Otto Energy Completes Lightning Field Commissioning

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THE BOWSER: Otto Energy (ASX: OEL) reported that production from the company’s Green #1 well on the Lightning field in Matagorda County Texas, USA has reached a steady production state as final facilities commissioning has been completed.

Otto Energy has a 37.5 per cent working interest (28.5% Net Revenue Interest) in the leases covering this field.

The company said it has put the Green #1 well through a series of tests to determine deliverability and that it is currently being operated on a 13/64th of an inch choke setting.

The well is delivering approximately 10 million standard cubic feet per day (MMscf/day) with more than 280 barrels per day (bbls/day) of associated condensate.

Otto indicated that final commissioning of the gas plant and associated facilities at the Lightning development have now been completed and production has reached a steady state.

The hot tap into the sales pipeline was completed in May and the well was opened to the sales line.

The company expects the Lightning well will contribute towards revenue through the commissioning months in May and June 2019 with the first full month of contribution to occur in July 2019.

Field Development Field evaluation will be ongoing with flowing material balance being used over the coming months to determine well deliverability and the overall reservoir size to optimize future development wells.

At this stage, the joint venture is planning for a second well to be drilled in January 2020 or earlier dependent upon the results of this analysis.

Further wells will likely be required to fully develop the very large size of the Lightning field.

“The Lightning field development represents the first in what Otto anticipates will be a strong pipeline of new development opportunities to come out of the current busy exploration drilling campaign that has been underway since mid-2018,” Otto Energy managing director Matthew Allen said in the company’s announcement to the Australian Securities Exchange.

“Diversifying Otto’s production base and delivering upon our strategic goal of 5,000 barrels of oil equivalent per day by the end of 2020 has been a key focus for Otto over the past three years since entering the USA and making our first discovery at South Marsh Island 71.

“Otto is very pleased to be making significant progress towards the achievement of this goal.

“Otto would like to congratulate the field operator and all the team involved at Hilcorp Energy on the successful commissioning of the Lighting facilities and achieving a steady production state.

“The development of deep, geo-pressured gas/condensate fields requires the skills and experience of an operator of Hilcorp’s calibre.

“Otto looks forward to working with Hilcorp to further the Lightning development in coming months with the drilling of additional wells being planned in the early stages of the field life to optimise ultimate recoveries.”

 

Email: info@ottoenergy.com

Website: www.ottoenergy.com

 

Empire Energy Group Sells Kansas Assets

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THE BOWSER: Empire Energy Group (ASX: EEG) announced it has reached a deal with Mai Oil Operations, Inc for the sale of the company’s Kansas assets for US$19.1 million.

Empire Energy Group said the sale proceeds will principally be used to retire debt to a maximum remaining gross debt balance of US$8 million, while retaining a proportion from the sale proceeds for working capital and continued investment in Empire’s core Northern Territory shale assets.

The company expects the sale will enable it to retain cash flow positive production from its New York State and Pennsylvania gas production assets and the substantial upside potential of its Marcellus Shale and Utica Shale rights in New York State.

The sale is expected to complete in Q3 2019.

“The sale of the Kansas assets represents a key milestone in the execution of Empire’s strategy to build value for shareholders through the reduction of debt and the continued focus on exploration and development in the McArthur and Beetaloo Basins,” Empire Energy Group chief executive officer Alex Underwood said in the company’s announcement to the Australian Securities Exchange.

“Over the last year management and the Board have concentrated their efforts on the active repair of Empire’s balance sheet to favourably position the company for growth in the McArthur and Beetaloo Basins.

“The execution of a recapitalisation and debt reduction program, as well as the Kansas asset sale has enabled us to substantially reduce debt and increase our working capital position ahead of the exploration and development program in the Northern Territory.”

 

Website: www.empireenergygroup.net

 

Strike Energy Provides Jaws Operation Update

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THE BOWSER: Strike Energy is progressing work at the Jaws-1 project wells, located at the Southern Cooper Basin Gas Project (SCBGP) Joint Venture (Strike Operator and 66.67 per cent, Energy World Corporation 33.33 per cent).

