Oil and Gas Eye Q1 2013

On the main market, most companies recorded a share price gain.

EnQuest performed best, with a 20% gain. During Q1 it said it had agreed to buy an 8% non-operated interest in the UK’s producing Alba oil field. In February, it said it had approved an increase in the scope and specification of the Alma/Gaia project aimed at extending field life, optimizing operating costs and enabling a potential second phase development. The results of wells drilled so far have been as, or better than, expected.

In February Essar Energy said the gross refining margin at its Stanlow plant was 128% higher in Q4 2012 than in Q4 2011, and said it is further improving the margin. Its share price ended Q1 up 15%.

BG Group’s share price rose 12% over Q1. In January, it announced first production from the Sapinhoa field offshore Brazil. In March, the Ophir-BG joint venture in Tanzania said that a successful appraisal program had confirmed the Jodari field’s resource potential, and that it could underpin an LNG development. Ophir’s share price rose 6% over Q1.

In February, Salamander Energy said the South Kecapi well in the Bontang PSC in Indonesia had been completed as an oil and gas discovery. In March, it said it had agreed to an asset swap to acquire the outstanding 15% interest in the Bangkanai PSC in Indonesia, and that it had agreed to farm-out a 30% interest, leaving it with a 70% operated interest. Its share price ended Q1 up 9%.

In March, Afren exercised an option to buy 10.4% of the issued capital of First Hydrocarbon Nigeria, which will give it 54.8% of FHN and result in a material increase in Afren’s 2P reserves. Its share price ended Q1 up 8%.

Cairn Energy announced it had farmed-in as operator of three blocks offshore Senegal. It will acquire a 65% working interest in the blocks by fully funding, to an investment cap, the costs of one exploration well. This marks Cairn’s entry into Senegal and its share price rose 3% over Q1.

Tullow Oil’s share price fell 2%. In March, following a failure to recover to the surface hydrocarbons during drilling, it announced the suspension of the Paipai-1 exploration well onshore Kenya for future evaluation.

Share price movements of FTSE 350 Oil and Gas Producers over Q1 2013

Source: Thomson Datastream