www.blackrockoilandgasplc.co.uk
www.vsaresources.com
www.oilbarrel.com
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

Chav, the reason BLR isn't in the Falklands is because it would cost a lot of money that it just doesn't have. DES and FOGL are burning a lot of cash down there and it's going to be a long time before they produce any results. BLR very sensibly decided to go for overlooked projects that were near to production in order to produce near-term cashflow (in contrast to what they had going on in Australia a year or two ago, which was high-risk and produced nothing but dusters).

As for exciting the market, well, I'm afraid that at times both DES and FOGL have been overrated. The high SP's have been the result of a lot of speculation, and the realistion of the companies' vision just isn't there yet.

I would expect BLR to broaden its portfolio again once it starts producing in Colombia and/or the North Sea, as it will then hopefully have the cashflow basis with which to do so.

Re: the possible nature of forthcoming announcements: I'm afraid I can't give my backing to the pessimists all that easily. Greatsuccess, I have to wonder exactly what "good news" you might have been expecting. Arce has been, to a certain extent, a known quantity for a while. We know that there is oil there; we know that a typical well will flow around 30 bopd without stimulation such as steaming. So any announcement such as "Arce 4 has been drilled and is flowing 25-30 bopd" is within the realms of what was to be expected. They were never going to say, "Actually, Arce has surprised us all and is now producing at 15,000 bopd!" Of course, Arce 4 may turn out to be an abject failure, but I think it's unlikely. The greater excitement will come with news of successful steam testing, but thanks to BLR's excellent attention to detail in their presentation, it is now clear that the testing will take a while. It's also good to see the detail of the well-drilling programme for the rest of the field - which hopfeully augurs well for the economic viability of Arce, but we shall have to wait for the testing of wells 2 - 4.

I am not surprised that BLR has made another cash call, as they never have a huge amount of funds in the bank. In view of the SP activity (read: "instability") I think they have simply done the sensible thing and raised some more funds as and when needed, while the SP/placing price is still above 1p.

The news for the rest of the Las Quinchas Block looks good as well - maybe I've been asleep but I had not previously given consideration to the details regarding further prospects and leads on this block, i.e.:

Acacia (50-100mmbo*): heavy oil
prospect
South Lalinda (10 mmbo*):
heavy oil prospect
Rio Viejo/La Tolda (49 mmbo*):
light oil, 18,000 ft target depth
Morroa another deep Cretaceous
play

For my money, it looks like this one is heading in the right direction, but it could take time. It occurs to me also that BLR may have issued shares now at 1.1p out of respect for those who are involved in the placing - the company would become very unpopular if it issued stock at, say 2p on a price spike, only for the share price to drop back to current levels purely on volatility issues, and then there would be no more investors, no more placings, and no more Black Rock.

PS - Rutherford, thanks for updating the header and providing other useful info!

Chav - just a thought if you're keen on the Falklands. You may wish to check out Global Petroleum (GBP), which has about a 14% stake in FOGL, held as shares but has some diversity by virtue of its other portfolio interests. IMO, PDYOR.

Nobody likes dilution. But realistically it was always on the cards that BLR would need more cash to fund current ops... and the steaming delay only made that even more likely. Look on the bright side... if the placing has been fully taken up, then there are still some serious backers out there.

Sticking my neck out, I would guess that the end of next week will have seen little change in the sp. Come successful steaming and future benefits from Monterey, we may then see the sp do the right thing... but thats quite an assumption.

Judging by comments posted elsewhere, Soul, your anticipation of the Doc's return may prove to be spot on!

Ref below is a good Company Perspective

http://www.oil-barrel.com/conference/july/blackrock.pdf

If we get an rns about arce 4 testing results next week it should negate any negative sp movement due to dilution.
The instituions paid 10% higher than the last placing the other month.
The cash is now in place for Monterey and if successful it is the company maker rather than Arce which is the bankroll for future drilling like Bukhara and hopefully developement wells on Monterey. A good time to be in BLR IMHO.

Soultrader,DES didn't have any cash to kick off either but because the potential for huge reward is there they had no problem raising cash from people like me whereas BLR raise and fritter money at a lower rate.Sometimes you have to take the condom off to excite!
Falklands has proven world class source rock,very good tax regime,politically stable and being true Brits will continue to be friendly.I think their SP, if anythink, is undervalued given the possibilty of big finds.

I take the current SP as a cue to top up, and will do so at the next opportunity!

Possible drop on Monday as Tips ---Tom Winnifrith is saying sell now ?
Strange guy as he has been tipping them for over a year and now when something about to happen he is saying sell.
May get some cheap tomorrow although could be an RNS with test results which will move them on up a bit.
Anybodies guess for tomorrow?

Could Tom W now be shorting BLR? I wonder?

