This blog is a journal for my research, findings and Insights. The term “goombah”, comes from Latin “cumbà”, is an older or senior advisor, or quite literally godfather. The term also has gangster connotations, but that is not my intent. I have misspelled it deliberately, adding an “r” to make the sound more my own.
Just noticed on my screens this morning, that Westernzagros in Kurdistan, is now moving out of their cup bottoming formation and breaking through the rim resistance. Let the chart following tell the story:
Also, Petroamerica in Columbia, is also moving and doing almost exactly the same thing, breaking out of their cup bottoming formation. Again, the following chart tells the story:
By the way the orange lines in the chart are the Tirone Levels, an indicator similar to Fibraconi lines. Here is an explanation of them:
Definition of 'Tirone Levels'
A series of three sequentially higher horizontal lines used to identify possible areas of support and resistance for the price of an asset. The position of the center line is plotted by calculating the difference between the highest high and the lowest low for the asset price over a period of time and dividing it by 2. The top and bottom line are drawn 1/3 and 2/3 of the difference, respectively, between the same high and low that are used to calculate the center line.
Outlook
With Balay-1 and Balay-2 continuing to produce on long-term test the Company is anticipating that it will continue to realize production revenues. Additionally, the Company and partners envisage finalizing the development plan for the Balay discovery, with approval for the first phase expected in the fourth quarter of 2011. Sanctioning of the second development phase will depend on the results of Balay-3 which should enable the joint venture to properly assess the size of the Balay oil discovery.
The Company plans to evaluate and appraise the Las Maracas discovery in 2012. This will include placing the discovery well on long-term test and the drilling of several appraisal wells. Subject to the outcome of the appraisal results, the Company and current partner are committed to fast tracking the development of this discovery. The Las Maracas discovery is viewed to be an extremely positive event for the Company.
The Company will continue its strategy of rationalising the portfolio to leverage some of its high working interest positions into more strategic and cost effective holdings. This strategy, which began with the relinquishment of the COR-12 and COR-14 Blocks early in 2011 and has continued with the sale of the VMM-3 block and equity changes in the El Eden block, is expected to enhance the Company's competitive position by allowing it to free up working capital, recover past costs and to enhance the risk/reward balance of its portfolio. The Company is also considering reducing its working interest positions in the LLA10, CPO1 and SSJN5 blocks.
Furthermore, the Company will participate in an extensive exploration program in 2012 with the drilling of seven exploratory wells targeting net mean unrisked prospective resources of 45 million barrels of oil equivalent ("BOE"). All of the prospects to be drilled in 2012 will be covered by 3D seismic, thereby significantly reducing the exploration risk.
Overall, the 2012 outlook for the Company is expected to be one of rising production and revenues, as the Balay development and Las Maracas appraisal programs get underway, and significant exploration upside exposure by way of a seven well drilling program.
Sources say French major signs deal for four oil blocks.
France’s Total has signed an agreement with the semi-autonomous Kurdistan Regional Government to develop four oil blocks, two of them previously allocated to foreign operators already active in the province, Kurdish sources said February 4.
The sources told Platts that two of the blocks were previously allocated to ShamAran Petroleum, a Canada-based independent with a focus on Kurdistan, and to Petoil, a Turkish company which has four exploration and production assets in the province.
The two other blocks are located in Khalikan, in the south central part of Kurdistan, the sources said.
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Perhaps this is cause for Westernzagros's (WZGRF, TSX:WZR) movement up by over 10% in the last few days!
As another example of what you may expect, if you get in on my email list, here it is, a recent flash:
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Goombarh Flash 37, - Feb 6, 2012
Good Morning,
Westernzagros (WZGRF, TSX:WZR)is nearing news about their drilling of their Mil Qasim well in Kurdistan.After much accumulation over the past few weeks the stock price broke decisively above the resistance at about 70 cents Cdn this morning.
Here are links to their latest corporate presentation and interview of Simon Hatfield CEO.
