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.
____________________________________________________________________



** As with all O+G exploration, there is considerable risk involved, so not for widows or orphans !!
____________________________________________________________________

Oz chart for Elixir (ASX:EXR)

A good post on the Jaguar prospect from Edgein.

Edgein - 23 Feb'06 - 09:29 -


Firstly,

What struck me with ELP was the fact that on a $15m North Sea well they are getting free carried for 32.5%. That's a hell of a free carry by many a standard. They are paying out 7.5% of this well, a mere $1.1m usd. The downside in financial terms isn't that great they have at least $8m usd in the kitty. The upsuide on a 400mmbbls is stratospheric (north sea light has an undeveloped value of $13bbl in the ground)

Jaguar is a better play for me than Leopard or Panther, some in the broker note sugest that Leopard is a bit safer. Most of tme north sea oil finds are in the Brent, Piper or Forties sandstone layers (all of the notable ones have Nelson, Brent, Forties etc). We are well positioned in Jaguar on a north sea oil fairway running from south to slightly north west. Most of the major defined structural closures have been appraised in the NS, but it has been suggested that there are a number of signifncant strat traps still to be encountered. The search for the higher risk strat traps has really only just begun with Buzzard and Oilexco's smaller Brenda field. I got into the appraisal of the Brenda strat trap purely on their seismic shots. They had rund AVO analysis and 4D depth migration and I liked the look of what they had.

PDF Link

If you look at the above PDF you will see that there have been successful wells on 4 sides of Jaguar. Its a strat trap there isn't four way closure, its on an oil migratory pathway (oil fairway) in the NS. Those 2 single wells probably have a fault line (probably not continuous) likely to have been oil structures to have been deemed too small at the time. Brenda one one such, abandoned by connoco, and turned OIL from a 30m market cap to ober 200m (luckily I was in there early too). The chances of oil as a result of having 2 large fields to the west and south and 2 positive wells to the north and east is good. This is still a high risk expo well, but the norwegians like the seismic enough to want to pay 92.5% ($14m usd) to gain 60%. A very good start. I'll get on to the seismic in the next post.

Regards,
Ed.

And a second good post by Edgein:

Edgein - 23 Feb'06 - 09:59 -


Now that you have the ambrian rearch report at hand:

Ambrian Report

The first thing to notice is the seismic crossection of Jaguar with clear directional faulting. It looks like the Brent layer has been pushed one on top of the other, in effect giving two shots or double the thickness of Brent sandstone. We don't have a scale but it must be of sigificant thickness to have been given a potential of up to 450mmbbls. There are clearly multiple horizons to be targeted in the Brent layers here.

If you look at the simplified seismic model (and remember the Norwegian's got the full seismic data not just these snap shots) you see the over lying kimmeridge oil shale present in all of the surround wells, overlying the upper jurassic and brent sandstone layers. The kimmeridge is clearly the source rock in the other wells, its has been faulted into a higher position in this well. All of the other wells in the area have the same overlying shale and the Brent sandstone oil reservoir. I'm hopeful of the potential of the Brent layer in this well, with the Upper Jurassic as an unknown.

There was a doubt over the porosity in the Brend and upper Jurassic layers, look at the snap shot of the acoustic impedance analysis. The red areas will be those of highest porosity. It is clear that there are areas of high porosity in that small snap shot, interesected by non-porous (shale and siltstone) layers. From what I've seen there is a good posibility of multiple sandstone layers divided by oil shale.

While this is a high risk expo well, there is nothing certain especially with strat traped oil, they've limited their risk by:

Advanced seismic, typical of high cost north sea drilling. Oil on four sides of this strat trap (separated off by faulting). A clearly identified Shale and sandstone layer corresponding with the local oil wells. A large strat trap lying on one of the most oil prolific fairways of the north sea, that have all produced from the same sanstone layer (Brent). The buzzard field not much more than a stones throw away (clearly good exploration potential in the area). Norwegian's that are so impressed by the full data that they want in and will pay 92.5% of the costs of this well.

