Arrow Exploration Corp. press release
Grove Energy Limited - Third Quarter Results and Conference Call
TSXV - TSX Venture Exchange · Oil · Natural Gas · Canada
Exploration well on Abbadesse discovery scheduled for December 2005. ENI to test extension of discovery into adjoining San Potito concession held by ENI by drilling the Longanesi-1 exploration well. San Marco farm out to Blugas for 72.5% of costs for 50% working interest Acquisition of additional 148 km of seismic in San Marco and two additional prospects identified for proposed 2006 drilling Pantelleria seismic interpretation completed. Results very positive and to be announced in December 2005. Stellar Energy Advisors appointed to handle farm out negotiations. South Craiova Concession - 185 km of additional seismic acquired in south east. Prospect definition under way for proposed drilling in early 2006. D-14, Slovenia - Drilling contract negotiated for 1st quarter 2006. D-14 well to be deepened to test structure. UK North Sea - Six blocks awarded to Grove in the 23rd licensing round.
VANCOUVER, Nov. 24 /CNW/ - Grove Energy Limited ("Company") (TSX-V & AIM: GRV) the oil and gas exploration company with its primary assets in Europe and the Mediterranean Margin, announces its September 2005 financial results.
Conference Call
The Company also announces that a conference call is scheduled for Monday, November 28, 2005 at 6 am Vancouver Time (PST), 9 am Toronto Time (EST) and 2 pm London Time (GMT). Shareholders, analysts and institutional investors can call in via telephone at: 1-416-644-3423 or 866-250-4892 (toll free from North America). The webcast can be accessed through Grove's website at: www.groveenergy.com. Webcast and telephone replays of the conference call will be available approximately two hours after the completion of the call. Callers can access the replay by dialing 1-416-640-1917 or 877-289-8525 and entering the passcode 21163772 followed by the number sign. Interested investors, the media and others may review the quarter results and supplementary financial information at: www.groveenergy.com or, alternatively, at: www.sedar.com.
Highlights and Update for the Third Quarter 2005
Grove Energy is pleased to add a Highlights and Activities Update to its quarterly reporting information. There were a number of significant developments during the quarter including:
San Marco Concession, Po Valley, Italy
Abbadesse-1 Discovery Well
The Abbadesse-1 well was drilled on the north east of the Company's San Marco concession and was completed during the second quarter of 2005 as a producing well. An application was made during the second quarter with the Ministry of Productive Activities for a development and exploitation license in respect of the Abbadesse discovery. The development plan calls for a 2 km pipeline, a modular gas plant and two additional appraisal wells, Abbadesse 2 & 3. Grove has mapped six gas-bearing horizons - "A" through "F" - and tested sands C, D and E&F (co-mingled) with flow rates of approximately 5 mmscf/d from each test. Initial modeling has indicated that Abbadesse-1 will produce about 4 mmscf/d and that Abbadesse-2 & 3, with a dual string completion and producing from two horizons simultaneously, could produce at approximately twice this rate. With Italian gas prices ranging between Euro 5 and Euro 6 per mcf during the quarter the Abbadesse field could be a significant cash generator. Grove intends to undertake an extensive production test of the A and B horizons when the Abbadesse-2 and 3 appraisal wells are drilled during 2006. The intention is that such wells will be completed as producing wells. The Abbadesse-1 well site was designed to allow for additional wells to be drilled from the same location, thereby minimizing development site costs and approval delays. Based on mapping, testing and the vertical seismic profiling survey, the Abbadesse discovery appears to be a stratigraphic trap that expands (thickens) to the east-south-east into the San Marco concession and pinches out to the west into the adjoining San Potito concession held by ENI S.p.A.
During the third quarter:
Grove was advised by the Ministry of Productive Activities to work with ENI to agree a joint development plan for the Abbadesse discovery due to the probable extension of the discovery into San Potito. Technical and commercial meetings were held with ENI to advance development and exploitation strategies. Grove agreed to make available its well data to ENI, on a pre-trade basis, to ensure the timely development of the Abbadesse field. Grove was advised that ENI intends to drill the Longanesi-1 well to confirm the extension of the Abbadesse discovery into the San Potito Concession. Grove believes that this well will determine how far zones A through C extend into the San Potito Concession and whether zones A through C cover a much larger area than initially mapped and contain thicker sands than interpreted by Grove. Grove has only tested zones C, D, E & F and should ENI have a discovery and subsequently test zones A, B & C the data will assist both parties in determining the extent of the field, reserves, production profiles and ultimately development strategies. Site preparation is ongoing for the Longanesi-1 well, with a spud expected mid December 2005 and the results expected in early January 2006.
Grove is extremely pleased that an excellent working relationship has been established with ENI and with the decision by ENI to drill the Longanesi-1 well to test the structural extension into the San Potito Concession. The data gathered will assist both parties in determining an appropriate strategy for the development of the Abbadesse discovery, which subject to the results of the Longanesi-1 well could be larger than originally mapped by Grove.
