oilbarrel.com 20/07/2004

Paladin Makes It Three-Out-Of-Three In Tunisia With Dalia-1 Oil Strike
Think of Paladin and you tend to think low-cost satellite tie-ins in the North Sea. But in recent years the company has also quietly built up a position in Tunisia where new discoveries can be hooked up and put into production in a matter of weeks.

The companys latest success in the North Africa country came last week when it announced the test results from the Eni-operated Dalia-1 exploration well in the Adam Concession, southern Tunisia. The partners in the project, should Tunisian state oil firm Etap decide to participate, include Paladin (7 per cent), Etap (30 per cent), Eni (operator, 35 per cent) and Pioneer Natural Resources (28 per cent).

The well, the partners third successive discovery in the country, flowed at 3,600 barrels of per day (bpd) of 44-degree API oil during testing. Dalia-1 encountered several oil and gas bearing zones throughout the Acacus A and Tannezuft sandstones at a depth of 3,400 metres.

The well has now been completed and suspended as a producer pending approval of the field development plan and hook up to existing processing and export facilities some 13 km away at Enis Oued Zar oilfield. The Dalia deposit could be onstream within a matter of weeks, Paladin said in a statement.

Chief executive Roy Franklin also pointed out that the partners are in ongoing negotiations to allow commercial gas production to start flowing from the concession later this year.

The previous exploration well on the concession, Hawa-1, which was discovered at the end of 2003 and in production three months later in March 2004, produced significant quantities of gas during testing. The well, which is now pumping some 5,000 bpd, flowed 14.3 million cubic of gas per day plus 1,000 bpd of condensates during testing in addition to the 6,200 bpd of oil.

The partners first well on the concession, Adam-1, was discovered in September 2002 and is today pumping some 4,000 bpd.

The latest exploration success in Tunisia follows on from Paladins first operated exploration well in the UK sector of the North Sea, which last month came in as an oil discovery. Well 22/23a-7 on the Brechin prospect, some 3.5 km to the east of Paladins Arkwright field, encountered 110 ft of oil-bearing sands in the Palaeocene Forties formation. The well was suspended as a potential future producer and the British oil firm hopes to fast-track its development and tie the new oil pool into the Arkwright infrastructure. Franklin said last month that the incremental production stream through the companys existing facilities would result in high value barrels.

Big Al

Okay, we will see what the morrow brings.

I see oil has dropped a few cents, enough to make mm happy again probably.

I want to part with this punt, but I want a decent profit first.

Speak later.

sw - just took advantage of something I saw on L2. Will look to close early one way or the other.

;-)

No worries.

Investors Chronicle says Sell Paladin!

The company's strengths are beyond dispute. It's the valuation that we have more trouble with.


BEAR POINTS
Rating hard to justify
Acquisition opportunities are thin on the ground
Difficult to find sensibly-priced oil
High taxation

BULL POINTS
Profits sensitive to high oil price
Management's track record

sw - covered for +2.5

Butted out -1.5.

Another opportunity will come my way.

apple

If IC says sell, it's usually a raging buy! ;-)

sw - you did better than me! ;-)

Yes but it should have been better.

Oh well better luck next time and all that.

Apparently, I'll be on one of their wells shortly. Hmm.

Big Al

I was considering it but now I think that I'll keep watching it for a while.

Bit of ISD afterwards????

LOL

sw - I've done some work for them already in the UK sector. I was impressed and have worked with some of their new people before with other small outfits. Very incestuous I know, but that's the way these things are.

I'm not brilliant at fundamentals, but they've picked up some decent stuff to redevelop IMO and have ambitions to pick up more. Tunisia looks very good too.

apple - always good to wait and watch. It's never to late to jump on a good one! ;-))

Good luck there.

I am in total agreement with you.

Best

Nexen the Canadian Oil Company, are interested in buying assets, with a similar portfolio to Paladin.

I have not seen this repeated but it was a news story in the Times or Telegraph on Sunday.

I will pull it out and report in on this thread.

Here it is. I am not reproducing all as it goes on a bit.

Sunday Times Business Suppliment page 3.

Canadian oil giant eyes North Sea minnows.

Nexen, the 2.5 billion Canadian oil, gas and chemical company has appointed Bank of Ameriica to investigate opportunities for the business to expand into the British North Sea, writes Lucinda Kenneny.
The company which employs almost 3000 staff in Western Canada and the Gulf of meico, Yemen, Australia and Nigeria, is keen to join it's peers including Petro Canada in opening a British Operation.
(Edited here)
Rumors have already pinpointed Venture Produstion and Paladin Resources as potential targets.
(More edits)

If I get a chance later I will reproduce a bit more on this item here, but it is very interesting none the less.

For you guys : press mention which will appear in tomorrow's Daily Mail Newspaper.

Market report: Tuesday close
Mickey Clark, Evening Standard
10 August 2004


Paladin Resources, steady on 126p, traded near their highs following speculation that either could be taken out by Canadian energy company Nexen.


It has appointed Bank of America to investigate opportunities in the North Sea after inviting bankers to Canada last month and is thought to have a war chest of 400m.


Nexen did talk to Venture earlier this summer, but may now look to snap up individual fields in the North Sea instead.


Meanwhile, Caledonia Investments ( up 8p at 1016p) has sold 4.5m shares (1.39%) of Paladin reducing its stake to 30.4m (9.41%) and retains an interest in a further 33m (10.2%).

http://www.thisismoney.com/20040810/nm81256.html

Sue Helen

Thank you as always for your research.

x

http://www.paladinresources.plc.uk/uploads/50031.pdf

Record results:
- Cash flow from operations increased 20 per cent to 171.9 million (2003: 143.1 million)
- Pre-tax profit increased 29 per cent to 109.7 million (2003: 84.8 million)
- Profit after tax increased 26 per cent to 35.8 million (2003: 28.4 million)
- Earnings per share increased 24 per cent to 11.06 pence (2003: 8.92 pence)
- Proposed final dividend of 1.14 pence per share to give a total for the year of 1.7 pence per share
(2003: 1.575 pence per share), an increase of 8 per cent