I am using this tidbit to entice more of you to sign up for my email list. It is easy, there are no costs or obligations and only requires an email to me (Goombarh at gmail.com) with your email address. I will not reveal the list to anybody else, and my only purpose is to perhaps share some insights. My aim is entirely selfish for myself, in the hopes that in the future, I may be able to have a small impact on moving stocks with a good pick (well, enough dreaming). Usually, anything I write about, I already have a small position in, and I am hoping that my writings, together with my research and analysis will lead to good outcomes for everyone involved (meaning me and you). Also, I would be interested in your comments and your insights, by email, and I do usually respond to your emails, in due course.
Now for my sales pictch, I did do good in my last Goombarh Flash to those on my email list. Shoal Point has reached .35 cents today. I issued a Goombarh Flash 35 on Jan 24th when the stock was at .23 cents, an appreciation of about 50%. This is not a really big deal, as smaller stocks like this do have volatility in moves up and down, but FWIW, this might be a beginning of a much higher movement upwards.
I do not believe the time to sell has come yet, and I see further and stronger price appreciation ahead. I believe the company is sitting on an oil gusher and the market moves are supporting this idea with higher prices for the stock.
Here is the link to the news release today, announcing coming oil testing:
WASHINGTON (Reuters) - The Obama administration on Wednesday rejected the Keystone crude oil pipelineproject, a decision welcomed by environmental groups but blasted by the domestic energy industry.
U.S. President Barack Obama said TransCanada's application for the 1,700-mile (2,740-km) pipeline was denied because the State Department did not have enough time to complete the review process.
"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people," Obama said in a statement.
With environmental groups concerned about carbon emissions from oil sands production, the administration in November delayed a decision on a presidential permit for the project until 2013.
But lawmakers that support the project attached a measure to a tax-cut law passed at the end of last year that set a February deadline for a decision.
CALGARY, ALBERTA, Jan 09, 2012 (MARKETWIRE via COMTEX) -- Longford Energy Inc. /quotes/zigman/495542CA:LFD-6.06%("Longford" or the "Company") announces that its shares will resume trading today and notes the speculation with regard to a possible transaction with Genel Energy plc ("Genel") in relation to the potential sale by Longford of its interest in the Chia Surkh block in the Kurdistan Region of Iraq. Longford confirms that it is pursuing negotiations with Genel, however there is no certainty that these negotiations will result in a transaction. Longford is also in consultation with the Kurdistan Regional Government on their guidance and feedback with respect to the structure of any potential transaction. The Company will update the market if and when there are any material developments.
About Longford Energy Inc.
Longford Energy Inc. is a junior Canadian oil and gas exploration and production company. Longford holds a 40% working interest in the Chia Surkh Block Production Sharing Contract in the Kurdistan Region - Iraq. The Block offers a field development opportunity and multiple exploration prospects.
Gulf Keystone Rises 12% on Speculation That Company Will Be Sold
Q
By Brian Swint - Jan 10, 2012 2:56 AM PT
Gulf Keystone Petroleum Ltd. (GKP), an oil and gas explorer in the Kurdistan region of northern Iraq, rose to a record on speculation that the company will be sold.
Shares climbed as much as 12 percent in London and traded up 11 percent at 245.5 pence as of 10:54 a.m., the highest since listing in 2004. The stock rose 8.6 percent yesterday.
The Bermuda-based company today confirmed that the Kurdistan regional government has the right to buy into the Shaikan and Akri-Bijeel blocks. The Daily Mail newspaper reported that speculation the company will be taken over had been revived after Gulf Keystone last month denied it was in talks with Exxon Mobil Corp. (XOM)
“Gulf Keystone will sell up, that’s the consensus,” said Alex Ogbechie, an oil analyst at Fox-Davies Capital Ltd. in London. “It’s just a matter of time. The agreement on provisions of the contracts makes investors a bit more comfortable.”
To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
===================================== http://www.stockmarketwire.com/article/4288310/Oil-Gas-SectorGulf-Keystone-shares-rise-after-update-on-Kurdistan-operations.html
Oil & Gas Sector:Gulf Keystone shares rise after update on Kurdistan operations
9 January 2012|15:59pm
StockMarketWire.com- Shares in Gulf Keystone (LON:GKP) rose after it gave a detailed update on its ongoing exploration and appraisal programme in the Kurdistan region of Iraq.