Strike Energy said it has continued carefully drawing the wells down towards desorption and the flowing bottom hole pressure has now reached 250psi.

Sustained gas production has continued and is slowly building as further water is removed and more coal around the wellbore is depressurised.

The company is now setting pump rates to maintain the 250psi pressure in the wellbore and allow the desorption front to gradually propagate outwards into the reservoir.

Current water rates of 450 barrels per day show continuing strong reservoir productivity, with a natural decline in water anticipated over time as more coal transitions from water to gas production.

 

Email: strike@strikeenergy.com.au

Website: www.strikeenergy.com.au

 

Winchester Energy Continues Development of Mustang Prospect

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THE BOWSER: Winchester Energy (ASX: WEL) has formulated a development plan to accelerate oil production from the Strawn Fry Sand member of the Mustang prospect in the Permian Basin of Texas, USA.

Winchester Energy is developing the plan following its recent success with White Hat 20#3 that has initial production of 306 barrels of oil per day (bopd).

Winchester has commissioned independent U.S. based petroleum consultants, Mire & Associates, Inc. to conduct an optimization study and update of the Gross Prospective Resources of the Strawn Sand Fry member within the Mustang prospect.

The company has completed development optimisation studies that identified a further nine well locations within the central Mustang area followed by up to a possible further 25 wells across Mustang North and South (total of 34 wells) subject to ongoing development drilling success.

Recent observations documenting modest associated gas flow from White Hat 20#3 have led Winchester to commence work to connect the well to gas sales.

The gross prospective gas resource converted to barrels of oil equivalent (boe) has also been factored into a revised Gross Prospective Resource estimate.

Incorporating new data from White Hat 20#3, the Mustang Prospect Prospective Resource target best estimate has a P50 of 2.03 million barrels of oil equivalent (mmboe) recoverable and a high estimate P10 of 3.77mmboe from the Strawn Fry Sand member.

The original oil in place in the Fry Strawn Sand member has increased to a best estimate P50 of 10.8 million barrels of oil in place and a high estimate P10 of 16.9 million barrels of oil.

Winchester indicated a new well, White Hat 20#4, is on schedule to spud in July that is anticipated to be followed by White Hat 20#5 (permitting underway) which will be spudded shortly thereafter.

 

Website: www.winchesterenergyltd.com

 

Last Look at Resources Companies Presenting at Gold Coast Investment Showcase

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THE CONFERENCE CALLER: The 2019 Gold Coast Investment Showcase kicks off next week and The Resources Roadhouse continues its look at companies that will be in attendance.

 

Venture Minerals (ASX: VMS) has upgraded the Resources at the company’s Riley iron ore project in Tasmania.

Venture Minerals announced the upgrade as part of the ongoing iron ore mining study underway at the Riley project that has updated the JORC Code 2004 maiden resource statement of 2 million tonnes at 57 per cent iron to meet the guidelines of the JORC Code 2012.

The company indicated the upgrade coincides with release of the tender documents to be released this coming week to contractors for the mining, processing and haulage components of the Riley DSO project, from which the resultant prices will be used in the updating of the mining study.

Venture said that as part of the mining study update, the Riley ore reserves will also be upgraded to JORC Code 2012 so that a decision to recommence mining can be made at the earliest opportunity by the Board.

Following a favourable study outcome and a decision to mine, Venture’s goal is to commence iron ore production in Q4 2019.

“The resource upgrade and the imminent release of the tender documents for the three main contracts of the Riley Mine are significant steps towards completing the updated mining study,” Venture Minerals managing director Andrew Radonjic said.

Venture Minerals’ Resource upgrade follows firm commitments under a Share Placement to sophisticated and professional investors.

Venture Minerals is raising just over $1.5 million through the issue of around 78 million Ordinary Shares at an issue price of two cents per share.

