http://emerald-energy-een.blogspot.com/


I decided to start this thread due to the lack of interest via the other thread?
Today EEN with its partner GPX released what can only be described as outstanding news, a 3rd appraisal well in a field couple of kms across flowed 3420bo on a small choke, unaided and they still have not found the limits of this field. Reserves will released in the next 3 weeks and could go as high as 100mbo(speculative).
The market has yet to digest this latest news and imo the SP is still in the bargain range?

http://www.emeraldenergy.com
http://www.investegate.co.uk/Article.aspx?id=200812220700095529K
http://www.investegate.co.uk/Article.aspx?id=200901260700092060M
http://www.emeraldenergy.com/documents/20090126EENInvestorPresentation.pdf/
http://www.investegate.co.uk/Article.aspx?id=200902110700131142N
http://www.emeraldenergy.com/documents/EEN2008Results.pdf
http://www.investegate.co.uk/Article.aspx?id=200905060700127309R
http://www.emeraldenergy.com/documents/EENInvestorPrentation/May2009.pdf

cyril

Big Ted;
Correction myself 10,000bopd should be halved so the 35m becomes 17.5m.
cyril

Yes Guys !, this should be heading during the spring up to the 3 mark !

slide 18

Based on US$75/barrel realised oil price and gross daily production ≤25,000 bbls/day

The Block 26 Contractor Group (Gulfsands 50% and Emerald 50%) is entitled to recovery of all SPC approved exploration, development and operating costs

Exploration and operating costs are fully recoverable within acalendar year

Development capital cost recovery is capped at 25% per year (i.e. 100% of capital costs recovered after 4 years)

For example, based on a US$75/barrel realised oil price, the Contractor Group will receive in ~US$44/barrel of revenue per barrel of produced oil while costs are being recovered

After costs have been recovered, Contractor Group revenue is ~$23/barrel of produced oil


http://www.gulfsands.net/i/pdf/20071024_CorpPresentation.pdf

DFGO, what is your estimate of recoverable costs that they can reclaim?
tia
cyril

DFGO, at the figures from your previous post, i see my calcs of 17.5m are quite
close,from the $23/barrel(assuming thats after tax)?
5000*23/2=57,000*300= 17.25m
5000*44/2= 110,000 a day (until costs recovered)
cyril

"Oil explorer Emerald Energy is wanted today after receiving permission from the Syrian authorities to develop the Khurbet East Field in Block 26. Emerald owns a 50% stake in Block 26 through its subsidiary, SNG Overseas.

Work on developing the field will start immediately with a view to establishing early production from the shallow Cretaceous Massive reservoir. The company is aiming to have an Early Production Facility capable of processing 10,000 barrels per day up and running by the end of 2008.

The companys share of the cost of setting up the first phase of development will be met from Emeralds existing cash flow.

The gross life-of-field Proved plus Probable Reserves of oil contained in the Massive Reservoir were estimated to be 65.6m barrels as at 31 December 2007."

http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=1899448

niceonecyril

It is also important to consider the fact that the net estimated 2P reserve of
11.5mmboe attributed to Emerald are HIGHLY VALUABLE PROFIT BARRELS sold by
Emerald without any further goverment deductions such as tax

copied from advfn


New Evolution Broker Note on EEN :

http://www.mediafire.com/?ejljnz0z02i

enjoy !!

As long as the markets treat us favourably, (never know what the general trend is going to be !), a little bit of good spudding news (new well being drilled), coupled with stable 4000 barrels per day in Columbia, there could be a steady upwards trend, up to a (I'm guessing) 2.5 base, with a further probable climb up to the 3 area later in the year, here's hoping, by the way thanks for all the info DFGO, Niceonecyril, cheers !.

Euhhh.. Guys check out MRS... , possibly somethings up... not sure what ?

Oilbarrel 06.02.2008
Gulfsands Petroleum Targets First Production From Syria By Q4 2007

Shares in Gulfsands Petroleum enjoyed a healthy bounce on Tuesday as the company announced it was all systems go in Syria where the authorities appear to have matched the AIM firm in efficiency and speed. It was only last month that Gulfsands completed the second appraisal well on the Khurbet East field in Block 26 in the northeast of the country; this week the Syrian Ministry of Oil & Mineral Resources and state oil company SPC gave their approval to the development of the field.

