Elixir Petroleum

AIM EPIC : ELP

(ASX EPIC : EXR)

Web Site : http://www.elixirpetroleum.com/

Elixir Petroleum Limited is an Australian company with a focused strategy of North Sea Exploration. The company is listed on the Australian Stock Exchange (ASX) and on the London AIM market
Elixir believes that the United Kingdom Continental Shelf region of the North Sea (UKCS) remains highly prospective for oil and gas exploration. The area also benefits from low political risk, relatively attractive fiscal conditions and established oil and gas infrastructure. Changes to the licensing regime in 2003 provided improved access for junior explorers. They created the opportunity for Elixir to rapidly build a portfolio with exposure to meaningful and prospective targets in the region.
The company listed in Australia in July 2004 with interests in one UK Licence covering Block 21/6b. Interests in five further UK licences were added in September 2004 as a result of the 22nd UK Licensing Round. One further licence was acquired in December 2004. Elixir has interests in 6 licences being awarded in the 23rd UK Licensing Round. This addition takes Elixir's portfolio to interests in 13 UK exploration licences covering 18 North Sea blocks.
Elixirs primary objective is to establish a successful North Sea focused oil and gas exploration and production business. This will be achieved through advancing exploration of prospects on its existing Licences, attracting farm-in partners for drilling wells on these prospects, progressing any discoveries to commercial production and aggressively pursuing opportunities to acquire further interests in prospective North Sea acreage.
The company is targeting participation in a minimum of five exploration wells over the two years from May 2005. With the best five prospects having an average success case reserves potential greater than 20 million barrels of oil net to Elixir, a discovery would have a material benefit to the company.
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** As with all O+G exploration, there is considerable risk involved, so not for widows or orphans !!
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Oz chart for Elixir (ASX:EXR)

only a 42% drop today, a drop in the ocean, hope TAG does a bit better!!! please!

Kivver, this was and still is high risk. Its not a one horse show either. An overreaction on a bad day in the markets to not very good news.

High risk remains.

Down another 15% today.

I must get my spread bet account opened with CRC

With an acreage portfolio like this, it's plain to see that ELP ought to be a winner in the medium term. Given the current weakness, there ought to be plenty of upside potential; as with all such stocks, it's a case of "when will they actually find hydrocarbons in commercial quantities?" Plus, of course, how much cash will they have to burn to achieve this? I shall continue to observe closely . . .

Not very good reporting by the Independent (like where was the no oil and capping ?) but anyway, Zac Philips retains the buy rating


The worst performer of the day was the oil exploration and production minnow Elixir Energy, as the company announced that its Jaguar well in the North Sea holds no recoverable reserves and will be capped. Its shares tumbled on the news, losing 19.75p to close at 26.25p, a fall of 42.9 per cent. The house broker Ambrian said there is still a lot for the company to go for, as the Jaguar well was just one of 25 targets the company has a license for, as the analyst Zac Philips maintained his buy recommendation on its shares

Sleepless nights?

Elixir Petroleum abandons dry Jaguar well
AFX


LONDON (AFX) - Elixir Petroleum Ltd said it is to plug and abandon the Jaguar well in the North Sea after the hole turned out to be dry.

In a drilling statement, Elixir said 'oil shows' were encountered while drilling the well which was spudded up to the target depth of 13,050 feet.

'However, obtaining representative fluid samples proved difficult

due to low permeability. Consequently, the well is now being plugged and abandoned,' it said.

Elixir owns a 40 pct stake on the block, while operator DNO ASA holds 50 pct. The remaining 10 pct is owned by Rocksource ASA.

Bottom drawer and wait for next drill in Q4

PP WHATS YOUR VIEW ON THESE NOW, DO YOU THINK THEYVE BOTTOMED OUT

Looks like it, a long summer before a sniff of possible Q4 drilling.

Interims out on ELP :

http://www.asx.com.au//asxpdf/20060316/pdf/3vx0r3t4pmtq4.pdf

Activities report and cash flow statement out today, as below link :

http://www.asx.com.au/asxpdf/20060428/pdf/3whydq4mhf5yd.pdf

i was pretty noisy about this company and its management on "another site" and see no reason to change my opinion ...... the hype surrounding the drilling in Jaguar was ridiculous, and that was meant to be the jewel in this company's crown ...... why would you still want to buy?

Cynic, they do have a fairly large portfolio of assets in the North Sea. I agree that there was a lot of hype which drove the SP up to ridiculous levels (as often happens with oils), but the current SP probably represents a cautious buying opportunity as the potential upside if they do make a discovery is considerable.

