustyurt Basin of Northern Uzbekistan.

The agreement would focus on the Bayterek investment block. Tethys' next step is to arrange for an exploration agreement.

Separately, Tethys' revenue rose 94 per cent in the first quarter to $12.6 million.

The company, which reports in U.S. figures, says it lost $4.3 million.

Production increased 24 per cent to 6,366 barrels per day from 5,117 barrels per day.

-- Adds news about Range's interests in Guatemala --

Shares in Range Resources (LON:RRL) perked up after the company issued an update on its Trinidad operations and raised the possibility of using mini-hydraulic fracturing techniques on some of its licence areas.

The company revealed that logs indicate 160 feet of gross oil pay on the QUN 141 well, making it one of the thickest Lower Forest pay sections the company has encountered to date.

Drilling has started on the QUN 142 well and the company expects to encounter the same well-developed oil pay as on the QUN 141 well.

Not content with that, the company plans to look into the possible reactivation of the QUN 16 well, which previously produced up to 145 barrels of oil per day (bopd). Reactivating QUN16 would further extend the Lower Forest trend.

Several production rigs are to be placed back into operation within the week to begin remedial work on up to 20 existing wells, expected to yield an additional 100-150 bopd of production, Range disclosed.

Range is currently reviewing multiple well completion options, including the use of mini-hydraulic fracturing and horizontal drilling, which, if successful, could potentially increase initial production rates by 5 to 10 fold.

The use of mini-hydraulic fracturing has been proven successful in other parts of the country, and significant economic gains can be achieved where these technologies can be applied in a cost effective manner, the company asserted.

Shares in Range were trading at 3.27p, up 2.2% on the day, having been trading at 3.15p prior to the operations update.

In a separate announcement, Range said Citation Resources (ASX:CTR) has announced that following a technical review programme on the Atzam#4 well, in which Range has an indirect attributable interest of 24%, flow testing of the C13 and C14 carbonate sections of the well is expected to commence within two weeks.

Coming seven months after last October’s management shake-up, the achievement marks the first step in Sound’s plan to become a ‘mid-cap’ Mediterranean oil and gas company.

Cairn Energy (LON:CNE) has confirmed that preparations are underway for the first well in its exploration programme offshore Morocco.

In April Cairn hired Transocean’s Cajun Express semi-submersible rig on a one-year contract. 

It said that drilling will start on the first well in the Foum Draa permit later this year, subject to approvals.

In the meantime it is carrying out sea bed site surveys and environmental surveys for the project.

Foum Draa hosts deep-water turbidite plays along the Atlantic margin. And Cairn says the planned wells will test older targets than any previous well on this margin.

It estimates the gross mean prospective resource at 142mln barrels of oil, and it says there is follow on potential of a further 126mln barrels.

Cairn has a 50% stake and it is the operator of the venture, AIM quoted San Leon and Serica Energy are also partners owning 14.1667% and 8.333% respectively, while Toronto listed Longreach (CVE:LOI) has a 2.5% interest. Moroccan state oil firm ONHYM retains a 25% interest in the project as well. 

Meanwhile Cairn also said plans are underway for the Juby Maritime venture, a 50:50 partnership with Genel Energy (LON:GENL), targeting the first well in late 2013 or early 2014. 

The update on Moroccan projects came as part of a broader operations update, in which it also highlighted its other frontier exploration opportunities in Senegal and offshore Ireland. 

Cairn says across its whole project portfolio it has 61 prospects and 124 leads.

Kazakhstan focussed oil junior Max Petroleum (LON:MXP) told investors that the ZMA-E6 development well has successfully reached target depth.

The well, on the Zhana Makat field, hit hydrocarbons in Jurassic sandstone reservoirs as expected, Max said.

The company said it will put the well into production as soon as practicable.

It also confirmed that the drill rig will now move on to the location of the planned UTS-5 exploration well on the Uytas North Prospect on Block A.

The well will be targeting resource potential of 11mln barrels of oil and it has a 24% chance of success, Max explained.

North American Petroleum (ISDX:NAPP) has announced initial production rates for two new wells drilled in the Mississippi Lime formation, in Oklahoma.

The newly established junior oil firm has a 1.25% stake in the Wolf 1H-25 well, which produced at a rate of 195 barrels of oil per day, and it has a 0.055% interest in the McClure 36-2H well, which yields 90 barrel per day.

The company’s interests in the two wells equate to 2.9 barrels of oil production per day.

"From a standing start at the time of our IPO in March 2013, we now hold leases totalling 416 net mineral acres and have interests in seven producing wells in the proven Mississippi Lime formation, Oklahoma,” managing director Stefan Olivier said.

“We intend to build on the momentum behind the company and are actively evaluating opportunities to acquire additional leases and participate in the drilling of new wells in proven US onshore formations, as we look to generate shareholder value by growing net production and proving up reserves."