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!
Beyond the region covered by the state of emergency, gunmen stormed a police station and a bank, the army said, a sign the offensive could provoke violence by smaller militant cells across the north.
It was not clear who carried out the attack.
Boko Haram, other Islamist militant groups such as al-Qaeda linked Ansaru and associated criminal gangs have become the biggest threat to stability in Africa's top oil producer.
Thousands have been killed since Boko Haram launched an uprising almost four years ago in an effort to create an Islamic state in a country of about 170 million split roughly equally between Christians, who are the majority in the south, and Muslims, who predominate in the north.
Violence has mostly happened far from the commercial hub Lagos or political capital Abuja, and hundreds of miles away from oilfields in the southeast.
Military jets, helicopter gunships and thousands of troops are involved in the current offensive, which may answer some critics who accuse Jonathan, a southern Christian, of underestimating the severity of the crisis in the Muslim north.
Rights groups are concerned the state of emergency will lead to more abuses they have document by Nigerian forces.
May get Huntington production data around that time at this presentation or from E.ON. Gas compression systems should be fully commissioned by now!
Invitation to Noreco Q1 2013 Presentation and Webcast
Norwegian Energy Company ASA (Noreco) will present the results for Q1 2013 on Thursday 30. May 2013 at 08.30 Norwegian time.
The presentation will take place at Thon Conference Vika Atrium, Munkedamsveien 45, Oslo. The presentation can also be followed by webcast on Noreco`s web page
Big change in the USD vs. CAD today.
Expect the spread in US, in IONAF to be 1.5 cents below the spread in INA.V in CAD. Was almost par or like .1 cents difference.
Big move today! This conversion is getting shifty!
currently @ 1.42 yield is around 14% but with all the geopolitical risk I wont be trading any of my safe IONAF for any shares of it as its a one trick pony sitting in a powderkeg where the entire government could be overthrown and Mart taken over! Pipeline breaking and oil theft is rampant. On the other hand if you wanted in today might be an opportunity. May drop into the 1.30's later today?
MAIDUGURI | Fri May 17, 2013 1:34pm BST
(Reuters) - Nigerian forces used jets and attack helicopters to bombard Islamist militant camps in the northeast on Friday, in their biggest military offensive since Boko Haram launched an uprising in 2009.
"A number of insurgents have been killed," the defence headquarters spokesman said, including at the Sambisa game reserve in Borno state, the epicentre of the insurgency.
"It is not just Sambisa, every camp is under attack. But we have not done the mopping up operations on the ground to determine the numbers killed," Brigadier-General Chris Olukolade said by telephone. A military source, who declined to be named, said at least 30 insurgents had been killed.
Nigerian forces are trying to regain territory controlled by increasingly well-armed Boko Haram Islamist insurgents in their northeastern stronghold states of Borno, Yobe and Adamawa, put under a state of emergency by President Goodluck Jonathan on Wednesday.
More troops arrived in the Borno state capital Maiduguri on Friday, witnesses said.
"I saw more than 20 trucks loaded with soldiers fully kitted for battle towards Marte. I wish them luck in ending this BH (Boko Haram) madness," resident Ahmed Ibrahim said by telephone.
You wouldn't be able to trade INA directly, but my broker at tdAmeritrade said he could execute trades in INA directly and I can hold them in my account as INA rather than IONAF. Has to be brokered and they get $44.95 instead of $10 but for a large number of shares it would be worth it for the additional liquidity. Didn't know that ahead of time so I have a boatload of IONAF instead. And with a two year horizon don't think it matters too much IMHO.
5/16/2013 12:04:51 PM by Oiljack
* total resource / reserve potential (estimated)...based on actual E.ON and Noreco numbers for the Huntington Forties and Jurassic formations is a high case of 75 mmbo/e. 40-45 mmbo/e for the Forties and 30-35 mmbo/e for the Jurassic.
* the partners will need to drill appraisal / development wells into the Jurassic to confirm their resource estimations for the deeper Jurassic sands but reserves and production liefetimes for the field could easily be considerably longer than the initial 5 year time period identified thus far.
