West Perth-based Emerald Oil and Gas NL is on the path to developing several oil and gas opportunities since listing on the ASX last month and successfully raising $4 million.
West Perth-based Emerald Oil and Gas NL is on the path to developing several oil and gas opportunities since listing on the ASX last month and successfully raising $4 million.
The company arose from the ashes of the insolvent Matrix Oil NL and last week advised one of the project operator’s rigs had mobilised to the location of the first well on the Greenbush project in Renville County, North Dakota, of which Emerald, through its United States subsidiary Emerald Gas USA LLC, will participate in a 15 per cent interest in the project.
The prospect involves the drilling of two wells to test primary and secondary objectives, with the operator’s lease holdings in Greenbush having the potential to host three to four million barrels of recoverable oil from the primary target reservoirs.
With oil prices at all time highs, Emerald executive director- finance John Hannaford told WA Business News there was scope for a very quick payback for the company and the operators for the two-well program.
“It is an area that has existing oil production, so to get end of production cash flow is a relatively simple process due to low costs of discovery,” he said.
“We think if we can get some success, then in three months or so we could be seeing some cash flow.” Emerald also has an agreement for an 18.75 per cent interest in the EP104 oil and gas project, onshore Canning Basin in WA, which has an estimated flow rate of four to five million cubic feet of gas and 200-plus barrels of oil per day.
Mr Hannaford said EP104 was different to its US-based projects, with higher costs associated with greater infrastructure expenditure.
“There is bigger potential [from the Canning Basin] but the economic payout is further down the track, while in the United States we have smaller discreet projects but you get into immediate cash flow,” he said.
“A combination of the two for us is really the future of the company.”
The company’s recent application for LO5-5 in the Canning Basin was also successful.
In the US, Emerald also has an option to farm-in a 15 per cent interest, held by partner Daytona Energy Corporation, into the Pandura gas project and an option to take a 30 per cent stake in the Progresso gas project, both located in South Texas.
Drilling is expected to take place in September for Pandura and the fourth quarter of 2006 for Progresso. Emerald also has another gas well in Mississippi scheduled to be drilled in October.
Earlier this month, Daytona Energy Corporation announced an agreement where Emerald would participate in three of Daytona’s prospects in the US.
Late last year, Matrix shareholders approved the company’s recapitalisation and a newly appointed board of directors identified an opportunity to acquire unlisted oil and gas explorer Emerald Gas Ltd.
The renamed company’s securities were reinstated to official quotation on June 30.
Earlier this week, shares were trading at 14.5 cents with 29.6 million shares on issue and a market capitalisation of $4.3 million, after an initial public float of 20c a share.