This includes the Shaikan block, a major discovery with independently audited gross oil-in-place volumes of between 8 billion barrels to 13.4 billion barrels calculated on the P90 to P10 basis with a mean value of 10.5 billion barrels.
Gulf Keystone says it continues a well testing programme for the Shaikan-4 appraisal well, drilled 6 km to the west of the Shaikan-1 discovery well, targeting several formations in the Jurassic and Triassic.
One well test in the Triassic has been completed and six further tests are planned. Once the testing programme has been completed in all target formations the Company will make the appropriate announcement.
The Shaikan-5 appraisal well, 6 km to the north-east of the Shaikan-2 appraisal well, is currently drilling at a measured depth of 1,008 metres.
After slower than expected drilling progress due to temporary hole stability issues encountered in the shallow formations, the well is now drilling ahead to the estimated total depth of 3,500 metres subject to technical conditions.
The Shaikan-6 appraisal well, 9 km to the east of the Shaikan-2 appraisal well, has drilled to a measured depth of 362 metres and 26-inch casing has been set.
The well will drill to the estimated TD of 3,800 metres subject to technical conditions.
The company says that as part of the ongoing extended well test on the Shaikan block, the output from the Shaikan-1 and 3 EWT facility has been at an average level of 2,520 barrels gross of oil per day from the latter part of November through to the end of 2011, totalling 103,328 barrels gross as of 31 December.
At the end of 2011, Shaikan test production levels were in excess of 4,000 barrels gross of oil per day and are due to increase further after the ongoing upgrade of the Shaikan-1 and 3 EWT facility has been completed and additional test production facilities have been designed and built.
The upgraded and additional EWT facilities will allow test production of Shaikan crude to export specification and a subsequent ramp-up of the company's export operations.
Gulf Keystone is the operator of the Shaikan block with a working interest of 75% and is partnered with Kalegran Ltd, a subsidiary of MOL Hungarian Oil and Gas, and Texas Keystone Inc which have working interests of 20% and 5% respectively.
Gulf Keystone says that according to the operator's Akri-Bijeel block operational update and 2012 outlook issued on 28 December, the exploration and appraisal programme will continue with two exploration wells (Barkman-1 and Gulak-1) and four appraisal wells (Aqra-1, Bijell-2, Qalati-1 and Qandagul-1) to be drilled in 2012.
Following the completion of the Bekhme-1 exploration well testing programme, after the well reached TD at 5,000 metres in the Triassic, the rig is currently moving to the Aqra-1 appraisal well drilling location with the well expected to be tested in the second half of 2012.
While no commercial inflow of hydrocarbons was encountered in Bekhme-1, new data gained during the well testing programme is a significant contribution to the continuously improving knowledge of this unexplored region, decreasing uncertainty for the remaining Akri-Bijeel prospects.
In addition to the envisaged acquisition of a significant amount of 3D seismic data over the Bijell discovery area, an extended well test is planned for the Bijell-1 discovery well in 2012, similar to the ongoing successful Shaikan-1 & 3 extended well test.
The operator plans to build a surface facility with 10,000 barrels of oil equivalent gross capacity and a 30,000 barrels storage capacity by the third quarter of 2012.
Gulf Keystone has a 20% working interest in the Akri-Bijeel block operated by Kalegran.
Gulf Keystone says the first exploration well on the Ber Bahr block is drilling at a measured depth of 2,418 metres in the Triassic to the estimated TD of 3,000 metres subject to technical conditions.
Gulf Keystone has a 40% working interest in the Ber Bahr block operated by Genel Energy.
UPDATE 1-Genel says to pump more oil from Kurdistan field
Tue Jan 10, 2012 3:05am EST
* To lift production to 100,000 bopd from 60,000
* Recent report upgraded reserves
Jan 10 (Reuters) - Oil firm Genel Energy said it planned to pump significantly more oil by the end of 2012 by expanding facilities at its oil field in Kurdistan.
