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Faroe Petroleum, Egdon Resources, Global Energy Development, Central African Gold, Centamin Egypt news briefs

By Fox-Davies Capital

Faroe Petroleum announced that drilling has commenced on the Fogelberg prospect, located in licence PL433 of the Norwegian Sea. Fogelberg is a substantial oil prospect located some 10km to the north of the producing ?sgard oil Field. The structure is similar to the recent Statoil operated Morvin oil and gas discovery located 10km to the SW, which was successfully appraised in 2006 by Statoil and is expected to come on stream towards the end of 2010. The well, 6506/9-2 S, will be drilled in a rotated fault block localised on the Halten terrace north of the producing ?sgard field. Faroe Petroleum has a 15% interest in the well, operated by Centrica (28%) and with partners Petro-Canada (30%), E.ON (15%) and North Energy AS (12%). The drilling operation, using the West Alpha semi-submersible drilling rig, is expected to take approximately 80 days.
Fogelberg is the first of two wells scheduled for the Norwegian Sea this year. The second is the Wintershall operated Maria appraisal well (Faroe 30%) which is expected to commence in the second quarter. The other three 2010 exploration wells will be drilled in the deep water Atlantic margin, with substantial oil prospects Anne Marie operated by Eni in the Faroes, Cardhu operated by BP in the UK and Lagavulin operated by Chevron in the UK.

Egdon Resources provided an update on drilling operations at the Kirklington site in its Nottinghamshire licence PEDL203. The Kirklington-3 well was drilled directionally using the BDF28 rig to a total depth of 821m against a planned depth of 980m and encountered the target Chatsworth Grit sandstone significantly deeper than predicted.  The Chatsworth Grit was encountered below the interpreted field oil water contact with only poor oil shows seen and was interpreted as water bearing.  As such, a decision was made to curtail the drilling of the planned horizontal section and to cement back the well to allow the drilling of a sub-vertical sidetrack (Kirklington-3z) close to the original Kirklington-2 producer to gain additional data and enable restoration of field production. The Kirklington-3z well reached a total depth of 698m on 10 February 2010.  Drill cuttings through the interval had oil staining and good oil shows.  An open-hole completion has been run in Kirklington-3z to enable pumped production of the Chatsworth Grit. The rig is currently being demobilised from site following which surface facilities will be reinstalled.  The next well in Egdon's planned drilling programme is a sidetrack of the Keddington-2y well in Lincolnshire licence PEDL005. This will now commence in March once all drilling preparations are completed at the site.

Global Energy Development announced that it has signed a rig contract with Saxon Energy Services de Panama S.A. for the drilling of the Rio Verde 2 exploratory well within the Colombian Rio Verde contract. Rig mobilization is expected to commence at the beginning of March 2010 with the well drilled, completed and tested prior to May 2010. The well has a proposed total depth of approximately 12,500ft and will target three different formations.

Central African Gold announced that it has entered into new loan agreements with its two largest shareholders, ECP Africa Fund II PCC ('ECP') and HBD Zim Investments Limited('HBD') ( 'NLAs') in an aggregate amount of circa US$1M  (approximately ?690,000). ECP and HBD together hold 78.2 per cent. of the issued  share capital of the Company. The NLAs have been subscribed for on the following basis: ECP US$705,070.17 (?450,539.84) HBD US$302,732.48 (?193,446.05) The Company is in the process of agreeing a new loan agreement with Investec Asset Management (Pty) Limited ('IAM') under the terms of which IAM will loan a further sum to the Company. A further announcement will be made in due course.
The Board confirms that funds received under the NLAs will be used to accelerate investment in CAG's Zimbabwean operations and support the Company's general working capital requirements. The Company is continuing to seek debt finance from a number of sources to support further CAG’s working capital requirements. Accordingly, a further announcement on the progress of the debt finance process will be made in due course.

Centamin Egypt announced the completion of Stage 1 commissioning activities with remaining Stage 2 construction activities well advanced and the process Plant performing in accordance with design specifications. The underground decline development is underway. The Sukari Resource upgraded to a Measured and Indicated Resource of 210.2Mt @ 1.52g/t Au for 10.29Moz Au with an Inferred Resource of 66.3Mt @ 1.6g/t Au for 3.4 Moz Au. The first gold was produced in the December quarter, 1,118oz and the company says that it remains on schedule to produce over 200,000oz in the current calendar year.