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Presentation from Thursday 6th July 06 can be seen on oilbarrel !


Monterey appraisal well suspended pending Wintershall evaluation. 1/12/06
BLR and Kappa in dispute.
BLR to meet with Kappa within next two weeks 1/12/06

Still have California and N Sea news to come. This could build strongly from this level especially with a little press to boot.

From Oil Barrel Today

Black Rock Provides Update On Near Term Production Opportunities In Colombia Investors have been waiting for some months for an update from Black Rock Oil & Gas on its operations in Colombia. There had been something of a hiatus in newsflow just as the AIM-quoted company seemed to be really motoring in the South American country, having drilled two appraisal wells on the Arce heavy oilfield and talked of near-term production opportunities in 2006.

Now it seems the company, which in December exited its Australian business in order to focus on its operations in Colombia and the North Sea, has reached agreement with its 50/50 joint venture partner Kappa Resources to complete the Arce-2 well ahead of a steam flood production test. While the project is never going to be a company-maker, it does hold the promise for maiden production later this year.

Black Rock took 50 per cent of the Arce oilfield, which lies in the Las Quinchas Block in Colombias Middle Magdalena Basin, in April 2005. There followed a series of appraisal wells: Arce-3 came in pretty much in line with expectations, flowing between 25 and 36 barrels per day of sticky 13.5 degree API oil, while Arce-2 flowed at rates of between 10 and 60 bpd.

The partners plan to steam flood the field, a process which should make the heavy oil more mobile and so increase flow rates. Steam flooding is a common technique on heavy oilfields in Colombia and has been proven to increase production rates by a factor of five or ten. The steam test will begin once the necessary hardware has been manufactured and shipped to the oilfield. Should this technique prove a success at Arce-2, then further production wells will be drilled into the field to increase the daily production rate.

Black Rock and Kappa have also agreed to re-enter the once producing Baul well, which was shut-in in 1961 due to low oil prices. If the wellbore is found to be in good condition, then it will be production tested to check the reservoirs commercial viability.

Las Quinchas is also home to the Bukhara prospect. Bukhara has the potential to hold 70 million barrels of heavy waxy crude although results from the Bukhara-1 well proved inconclusive. Further testing and work will be needed on this deposit. The company also holds 50 per cent of the adjacent Kappa-operated Alhucema licence. New 2D seismic and drilling work is planned on Alhucema this year.

It adds up to an interesting cluster of projects, which seems to justify Black Rocks decision to switch attention from Australia to Colombia. The fiscal and licensing regime is favourable to start-ups and the Colombians, anxious to attract inward investment to shore up production levels, have announced their intention to further reduce corporation tax, from 38.5 per cent to 28.5 per cent.

There is also plenty of scope for smaller companies to revisit existing but undeveloped oil finds, such as Arce and Baul. This is not wildcat territory, which derisks some of the drilling, and even the Middle Magdalena Basins modest deposits of heavy waxy crude can be made to work when oil prices are this high. Heavy oil isnt the high margin end of the business but there are advantages to being in the Middle Magdalena: this is a prolific oil province, having produced over 2.2 billion barrels of oil, and a major oil pipeline runs through the acreage, linking to a refinery capable of handling heavier crudes.

Anyone know where to find the market price for heavy crude? (As opposed to Brent or light crude, which are all over the place)

rpaco

I would try EEN reports for a rough guide? They operate in the same area. Also WH Irelands report think you can see it on the BLR web site for oil in the ground value.

Moneyman I believe they willl need another placing before the north sea happens even though I am led to believe that the rigs have been booked?

Interesting times

regards

Has anyone any udated news about BLR?

Out today

News from the web site

Regards

no RNS's. typical

Just in case you miss this as it is buried on the web site.

United Kingdom
In the United Kingdom, the key opportunity is the Monterey Gas Field in the Southern
North Sea, where the operator, Wintershall, a highly experienced exploration and
production company from the Netherlands, has estimated mean recoverable gas
reserves of 165 billion cubic feet and has set the potential for commercial success at
over 70%. The intention is to drill Monterey in Q2/3 2006, and if successful to convert
this to a production well. Development is then envisaged via a 2/3 well subsea tieback,
probably via a short pipeline to the nearby producing Markham fi eld. Production is
expected as early as 2007/8. Black Rock has 15% in the Monterey Gas Field with the
operator Wintershall (part of the BASF Group) having 45% and partners Hunt having
15% and Carrizo 25%.

Just need the funding, please let them get the funding.

regards

This was the RNS relating to Dr. Square's link - many thanks for that, Doc!