The company explained the raised funds will provide certainty that it will be funded to progress the development of the Riley iron ore project in Tasmania should a positive decision to mine be reached by the Board.

“The Placement and the fully underwritten Entitlement Offer secures key funding capacity for Venture to progress the updated feasibility study on the Riley iron ore project during a time of significant strength for global iron ore markets,” Radonjic said.

“The recently executed off-take agreement for the Riley project provides strong market validation that the Riley product will be highly sought after.

“The Fully Underwritten Entitlement Offer provides all shareholders the opportunity to participate in the future of the company as we enter an exciting phase of working towards potentially bringing Australia’s next iron ore mine into development.

“With the iron ore price recently breaking through US$100 a tonne, the outlook for the iron ore sector is positive and the Riley project will benefit from a quick-to-market development status by leveraging circa 90 per cent of the required equipment that was previously purchased in 2014 being still on hand.

“The Board looks forward to completing the updated feasibility study on the Riley iron ore project and updating the market on its outcome in the near term.”

Venture has also invited eligible institutional shareholders to participate in a Fully Underwritten Institutional Entitlement Offer.

 

Meteoric Resources (ASX: MEI) recently completed the acquisition of the highly prospective Juruena and Novo Astro gold projects in Brazil from Crusader Resources (ASX: CAS).

The Juruena and Novo Astro projects cover an area of approximately 770 square kilometres, comprising 24 tenements, located on the western end of the highly prospective Alta Floresta Belt, which is host to major miners including Anglo American and Vale.

Geologically, the Alta Floresta belt is a Paleoproterozoic, east west trending, continental magmatic arc, estimated to have produced over seven million ounces of gold to date.

The Alta Floresta Belt is arguably the most desirable gold exploration destination in Brazil.

The Juruena project hosts a JORC (2012) Compliant Resource Estimate of 1.3 million tonnes for 261,000 ounces of gold at 6.3 grams per tonne.

“The formal completion of the Acquisition of Juruena and Novo Astro marks the commencement of the next exciting stage of development for Meteoric as we move to commence exploration,” Meteoric Resources managing director Dr Andrew Tunks said.

Tunks advised that he was travelling to site to join Meteoric operations manager Peter Sheehan and the company’s Brazilian team to finalise the initial drilling plan for the Dona Maria and Querosene prospects, the two most advanced targets on Juruena.

“These prospects already contain a combined high-grade JORC 2012 Mineral Resource Estimate of 436,000 tonnes at 14.7 grams per tonne for 205,000 ounces it is our intention to complete further drilling at these bonanza grade prospects,” Tunks continued.

“This is truly an exciting time for the company and its shareholders as we move into gold exploration in what we believe is one of the most prospective regions in the world, the Alta Floresta Belt in Brazil, which is home to majors including Anglo American and Vale.

“Since the announcement of the Acquisition back in April, the Meteoric team – myself included – have been itching to get on the ground and start exploration and I am simply thrilled that we are now mobilising.”

 

Corazon Mining Chasing New Discovery at Mt Gilmore

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THE DRILL SERGEANT: Corazon Mining (ASX: CZN) is currently conducting exploration activities that are focused on the discovery of a large, concealed suphide system within newly identified zones of mineralisation at the company’s Mt Gilmore copper-cobalt-gold project in New South Wales.

Corazon Mining is carrying out field activities at Mt Gilmore testing newly identified copper-cobalt-silver geochemical anomalies, to define priority targets for the company’s next phase of drilling.

The company believes these large geochemical anomalies represent alteration zones associated with intrusive-related copper-sulphide systems, located at favourable structural dilatant zones within the Mt Gilmore trend.

Ground preparation for an Induced Polarisation (IP) ground geophysical survey is currently underway, which is expected to commence this month and be completed by the end of July.

Testing will consist an initial reconnaissance survey of 20 line-kilometres, with provision for follow-up based on results.

