Asset Summary:

Oman Block 31 (50% Indago, 50% RAK Petroleum)
Jebel Hafit: estimated at 1 billion boe. Al-Jariyal-1 presently being drilled - originally due to complete in 160 days (9 July). Drill problems and raised costs announced 11 July. 21 Sept announced that drilling had reached 3600m (target depth 5900m) and was expected to penetrate the objective reservoirs towards the end of Q4 2007. Drilling problems and delays to cost additional $2M. 2D seismic results "encouraging". 28 Dec announced that drilling progressing slower than expected and costs increased to $25M for Indago alone. Now expected to hit target depth in Feb and test by end of April 2008. 4 Feb - Announced that well had reached 5131m, then encountered high-pressure, high-temperature salt water, disabling drill string. Assessing damage.

Oman Block 47 (50% Indago, 50% RAK Petroleum)
Hawamel-1: Estimated 61 million boe. Gas shows during drilling. Currently suspended pending horizontal wellbore testing (unlikely that standard testing procedures would achieve a commercial flowrate). New 2D seismic results "encouraging". Zad - 1 on the Adam prospect will be drilled after Al-Jariya with same rig. Evaluating seismic with a view to refining the prospect inventory.

Oman Block 43a (50% Indago, 50% RAK Petroleum)
Evaluating seismic with a view to refining the prospect inventory.

Cash
$54 million at 30 June 2007

After sale of many assets to RAK Petroleum, Indago is now an exploration company.


Click to enlarge work programme


Useful Links:
Indago Portfolio Overview
Sep 06 : Investor Presentation
Sep 06 : Interview with Peter Sadler, CEO of Indago Petroleum
27 Sep 06 : Interim Results RNS
8 Nov 06 : West Bukha-2 secondary target success RNS
21 Nov 06 : West Bukha-2 primary target success RNS
5 Jan 07 : Conclusion of West Bukha testing, Hawamel-1a exploration
10 Jan 07 : Oil Barrel Article - Indago Petroleum Enjoys Further Success On Block 8 Offshore The Sultanate Of Oman In The Middle East
Feb 07 : Al-Jariyal-1 spudded and "encouraging" seismic progress
13 Feb 07 : Oil Barrel Article - Indago Petroleum Goes For A High Impact Exploration Well Onshore The Sultanate Of Oman
Mar 07 : West Bukha info from Heritage Oil
7 Mar 07 : Potential Transaction RNS
11 Mar 07 : Oil Barrel - Little Fish In A Big Pond: AIM Juniors Finding Their Feet In The Middle East
14 Mar 07 : RNS - Disposal Of Assets (special dividend, share consolidation)
15 Mar 07 : Indago Presentation On RAK Petroleum Deal
1 May 07 : RNS - Indago response to rapid share price movement, plus drilling progress update
11 July 07 : RNS - Drill problems, $8.2 million cost increase and delays to reach target depth
21 Sept 07 : RNS - Interim Results
28 Dec 07 : RNS - Slow Progress And Increased Costs At Jebel Hafit
4 Feb 08 : RNS - Jebel Hafit update - Salt water encountered, drill string stuck

Down 12% already this morning on the back of the RNS:

LONDON (Thomson Financial) - "Indago Petroleum Ltd said it expects drilling costs at its Al Jariya-1 well, adjacent to the border with Abu Dhabi, to increase by 8.2 mln usd due to relatively slow progress as the well has proved to be technically very difficult.
The oil and gas exploration company said it has the funds to complete this well and the rest of the planned work programme.

The Al Jariya-1 well is located on the Jebel Hafit prospect in Block 31."

A little disappointing in terms of at least another 3 months before results, but the positive is it will not effect their fully funded 3 well drilling campaign, and also the geologic findings are as prognosis pre-drill.

As PapalPower says, it's disappointing news. Given the slow progress to date, I'd say that 91 days is an ambitious estimate. Still, may turn out to be a nice Christmas present for holders, but I still hold no shares here at present.

