Potential mini-hub in prospect south of Ninian in North Sea
CALGARY, Canada – Iona Energy plans further acquisitions, farm-ins, and participation in North Sea licensing rounds.
Last October the UK government awarded the company a 100% interest in three northern North Sea blocks which include two oil discoveries.
Blocks 3/7c (part), 3/8c, and 3/12 (part) are southwest of the CNR-operated Ninian field and adjacent to Iona’s block 3/8d, which includes the planned Kells oil and gas field development and the Ossian oil discovery.
The newly awarded blocks contain the undeveloped Ronan and Oran oil fields, 8 km (4.9 mi) apart. Drilling to date has encountered oil columns only with no water legs, leading Iona to believe that a joint development is possible. Further appraisal could lead to significant volume increases in both cases.
These discoveries, along with Kells, have the potential to create a synergistic Iona- operated “South of Ninian” development hub, the company says.
Look at it this way, at least we're not in one of those duber stocks! UP IN SMOKE!!!
Go to INA.V board on IV and read recent posts. Turns out a fund "Hedgehog Capitol LLC" sold 35 Millionshares recently to cover losses in other securities. Lot of good discussion better left on that board.
Look like the selling is over and we will go UP now IMHO.
Also, no presentation until stabilized production rates are released by E.ON so may be a couple of weeks yet, at worst.
Boy those refer stocks are having a rough day! I'll take a nice quiet day in IONAF over that anyday!
since we are only the tail of the dog, then I guess I'll do some gardening!
P.S. No 14 cent up day today, at least our holidays are not on someone else's Queen...
* again...positive changing sentiment for the UKNS...by the professional money men (they matter the most) and a low risk...front loaded development program that will lead to multiples of the current share price within the next few years....either by production adds or an eventual sale or both.
What is not to like!?
P.S. When you have an OilJack, just ride 'em till the sun go down 'en de skie!
North Sea (UK) starting to lure bigger / professional money back...sentiment change under-way...
* one of the UK most successful fund managers is pouring investment monies into UKNS companies due to the resurgence of the area as a result of new tax incentives and responding capex commitments.
* IAE is one of his bigger holdings. We are seeing the share price respond in the past few days. See the storu below and the link above for more details.
* what I like even more is that with INA I am exposed to a multi-year low risk oil and some gas development story that can be fully funded from existing and growing cash flow. We will be a debt free company within the next few years...no doubts at all from my perspective.
* looking below...you can see up to three low risk gas appraisal / development wells on tap for 2014...two of which will be drilled for certain I believe. Tyne NW and Tyne East. The Tyne South side-track in the future. This is worth well over 12 mmbo/e in new (2p gross reserve potential) adds and they can be put into immediate production upon success.
* also looking below you can see that E.ON models strong Huntington Forties production and that the seismic showed that the actual production wells came up with more net pay than prognosticated and as Premier has stated...three of the four production wells...tested 20% better than thought / expected.
* further to that is that Noreco estimates Huntington 2P reserves at 42 mmbo/e and that if you look at the Jurassic production profile within the known oil pool boundaries or limits (3-5 mmbo net to INA according to E.ON) the production profile for Huntington could be extended by years with a successful two well production program let alone more wells than that. E.ON estimates low (under-promises and over-delivers).
* again...positive changing sentiment for the UKNS...by the professional money men (t
what IAE taught us last week is its the funds buying in that will jump start our stock. Good chance that IAE's sudden move will spill over to INA and IONAF IMHO. When we go higher it will be quick I think, maybe just around the corner, next week good chance I'm thinking. Oh the other hand, and conversely, readers of message boards don't make much difference! Purely for entertainment purposes only!
its really OilJack doing the heavy lifting, but with him around may as well just hook up the wagon!
while we wait for Huntington production news IONA is moving the ball downfield...
CNQ / CNR Ninian Platform upgrade for Kells oil field development....
* It shows that the Ninian South portion of the platform will be shutting down in a few weeks to complete the top side work for the eventual hook-up of the Kells oil field. It is assumed that all of the Orlando top side work was completed on the platform last year.
* this is a very important project for CNQ and INA. CNQ is going to be able to run up to 5 Brent oil fields through its platform and extend the life of said platform for a consideral amount of time. Those 5 oil fields will have reserves of 45 mmbo/e to pick a number....75 mmbo/e to possibly even 100 mmbo/e....on a 3P and a contingent resources basis. More appraisal drilling and actual reservoir performance will be needed to finalize the reserve / resource numbers but the amount of satellite oil field potential here is very considerable.
* so as we await more news on Huntington oil performance we can expect work to continue to advance the Orlando and Kells oil fields towards their production dates.
* looks like we get 2 wells in 2014 and another 2 wells in 2015. Re-entry of existing vertical and turn it into a 10,000 bpd horizontal in 2014 and production wells number 1 for Kells also in 2014. Then add one more well into each field in 2015 if reservoir performance meets or beats expectations.
* kick in 1-2 Tyne production wells and you have enough activity to keep Mr. Market happy all the way through 2014.