“Geological mapping of the large copper-cobalt-silver soil anomalies is ongoing and continues to identify extensive favourable alteration and outcropping sulphide mineralisation,” Corazon Mining said in its ASX announcement.

“Alteration includes the quartz-tourmaline breccia-styles typical of the Cobalt Ridge sulphide deposit at Mt Gilmore, along with extensive propylitic and skarn style hydrothermal alteration assemblages, including the minerals epidote, calcite, garnet, magnetite and sulphide (pyrite-pyrrhotitechalcopyrite) typical of the intrusion related sulphide deposits being explored for.”

 

Email: info@corazon.com.au

Website: www.corazon.com.au

 

Calidus Resources Improves Warrawoona Confidence

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THE DRILL SERGEANT: Calidus Resources (ASX: CAI) announced first assay results from a recent 42-hole RC drilling program at the company’s Warrawoona gold project in the Pilbara region of Western Australia.

Calidus Resources stressed the importance of the results being from infill drilling, saying they confirm the continuity of the western part of the main Klondyke Resource model at Warrawoona.

Results for the eastern portion are pending and are expected to be released soon.

Of the 42-hole RC drilling program, 35 RC drill holes were completed over the current Klondyke Resource as part of the infill program while a further 7 RC drill holes were drilled into two regional targets that a truck-mounted air-core rig was unable to access.

Calidus has received an initial batch of results for 10 holes drilled into the western part of the Klondyke Resource, with results including:

13m at 1.58 grams per tonne gold from 28m;
12m at 1.52g/t gold from 66m;
5m at 2.85g/t gold from 2m;
7m at 1.9g/t gold from 86m; and
6m at 2.06g/t gold from 71m.

Calidus explained the infill drilling across the Klondyke deposit was undertaken to increase the reliability of the Resource and the mineralisation types inside the PFS open cut pit design as part of an ongoing strategy to de-risk the project.

“The RC drilling and trench campaigns are part of Calidus’ strategy to derisk the development of the Warrawoona project, where a Pre-Feasibility Study is due for completion next month,” Calidus Resources managing director Dave Reeves said in the company’s announcement to the Australian Securities Exchange.

“Upgrading drill density and trenching the upper portions of the Klondyke Resource will result in an improved level of confidence in lode geometry, continuity and predictability.

“Results will be used to refine the open-cut mine design and shallow early mine-feed material.”

 

Email: info@calidus.com.au

Website: www.calidus.com.au

 

Hillgrove Resources to Commence Kanmantoo Drilling

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THE DRILL SERGEANT: Hillgrove Resources (ASX: HGO) is undertaking an underground study at the company’s Kanmantoo Copper Mine in the Adelaide Hills region of South Australia.

Hillgrove Resources is evaluating a possible underground mining development below the Giant Pit at Kanmantoo that may be able to work in conjunction with the company’s Pumped Hydro Energy Storage (PHES) development.

The company’s objective for the underground development is to extract value from the Kanmantoo Exploration Target of 5 to 10 million tonnes at 1.7 per cent to 2.2 per cent copper and 0.4 grams per tonne to 1g/t gold, whilst AGL review the potential of the PHES project.

As part of this evaluation an exploration drilling program will commence on 24 June to confirm the depth extension, grade and continuity of the central Kavanagh copper-gold lode below the Giant Pit.

Hillgrove anticipates the drilling to take approximately two months.

“If the drilling successfully intersects the copper-gold mineralisation of significant grade and continuity, then this drilling information will be used to assist Hillgrove to estimate an Indicated Resource and thereby enable the company to assess the viability of establishing an underground mine before the potential PHES project is commissioned,” Hillgrove Resources said in its ASX announcement.

 

Website: www.hillgroveresources.com.au

 

Strike Energy Continues Drilling at West Erregulla-2

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THE BOWSER: Strike Energy (ASX: STX) provided an update on drilling of the company’s West Erregulla-2 oil target.

Strike Energy is drilling West Erregulla-2 in EP 469, which is adjacent to and targeting analogous Permian gas sands of a similar size and nature as the Waitsia gas discovery.