I've updated the header.

I'll own up, been adding a few here and there during the recent fall. Did not want to buy too much, so as the MM's would not mark it up.

Been very low volume sells has dropped the price, so I have added in small amounts too.

Seems like today a few others have decided to add some more.

Do you not think that this is likely to drift off further as the results date is now 2+ months away.
I will get back in, but sub 80p is likely, imo.

Looking at the 1 yr chart, resistance looks to be at around 74p, supported by the 200 DMA also at 74/75p.

The 200 DMA will run over the share split and sale of the assets, so need to be careful with analysis of it.

The drift depends on the sellers.......it needs sellers to sustain drift.

The selling volume appears to be drying up.

I am a buyer and I will hold through all three drills, so it does not really matter to me, drill one has upside of 1000p, and drills 2 and 3 together can give anywhere between 300p and 500p upside.

1500p potential upside you can buy for 80p - downside being 0p.

Thats nice odds for me for a speculative punt, and the money I am dribbling in here I do not care if its lost.

Point taken, PP.
I agree in principle that the potential is good, hence I will be getting back in.
I would qualify your last statement, though. Does it matter if I lose the money? No.
Do I care if I lose the money? Yes.

The time is getting near now, with Peter Saddler saying we will know something by end of Q3, and in fact, if the drilling went well, they could be into the reservoir zone first week of September, it it went to "nominal" target, then they will be into the reservoir zone mid Sept.


This is my post today on TMF, for a CQ, that being IPL from 59.5p mid price.


"This is a re-entry, after drilling problems caused a delay to the programme, which caused a fall and the stop loss being hit. The present market is confused and overlooking IPL imv, however, I believe the potential is very much still on, and a lot closer to fruition than people think.

According to a 19th July interview with Peter Saddler (CEO of RAK) the drilling would recommence latest 21st July.

The target was between 40 to 50 days to drill to potential reservoir zome, and between 30 to 40 days to drill through the reservoir.

This means best case 70 days to completion to TD (40 days to having first info coming back from the potential reservoir zone).

Nominal is 90 days to completion (50 days to having first info back from the potential reservoir).

Peter Saddler said that they should know something by at least end of Septmeber latest (the inclination being potentially sooner).

From the schedule and utilsing 21st of July as drilling starting again :

All being well they will be into the reservoir first week to mid September.

The risk is further drilling problems will further delay the drill, or cause it to be abandoned, however Saddler was confident that the problems in the initial stage do not take away anything from being able to complete the drill. He is ex-Schlumberger, so he should have as good a feel as anyone.

The fall from 105p down has been on very minimal volume ( http://bigcharts.marketwatch.com/charts/big.chart?symb=uk%3Aipl&compidx=aaaaa%3A0&ma=0&maval=9&uf=16&lf=2&lf2=4&lf3=1&type=64&size=3&state=11&sid=2639653&style=350&time=7&freq=1&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=5389&mocktick=1 ) and given that and the recent market wobbles, I am sure it will move back up very quickly once a few buyers come back.





Indago Petroleum

EPIC : IPL

Current mid price : 59.5p

Target price: Open ended for the duration due to the potential.

Potential unrisked price on AJ-1 drill success over 1000p a share

Downside potential on AJ-1 failure fall to around 35p a share imv (however have two further fully funded drills in place with upside potential of anything up to 400p a share)

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NMS : 2000
Can buy/sell over NMS normally with no problem.

