African oil opportunities in focus for investors after Cove Energy windfall
May 7, 2012 (Proactive Investors) -- Cove Energy (LON:COV) shareholders have a pleasant task in deciding what to do with the £1.2 billion
that’s soon to flow their way after its agreed takeover by Shell.
The cash is likely to burn a hole in a few pockets. And analysts
reckon much will find its way back into the market.
Assuming the bulk of these investors stick to their previous
blueprint for success a number of other Africa focused oil explorers could benefit
from this fresh injection of cash.
Indeed analysts were quick to identify Afren(LON:AFR) and Ophir (LON:OPHR) as
options of a similar ilk.
The latter has a similar LNG asset – in Tanzania, where it is
partnered with BG further north from the Cove-Anadarko Mozambique venture. And
in the next two years Ophir plans to drill as many as twenty-two high impact
wells in and around the continent.
has a large African portfolio spanning both east and west flanks – as well as a
potentially impact new discovery in the Kurdistan region of Northern Iraq.
The Ebok field, in Nigeria, provides Afren with
production growth while a planned 14 well exploration and appraisal drilling
programme also provides investors with plenty to get their teeth into.
Aside from those two fairly high profile names a new entrant to
the London market may also turn a few heads.
Rialto Energy (LON:RIA)
came to the AIM market in April. And it is already being tipped for
Investors are likely to know Rialto managing director Jeff
Schrull, who previously ran Addax Petroleum prior to its US$8.3 billion sale to
China’s national oil company Sinopec.
Rialto is a pure play on the Ivory Coast where it has a number of
appraisal stage oil and gas discoveries within the 85 per cent owned CI-202
block. Some of these deep water - around 1,000 metres - assets are located just
80 kilometres away from Tullow Oil's massive Jubilee field, which is in Ghanaian waters.
At present it contingent resources totaling 50 million barrels of
oil and 396 billion cubic feet of gas, as well as 551 million barrels and 1.7
trillion cubic feet of prospective resources.
Up until recently the exploratory emphasis was on the shallows.
But future exploration programmes are expected to move into deeper water.
With almost 3 billion barrels have been discovered offshore Ghana,
Rialto boasts an impressive postcode – and is likely to attract investors
picking stocks based on ‘closeolgy’.
According to Investec analyst
Stuart Joyner says the recent discoveries in Ghana have established the Ivorian
Basin, where Rialto’s acreage is found, as one of the most promising emerging
offshore petroleum provinces in the world.
“CI-202 is located in a highly desirable neighbourhood
geologically,” Joyner said in a note to clients.
He adds: “The block is a highly prospective licence that contains
multiple pre-existing unappraised oil and gas discoveries – including the
liquids-rich Gazelle gas field and 3 additional discoveries with contingent
resources of 36 million barrels of oil and 130 billion cubic feet of gas (Hippo-1,
Bubale and Addax).”
Elsewhere there are other interesting Africa focused oil and gas
Another West African driller is Chariot Oil & Gas (LON:CHAR) which
has built up several prospects in the deep waters off Namibia. Last month
drilling began on the first of these, the 600 million barrel Tapir South
It hopes to drill either four or five wells in the current
programme, which has some co-ventured prospects alongside majors BP and
SacOil (LON:SAC) has a
portfolio of assets in Nigeria and the Democratic Republic of Congo. It is a
mix of exploration, appraisal and production assets. And it also flagged
recently that it is considering a number of proposals and potential
Toronto-listed Simba Energy (TSXV:SMB) is also
worth a mention. It has quickly built an inventory of prospects in a number of
different African countries – including Namibia and Kenya. And it is currently
seeking farm-in partners to help it take it exploration work to the next level.
Meanwhile in east Africa, where cove made it fortune, there are a
number of other AIM firms with big ambitions.
Wentworth Resources (LON:WRL) is one.
And its origins are shared with Cove as both were borne out of the same company
several years ago.
It has a joint venture with French firm Maurel et Prom which is
developing onshore gas assets near the Tanzanian coast. And a work over and
exploration drilling programme aims to find enough gas to feed a major pipeline
up to the country’s capital, Dar es Salaam.
Not far from Wentworth’s acreage Aminex (LON:AEX) and Solo Oil (LON:SOLO) recently declared a new gas discovery, which they hope will in time also be
sufficient to tie into planned infrastructure.
Beyond that Aminexhas
big plans to grow into a significant mid-sized Africa focused oil company.
In a recent interview with Proactive Investors chief executive
Stuard Detmer said Aminexexploration companies.