Not for widows nor orphans, but from what I've seen initially I'm happy to be here with a decent amount of my cash. With a tiny cap and only small financial exposure to this well ELP looks like an attractive risk reward scenario. Downside $1.1m approximately down the loo, upside a significant oil pay in the brent sandstone. You pays your money and you takes your chances. All imo, DYOR etc etc.

Regards,
Ed.

Two to three more weeks to go before news on the Jaguar drill, which is a potential company maker for ELP.

Info on the Wildcat Jaguar Drill :

Link 1 (Jaguar Drill Commences)

Elixir/Jaguar Info Link 2

Elixir/Jaguar Info Link 3

The price has recently risen in Oz (ASX:EXR) and this is with no news, normally a bullish sign when this happens, and now interest has picked up on AIM too, so although high risk, good news might be coming.

The upside is massive if Jaguar strikes a good oil find, just a week or two to go now to find out.

The link to the Oz price is below :

ASX EXR Price

This is the Oz ASX chart for Elixir.

Certainly the forgotten big Jaguar drill is being remembered now.

Tomorrow on Oz will be most interesting, if it spikes up in Oz, things will get much hotter on AIM.

Solid day, now we wait and see what happens on the ASX over night :) Hoping for another solid rise on there too !

Strong shake at the end, but the on line limits give it away, they are short of stock.


Buy just 750 @ 41.4p
Sell 100,000 @ 39.65p

PP

I do enjoy reading your posts, very informative. The reasearch you do is excellent. You are obviously an experenced investor. This one is a bit too blue sky for me, having said that I'm up to my neck in GMC, but no doubt it'll be my loss. Good luck with your investments.

MS

mickeyskint, just an interested investor who likes to share any research or info with others, the more we share, the more we all know.

ELP is a high risk play, so its not going to be for everyone.

GMC, a good play, the sector is going to be hot in 2006 I think, and why I am building a position in BIT (they go IG live in Q1, a big change of direction, but big potential for them too as such a small market cap now)

The Oz price of EXR is rising again, up over 7% in initial trading.

Checking around, and with those with highest impact to Jaguar Drill news, there was a trend yesterday, a strong rise up.

This was seen in both Elixirs' listings ASX:EXR, AIM:ELP and also in Rocksource (www.rocksource.com)

Rocksource use cutting edge technology and methods to derisk frontier drilling.

They were farmed in by DNO for 10% rights to Jaguar.

Yesterday their price went up 12% in Norway on no news.

Read into that whatever you wish to, but for those who want to see it what way, then rises in Norway, Australia and UK
and all on the same day, points to some positive indications from ongoing drilling possibly.


Their share price is in the chart below, latest price and weekly chart (Oslo ticker RGT)

Good start to the day today again !!

The rig drilling the Jaguar prospect for Elixir is the Bredford Dolphin, for those with an aversion to taking a look, in the link below is a photo and details on it. 93 living quarters on it, its not a small rig, as you can see by it being able to do 4000MT.

http://www.dolphin-doc.no/index.asp?tid=8020&sid=8064&title=Bredford+Dolphin

Solid and stable, ready for the next two weeks up to drill results.

High risk, but with over 10 bagger potential on a good result, high risk players will be moving in.

PP
Do you seriously think the sp could increase to 4 in the next two weeks?

Ted1, the drill is potentially a several hundred million barrel find. North Sea light is worth plenty of money, just in the ground (I think around 13$). If ELP have around 200mmbo after this drill, their market cap is then 200 million x 13 from just oil in the ground, if they proceed to pull it out with other drills, then their market cap goes up with it.

Its very high risk, but the upside is massive too. Not for non risk takers, as a high chance the well will be dry and not flow commercially.

Hmmmm......
Still thinking about it..
Many thanks

Ted1, just be sure you understand the risk.

If its dry its not the end of the world though, ELP have cash in the bank and also lots more drills planned and also licenses to explore. If its dry I would expect the price to go down to around 25p, before recovering again later in the year.

So its high risk stuff, and obviously, the higher the risk the higher the potential gain.

I hear what your saying but 4 quid or more in 2 weeks jesus....
when do you expect to hear if the well has oil or not.