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Reason for 20% (or lots more) gain:

Recently sold all their production assets to RAK Petroleum, returned 60p a share to investors and retained lots of cash and some exploration licenses, jointly held now 50/50 with RAK. Indago are not the operator.
Their ongoing drill is also their biggest, it's a very deep well targeting a 2 Billion BOE reservoir which sits half on the Omani side and half on the Ahu Dhabi side, therefore the target is 1 Billion potential for IPL/RAK or therefore 500 million for IPL.
Unrisked upside of this well is 1000p (yes a tenner per share). Downside on failure would see around a 35p a share price, based on the 2 remaining drills to come (fully funded, cash in bank and assets)


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Mcap: 31.73m

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Company website: http://www.indagopetroleum.com/

My esnips web folder of information is located at : http://www.esnips.com/web/IndagoInformation

Interview with Martin Groak April 2007 : http://www.wallst.net/audio/audio.asp?ticker=AIM:IPL&id=3300

It's a higher risk punt in all effect, but I know of no share that has the upside potential on a single event to potentially 10 times the current SP on success, but also offer some limit to the downside (as potentially their other 2 planned drills could be worth up to 400p a share later so the initial sell off on any bad news could potentially be recovered with a decent profit with later events).

Should easily see a 20% gain in the build up to results, could potentially give a 1000% gain if the AJ-1 drill comes in good, or an initial 50% loss (at the present SP if not.)


Asset Summary:

Oman Block 31 (50% Indago, 50% RAK Petroleum)
Jebel Hafit: The target is estimated at 1 billion boe on the Omani side (with another 1 billion boe on the Abu Dhabi side). Al-Jariya-1 presently being drilled. Completion and testing in Q3. Classed as low risk on an industry scale of drilling prospects (this still means high risk to me and you)

Oman Block 43a (50% Indago, 50% RAK Petroleum)
Adam prospect (Zad well to be drilled after Al Jariya -1 well is complete and the rig is released). The estimated target is 140 million boe recoverable

Oman Block 47 (50% Indago, 50% RAK Petroleum)
Izz prospect (Hawamel well drilled end 2006 with gas interpreted as being in place, but in a tight formation. IPL are contemplating a horizontal section to produce the well at a later date). The target is estimated at 60 million boe recoverable.

Further detail at : http://www.indagopetroleum.com/overview.asp


************* Note, I do hold IPL, however its made me significant profits already from the takeover news and rise, and my holding is now mostly "free". Therefore, I am holding all the way through regardless of results of drills. I would strongly suggest against holding margin positions like spread bets. The massive scale of the upside will mean that this share will undergo, imv, big movements down and up ahead of news to shake margin positions out. Its far better, if you are going to buy, to buy the real shares and hold them. The advantage is that if AJ-1 well fails and the price falls, there is still up to 400p of unrisked upside from the other two drills, so all is not lost on AJ-1 failure alone, should that happen.Its high risk, so be careful and always DYOR !!

It sailed past the 70/75p support level, so next support is at 50p.
With news still a few weeks away & the markets still falling I think there is still further downside for the IPL sp. But, as you say, the sp should blip up just on the approach of news.
High risk! Yes, for sure, but that's the buzz!!!

http://www.zawya.com/Story.cfm/sidDN20070719004025/SecProjects/pagNews/chnProjects%20News/objB5CA3253-195D-437A-832DF68D2587A1D7/


Thursday, Jul 19, 2007

By Ayesha Daya

Of DOW JONES NEWSWIRES

DUBAI (Dow Jones)--RAK PetroleumRAK Petroleum, an oil and gas exploration and production company based in the U.A.E. emirate of Ras Al Khaimah, is to review the company's strategy towards the end of the year, the company's new chief executive said.

Appointed a month ago to replace Philip Turberville, Peter Sadler, who previously ran the company's exploration and production arm, told Dow Jones Newswires in an interview that he will meet the board in the next quarter to define future direction and targets.

"In the next quarter I will meet with the board to review our strategy, including our output target," Sadler said in a phone interview. "We will see if we need to continue as we are, or if we change tack."

For the rest of 2007, the company will continue to focus on its core area, exploration in its Omani and Ras Al Khaimah acreage.

"This year we've been quite active operationally," he said.

Current net output is 2,000 barrels of oil equivalent a day, Sadler said.

Owned by a number of local investors, including the Ras Al Khaimah government, RAKRAK is one of several companies established in the Gulf in recent years keen to enter the international oil and gas arena.