The company, established last year when the bid vehicle of former BP chief executive Tony Hayward bought Turkey's Genel Enerji, said that it aimed to lift production from the Tawke field to 100,000 barrels of oil per day (bopd) by the end of 2012 from the current level of around 60,000 bopd.
Genel's confidence in being able to pump more oil from the Tawke field was boosted by a recent independent report which found proved and probable reserves were 78 percent higher than previously thought, at 509 million barrels of oil.
Norwegian oil firm DNO, the operator of the Tawke field and Genel's partner, said in July 2011 that the field had "ultimate" recoverable reserves of 636 million barrels.
DNO's Head of Exploration, Tore Lilloe-Olsen, told an investor conference on Monday that the field could pump 100,000 bopd after improvements planned for this year.
He added that the field had a "realistic mid term capacity" of 200,000 bopd, according to a copy of the presentation posted on DNO's website.
Genel and its partners DNO and the Kurdistan Regional Government will upgrade the pipeline and plant facilities and drill five more wells to reach the higher production target, Genel said on Tuesday.
Shares in Genel closed at 754.5 pence on Monday, valuing the firm at 1.4 billion pounds ($2.16 billion).
Shoal Point Energy Ltd. Announces Commencement of Drilling Operations and Closing of Additional Financing.
(via Thenewswire.ca)
Toronto, ON: Shoal Point Energy Ltd. (the "Company" or "Shoal Point") (SHP on CNSX) announces that it has commenced drilling operations and has closed additional financing.
Operational Update
Shoal Point is pleased to announce that drilling operations have commenced at the Shoal Point 3K39z well, at Shoal Point, Port au Port Bay, Newfoundland. The borehole has been drilled to a measured depth of 1745 metres, and is cased to a measured depth of 1711 metres. Liquid hydrocarbon shows were recorded over the entire gross section of the well below about 700 metres, primarily in the form of gas chromatography/mud gas indicators, blue-white fluorescence in rock cuttings cut in solvent, oil-stained core, and petrophysics.
The current program is scheduled to set a whipstock, sidetrack, and deepen the current borehole to near the base of the Ordovician Green Point Formation, the primary target of the current exploration program. The evaluation program will involve the flow testing of up to five zones, including (1) a lower open-hole test in new hole, (2) a cased-hole extended formation leak-off (injection) test, and (3) up to three cased-hole perforation flow tests.
The lower open-hole test is designed to assess the natural flow properties and hydrocarbon saturation of newly-drilled (un-invaded) formation near the base of the well. The leak-off test is designed to assess the matrix rock properties and hydrocarbon saturation of the formation, as identified by NuTech, our petrophysical consultants, so that programs for stimulation of the Green Point Formation may be designed in the future. The cased-hole perforation flow tests are designed to assess the hydrocarbon saturation and the unstimulated natural flow potential of the formation which arises from a high concentration of bedding-parallel natural fractures, as interpreted by NuTech and the Company's geological team from logs, core and gas chromatography data. One of these fractured zones indicated potential permeability on a short open-hole Closed Chamber Test carried out during the initial drilling of the well, as reported by the company on June 24, 2011.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or "the Company") is pleased to provide an operational update for the drilling and testing operations at Mil Qasim-1 and Kurdamir-2, and the continued production from the Sarqala-1 extended well test.
Mil Qasim-1 Exploration Well (Garmian Block)
The Mil Qasim-1 well was cased to a depth of 2,129 metres and successfully drilled and wirelined logged to a final total depth of 2,425 metres. The planned testing program of the Upper Fars sandstone reservoir is ongoing. An initial open hole drillstem test (DST) conducted in the lowermost part of the wellbore successfully flowed oil to surface with no water. A second DST test is presently being performed in the Upper Fars within the lower part of the cased hole section. The Company plans to release final results from the testing program when it is completed.