The company plans to frill to a total depth of 5,200 metres and penetrate a further two independent reservoir targets.

These include a conventional gas target in the Basal Wagina sandstones and the primary gas sand sequence in the Kingia High Cliff.

Strike Energy has continued to drill the first intermediate section with the hole currently nearing section TD.

The company said its rate of progress has improved over this section during the under-reaming and the well remains on schedule and within budget.

During the latter part of drilling this section Strike passed through the tertiary Cattamarra oil target.

The company said that although hydrocarbon shows and elevated mud gas readings (including all heavy hydrocarbon components) were evident at the prognosed depth, it considered these were insufficient to warrant the running of advanced wireline logging and testing.

The company said the hydrocarbon shows are supportive of the Cattamarra geological model in this low POS target, and will strongly assist in calibrating the amplitude response to both hydrocarbons and good quality reservoir for future Cattamarra activities.

Looking ahead, Strike will complete drilling the hole section towards the nominal 2,550m TD or when suitable 11-3/4” casing setting formation is intercepted allowing casing to be run into hole and cemented in place at section TD.

Strike will begin drilling a second 10-5/8” intermediate section to a nominal 4,230m.

The Basal Wagina, a secondary conventional gas prospect, will also be intercepted in the next section.

Strike Energy is the operator and the holder of a 50 per cent Joint Venture interest in EP469, and Warrego Energy (ASX: WGO) the holder of the other 50 percent JV interest.

 

Email: strike@strikeenergy.com.au

Website: www.strikeenergy.com.au

 

Technology Metals Confirms High Recoveries from Gabanintha

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THE BOURSE WHISPERER: Technology Metals Australia (ASX: TMT) received results of pilot plant scale roasting testwork of a bulk sample collected from within the North Pit region of the company’s Gabanintha vanadium project near Meekatharra in Wesertn Australia.

Technology Metals explained the bulk sample for the pilot plant scale testwork was collected from within the North Pit region of the Gabanintha project late last year.

A total of 14.2 tonnes of sample was collected from this program; consisting of a blend of transitional massive magnetite mineralisation, fresh massive magnetite mineralisation, transitional hanging wall banded mineralisation, fresh hanging wall banded mineralisation and fresh footwall banded mineralisation.

The pilot plant scale testwork using this bulk sample was designed to confirm optimal operating parameters and scalability of laboratory testwork results and provide data for vendor definition of design parameters and cost estimates for the ‘roasting’ section of the processing circuit.

Initial ‘sighter’ testwork was completed previous to this using a representative 300 kilogram sub-sample of the bulk sample that confirmed the very high purity of final vanadium pentoxide (V2O5) product that can be produced from the GVP, delivering a 99.36 per cent V2O5 product purity.

Samples of this material have been sent to potential end-users / offtake partners for independent verification.

The latest testwork was conducted by roasting kiln suppliers FLSmidth in Pennsylvania USA, confirming the very high vanadium solubility/recovery rates indicated from the previous laboratory and sighter scale testwork.

Rates ranged from 84.9 per cent to 90.7 per cent during continuous feed, confirming the 85 per cent solubility/recovery to be used in the Definitive Feasibility Study.

FLSmidth is now undertaking engineering design and cost estimates for the roasting section of the process circuit.

Technology Metals expects delivery of the DFS mid-2019, which will ultimately be determined by how long it takes to verify and incorporate this information in to the overall DFS model.

“The very important pilot scale testwork, a key component of the delivery of a high-quality Definitive Feasibility Study, has confirmed the very high recovery rates for the roasting section of the process circuit,” Technology Metals Australia managing director Ian Prentice said in the company’s announcement to the Australian Securities Exchange.

“Delivery of the kiln design and operating parameters from kiln experts FLSmidth is the next vital step to be completed.”

 

Email: investors@tmtlimited.com.au

Website: www.tmtlimited.com.au