We can expect to see the following activity funded from this placing.
1. Additional 3D seismic to overlay onto existing Lytham older seismic. 2. Completion of environmental impact study for Kincardine/Firth of Forth. 3. Planning application for pilot plant in Kincardine/Firth of Forth.
After which I expect to see.
1. Farm in to North Sea licence, more attractive now due to new tax rules. 2. INEOS farm in / partnership on UCG pilot plant.
Exploration well 41/5-1, drilled by Walter in 2004, was the first well in the licence after award in 2003. TD was at 6263 ft TVDSS, some 100 ft below the top of the Carboniferous. The well encountered some sand of Namurian age. Only 20 ft at the top had decent logs across it. The sand had no gas shows. In the overlying Zechstein the Hauptdolomite and the Plattendolomite showed reasonable, resp. questionable reservoir quality. The quality of the logs suffered from poor hole conditions. Two Zechstein reservoirs were tested. The Hauptdolomite flowed water but the tests are invalid due to no isolation. A test in the Plattendolomite, questionable due to flowing water behind the casing, produced some gas (no water). This reservoir is believed to be fully gas-bearing. The upper (original) pick on seismic of the Hauptdolomite appeared to be a multiple and the structural closure of this reservoir is doubtful.
Algy Cluff interview - he wants to hydraulic fracture the Lytham prospect, and is banking on the chancellor to assist in paying for it to avoid farming out.
"The founder, chief executive and chairman of Cluff Natural Resources (LON:CLNR), Algy Cluff, tells Proactive Investors he hopes Chancellor George Osborne unveils Norwegian-style tax rebates for North Sea explorers in Wednesday’s Budget. Cluff explains that the Norwegian model provides a rebate of 70% of the costs of drilling an exploration hole, which he says has ‘galvanised exploration in Norwegian waters’. His comments come as CLNR announced a placing to raise £2.2mln, which will help it to fund the company’s plans for its underground coal gasification (UCG) projects in the UK, and its southern North Sea gas licences."
"the Company anticipates utilising approximately £0.4 million from the Placing to acquire and process seismic data to fully define prospects over these licence areas with the primary focus being the Company's licence P2252 which contains the undeveloped Lytham discovery in block 42/1 (CLNR 100% interest). Following this, CLNR will seek to secure suitable farm-in partner(s) ahead of a drill-or-drop decision by the end of 2016."
It looks like any tie up with ineos is of the table for now, we have further dilution and own furrow to plough. Looking on the bright side we have capital to keep us afloat. Not shore if this is a glass half empty or half full.
a placing is unfortunate but necessary to get things going, positive news in general and good to see the shares are only at 5% discount to current price. 2.2 mil won't last long so let's hope for a farm in soon
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