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.

 Afren meanwhile 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 success. 

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 plays.

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 prospect.

It hopes to drill either four or five wells in the current programme, which has some co-ventured prospects alongside majors BP  and Petrobras.

 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 transactions.

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 Aminex has 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 Aminex exploration companies.