Balance of San Marco Concession
Early reviews of seismic data over San Marco, prior to the successful Abbadesse well, led to the identification of a number of exciting leads. A decision was made to first drill the Abbadesse structure and, upon a successful discovery and validation of the geological model, to focus on other similar structures (leads) on trend within the license block and to acquire further seismic to mature these leads into prospects. During the third quarter:
Grove acquired, reprocessed and is interpreting 148 kms of infill 2D seismic over four leads running on trend with the Abbadesse discovery. Entered into a Farmout agreement with Blugas for the portion of the concession not included in the Abbadesse area. Entered into a long-term gas sales agreement with Blugas. Commenced negotiations with drilling contractors in respect of two exploration wells in the San Marco Concession Began sourcing long lead items such as tubulars, casing and well heads.
During the quarter Grove expanded its relationship with Blugas to include the balance of the San Marco Concession. Pursuant to this agreement, Blugas agreed to fund 50% of the cost of acquiring, processing and evaluating 148 km's of seismic over the leads on trend to the Abbadesse discovery. It is estimated that this cost will be approximately C$ 1 million. Upon funding its seismic option, Blugas has the right to farm into any prospect identified. Upon electing to farm in, Blugas will meet 72.5% of the costs associated with drilling, testing and completing any wells drilled on such structure for the right to a 50% interest. Should Blugas withdraw from any prospect or acreage, Grove will have the right to either sole risk or farm out such area to third parties. Infrastructure required to develop the field, post testing, will be funded 50/50. Grove has agreed to sell all gas produced from fields jointly funded with Blugas to Blugas pursuant to the Standard Gas price index that prevails in Italy less a discount of 1% for handling and marketing.
Other Onshore Concessions
An application has been made for the Solarolo Concession to the south of San Marco and the Casale Cocchi Concession immediately to the south of the Abbadesse discovery. It is understood that a meeting will be held in December to decide the award of the Casale Cocchi concession.
Pantelleria Concessions
Earlier this year Grove completed the acquisition of 700 kms of 2D seismic over the north east section of the GR 15 Pantelleria concession. The seismic was processed during the year, and interpretation was completed in November 2005. The seismic results are extremely encouraging and a number of significant structures have been identified within the Concession, validating Grove's decision to sole risk the seismic acquisition program. Sole risking the seismic has allowed Grove to maintain a 100% interest in the two concessions. Now that seismic processing and interpretation is completed, Grove is seeking a formal license extension as required under Italian law. Details of the seismic results will be made available in December 2005 upon the establishment of a complete seismic farm out package that will be available to potential farm in partners. Grove believes that the size and quality of the structures will generate significant interest from a large number of companies, and as such Grove has decided to appoint Stellar Energy Advisors Limited, in the UK, to handle farm out negotiations and data room access.
Romania
Analysis of the Cetatutia-1 exploration well determined that side-tracking the well was not advisable. Subsequent to the completion of Cetatutia-1 well Grove participated in:
The acquisition of 185 kms of 2D infill seismic that was shot in the south eastern portion of the concession to mature several of the 29 leads on trend from the Bulgarian side of the Danube. Together with the Operator, Sterling Resources, Grove is evaluating the seismic results with the objective of defining a number of prospects for drilling in the first quarter of 2006.
Despite the disappointing results of the Cetatutia-1 well, Grove is very confident in the potential of the South Craiova Concession. The Concession is in a proven hydrocarbon basin; is surrounded by discoveries to the north and in southern Bulgaria; and is relatively under explored.
Slovenia
Grove intended to deepen the D-14 well during the fourth quarter of 2005; however, due to lack of availability of suitable drilling rigs, this activity has been delayed until the first quarter of 2006. Contract discussions are being finalized with a local drilling contractor, Nafta Geoterm.
UK North Sea
The Company was awarded an interest in six blocks in the UK North Sea 23rd licencing round. These blocks, together with Grove's interest in the 42/13 block provides an opportunity to participate in the prolific North Sea hydrocarbon region. Bids are being solicited for a turn key appraisal well for 42/13 with a target start of late 2006.
Other Business
Grove constantly evaluates property interests in Europe and the Mediterranean Basis. Applications have been filed over three blocks in the Dutch North Sea and evaluation of other property opportunities is ongoing. The Company's office in Perth, Australia will close before year end and the Company's Chief Executive Officer, Glenn Whiddon, will be relocating to Europe in December, 2005.
GROVE ENERGY LIMITED
Per "Anthony Hawkshaw" Anthony Hawkshaw, CFO
Some of the statements contained in this release are forward-looking statements. Forward looking statements include but are not limited to, statements concerning estimates of recoverable hydrocarbons, expected hydrocarbon prices, expected costs, statements relating to the continued advancement of the Company's projects and other statements which are not historical facts. When used in this document, and on other published information of the Company, the words such as "could," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward- looking statements. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable, such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors could cause actual results to differ from these forward-looking statements including the potential for the Company's projects to experience technical or mechanical problems, geological conditions in the reservoir may not result in a commercial level of oil and gas production, changes in product prices and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties.
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The information contained herein does not constitute an offer of securities for sale in the United States, United Kingdom, Canada, Japan or Australia.