This is good news for Gulfsands and its 50/50 partner Emerald Energy. It vindicates their decision to enter the Middle East country (Gulfsands signed up in 2003 and was joined by Emerald in 2005), to stick with exploration despite a couple of disappointing wells and to seek further investment opportunities in the country. KHE-1, drilled in the second quarter of 2007, was a multi-zone discovery flowing 35-degree API oil from the Triassic-aged Kurrachine Dolomites, natural gas from the Triassic-aged Butmah reservoir and 24-degree API oil from the shallower Cretaceous-aged Massive Formation. A follow-up well, KHE-2, confirmed the presence of a high quality reservoir in the Massive capable of high production rates, while the recently drilled KHE-3 confirmed that capability, testing at 3,420 bpd of 26-degree API oil from the Massive Formation.

The initial development of the field will target only the Massive reservoir, which is reckoned to hold gross 2P reserves of 66 million barrels of oil and 3P reserves of 143 million barrels of oil. CEO John Dorrier said he was very pleased to confirm this substantial reserves estimate for the field. There is additional potential in the Butmah Formation and the Kurrachine Dolomite reservoirs encountered in the original discovery well of 2007 but these will be appraised in the second half of 2008.

The partners are pursuing the Massive formation before getting to grips with the deeper zones because this will be the easiest, cheapest and fastest way to commercialise the discovery. The Massive formation is well understood in the area and this crude quality can be easily transported in the existing nearby infrastructure. The Massive is also relatively shallow so drilling costs can be kept down and the relatively low gas-to-oil ratio means there is no need for gas handling or transportation. Whats more, the construction of production facilities for the Massive should reduce costs when Gulfsands comes to exploit Khurbet Easts deeper reservoirs.

Gulfsands now plans to fast-track the development by using three horizontal wells and an early production system (EPS). It hopes to get a 10,000-bpd-capacity EPS up and running by the fourth quarter of this year, less than two years after discovery, with a full field development facility in place the following year with a production capacity of 30-40,000 bpd. The benefit of the EPS is that it will provide valuable information about reservoir performance to help design the full field facilities as well as generating cash flows to pay for the full field development. The estimated cost of the EPS, including the three wells, is US$10 million (US$5 million net to Gulfsands). Project economics are helped by location: Khurbet East lies within 12 km of the Souedieh and Rumeilan oilfields and the oil export pipeline runs directly through the field. Whats more, Gulfsands has the right to access the surface facilities and pipelines at an agreed tariff of 75 cents a barrel.

Gulfsands and Emerald are entitled to recover all their costs within four years, with development capital cost recovery coming from a 50 per cent share of the post-royalty oil production (the royalty is a fairly typical 12.5 per cent). Following cost recovery, Gulfsands and Emerald will have 50 per cent of the profit oil share. This means, based on an oil price of US$75 a barrel, the London-listed firms will receive US$44 per barrel of produced oil while costs are being recovered and thereafter around US$23 per barrel of produced oil.

The good news here is that the two companies appear to have plenty of other prospects to target in the vicinity of Khurbet East not to mention those deeper Triassic reservoirs to extract maximum value from any capital investments in processing infrastructure. The company has identified a Khurvet East play fairway, which it intends to chase down through exploration drilling over this year and next year. Given the readiness of the Syrian authorities to work quickly with its Western partners to greenlight new developments and provide access to infrastructure, this could be a start of a beautiful relationship.

Tiddler to watch

Gulf Sands Petroleum rose 10p to 175p after it and Emerald Energy, up 7p at 218p, declared 66 million barrels of proved and probable oil reserves at their jointly owned Syrian field, with production by the end of the year. Seymour Pierce has a 246p target on Gulf Sands, while Evolution raised its Emerald target to 420p.

http://business.timesonline.co.uk/tol/business/markets/article3316058.ece

Gulfsands given go-ahead over Syrian oilfield
By Toby Shelley

Published: February 5 2008 19:25 | Last updated: February 5 2008 19:25

Gulfsands Petroleum expects to push ahead with production in Syria by the end of the year following approval from the Damascus government of development of the countrys Khurbet East oil field.

The go-ahead from the Syrian government on Tuesday helped boost shares in Gulfsands and Emerald Energy, its partner in the development consortium. Gulfsands share price rose 10p to 175p on Tuesday while shares in Emerald closed up 7p at 218p.

An initial production facility will pump about 10,000 barrels a day of crude, half of it attributable to the Aim-listed company. Cash flow from early production will help finance Gulfsands share of full development of the field in 2009 as production builds to 40,000 b/d.

Khurbet East, which is estimated to have proven and probable reserves of 66m barrels, of which 11.3m barrels is attributable to each of Gulfsands and Emerald after royalties, taxes and the Syrian governments share are taken into account.