Black Rock to start Arce output in May - Colombia
Published: Thursday, March 23, 2006 11:40 (GMT -0400)
British oil junior Black Rock Oil & Gas (AIM: BLR) is steam-testing the Arce field in
the Las Quinchas block of Colombia's Middle Magdalena basin and will start first
production in May, Black Rock managing director Ivan Burgess told BNamericas.
Arce is thought to hold gross recoverable reserves of 5 million barrels of heavy oil.
Production from the four wells already drilled could be in the region of 150 barrels a
day per well, Burgess said, adding that as many as 30 wells could eventually be
drilled.
Black Rock bought a 50% interest in the 249,000 acre Las Quinchas association
contract from Kappa Resources in 2005.
On the Ba field in the same block, technicians are evaluating the well and casing,
and if both are in good condition, the company will prepare them for production early
in the second half of the year, Burgess said. Production there will probably be similar
to that at Arce but from one well only, with further wells dependent on how the first
one performs.
Black Rock has a 50% non-operating interest in the Alhucema contract that lies
immediately north of Las Quinchas. Black Rock and Kappa are acquiring 2D seismic
and could start drilling this year.
By Karl Royce
BNamericas.com


Looks very encouraging - finally production from BLR !! Perhaps the company could do the decent thing and leak the news to the mainstream financial press so it actually has an effect on the share price ??!!??

Thanks Dr & soul, i have always liked the month of May.

Been thinking about this stock all weekend - a comforting factor at the moment is that Bruce Rowan has purchased approx 2.6% of BLR for his Starvest fund (discussion thread under "SVE"), as well as holding 7.3% privately through his wife. Presumably they bought at higher prices than the stock is currently trading for.

My arithmetic suggests that this stock could be a multi-bagger just on the success of the suggested 30 wells at Arce. The current four-well programme alone should have a noticeable effect on the share price. Then there's the rest of the portfolio to consider, of which the potential is considerable.

I have factored in the possibility that BLR may have to issue much more stock to raise further funds (for example, taking the number of shares in issue from its current 430 million to 1 billion) and still I see the share coming out as a winner. I assume that Bruce Rowan (and his lovely wife) have done similar calculations and come to a similar conclusion.

For those of you who may not have seen, BLR's broker has produced a report under the title "Metamorphosis of an Oil Company - BUY", dated 04 Oct 2005. This makes very interesting reading and sets the case for investing in BLR very clearly. I have to say I'm not totally sure of their estimates of Net Asset Value at the end, because I can't follow their explanation of the maths involved, but their case that BLR is trading below its potential is convincing and the NAV and predictions for the future (regardless of the maths issue) seem plausible.

The report is available at:
http://www.blackrockoil.com/investor/broker/041005_whireland.pdf

I have significantly increased my holding in BLR this morning on the strength of forthcoming production, hopefully in May as stated by Ivan Burgess, and I will probably continue to add on any good news in the future. For those who are not averse to risk, now would appear to be a good time to buy.

All IMHO, DYOR etc.

Good article on BLR.The site is free to register

http://www.proactiveinvestors.com/registered/articles/article.asp?BLR

Black Rock Oil & Gas plc: prepares for new focus on Colombia and North Sea

Black rock has had a bumpy ride since listing on the OFEX market in 1999; it has since re-listed on AIM and only now after major re-organisation is pushing ahead after near-term production opportunities.

The company recently went through a management re-organisation, and now is under the management of the highly experienced Ivan Burgess (former CEO of Norwest). Since Ivan has taken the reigns at BLR the company has went from having some small 5-10% working interests (wi) onshore UK, to having multiple projects in Colombia, UK offshore and offshore Ireland. The main focus of the company now is to deliver short-term production from Colombia

Mostly buy-side activity the last few days, although it's having little effect on the SP. Big spread persists, although it seems most trades are well within spread. I'm wondering if there's a stock overhang after the price-slide of the last few months.

Am i reading the interims correct, it seems like the company is trying to get the gas/oil out of the ground rather than look for more. this in turn should produce a flow of cash and hopefully a rise in the SP. Please would someone correct me if i have got this horribly wrong
Alex

Alex,

the co is going to be producing from Arce as of May (WE HOPE!), according to announcement made by Ivan Burgess (see other recent posts). Exploration drilling will hopefully commence in the near future on Alhucema block which is though to be highly prospective. Other drilling is also planned for various sites.

So basically we should be seeing first commercial production within a couple of months, plus exploration will continue, hopefully producing new resources. I would say this is an ideal situation.

If the Arce project's first four wells are as successful as has been intimated (i.e. producing a minimum of 150 bbl/day each) then BLR will continue, with its 50% JV partner Kappa, in drilling up to 30 wells at the site. My arithmetic suggests that that adds up to quite a lot of oil.

