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Circle Oil, Victoria Oil & Gas, Frontera Resources, Resaca Exploitation, Erratum, Jubilee Platinum, Alexander Mining news briefs

By Fox-Davies Capital

Circle Oil announced that the Geyad-2X ST1 well has commenced production in the onshore NW Gemsa Concession in Egypt. Production has started from the upper of the two identified pay zones in the Kareem Shagar Sandstone. The lower untested pay zone, in the Kareem Rahmi Sandstone, will be further evaluated at a later date. The Geyad-2X ST1 well is producing at a rate of approximately 2,100bopd.

Comment: Geyad-2 is producing at a higher stabilised rate than we had expected, as a result the production has already reached the bottom end of our 9-10,000b/d target for this year. It is now likely the Company will exceed it. We remain positive on the stock and maintain Buy rating and price target.

Victoria Oil & Gas announced an update on the passive seismic spectroscopy survey at its Logbaba gas and condensate project in Douala, Cameroon. The survey findings are in line with the geological understanding of the Logbaba reservoir sands and correlate well with data from the four old wells and the newly drilled well La-105. The analysis of the survey indicates a major potential hydrocarbon accumulation around two kilometres from the current drilling location. The survey also suggests that the most prospective area at the existing discovery lies around 300m from Well La-104, between that well and La-101. The well design team are considering this data and its impact on the design of the next well, La106, which is due to be spudded on 6 February 2010.

Comment: This is exciting news and will undoubtedly be taken into account in the design of La-106 as the Company needs to test the sweet spot of the anomaly. Passive seismic works best with good well control and in this case provides good evidence for the filed to be possibly larger than anticipated. The positive anomaly further to the North is likely to become the target of further exploration drilling by Victoria Oil&Gas in the licence and could provide further material upside.

Frontera Resources announced that it has completed a new phase of drilling operations at the Mirzaani and Mtsare Khevi Fields within its Shallow Fields Production Unit, Block 12, in the country of Georgia. The Mirzaani #1 well was drilled to a depth of 1,500m and encountered multiple oil and gas shows throughout 146m of net sandstones, in primary as well as deeper, secondary reservoir targets. The Mirzani #5 well was drilled to a depth of 1,125m and also encountered multiple oil and gas shows throughout 120m of net sandstones, in primary as well as deeper, secondary reservoir targets. Reservoir sections in both wells exhibited higher than expected porosity and permeability values.

Resaca Exploitation announced the Company has received a firm commitment for a new $200M senior secured revolving credit facility provided by Union Bank. The New Facility will close in conjunction with the Company's proposed merger with Cano Petroleum, Inc. Proceeds from the New Facility will be used  to repay and refinance  Resaca's and Cano's existing debt, to fund future acquisitions and for general corporate purposes.

Erratum: In Appendix 1 of our latest report on the Falklands, the net un-risked resources for Rockhopper should have read 364MMboe, as illustrated on Exhibit 5, and not 282MMboe. As a result net risked resources should read 36MMboe and our target price 110p. Our Hold recommendation remains unchanged.

Jubilee Platinum announced that it has entered into a Framework Agreement whereby the basis of joint activities under the previously announced strategic partnership between the parties has been agreed. Under the terms of the Framework Agreement the parties have agreed to incorporate a company to undertake smelting and refining activities using Jubilee’s ConRoast technology. The ownership structure of the Smelting Company will be split 70% Jubilee and 30% Sylvania. In addition, the parties have agreed to incorporate a second company to undertake the processing of future platinum tailings opportunities. The ownership structure of the Tailings Processing Company will be Sylvania 50% and Jubilee 50%. Sylvania’s current tailings and Northern limb operations will not form part of the Tailings Processing Company arrangement.

Alexander Mining announced that it has been approached by a number of multinational mining companies which have a commercial interest in production using its AmmLeach ammonia leaching technology under licence. In addition, one company has made an indicative, non-binding proposal to purchase the Company's AmmLeach technology, on an outright basis, for its global operations.