Further small discoveries have been made in the vicinity and they will be appraised in the second half of the year. Analysts at Seymour Pierce said these were likely to boost the reserves to 80m barrels with further upside possible from nearby prospects.

The cost to Gulfsands and Emerald of the early production system will be a modest $10m (5.1m) as the development will have access to the pipeline infrastructure of the state-owned Syrian Petroleum Company.

Damascus launched a block tender system for foreign oil companies in 2001 as a means of combating the countrys falling output. From a peak of 590,000 b/d in 1996, output fell to about 400,000 b/d in 2006, threatening the country with becoming an oil importer.

In 2003 Gulfsands became one of the first companies to win a share in a concession. In 2005, the year it listed on Aim, Gulfsands bought out its larger partner, Devon, and took over operational responsibility for the block.

Gulfsands current production is running at about 2,500 b/d, generated from US assets. It also has a memorandum of understanding with the Iraqi government to capture and market gas that is currently flared during oil production in part of southern Iraq. Emerald, meanwhile, currently produces about 3,600 b/d in Colombia.

http://www.ft.com/cms/s/0/2a4372c2-d41e-11dc-a8c6-0000779fd2ac.html

http://www.investorschronicle.co.uk/Companies/ByEvent/Regulatory/Inbrief/article/20080206/7e37567c-d4a6-11dc-aed6-0015171400aa/Gulfsands-and-Emerald-get-Syria-goahead.jsp

Gulfsands and Emerald get Syria go-ahead

Created: 6 February 2008 Written by: Martin Li

Gulfsands and Emerald Energy have received approval for the commercial development of the Khurbet East Field in north-east Syria, in which each holds a 50 per cent share.

Gross life-of-field proved and probable reserves have been independently estimated at 66m barrels. First oil is expected in late 2008, at a rate of 10,000 barrels of oil per day (bopd), with full field development expected in 2009, at a rate of 30,000-40,000 bopd.

TIP UPDATE

BUY
Khurbet East reinforces both Gulfsands and Emerald, at 164p and 215p respectively, as buys.

Khurbet East field development begins in Syria

Offshore staff

LONDON -- The Syrian Ministry of Oil and Mineral Resources and the Syrian Petroleum Co. have approved commercial development of the Khurbet East field, according to Emerald Energy Plc.

Field development is intended to commence immediately and establish early production from the shallow Cretaceous Massive reservoir as soon as an early production facility (EPF) can be installed. An EPF capable of processing 10,000 b/d of oil is expected to be operational by the 4Q 2008.

Engineering and construction of the EPF is scheduled to commence this quarter. The first phase of development will consist of the construction and installation of the EPF and the drilling of up to three wells, Emerald says.

Khurbet East discovered in 2Q 2007 with the Khurbet East No.1 well. Two appraisal wells have been drilled and tested since, with Khurbet East No.2 flowing 710 b/d of oil from a 10-m (33-ft) section and Khurbet East No.3 flowing 3,420 b/d of oil from the full section of the Massive reservoir.

Emerald holds a 50% interest in block 26 through its subsidiary SNG Overseas Ltd.

02/06/2008


http://www.pennenergy.com/display_article/319376/9/PRARC/none/DRLCM/1/Khurbet-East-field-development-begins-in-Syria/

copied from advfn


captainfatcat - 7 Feb'08 - 09:58 - 30576 of 30589


Just totting up the costs of the KE discovery so far

%50 Syria Block 26 circa $17M

Initial period minimum expenditure $15M

1st Extension period $10M

Eearly Production Facility $5m

Total $47M round up it up to $50M

Initial Results $1.32 per barrel of P2 which is broadly in line with the figures set out in the November 2005 acquisition for growth presentation.

EEN are turning a $50M investment into a (pick a figure add on lower reservoirs) say $500M asset

Not bad work in less than 3 years and still has some 30+ other targets on the books in block 26 still to explore with the drill bit!

And all the $500mil is profit

DFGO;
Thanks for your posts, most informative. I'm very surprised even in todays market, and cannot believe that we are still at roughly the same M/Cap prior to confirmation of reserves. On the annoucement of Block 26 EEN reached 360p and
now its proven up and oil at all time highs we're still only 218p, beggers belief imo.
cyril

niceonecyril

I,m sure the market will wake up to the fact that Emerald is under valued in due course,and in meantime EEN investers can buy at a very favourable price

Bought some more today, if the Colombia news is half as good as the Syrian then we should see the sp above 250p; really starting to look seriously undervalued now !