Sadler used to head Indago PetroleumIndago Petroleum (IPL.LN), the London Alternative Investment Market-listed energy firm. He moved to RAKRAK in April when it acquired all of Indago's exploration and production assets for GBP194.2 million.

RAKRAK continues to share exploration assets in Oman with Indago, including Block 31, Jebel Hafit, a 104-square-kilometer mountain area estimated to hold 1 billion barrels of oil equivalent on the Omani side. The other side of the mountain is in Abu Dhabi, which hasn't been drilled.

Indago recently announced that drilling in the Jebel Hafit well would cost a further $8.2 million owing to problems with drilling in a high pressure environment.

"The cost has been $21 million to date. It is going to cost some $40 million by the time we have finished," Sadler said.

Results, previously expected in June, will now be known by the end of September.

For the past two weeks, operations have been shut down to prepare for the next phase of drilling, which will commence later Thursday or Friday, Sadler said.

"It will take 40 to 50 days to get into the reservoir, and a further 30 to 40 days once inside it to evaluate reserves," Sadler said. "By the end of the third quarter, we should have an idea."

After Jebel Hafit, the company is targeting the Zad-1 wildcat in Block 47 in Oman.

West Bukha, an oil prospect offshore Oman, is scheduled to produce between 10,000 to 15,000 barrels a day of oil from May 2008, Sadler said.

New acquisitions of assets and companies in the Middle East and North Africa are always on the cards for RAKRAK, Sadler said. "Our strategy is to acquire to expand in gas and oil," he said. "The MENA region is an area where we think we can work."

The company's offer in April for Algeria-focused Gulf Keystone Petroleum Ltd. (GKP.LN) failed to materialize.

"Gulf Keystone was a $400 million bid. That money is no longer committed, but there is no point rushing to get rid of it," he said.

Sadler said that a proposed initial public offering of RAKRAK had "no definite timing."

-By Ayesha Daya, Dow Jones Newswires; +971 4 3644962; ayesha.daya@dowjones.com

Copyright (c) 2007 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

July 19, 2007 05:51 ET (09:51 GMT)

60p is a key level for me for IPL, simply because after the 60p special dividend and then the 5 for 1, there is really no trading history below this level.

The volume says it all imv, no volume, just small PI's getting fidgety, panicky with the markets or getting margin calls and being forced to sell.

A few decent buys coming in, and it will soon start to move back up.

With the potential for a news leak in the coming 2 to 6 weeks (given the new drilling schedule according to RAK), its also the time soon that speculative money will start coming back.




.

Shares in Issue is now : 53,333,311

At 55p mid price the market cap is just 29.33m now.

With around 20m in the bank imv, thats just 9.33m EV for potential of 1500p a share upside.

Its getting very cheap now imv, high risk and big potential reward play.

Whether this is cheap will depend on how much of that 20m is left at present. Too little and more money will be needed to allow development of the other assets once JH completes. For me, there is still no compelling reason to buy at present. I await the next update on JH.

VM, I am taking off expenditure already (which knocks off around 9m) to give a present today value of 20m cash.

On completion of JH-1 they will have enough for Zad-1, and should be enough for the sidetrack on Hawamel-1 too.

JH-1 is the most expensive of the three, followed by Zad-1 and with the final sidetrack at H-1 being the cheapest.

They stated in their last update that the increased costs of JH-1 will not compromise their allocated funding for the next two wells, so all in all, their last statement was that they can complete all three wells with no further funding requirement.

L2 on the up today as some buyers come in, all is blue so far, and now 2 v 1 @55/58

25K MM buy there, which means a larger trade is to be reported later (for which the MM buy helped fill).

Nice to see some movement, now L2 is 1 v 1 @61/65

On Line Limits getting stronger now :

BUY 1.5K at 68.76p

SELL 15K @ 66.2p

A decent day overall, lets hope more of the same today.