P.S. Have you ever noticed the word "IONA" is contained in the word "MILLIONARE"?
First from Casimir Capital Analyst Ryan Galloway:
By The Energy Report | Thu, 04 April 2013 22:32
TER: Is Iona Energy Inc.'s (INA:TSX.V) focus on the North Sea permanent, or is it just a springboard to future expansion elsewhere?
RG: Management at Iona is well experienced in the U.K. North Sea. Neill Carson and Brad Gunn, Iona's CEO and CFO, were also founders of Ithaca Energy Inc. (IAE:TSX), another successful offshore U.K. player, and the rest of the management team is very experienced in U.K. offshore. It makes sense for them to go after the assets that they know, and they've done a good job of it so far.
Iona's game plan in the past has been to secure smaller fields that have been ignored by the larger players, and do this at discounted costs, and then get them developed and tied back into existing facilities. This minimizes its infrastructure risk and minimizes delays associated with building new infrastructure. So we see it continuing with a U.K. focus for the foreseeable future.
The key asset it just acquired, Huntington, is likely going to be onstream imminently. Then it is going to continue with U.K. development of an asset called Orlando, which should bring on about 7,500 barrels per day oil net in late 2014, Kells in 2015 and then another asset called West Wick to follow. I see Iona advancing with quite a good pipeline of development-oriented assets in the U.K. for the next few years. What I like about Iona is that, by 2014, it could be putting out nearly $0.90/share in cash flow versus where it's currently trading, around $0.68/share. This could be a story that really takes off again.
Even if we don't get Orlando production until mid-2015, with $0.90 cash flow by then x 3 multiple we could easily get to $2.50-$2.70. Yes, I'll take a 4.5 - 4.2 bagger at that point, mid 2015, and not whine about it!
P.S. This article "Investing in Natural Gas Companies Despite the Low Gas Prices" has interesting analysis of U.S. and Euro natural gas market.
Huntington discovery was through multiple zones through a single bore:
Discovery and drilling of E.ON E&P UK's fie
"E.ON E&P UK, an upstream oil and gas company owned by E.ON, operates the Huntington oil field with a working interest of 25%."
The Huntington field was discovered by Oilexco (acquired by Premier Oil in 2009) in June 2007 by the discovery well 22/14b-5. The discovery well was drilled to a total depth of 4,061m in the Triassic Skagerrak Formation in the central North Sea. It encountered oil in two separate zones through a single bore.
Oil bearing sandstones in the Paleocene Forties reservoir were encountered at a depth of 2,731m and had intersected a 37.18m oil column. Oil bearing sandstones in the second reservoir, the Upper Jurassic Fulmar, were encountered at a depth of 3,892m and had intersected a 41.45m oil column.
Wireline pressure and sampling tools have recovered high-quality oil, 41° API gravity from the Forties and 39° API gravity from the Fulmar. Flow rates from the two zones aggregated in excess of 11,000 barrels of oil equivalent per day (boepd) during drillstem testing.
The first phase of appraisal drilling of the Forties and Fulmar sands was completed in December 2007 and February 2008 respectively. At the end of the programme, at least 137.7m of oil column was identified in the Fulmar zone.
Highly recommended is to look at OJ's post on "Oil and Gas Discussion BB" on IV, look at the map of the extension of the Upper Jurassic Fulmar (100% Iona's) and review the Fulmar data.
[ii] lower zones (with thanks to OilJack: 5/17/2013 11:35:00 PM by Oiljack)
INA......Block 22/14D extension paper....
* INA got this one for free.
* E.ON abandoned it last year in favour of the no risk Huntington Forties play.
* E.ON believes that the current Huntington Jurassic could hold 3-5 mmbo of reserves net to INA in the current producing field area or some 20-35 mmbo/e (gross) in possible total recoverable volumetrics. On the high case, as I have discussed, that would double (almost) INA's current Huntington reserves.
* now what is in for free is the recently E.ON relinquished and INA aquired Block 12/14D mapped extension of the Huntington Jurassic discovery. Suffice it to say it is a complex mapped extension that will not be drilled any time soon but it could hold up to an additional 160 mmbo OIIP with over 32 mmbo recoverable on the P10 high case based on the limited data available.
* IF INA continues to proves their worth as readers of reservoir they just might have acquired a game changing asset for nothing. Now I say again....this will not be drilled any time soon but the data sets are all below and what does matter is that Huntington Main could easily result in 10-15 mmbo/e in 2P booked reserves for INA by the end of 2013 when the next reserve report comes out. These guys are that good imo.
* lots of very low hanging fruit for INA and Huntington starts to push us higher in the immediate days ahead.
* surely by the nest quarterlies (less than 2 weeks away) we will get an updated presentation....I would think.
* unique mix of assets that are primarily / over-whelimingly appraise and produce!
[I] the Huntington discovery
Huntington oil field development
Block 22/14b includes three discoveries in three separate zones or reservoirs, which include Paleocene Forties, Upper Jurassic Fulmar and Triassic Skagerrak. The initial phase of the Huntington development project covers the Paleocene Forties reservoir.
