EnCore Oil PLC

Encore Oil (EO.), a Times report today suggests Centrica are interest in bidding 500m for the Breagh gas field. Encore has a 15% stake (which would be valued at over 24p per share at a 500m bid).
cyril

Seems to have excited the market. up 23%
cyril

;-)))

Added 3 days ago. She's trying to break up. 20p anyone?

Make that 2 days ago. Doh!

This was definitely the one to be on IMO. ;-)))

HOIL hasn't been too shabby either!

.............. but definitely not EME. ;-))

i think its NAV was estimatedend of last year at around 25p but its hard to estimate it as encore want to prove up assets.......but oil price is going up up up.

i agree with you al on both issues.....good medium hold this one

i am out of this one at the mo, but for a micro mini it has it's good points, not least that it operates in uk waters

they reckon breagh is about to be sold of for at least 500 million and likely to be more than this.....mmmm

One of my main fund picks on stockopedia

Press Release




For immediate release: 25 June 2009




EnCore Oil plc ('EnCore' or 'the Company')




Activity Update




EnCore Oil plc is pleased to announce an update on its activities.




OFFSHORE ACTIVITIES




Breagh: Following the successful testing of the Breagh horizontal well in January 2009, located in block 42/13a in the UK Southern North Sea, the company confirms that along with its partners, it is now in exclusive negotiations with a third party with regards to the sale of an aggregate 70 per cent equity interest in the Breagh gas discovery. EnCore intends to sell the whole of its 15 per cent equity in this and the adjacent licences. A sale and purchase agreement is expected to be signed in the coming weeks and a further announcement will be made at that time.




Cladhan: (formerly known as Bowstring East) Plans are underway for an appraisal well to be drilled on the Cladhan light oil discovery located in block 210/29a in the UK Northern North Sea. Timing of the well is still to be finalised, but it is likely that this will be Q4 2009 or Q2 2010. EnCore holds a 16.6 per cent. interest in the discovery and the licence operator is Sterling Resources Ltd. The initial well, drilled in November 2008, confirmed the presence of a stratigraphically trapped 110 ft light oil column with no apparent oil-water contact.




Ceres (formerly known as Barbarossa): Located in the UK Southern North Sea block 47/9c, Ceres is expected to begin first production in Q4 of this year. EnCore has a 10 per cent. interest in Ceres subject to a 5 per cent. buy back right by a previous owner. The well is being developed as a subsea tieback jointly with the nearby Eris discovery.




Catcher (EnCore 15 per cent.): In May, the Company assumed operatorship of blocks 28/9 and 28/10c following licence operator Oilexco being placed into administration. The Company is now working with partners, Premier Oil, Nautical Petroleum and Wintershall, to finalise a plan for a well on the Catcher prospect which is likely to be drilled in 2010.




Cobra (EnCore 25 per cent. Operator): Following the drilling of the Cobra appraisal well (48/2c-5) in 2008 the Group has undertaken a number of subsurface geotechnical studies and is currently carrying out a fracture stimulation study with a view to redrilling the 48/2c-5 well as a horizontal well and completing it with fracture stimulation.




Bennett (EnCore 70 per cent.): In 2008, 525 km of 2D seismic data was acquired and 150 square km of 3D data was reprocessed to better image the Bennett prospect, located in block 43/15a. The new data has now been interpreted and the Company is seeking an additional farm-in partner with a view to drilling a well on the Bennett prospect possibly in 2010.




Ireland: Following the acquisition and interpretation of new seismic data in 2008, Island Oil and Gas (operator) has commenced a scoping reservoir engineering study to evaluate injection and withdrawal rates for conversion of the Old Head gas field (EnCore 15 per cent.) to a gas storage facility early in the future production life of the field. Subject to the results of the engineering and facilities study, Island will also investigate the potential conversion of the Schull gas field (EnCore 12.5 per cent.) to a gas storage facility.