Arce alone gives me confidence that from the current SP, BLR could turn into a multi-bagger. Adding in future success in the rest of the E&P portfolio could see this turn into quite a stunning earner. At present I think the shares have been oversold and ignored, so could be due a sharp re-rating. Whether this will happen soon or whether we will have to wait until BLR posts a profitable set of results is a matter of pure speculation.

All IMO DYOR. etc, but between you, me and Bruce Rowan, I think we could be onto something.

Again, if you haven't yet seen it, read the WH Ireland broker's report on the company website (I posted the link a few days ago), as this gives a very clear picture of the company's prospects. It still feels like a bit of a risky play, but in a balanced portfolio I think it's one worth following up.

Hope this helps.
ST.

Alex,

Sorry, I hadn't realised the interims were out today and I wish to add to and revise some of the comments I made in my previous post. I am encouraged further by the following comments in the chairman's statement:

>> The Baul Oil Field located in the southern part of Las Quinchas association
block is also being investigated. That well was in oil production during the
1960's but was shut-in because of the then low oil price. If in good condition,
the Joint Venture will recomplete one of the wells drilled into the field and
establish test production from that well. Alternatively, a further well may be
drilled into the Baul Oil Field.

Closer to home and during the summer months the Company plans to participate in
its first North Sea well. The Operator, Wintershall, will drill an appraisal
well into Monterey Gas Field. The discovery well drilled by ARCO intersected a
185 foot gas column and the field is estimated to contain a 165 BCF of
recoverable gas. Black Rock has a 15% equity share in this venture. If
successful, it is planned to sub-sea-complete and the gas will piped to the
nearby Markham Gas Field and from there to the Netherlands.

These projects have the potential to transform Black Rock. <<

That is excellent news about Baul, as this is another producing field. If the existing, shut-in well can be re-opened and production begun without resorting to drilling a further well, then that will represent a low-cost access to a further significant production increase.

Monterey also seems to be very exciting; at US$4.00 per thousand cubic feet of gas, BLR's share in the field would be worth $99 million/56 million in total. Again, that kind of amount of turnover spread out over a number of years will make a huge difference to BLR's SP.

The statements (particularly a brief RNS from AFX) do imply that BLR will be concentrating on production rather than exploration in the near term. There is no mention of Alhucema in the interims. I agree with your conclusion, Alex, and would actually welcome this in the case of Black Rock as they deperately need to go cashflow positive and stop diluting themselves by constantly issuing new shares. I've said before that I see this one coming up a winner even if they are forced to increase the number of shares in issue to one billion, but I'm sure we'd all be a lot happier if they can avoid that.

So thanks, Alex, for pointing that out, and good luck if you're thinking of getting on board.

The news coming from this company just seems to get better and better at present. I don't want to sound like I'm getting too carried away, but currently my biggest worry about Black Rock shares is that I haven't bought enough of them!

i bought in y/day at the expense of my bgf shares[formerly part of my long term hold] and was just wondering if this was a good move. as usual my timing is impeccable [sold bgf at a small loss only to find that they have gone up and with the big spread on blr my money is further down] but hey thats life. if only i could get my crystal ball to work....
Alex
ps. was top heavy in chp and halved my holding, got my timing right[just] and now debating whether to go back into chp at a lower sp or increase in blr. hmm decisions decisions
pps. with hindsight i should have kept bgf and sold chp y/day . doh!
i will learn the hard way

I know what you mean - I cashed in a load of SBE on Monday and bought some BLVN on the assumption that it's undervalued, only to find that nobody seems to agree with me (yet!). Still, I was able to get a good chunk of BLR recently as well, plus my long-held NOP is doing the biz nicely. But it's BLR I'd pick as having the most potential at this point in time. IMO/DYOR of course.

Glad you're on board this one though - am expecting a few others to join us in the course of time!! Bruce Rowan (of Starvest) reputedly doesn't muck around and if he believes in a stock then I certainly consider it worthy of my attention.

st, I met Dr John Cubitt the Technical Director at Master Investor 2006 and was highly impressed. This share is now on my watch list. As soon as I have free cash I'm buying in. What impressed me most was the drive for production to fund further opportunities already under licence. There is some very sweet light crude in their holdings and they will be going after that in the near future. Steaming plant on track for May 06. The only downside would be the number of shares in issue. The future looks bright, well done for getting in early.

Nice one, Silvermede - thanks.

You are right about the number of shares in issue being a potential drag, particularly as they will have to issue a few more to fund them through to decent cashflow, HOWEVER at the current SP, which appears to me to be very much undervalued, and given the co's excellent prospects, I'm convinced you can still come out a winner on this even if the number of shares in issue goes to one billion, as I have argued in previous posts.