A field development plan (FDP) for the Huntington project was submitted to the UK Department of Energy and Climate Control (DECC) in the first half of 2010. It was approved in November of the same year.
The field is planned to be produced by four production wells and two water injection wells. All the wells will be tied back to a floating production, storage and offloading (FPSO) vessel named Sevan Voyageur (or Voyageur Spirit) FPSO, via a subsea manifold. The vessel, which has been upgraded at Nymo fabrication yard in Norway to handle 30,000 barrels of oil each day, reached the Huntington site in early October 2012.
The produced oil will be stabilised and stored in integrated tanks of the FPSO. Shuttle tankers will then transport the oil to the market. The produced water will be injected back into the reservoir to maintain pressure.
The natural gas will be transmitted to an onshore terminal through the central area transmission system (CATS) pipeline system which runs from the central North Sea to Teesside, England.
E.ON E&P UK, London, UK
This paper describes the E.ON-operated Huntington development campaign in UKCS block 22/14b, its challenges and the solutions found to maximise economic recovery and NPV, which resulted in achieving higher than expected net sand, porosity and oil saturation coupled with improved standoff to the OWC.
The oil accumulation in the Paleocene Forties submarine channel sandstones has an areal dimension of 16 km2 and is complicated by a tilted OWC and the presence of a low-resistivity oil zone below the main oil leg. Drilling of the planned four horizontal producers and two injectors is currently in progress with first oil expected in 2012 using an FPSO-supported sub-sea development.
Detailed planning of well locations guided by top reservoir depth uncertainty analysis resulted in an optimised balance between horizontal well length, stand-off from the OWC and reservoir roof avoidance. Drilling the landing section required accurate pro-active geosteering to achieve top reservoir at the planned location at an optimum inclination of 87°.
This inclination would minimise the risk of both overshooting the reservoir and landing out the horizontal position too close to the OWC. The approach was executed successfully through integration of gamma-ray correlation, wellsite-biostratigraphic analysis and real-time gamma-ray image analysis and dip-picking.
Once in the reservoir, a deep-reading azimuthal resistivity tool enabled effective reservoir navigation and well placement in good quality sandstone. Excellent communication between all related disciplines during this critical phase of well operations proved a vital ingredient in the success of the drilling campaign.
/uploads/57687/files/INA dot pdf
* That would enable this project to through off a significant amount of cash flow for years to come.
* go and take a look at slide # 11 in the link below as well. The 5 INA operated Brent oil fields to be developed in the Ninian Platform area have at least 45 mmbo/e and a $1.1 bn tax tax shelter through just the Small Field allownaces (let alone any capex write-offs) and that is just on an initial assessment. Those reserve numbers / resourec numbers could well grow as at least in the case of two of the fields the oil / water contact point has yet to be found.
* those above numbers are gross but the next four year is filled with just development drilling form INA and reserves could easily double from here in the next two years alone just based on said drilling plan. Imagine the cash flow machine then!? Imagine the share price appreciation!
* just too easy on days like today to be calm and think forward a number of quarters. Imagine when and not if the market digests what we know and are discussing.
5/17/2013 2:46:05 PM by
Cash flow always wins over the market in the end.......
* see what is going on with IAE today? Ut is up huge on NO news. FE has been buying like crazy. Why? Simple...the market now "gets it" with regard to the cash flow machine that it is becoming with regard to its recent aquisition of Valiant.
* so.....for those of us that hold INA what should we think.
....Huntington ramp up and Trent / Tyne full farm-in to 37.5% will take us to 7,500 boe / pd in production by the end of June.
Speaking of how big Huntington is...see below.
...Noreco's reserve report states that the Huntington Forties is app. 42 mmbo/e based on a 16 km2 or 4,000 acre "known oil pool." INA thinks they have 7 mmbo/e in 2P reserves based on their 2.55% GORR and their 15% working interest. They model up to 6,000 boe / pd peak production based on the above reserves. What is interesting that INA has also stated that they could have up to an additional 5 mmbo/e (based on E.On's assessment) of reserves / resources in the deeper Jurassic formation. This is based on one well and on the INA interest in the Huntington partners block. INA has stated that they have been awarded an adjoing block that has a mapped extension of the deeper Jurassic sands that spill over on to its new block (operated by them and obviously with a much bigger working interest).
* INA seems to be very adept / skillful at selecting projects that have reservoirs / fields that has much more upside than the market initially gives them credit for....see Tyne / Huntington / Orlando results to date. Huntington Jurassic is believed to be some 24 km2+ in size and while it is a fairly complex reservoir INA certainly believes in its potential. Huntington therefore could have possible reserves / resources net to INA that may range from 10 mmbo/e (low estimate) to as high as 15 mmbo/e+ if you count the Forties and Jurassic zones and the mapped extension on to the INA adjoing block (for the Jurassic).
new fund buys in today and seems to be rocketing up... INA and IONAF next up and on deck in the North Sea? A 14 cents up day would really cheer us up! We'd be wearing our hats and t-shirts then!