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Petrel Resources, Salamander Energy, Xcite Energy news briefs

Contributed by Fox-Davies Capital

Petrel Resources: Operational Update - The company has identified several targets on the northern and eastern parts of the Porcupine Basin (Atlantic margin).  Petrel is committed to carrying on exploration activities on the block to develop targets for eventual farm-outs to secure funding for seismic and drilling campaigns. We will be waiting for further updates on this block. In this news:

- Management is encouraged by results emerging from the technical study of the Option blocks in the northern and eastern sections of the Porcupine Basin.
- The first two phases of work are now complete.
- Several new targets have been identified.

Salamander Energy: Commenced development drilling on B8/38 licence in the Gulf of Thailand - Commencement of development drilling on  B8/38 licence is valuation positive. Wells will be drilled from recently completed Bualuang Bravo Platform on Greater Bualuang, Offshore Thailand. The Company is making good progress across its asset base. This news also highliths the prospectivity of the Gulf of Thailand basin, which has, by comparison, been under-explored by the standards of the region. It is also worth highlighting that MEO Australia, the ASX listed explorer, is also operating in the Gulf of Thailand, and expects to spud its first exploration well in 4Q'12. With series of significant news flow expected over next six months, we have placed Salamander on our watch list.

Xcite Energy: Phase 1 Complete - The completion of the Bentley field pre-production well test programme tells us a lot about the asset. That the pre-production wells were successfully tested ahead of the field development is also encouraging. Nevertheless, we still have concerns on the longer-term producibility of the field, and while we do not doubt the initial commerciality, the ultimate recoverability of the crude within the reservoirs at commercial rates remains our main issue. In this news:

- Successfully demonstrated full field development drilling, completion, production and export techniques
- Extensive data gathering for reservoir model calibration and production facilities design, enabling optimisation of field development
- Significantly improved understanding of oil, gas and water movement behaviour
- Water ingress to wellbore better than expected (i.e. less water produced)
- Produced approximately 147,000 barrels of Bentley crude
- Successful management of flow assurance issues, including pipeline transfer to a dynamically positioned shuttle tanker for in-field blending
- Pre-production well test results exceeded management expectations