Global Petroleum Regulatory News (GBP)

31 Jan 2007 09:27

Global Petroleum Ltd31 January 2007 Global Petroleum Limited - December 2006 Quarterly Report Kenya (Global 20%) The Company began drilling its first well in the December quarter. The well,Pomboo No. 1 in Licence L-5, Kenya, spudded on the 2nd of December 2006. TheCompany's weekly report dated 28 December 2006 reported that the depth reachedwas 2,944 metres (751 metres below the seabed). The costs associated with Global's 20% in respect of this well are fully carriedso no costs were incurred by the Company. The other joint venture parties are: • Woodside Energy 30% (and operator) • Dana Petroleum 30% * • Repsol Exploracion 20%* Since the end of the quarter, on the 23rd of January, Woodside as operator ofthe Company's Kenya Joint Venture announced that Pomboo No. 1 had reached atotal depth of 4,887 metres and would be plugged and abandoned. The wellencountered "in excess of 200 metres of moderate to good quality reservoirsandstones" in the primary target zone from 4,685m to the total depth butwithout oil or gas. It had been expected that the drilling rig would move to Licence L-7 immediatelyfollowing Pomboo to drill Sokwe South No. 1. However at a meeting of the JointVenture on the 24th of January it was decided not to drill Sokwe South No. 1 inthis drilling campaign. The voting equity of Woodside and Repsol as farminees,was sufficient to make this decision binding on the Joint Venture. The Company'sannouncement dated 25th January advised shareholders of this outcome. While there are numerous prospects and leads in our Kenya Licences L-5 and L-7,and Pomboo has established the presence of reservoirs and seals, the well lackedoil and gas shows. The JV has decided that the next phase of exploration shouldbe determined after a comprehensive technical assessment of the relevance andimplications of the new information obtained from Pomboo. This work is expectedto occur over the next three to six months. Not drilling Sokwe South No. 1 in this drilling campaign is a disappointingresult when shareholders were expecting the Company to be participating in twowells in Kenya in this drilling programme. However, when the Woodside review is completed in 3 to 6 months time, the JointVenture will agree the forward plan for L-5 and L-7 - subject to theacceptability of the plan to the Kenya Government. The costs associated with Global's 20% in L-5 and L-7 are carried for allactivities through the drilling of one well in each Licence. Woodside iscontractually obliged to drill these two wells, - one each in L-5 and L-7. Onlyone well, Pomboo in L-5, has so far been drilled. Refer also to Woodside's release "Pomboo-1 Drilling Result" (23/1/07) and otherGlobal releases in late 2006 and on the 25th of January 2007. *Footnote: Another transaction is pending which, subject to the necessarypermissions, will result in the transfer of a 3% interest in L-5 and L-7 fromDana to Repsol, resulting in Repsol having a 23% interest in L-5 and L-7 andDana a 27% interest. Falkland Oil and Gas Limited ("FOGL") (Global shareholding 14.0%) In its six monthly report for the period ended 30 September 2006 (dated 21/12/06) FOGL noted that it had raised £8 million via a convertible loan note, thatan independent technical report by TRACS International assessed that in the 10prospects on which they focussed that the risked prospective resource potentialwas 863 million barrels nett to FOGL, and that the forward program involved aControlled Source Electro-Magnetic Survey (CSEM), further 2D seismic andseafloor coring surveys targeting the Company's top 20 prospects. FOGL's goalwas stated to be "secure a rig during 2007 and commence drilling in 2008". At a FOGL share price of 92p/share (as at 26/1/07), Global's shareholding isvalued at A$29.9m (17 cents/share). Malta Exploration Study Agreement Area 3 - Blocks 4 & 5 (Global 80%) Since the last Quarterly Report, RWE obtained the services of seismic companyFugro who recorded 852km of new 2D seismic lines in November last year. Thiswork, together with reprocessing of other seismic surveys in the Study Area, andthe acquisition of new magnetic and gravity data has satisfied the MaltaGovernment's Study area work commitment. The Malta Government has extended the Study Agreement to the 31/03/07 to enableRWE as operator of the project to interpret the new and reprocessed information. When this work is complete, the Joint Venture (RWE and Global) will make adecision as to whether to enter a Production Sharing Contract with the MaltaGovernment which is likely to involve a well commitment. Global's 30% share(including 3% of behalf of a UK marketing agency that assisted Global in thefarm-in process) of the costs of such a well would be fully carried by RWE. Ireland Licence Option 03/3 (Global 100%) The Company's campaign to introduce a new company to this project has not beensuccessful. Discussions with the Petroleum Affairs Division of the IrelandDepartment of Communications, Marine and Natural Resources indicated that nofurther extensions to the option deadline of the 31st of December 2006 would beavailable and that the only route available to Global was to enter a licencewith a well commitment. As a farminee was not found to share the risk and thecost of such well by the end of last year, the Licence Option has nowterminated. Outlook When available, the work program timing implications of the planned review ofL-5 and L-7 together with the results of the ongoing work by FOGL and thedecision by RWE, will be considered by Directors in regard to the mostappropriate way forward for the Company. John ArmstrongExecutive Chairman The technical information in this report was prepared by Dr John Armstrong PhD,BSc (1st Hons) Geo, executive Chairman of Global Petroleum Limited who has 35years experience in the upstream oil and gas industry. The information has beenreviewed as to its reliability by Mr Wal Muir BSc Hons (UNSW) MBA (UQ), who is apartner in MBA Petroleum Consultants. MBA provides independent technical adviceto Global. Wal Muir has over 27 years experience in the petroleum explorationindustry both in Australia and overseas. He is a Distinguished Member of thePetroleum Exploration Society of Australia and a member of the AustralianSociety of Exploration Geophysicists. Rule 5.3 Appendix 5B Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001. Name of entity GLOBAL PETROLEUM LIMITED ABN Quarter ended ("current quarter") 68 064 120 896 31 DECEMBER 2006 Consolidated statement of cash flows Current Year to date quarter (6 months)Cash flows related to operating activities $A'000 $A'000 ---------------------- 1.1 Receipts from product sales and related debtors - - 1.2 Payments for (a) exploration and evaluation (104) (200) (b) development - - (c) production - - (d) administration (416) (865) 1.3 Dividends received - -1.4 Interest and other items of a similar nature received 106 2051.5 Interest and other costs of finance paid - -1.6 Income taxes paid - -1.7 Other - management fees 15 25 ---------------------- Net Operating Cash Flows (399) (835) ---------------------- Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets - (2) 1.9 Proceeds from sale of: (a) prospects - 179 (b)equity investments - - (c)other fixed assets - - 1.10 Loans to other entities - -1.11 Loans repaid by other entities - -1.12 Other (provide details if - - material) Net investing cash flows - 177 ---------------------1.13 Total operating and investing cash flows (carried forward) (399) (658) --------------------- Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 538 5381.15 Proceeds from sale of forfeited shares - -1.16 Proceeds from borrowings - -1.17 Repayment of borrowings - -1.18 Dividends paid - -1.19 Other (provide details if material) (4) (4) ---------------------- Net financing cash flows 534 534 ---------------------- Net increase (decrease) in cash held 135 (124) 1.20 Cash at beginning of quarter/ year to date 6,732 6,9911.21 Exchange rate adjustments to item 1.20 - - ----------------------1.22 Cash at end of quarter 6,867 6,867 ---------------------- Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 147 1.24 Aggregate amount of loans to the parties included in item 1.10 - 1.25 Explanation necessary for an understanding of the transactions 1.23 - Payment of salaries/fees to directors under approved agreements Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Financing facilities availableAdd notes as necessary for an understanding of the position. Amount available Amount used $A'000 $A'000 ----------------------------------3.1 Loan facilities Nil N/a 3.2 Credit standby arrangements Nil N/a Estimated cash outflows for next quarter $A'000 ------4.1 Exploration and evaluation 100 4.2 Development - ------ Total 100 ------ Reconciliation of cash Reconciliation of cash at the end of Current Previousthe quarter (as shown in the quarter quarterconsolidated statement of cash flows) $A'000 $A'000to the related items in the accounts ------------------is as follows. 5.1 Cash on hand and at bank 85 555.2 Deposits at call 6,782 6,6775.3 Bank overdraft - -5.4 Other (provide details) - - ------------------ Total: cash at end of quarter (item 1.22) 6,867 6,732 Changes in interests in mining tenements Nature of Interest at Interest Tenement interest beginning at end of reference (note (2)) of quarter quarter ---------------------------------------------------- 6.1 Interests in mining tenements relinquished, reduced or lapsed None 6.2 Interests in mining tenements acquired or increased None Issued and quoted securities at end of current quarterDescription includes rate of interest and any redemption or conversion rightstogether with prices and dates. Total Number quoted Issue price Amount paid up number per security per security (see note 3) (see note 3) (cents) ( cents)7.1 Preference securities (description) None 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions None 7.3 Ordinary securities 174,444,787 174,444,787 7.4 Changes during quarter (a) Increases through issues (a) 2,150,000 (b) Decreases through returns of capital, buy-backs 7.5 Convertible debt securities (description) None 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted None 7.7 Options Exercise price Expiry date (description and A. 6,000,000 25 cents 30-06-2007 conversion B. 200,000 25 cents 31-12-2008 factor) C.10,000,000 25 cents 30-06-2008 7.8 Issued during quarter None 7.9 Exercised during quarter 2,150,000 7.10 Expired during quarter None 7.11 Debentures (totals only) None 7.12 Unsecured notes (totals only) None Compliance statement 1 This statement has been prepared under accounting policies which comply withaccounting standards as defined in the Corporations Act or other standardsacceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Des OllingCompany Secretary Notes 1 The quarterly report provides a basis for informing the market how theentity's activities have been financed for the past quarter and the effect onits cash position. An entity wanting to disclose additional information isencouraged to do so, in a note or notes attached to this report. 2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect ofinterests in mining tenements acquired, exercised or lapsed during the reportingperiod. If the entity is involved in a joint venture agreement and there areconditions precedent which will change its percentage interest in a miningtenement, it should disclose the change of percentage interest and conditionsprecedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities The issue price and amount paid up is notrequired in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for ExtractiveIndustries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not addressa topic, the Australian standard on that topic (if any) must be complied with. This information is provided by RNS The company news service from the London Stock Exchange