25th Offshore Licencing Round: EnCore, together with a number of co-venturers, was awarded four licences in the UK 25th Round. Consistent with our capital management strategy, we did not commit to significant work programmes on any of the licences awarded. Additionally the Company holds an option (but not an obligation) to participate at up to 30 per cent. equity on a ground floor basis in a firm well programme on a licence awarded to a another party.










ONSHORE ACTIVITIES




EnCore welcomes the recent decision by the Court of Appeal in the Bocardo vs Star case, relating to claims for sub surface trespass. Subject to any future appeal decision in favour of Bocardo, the result is regarded as a positive clarification for our onshore licence portfolio.




Markwells Wood and Havant: The Operator, Northern Petroleum has advised that the access track and site build for the well at Markwells Wood (PEDL126, EnCore 10 per cent) began in March 2009 and it is expected that the well will be drilled in Q4 2009 or Q1 2010 depending upon rig availability, and possibly in conjunction with a well on the Havant Prospect.




Kirkleatham (EnCore 20 per cent.): Progress has been made at the Kirkleatham gas discovery in licence PEDL068 operated by Egdon Resources, with the outline agreement in January 2009 of terms for gas sales for power generation on the Wilton site. A planning application has been submitted and Egdon is targeting first gas sales by the end of 2009.




Biscathorpe: 3D Seismic reprocessing work has now been completed on our recently awarded Biscathorpe licence (PEDL 253, EnCore 60 per cent. and Operator) and the partnership will be seeking farm-in partners with a view to drilling a well to appraise the Biscathorpe structure in 2010 or 2011. The structure, located updip of the Keddington and Saltfleetby fields, was originally drilled by BP in 1987 and is interpreted to have encountered thin hydrocarbon bearing sands. Biscathorpe represents one of the larger remaining unappraised onshore structures, with significant stratigraphic upside potential.




PEDL 089 and 1153: EnCore and Northern Petroleum (Operator) have both agreed to reassign all their respective interests in onshore licences PEDL 089 (EnCore 20 per cent.) and P1153 (EnCore 20 per cent.) to Wessex Exploration, in return for Wessex settling their outstanding cash calls. Following additional seismic studies which were performed on the licences, and under the relevant terms of the farm-in agreements with Wessex, both EnCore and Northern concluded that we did not wish to progress any further activity on this licence.







GAS STORAGE




Gas Storage (EnCore 100 per cent.): On 28 January 2009, EnCore announced that Star Energy (a wholly owned subsidiary of Petronas) no longer wished to proceed with the Front End Engineering and Design phase of the Esmond gas storage project, a requirement of Star Energy's farm in agreement with EnCore. As a result, Star's 50 per cent. ownership of the Esmond and Gordon licences has now reverted back to EnCore. Esmond and Gordon are located on UK Southern North Sea blocks 43/13a, 43/15a & 43/20a.




The Company is continuing with work on gas storage development options and will be seeking potential new partners or new owners to help move the project forward.



Commenting on recent activity and the current market, Alan Booth, EnCore's Chief Executive Officer, said:




'I thought it might be useful to reflect not only our current status and our future plans, but also to consider whether our original strategy as a company was the right one or whether we could, or should, have done things differently.




The last nine months of market and credit turbulence have demonstrated the market's strong desire to re-price risk. Oil and gas exploration and appraisal is by its very nature a risky and capital intensive business, and the market has now decided that these risks are higher than it either was led to, or wanted to, believe and share prices have moved accordingly. As a company we took a conscious decision not to over-leverage or over-commit ourselves by taking readily available debt and/or quasi debt in an overheated market. Whilst we received some criticism at the time, we believe that this was the right decision. Bidding on work programmes on new licences (which are, of course, financial commitments) has also been heavily tempered by both lack of further equity capital and a very tight market for attracting farm-in partners. As the oil price fell from $140 to $40 the demand, both from potential farminees and equity investors, for 'near term drilling opportunities' with a rig contract in place vanished almost overnight. Indeed the main question became 'do you have an ability to defer your activity and reduce capital spend?'. As can be seen from the lack of drilling activity in 2009, we feel we were reasonably well placed to do that. We are pleased that we were not tied into long term contracts for rigs, or trying to develop modest fields in $100+ cost environments whilst facing $40 per barrel revenue streams. Our relatively conservative strategy has, I believe, helped us weather the storm better than some. However if oil was still currently trading at $140, I'm sure we would have received some criticism for being 'risk averse'.