* these are estimations and need to be confirmed but those numbers are indeed out there and there is belief that they are real. Thusly INA could have some 12 mmbo/e+ from the Huntington oil field in 2P and 2C reserves / resources. That is well over $500 mm in cash flow from just this one field.
* so who cares what the share price is today......if you need to watch a computer screen all day...then go ahead. Me.....I see this as an incredible two year hold. It could also get bought out at any moment as they would be willing sellers imo.
Looks like the're shaking the tree pretty hard today, got my claws stuck into the bark like a rac#$%$ running from a #$%$ hound.
This is really really a lot of fun but I think it'll be even better when we're over a buck!
Seems like .55 cent shares are held by houses already with sizable positions so they have been dumping those shares on "hold" for profit. Production news would change their thinking perhaps. And they will be feeling stupid when IN A minute is worth much more!
starts out with brief mention of Huntington
Premier today provides its Interim Management Statement for the period 1 January to 16 May 2013. This statement is issued ahead of Premier's Annual General Meeting, which is being held at The Institute of Directors, 116 Pall Mall, London SW1Y 5ED at 11.00, Friday 7 June.
· Production for 1H 2013 is expected to be in the range of 58-60 kboepd (1H 2012: 58.4 kboepd); full year production guidance is maintained at 65-70 kboepd.
· The Huntington field achieved first oil on 12 April and is expected to be producing at full capacity once the gas compression systems have been fully commissioned.
other than that there is nothing else and nothing more on Huntington...
first post was 5/15/2013 9:46:50 PM by Oiljack
then followed by 5/15/2013 10:18:23 PM by Oiljack
Re: CEN, GTE and INA
I don't expect anything less than a $22 to $24 CEN by summerish (Malaysia) at the latest.
In the case of GTE....check out ther new Peru presentation on their website. If you know anything anout Dana Coffield it is, with the utmost of respect, what a conservative bean counting oil guy he is! Peru is a giant and there will be a very high impact Bretana South well drilled in 2014 and that field could be expected to produce 50,000 to 100,000 bpd on peak production if it goes as some have suggested it might to me. They would likely bring in a major partner to help with the heavy lifting.
In the case of INA.....INA's time is now. Up to 170 mm in cash flow YOY once we get to the end of June (or sooner) and with Huntington and Trent / Tyne full production and working interests on line and sorted out. That is worthy of a lot more than 60 cents that is for certain.
Mr. Market will reward me with the five stories that I like best....CEN, DTX, GTE, INA and MMT.
* have you been watching what CEN, DTX and GTE have been doing lately? Own value and buy the INAs and MMTs when they are on sale and not when they are fully priced.
Iona Energy Company (UK) Limited (Iona)
Orlando Field Development
Environmental Statement (ES) Summary
Title: Orlando Field Development Environmental Statement
Operator: Iona Energy Company (UK) Limited (Iona)
Consultants: Orbis Energy Limited
Report No: D/4130/2011
File Reference No: 12.04.05.02/62C
Submission Date: December 2011
Project Type: Development
Reviewer: Inger Söderström
Date: 11 February 2013
Iona propose to develop the Orlando Field located in Block 03/03a in the northern North Sea, approximately 127 kilometres (km) east north east of the nearest UK coastline (the Shetland Islands) and 17 km west of the UK/Norway median line. The field is located in a water depth of approximately 140 metres (m).
It is proposed to develop the Orlando Field by drilling up to two subsea wells, which will be tied back to the Ninian Central Platform, operated by CNR International Limited, via a new subsea manifold and a 10.8 km 8” production pipeline and associated electro-hydraulic and chemical umbilical. The pipeline and umbilical will be trenched and buried. The processed liquid hydrocarbons will be exported via the existing Ninian Pipeline System (NPS) to the Sullom Voe terminal on the Shetland Islands and the associated gas will be used for fuel on the Ninian Central Platform. Initially the field will be developed by re-entering the Orlando appraisal well drilled in 2011, with the second well contingent on the operational performance of the first well. If required, the second well will be drilled from the same drill centre.
The Ninian Central Platform will require minor modifications to receive and process the proposed Orlando fluids.
First oil from Orlando is anticipated in Q4 2014