Kurdamir-2 Exploration Well (Kurdamir Block)
The Kurdamir-2 exploration well has been drilled through the Lower Fars top seal to a depth of approximately 2,270 metres, where the third string of casing will be set above the Oligocene reservoir. Operations, to date, remain on time and on budget. WesternZagros anticipates that the drilling and testing of the Oligocene reservoir will occur in the first quarter of 2012, with the deeper Eocene and Cretaceous reservoirs expected to be drilled and tested by the end of the second quarter of 2012.
Sarqala-1 Extended Well Test (Garmian Block)
Oil production from the extended well test of Sarqala-1 continues uninterrupted, averaging over 4,000 bopd in December. This production is refined in local plants under the auspices of the Ministry of Natural Resources.
WesternZagros anticipated production from the extended well test to continue to increase in January and is currently increasing the tank capacity to optimize production and truck loading.
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WZR is being very coy about what they are doing presently.
Could this be because they are scheduled to present at quite a few oil investor's presentations in Europe over the next month?
Whatever the case, the 2012 looks rosy for Westernzagros
The Sunday Times reports thatGenel EnergyPlc will announce a deal this week to buy a 40 percent share inLongford Energy‘s Chia Surkh oil field in northern Iraq.
According to the report, the deal would be worth $70 million, and Genel, run by the former CEO of BP, Tony Hayward, declined to comment.
Kurdistan-focused Genel, already has a 20% working interest in the Chia Surkh oil field. The prospect is believed to contain some 305.7 million barrels of oil equivalent.
Outlook
With Balay-1 and Balay-2 continuing to produce on long-term test the Company is anticipating that it will continue to realize production revenues. Additionally, the Company and partners envisage finalizing the development plan for the Balay discovery, with approval for the first phase expected in the fourth quarter of 2011. Sanctioning of the second development phase will depend on the results of Balay-3 which should enable the joint venture to properly assess the size of the Balay oil discovery.
The Company plans to evaluate and appraise the Las Maracas discovery in 2012. This will include placing the discovery well on long-term test and the drilling of several appraisal wells. Subject to the outcome of the appraisal results, the Company and current partner are committed to fast tracking the development of this discovery. The Las Maracas discovery is viewed to be an extremely positive event for the Company.
The Company will continue its strategy of rationalising the portfolio to leverage some of its high working interest positions into more strategic and cost effective holdings. This strategy, which began with the relinquishment of the COR-12 and COR-14 Blocks early in 2011 and has continued with the sale of the VMM-3 block and equity changes in the El Eden block, is expected to enhance the Company's competitive position by allowing it to free up working capital, recover past costs and to enhance the risk/reward balance of its portfolio. The Company is also considering reducing its working interest positions in the LLA10, CPO1 and SSJN5 blocks.
Furthermore, the Company will participate in an extensive exploration program in 2012 with the drilling of seven exploratory wells targeting net mean unrisked prospective resources of 45 million barrels of oil equivalent ("BOE"). All of the prospects to be drilled in 2012 will be covered by 3D seismic, thereby significantly reducing the exploration risk.
Overall, the 2012 outlook for the Company is expected to be one of rising production and revenues, as the Balay development and Las Maracas appraisal programs get underway, and significant exploration upside exposure by way of a seven well drilling program.
Exxon’s entrance was six weeks after ex-BP PLC chief executive Tony Hayward’s Vallares PLC put up $2.1 billion US to acquire Kurdistan’s largest oil producer, Turkish-based Genel Energy PLC.
The political situation started improving late last year when the Kurds backed an Iraqi national government appointment in December. An oil and gas-sharing pact first drafted in 2007 between Kurdistan and Iraq now anticipated by the end of the year is expected to let oil flow from Kurdistan to other countries, lifting the price per barrel from just over $50 to the global benchmark Brent price — more than $100. The long-standing dispute over how to divide oil revenue meant majors active in Iraq couldn’t drill in the northern region of Kurdistan without penalty, limitations expected to end with the deal closing.
The Exxon development, which raised the ire of the Iraqi government, added a twist. Reuters reported that Baghdad has said any oil deals signed with the Kurdish Regional Government are illegal and has suggested the firm’s contract to develop an oilfield in south Iraq is in jeopardy.