One hell of a gamble if he is!

the whole thing stinks doesn't it ?
hopefully, when, not if, we finally start getting good news RNS, it'll all be worth it !

Dont hold these but have been watching for days, and yes something does stink.

it's girm!

Thanks Tom for letting me add at a bargain price ;-)

moving up now.. should settle at placement price, or thereabouts once the MMs have fleeced the tim winnipeg muppets

Chav, good points, but I still think that the timescale involved provides too much opportunity for downside (at the risk of digging myself an even deeper hole, I'd add COP to the list; although it's not in the Falklands it's a good example of what I mean). For my money it's not so much a matter of taking the condom off to excite as of the risk that if you have to wait too long for things to gush then drooping inevitably sets in. (Your choice of metaphor makes me wonder precisely how you spend your spare time, though!).

At current levels, the Falklands exploration co's may be looking more attractive than previously, but given issues of rig availability (DES) and the long tail on seismic ops (FOGL), I wonder if maybe there's stilll some room for manoeuvre. Still, WDIK, PDYOR, etc.

Getting back on-thread, I'm not in the least worried by BLR's current gyrations. Bring on Colombia and Monterey! A word of thanks to DIYDave, post 425 and Rutherford post 426 for some good comments. Dave, you have definitely taken the sensible view in that you have to price in the potential for dilution when considering buying this share.

Black Rock chief executive Ivan Burgess

The company is set to become something of a heavy oil specialist in the South American country. It also holds rights to the Baul oilfield, discovered in 1960 with proven reserves of 1 million barrels and possibly two or three times that number yet to be confirmed. Black Rock plans to revisit one of the old wells and test it during the third quarter. If successful, this would add a second near-term production project to the portfolio.

The Bukhara discovery, made in 2000, is a very interesting feature of Black Rocks Colombia asset base. The discovery well found a 175 ft oil column and the field has the potential to hold up to 75 million barrels of recoverable crude. But unlike Arce and Baul, this project has a higher risk profile: only one well has been drilled into the field and a 2005 test of that well threw up some inconclusive results due to a poor quality cementing downhole. Black Rock hopes to retest Bukhara next year.

The AIM-quoted company has added some diversity to its portfolio: it holds 15 per cent of a potential gas development in the Southern Gas Basin of the UK North Sea. A rig has been contracted to drill an appraisal of the possible 165 billion cubic feet Monterey gas accumulation, which was discovered back in 1989 by Arco. The discovery well suffered formation damage and flowed what was then a lowly 5 million cubic feet of gas per day, although it is believed to have encountered a 300 ft gas column. This well should spud next month and, if it confirms a commercially viable flow rate, Monterey could be brought onstream by January 2008.

To view Black Rock's presentation click here.

Has anyone got any idea as to whether this is good news or not

Keeping an eye on expenditure is something a number of the companies presenting at the conference know all about, particularly those that have yet to score first production. This is something that shouldnt worry Black Rock Oil & Gas too much longer: it is just months from maiden oil flows from its oil projects in the Middle Magdalena Valley of Colombia.

Black Rocks Arce heavy oilfield, with gross reserves of between 2.5 and 8 million barrels, lies in the La Quinchas licence and should start earning in August or September. Black Rock plans to steam test the Arce wells later this year, a process which improves the mobility of the thick viscous crude and can lead to a five or ten fold increase in flow rates.

In his third appearance at an oilbarrel.com conference, chief executive Ivan Burgess explained that without the use of steam these heavy oil wells pump around 20 to 30 barrels per day. However, steam assisted wells on the Chicala field in the adjacent licence produce 150 bpd. Burgess hopes to see similar outcomes at Arce, with a view to taking output there to 3,200 bpd within three years.


taken from www.oilbarrel.com

Marcel, if Black Rock's efforts at Monterey and Arce are successful in the way that Burgess and co are hoping, it ought to be fantastic news (like getting permanently the right side of 2p, for a start). Bukhara is a bit of an unknown quantity at present, but if the other two prospects come good and Bukhara just happens to be added in on top, you could find yourself with a very decent multi-bagger. Oh, and there's also Baul, which at the very least ought to add another well or two in the style of Arce.


A small part of me wants to believe that Bukhara has been unfairly cast in a bad light due to poor experiences in the past (when crude was way cheap and it presumably wasn't worth drilling a second hole to amend for the bodge-job done on the first one). However, the crude in Bukhara is very waxy, apparently and may prove too much for an acid/steam job. Perhaps any industry specialists out there could shed some light.

Am still very happy about the other prospects in the portfolio, too (USA, North Sea, rest of Colombia, etc). Provided the latter half of this year is relatively satisfactory, BLR should mature quite nicely.

IMO, PDYOR etc.