Our strategy is to find and appraise oil and gas fields to the natural point in their life cycle that give us the best return for the amount of capital invested. Many of our projects are now at that point in their life cycle, although some have arrived at that point sooner than we might have hoped because of the equity and credit crunch. We are now looking to sell some of these assets. The principal asset of course is Breagh, which is at an advanced stage in the sale process. We are also seeking to create tangible value from our Irish discoveries, now that the ownership of Kinsale has been settled. Our onshore portfolio has never attracted the market's attention, mainly due to perceived relative immateriality, and we are currently considering how we might best achieve recognition of this value for our shareholders. It contains a relatively balanced portfolio of pending production from Kirkleatham and near term low risk appraisal drilling as well as a high potential exploration target.




Of course gas storage has featured heavily in our minds over the past year. Now we own these assets 100%, we feel that we are better placed to seek to achieve value for them, although the market for such assets is still flat. This is mainly because of the level of capital investment required and a relatively depressed gas market. We are currently completing the revised development plan and associated economic model to account for the partially repressurised lower reservoir. Whilst recent events would strongly suggest that current UK storage appears to be as much dedicated to fulfilling European gas shortages as the UK's, it would seem there should be a political imperative to encourage the development of more gas storage with a more strategic element, although it appears that the market is being left to sort this out. Whilst there is a widespread recognition of these facts, the market interest for our asset is still uncertain. However we will keep our shareholders updated on any significant developments.




As significant shareholders, the Directors are aligned on creating value, and not just creating continued employment for ourselves. We will therefore continue to strive to create the maximum value for our shareholders'.

cyril

One of the few not up their eyeballs in debt with quite a few assets. Still holding these.

more than a few assets al......yes i think this will be a good earner by holding....good luck

i still follow this stock as i like it for a number of good reasons ...... however, it is of some moderate concern that it just does not and has not performed

True, and probably the reason for the update today .............. generate interest?

I'm up about 50% on it so happy to hold. I had very good knowledge of Breagh so was exceedingly happy to buy when it fell off a cliff with all the others. Small operators, reliant on bank funding, have been hit hard by the crunch, but I never included EO. in that group.

Houston, you're looking good. ;-0

RNS Number : 1123W
EnCore Oil PLC
22 July 2009







Press Release


For immediate release: 22 July 2009


EnCore Oil plc ('EnCore' or 'the Company')


Sale of EnCore SNS Ltd (Breagh Gas Discovery)

EnCore Oil plc (LSE: EO.) announces that the Company has signed Sale and Purchase Agreements with RWE Dea UK SNS Limited ('RWE Dea') for the sale of its 15 per cent. interest in the Breagh gas discovery on Block 42/13 and surrounding acreage in the UK Southern North Sea. RWE Dea will pay total cash consideration to EnCore of US$68.8 million, with the deal expected to complete in approximately 4 to 6 weeks. There is not expected to be any tax payable by EnCore on the sale. All Breagh co-venturers have sold their interests to the same buyer, other than Sterling Resources which has elected to retain a 30 per cent. non-operated interest from its original 45 per cent. share. EnCore and its co-venturers were advised on the transaction by Standard Chartered.

On completion of the deal, and receipt of the sale proceeds, approximately 20 per cent. of the consideration (US$13 million to EnCore) will be placed in an interest bearing escrow account for 12 months as security against any potential warranty or indemnity claims by the purchaser.

The Board will meet shortly to consider a full range of options for the application of the sale proceeds in line with its previously stated strategy of returning value to shareholders. The options to be considered will include seeking shareholder approval for a share buyback and/or a capital restructuring scheme and also the potential for opportunistic investment in strategic assets.