I quote the interims released in March:

>> Elixir has established a highly prospective exploration portfolio in the UK North Sea comprising of interests in 14 licences. The Company has sufficient cash funds to continue an active drilling program over the next 12-15 months. <<

From that portfolio, I would expect them to deliver something. If you need more convincing, that's fine with me, as I am still inclined to be wary of this one, but I don't think it should be rejected out of hand. All IMO, DYOR as usual.

my dislike was and is primarily on the basis that this is a blue sky company with no proven assets, yet the directors would appear to look after themselves very well indeed when the company patently cannot afford such extravagance

Understood - actually the cynic in me has often thought that the best way to get rich is to found an oil exploration company. You're not even obliged to find anything; you just have to make it look as if you're trying to. And you can pay yourself 50,000 a year and ride around in a Jaguar (oh golly, no pun intended!). I have no idea whether ELP's management are any good and am not attempting to insinuate that they are doin this, but all the same, it's a good scam.

See, for example, anything involving one Vasile Frank Timis.

ah .... my other favourite scumbag! ...... why on earth anyone would back that man beggars belief .... as for sp of RPT, looks to me to be supported like an indian rope trick

LOL - that one was a blinder!!! Glad I didn't touch it - and I still won't!

Link Here

02.05.2006

Elixir Petroleum Sets Out Its Strategy Following The Disappointment Of Its North Sea Jaguar Well

We wrote in a report on our most recent oilbarrel.com conference in March what a brave man Russell Langusch, managing director of Elixir Petroleum, was. He had stood up before a packed room of institutional, retail investors and industry professionals soon after his third dry hole in a row, and following a sharp drop in the value of his companys shares which are listed on Londons AIM.

He said he was not suffering from post dry hole depression. Instead he wanted to stress that there was still a lot to go for in the UK North Sea, where the company is focused. Now an operations update from Elixir has fleshed out the companys strategy post the Jaguar dry hole.

Languschs presentation went down well with delegates because he confronted the Jaguar issue head on. Langusch had always acknowledged that Jaguar was a high-risk prospect. Well 211/22b-5 located on the Jaguar prospect in Northern North Sea Block 211/22b was spudded by the semi submersible Bradford Dolphin on January 23, 2006.

The well was designed to test a subtle Upper Jurassic trap to the northeast of Shells North Cormorant oilfield. The underlying Jurassic formation was a secondary objective. This kind of subtle stratigraphic trap has been successfully drilled on the Norwegian side of the border but has largely been overlooked in UK waters. The well was drilled to a total depth of 13,050 ft (3,977 metres).

No indications of commercial hydrocarbons were seen in the primary Upper Jurassic target. However, oil shows were observed over a 55 ft (17 metres) interval within the Middle Jurassic. Obtaining representative fluid samples proved difficult due to the low permeability of the formation. The well was subsequently plugged and abandoned. There had been a pre-drill reserve of 450 million barrels of oil.

There was some consolation for investors in that Elixir had a 40 per cent interest in the Jaguar licence but only contributed 7.5 per cent of the costs following a farm out agreement with Norwegian operator DNO. But the Jaguar well followed on the heels of the Muness and Marquis disasters. Muness, in block 21/4b, was drilled at the backend of 2005 and found only minor gas shows. The Marquis well was drilled in the summer of 2005 and was plugged and abandoned after encountering water-bearing reservoir sands.

So where does the company go now? Elixir has come a long way from a standing start 18 month ago. It holds 14 licences and 17 prospects, including a variety of structural and stratigraphic plays in the Northern Central and Southern sectors of the North Sea. The company is geared up for high impact exploration but also stresses there are some lesser risk prospects in the mix. It is also involved in the latest annual offshore UK round which was announced last March with applications for 24th round licences due for submission by mid-June. More than 1,400 blocks are available in the latest round in the North Sea, Atlantic Margin and East Irish Sea through application for traditional, promote or frontier licences. The company has already commenced work purchasing data and identifying prospective blocks for application with two highly credentialed partners. The licence offers are expected around September 2006.

As for what it has already has, Elixir is adopting a three-pronged approach. First it wants to advance on the high impact front, despite Jaguar. It is actively marketing farming out the North Sea licences which host the Leopard and Panther prospects. Leopard should be the first. This prospect could have a possible 300 million barrels. The company currently holds 80 per cent of this prospect and is seeking farm-in partners to help shoulder the costs and risks of drilling the wildcat. Marketing this prospect could be tough but Langusch reckons it is different enough to be interesting.

He says: We have done more technical work on Leopard. It does have a stratigraphic element to it but its a bit more robust than Jaguar and has a couple more targets on it.

This prospect is unlikely until 2007. The first part of the companys strategy is an intensive marketing campaign along with Alliance partner, Granby Oil & Gas to farm-out interests in the jointly held 22nd Round licences. This has been going on for some months. Some of these prospects are lower risk than Leopard. Several proposals are under consideration and there is hope to drill two or three wells in the rest of 2006.

The third is to identify some production and near production. Although the company has 3.4 million the bank, enough for drilling over the next year, then successful addition of production would complement the higher risk exploration activity and reduce the dependence on capital markets to fund ongoing exploration. Rather than paying a premium for North Sea assets at auction, the company will also be looking at possibilities in Central Europe, North Africa and the Americas.

Good post PP.