Stevenson predicted mergers and acquisition activity will ramp up as firms look to gain a foothold in Kurdistan, which according to Bloomberg, Kurdistan’s Hawrami said could contain 40 per cent of Iraq’s 115 billion barrels of oil reserves — more than the Gulf of Mexico.
WesternZagros is about a year away from potentially becoming a takeover target, according to Calgary-based analyst Josef Schachter. The company’s highly anticipated Kurdamir-2 (K2) well, being drilled by its operator-partner on one of two Kurdistan blocks for WesternZagros, Calgary’s Talisman Energy Inc., is targeting the Oligocene carbonate reservoir, among the most prolific in Iraq.
“The big home run is what they get at Kurdamir,” Schachter said.
Schachter has a one-year target on the company’s share price of $2.10, far above the closing share price Monday of 72 cents.
WesternZagros, about 20 per cent owned by Abu Dhabi National Energy Co. (TAQA) since a share purchase late last month, reported third quarter financial results Monday, including a net loss of $2 million.
The firm is producing and selling oil in Kurdistan from its Sarqala-1 well, which it expects will produce 5,000 barrels per day before the end of 2011. WesternZagros has more than 3.6 billion barrels of oil equivalent per day of audited prospective reserves, more than half of that crude oil.
From a comment to an article about Middle Eastern changes:
I recently spent an evening with Ambassador Richard Jones, the Deputy Executive Director of the International Energy Agency in Paris, who had some eye opening things to say about the energy space. The IEA was first set up as a counterweight to OPEC during the oil crisis in 1974, and has since evolved into a top drawer energy research organization.
World GDP will grow an average 3.1%/year through 2030, driving oil demand from the current 84 million barrels/day to 103 million b/d. That means we will have to find the equivalent of six Saudi Arabia’s to fill the gap or prices are going up, possibly a lot. His conservative target has crude at $190 in twenty years. Some 39% of that increase in demand will come from China and 15% from India.
A collapse in investment caused by the financial crisis means that supply can’t recover in time to avoid another price spike. More than 1.5 billion people today don’t have electricity at all, but would love to have it. The best the climate negotiations can hope for is for CO2 to rise until 2020, and then plateau after that, because once this greenhouse gas enters the atmosphere it is very hard to get out.
This will require a massive decarbonization effort reliant on nuclear, hydro, alternatives, and carbon capture and storage. Up to half of the needed carbon reduction can be achieved through simple efficiency measures, like ditching the incandescent light bulb, driving more hybrids, and closing dirty, old coal fired power plants. Natural gas will be a vital bridge, as it is cheap, in abundant supply, and emits only half the carbon of traditional fossil fuels. The total 20 year bill for the rebuilding of our new energy infrastructure will exceed $10 trillion. Richard, who comes from a long diplomatic career in Kuwait, Kazakhstan, and Israel, certainly didn’t pull any punches. I have been a huge fan of the IEA’s data for 35 years. Better use any weakness in oil prices to accumulate long term positions in crude through the futures, the offshore drilling companies like Transocean (RIG), and oil and gas plays, and (OXY) (click here for the link). When oil comes back, it will do so with a vengeance.
The Goombarh is a veteran of the small cap wars, who has survived both the glory and collapse of the internet boom and the 2008 bust. Now he is focused on mining,oil and commodity stocks, as the world has turned with the rising tide of demand from the emerging markets. In this blog, he shares his findings and insights and sometimes his portfolio's contents. If this information and investing sector is of interest to you, drop him a line with your email address, and you will be added to his distribution.
The Goombarh has Neanderthal heritage and as such has an extra section in his brain that gives him his prescient ability. ...just kid'n.
Important Disclaimer:----The information and opinions contained here reflect the personal views of the author and should be viewed as food for thought only. The author may have a position in any of the securities mentioned. There are no guarantees of the accuracy, reliability or completeness. Independent due diligence and discussions with one’s own investment and business advisor is recommended. We do not request or receive compensation. This document may be quoted, in context, provided proper credit is given.
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