Commenting on the sale, Alan Booth, EnCore's Chief Executive Officer, said:

'It is close to three years since EnCore acquired its interest in Block 42/13, and the Company, together with its partners, has drilled three wells to appraise the 1997 discovery in a technically complex structure.

'We are very pleased to have proved up a significant gas discovery, and in line with our strategy we have now disposed of Breagh at a time in its lifecycle before it requires further significant capital injections, as it progresses to its development phase. We are pleased that in RWE Dea, the Breagh discovery will now be taken forward by a proven operator with the capital and technical resources to fully exploit the field.

'EnCore will continue to rationalise its portfolio of assets and seek to create value for our shareholders, particularly through those parts of the portfolio we feel are not fully recognised. We do not expect to commit to further exploration drilling activity in the near term other than on Catcher and Cladhan which we expect to be drilled in 2010. In the meantime we will seek to progress our gas storage, Irish and onshore portfolios, whilst maintaining capital flexibility.'




For further information, please contact:




EnCore Oil plc
www.encoreoil.co.uk

Alan Booth, Chief Executive Officer
+44 (0)20 7224 4546

Eugene Whyms, Chief Financial Officer


Yvonne Fraser, Investor Relations Manager
+44 (0)7957 241 408


Aquila Financial Limited
www.aquila-financial.com

Peter Reilly
+44 (0) 118 979 4100


Hanson Westhouse Limited


Tim Feather
+44 (0) 20 7601 6100

Matthew Johnson


Background to EnCore's interest in Breagh

EnCore acquired its interest in Block 42/13 and the surrounding acreage via the acquisition, in October 2006, of Grove Energy (UK) Limited. Grove Energy (UK) Ltd had, in turn acquired the block in the 22nd UK Licensing Round, and acquired the surrounding acreage (Blocks 42/8, 42/9, 42/12a and 42/14) in the 23rd UK Licensing Round.

For reasons connected with the process of the acquisition of Grove Energy (UK) Limited, EnCore has held a one per cent. interest in block 42/13 in EnCore Petroleum Limited, while the remaining 14 per cent. interest in block 42/13 has remained in EnCore SNS Limited (formerly Grove Energy (UK) Limited) together with the full 15 per cent. of blocks 42/8, 42/9, 42/12a and 42/14. EnCore Petroleum Limited is selling its one per cent. interest, and EnCore Oil plc is selling its entire shareholding in EnCore (SNS) Limited.


Exploration and Appraisal of Breagh

Two wells had previously been drilled on the acreage. The first was drilled by BP in 1968 and was dry, and the second was drilled in 1997 by Mobil. This well, 42/13-2, encountered a 450 ft gas column within the Carboniferous reservoir and when tested, flowed at an uncommercial 3 million standard cubic feet per day (mmscfd).

Since EnCore acquired its interest in Block 42/13, the Company, together with its partners, has drilled three wells to appraise the 1997 discovery.

Well 42/13-3 was completed in November 2007 and tested dry gas at a maximum rate of 17.6 mmscfd through a 56/64 inch choke. The well encountered a possible gas-water contact in line with the original 42/13-2 discovery well giving a gross gas column of 460 feet.

Well 42/13-4 was drilled in October 2008. The well tested two zones at combined controlled rates of up to 10.2 mmscfd. The final rate was held for a period of twelve hours prior to shutting in for pressure build up. The stabilised test was completed on a 32/64 inch choke at a flowing wellhead pressure of circa 1,630 psi.

The final appraisal well drilled on the accumulation was horizontal well 42/13-5z, completed in January 2009. The well tested dry gas at a maximum rate of 26 mmscfd through an 80/64 inch choke at a flowing wellhead pressure of circa 890psi. The well was then shut in for an initial pressure build up survey after which the well was flowed for a further 59 hours at various rates to evaluate reservoir performance.


Peter Williams B.Sc. (Hons.) in Physics and EnCore's Group Technical Manager, who has over 35 years' engineering experience in the oil exploration and production industry, has reviewed and approved the technical information contained in this announcement.

That's about 42m. Not too bad against mkt cap, is it?