Ferret's Stock to Watch: ROC OIL COMPANY LTD 09:26, Wednesday, 1 August 2007
AIMING TO BE A MAJOR PLAYER WITH STRING OF DRILLING SUCCESSES
Sydney - Wednesday - August 1: (RWE Aust Business News) *******************************************************
OVERVIEW ********
Roc Oil Company Ltd (ASX:ROC) is an Australian-based oil and gas explorer/producer, operating around the globe.
It has many activities now coming to fruition, increasing revenue at a breath-taking rate.
In its June quarter report released yesterday, Roc Oil reported total sales revenue was $60.4 million, up 55pc from $38.9m in the previous quarter, reflecting strong increases in global and regional crude oil sales prices and timing of cargo liftings.
Average realised oil price across all of Roc's production assets was $78.98, up 17pc from the March quarter.
Total working interest production of 789,543 BOE (8,676 BOEPD) was up 1pc from 782,544 BOE (8,695 BOEPD).
Total sales volume rose 34pc to 769,789 BOE from 574,409 BOE in the previous quarter due to timing of cargoes.
Chief executive John Doran declared, "This quarter delivered a combination of established production, new field production, exploration success, continuing aggressive exploration drilling and acreage acquisition.
"Enoch, a new oil and gas field in the North Sea, started production and achieved target rates soon afterwards.
"A three-well exploration drilling program in the offshore Perth Basin resulted in three discoveries, two of which may prove to be commercial, subject to further evaluation," Mr Doran said.
"A high profile, multi-well, exploration drilling program commenced onshore Angola."
The company also said it had entered East Africa for the first time when the Government of Madagascar awarded it a 13,700 sq km deep-water area in the Mozambique Channel.
The high activity level during the quarter was underpinned by total sales revenue of $60 million, up more than 50 per cent from the previous quarter.
As a result, Roc's first-half sales revenue for 2007 is almost $100 million.
"The quarter-on-quarter increase in revenue reflects strong oil prices and the timing of cargo liftings since quarter-on-quarter production remained essentially flat," Mr Doran said.
"Based on year-to-date results, production for the full financial year 2007 is expected to be at the low end of the 10,000 to 12,000 BOPD guidance range previously provided by the company."
SHARE PRICE MOVEMENTS *********************
Shares of Roc Oil rose 10c to $3.46 yesterday. The rolling high for the year is $4.15 and low $2.77. The company has 298.4 million shares on issue with a market cap of $1 billion.
Success of the Enoch Oil and Gas Field (Roc: 12 per cent) was outlined by Roc's wholly owned subsidiary, Roc Oil (GB) Ltd, in June.
The field started production on May 31.
Early field production rates were expected to exceed 12,000 BOPD and 20 MMSCFD of gas (Net Roc: 1,440 BOPD and 2.4 MMSCFD).
Enoch production is transported to and processed at the Brae Alpha facility, 15 km to the northwest.
The Talisman North Sea Ltd-operated unitised Enoch Oil & Gas Field is located 250 kilometres northeast of Aberdeen and straddles the UK and Norwegian international boundary.
Commenting on the start-up at Enoch, Mr Doran stated at the time that Enoch represented another production box ticked.
"As a result, Roc's company-wide production has kicked back into the 10,000-12,000 BOPD range.
"When the Blane Field starts producing later this year about 25 per cent of Roc's production will come from the North Sea," Mr Doran said.
Recent well workover operations at the Cliff Head Oil Field, offshore Western Australia (Roc: 37.5 per cent and operator), have been completed.
As a result, current reservoir production capacity is estimated to be comfortably above 10,000 BOPD. Actual gross production is approximately 9,500 BOPD (Net Roc: 3,375 BOPD) which reflects a current trucking constraint.
At the Zhao Dong C & D Oil Fields, Bohai Bay, offshore China (Roc: 24.5 per cent & operator), gross daily oil production averaged approximately 20,000 BOPD (Net Roc: 5,000 BOPD) during May.
The development drilling activities which commenced in April will result in an additional nine producers and six water injectors being drilled and this is expected to lift field-wide production to approximately 25,000 BOPD.
During May, the Chinguetti Oil Field in offshore Mauritania (Roc: 3.25 per cent) produced at a gross rate of approximately 17,600 BOPD (Net Roc: 572 BOPD) from six wells, including the recently completed infill development well.
BACKGROUND **********
Roc Oil listed on the Australian Stock Exchange in 1999 and the Alternative Investment Market (AIM) of the London Stock Exchange in 2004.
The company operates and has interests in four main regions - Australia, China, Africa and the UK.
Headquartered in Sydney, Roc has a strong operating emphasis, an international focus and a core worldwide workforce of about 200 employees.
The company has a strong operating emphasis and an international focus.
As a result of the company's encouraging exploration results, Roc has participated in the development of a field offshore Mauritania and is operating the development of a field in the offshore Perth Basin, Western Australia.
Roc also has two other fields under development in the North Sea.
Roc's sequence of drilling successes includes discovering commercial oil in each of its first exploration wells in Mauritania and Australia, and potentially commercial oil in China.
In June 2004 Roc made its debut as a deep-water drilling operator when it drilled, on schedule and below budget, Bravo-1, located in 1,500m of water, offshore Equatorial Guinea, West Africa.
In the next 18 months Roc will participate in multi-well exploration, appraisal and development drilling programs in, around and on trend from its recent discoveries offshore Mauritania, Western Australia and China and as well as in the North Sea.
Roc began producing oil at the Chinguetti and Cliff Head oil fields in May.
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