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LNG Energy Ltd.

LNG Energy Ltd. ("LNG") is a Canadian exploration and development company focused on developing the extraordinary oil and gas reserves in Papua New Guinea and Poland. In Papua New Guinea, LNG has assembled a strategic, world-class portfolio of acreage, holding a 100% interest in 5 concessions for approximately 5.5 million acres of prospective oil and gas properties. One of these important concessions is located adjacent to the ExxonMobil led consortium building the $14.0 billion in infrastructure for oil and gas export in PNG.

 

In Poland, LNG now holds a total of approximately 1.1 million gross acres in 5 separate concessions, including a 20% net interest in approximately 734,000 gross acres (146,000 net acres for LNG) of prospective shales with Saponis Investment sp zoo's ("Saponis") shale gas exploration project, consisting of 3 concessions. LNG's partners in Saponis include BNK Petroleum Inc., Sorgenia E&P S.p.A., and Rohol-Aufsuchungs Aktiengesellschaft. LNG also has a 50% net interest in approximately 360,000 gross acres of prospective shales in 2 concessions in Poland together with Realm Energy (BVI). LNG also owns 100% of BWB Exploration, LLC ("BWB"), holding approximately 7,000 acres of oil and gas leases in the Black Warrior Basin of Mississippi and Alabama.LNG Energy Ltd. is a independent energy company.

 

LNG Energy has assembled a world class portfolio of acreage in Papua New Guinea ("PNG") and holds a 100% interest in approximately 5.5 million acres of prospective oil and natural gas properties comprising five large licenses (see map).

The current licenses, renewed in 2008, have a six-year term along with new work and expenditure commitments for each Petroleum Prospecting License ("PPL").

  • PPL 319 approx. 500,000 acres

  • PPL 320 approx. 1.16 million acres

  • PPL 321 approx. 1.84 million acres

  • PPL 322 approx. 1.94 million acres

  • PRL13 approx. 40,000 acres

Recent industry activity

2009 has seen an acceleration of investment interest in PNG, culminating with two significant developments; (1) a US$15 Billion Liquefied Natural Gas development project, lead by ExxonMobil, was granted Final Investment Decision, FID, on Dec. 7th, 2009 (2) InterOil's gas discovery at Antelope #1,March 2009, achieved a World Record during testing operations of 382 MMscf/d, followed by Antelope #2, December 2009, surpassing the #1 well's record at 705 MMscf/d
 

The presence of large reserves of oil and gas within PNG has been known for many years, but it is only with the advent of a Liquified Natural Gas facility and burgeoning demand in Asia that the production of significant quantities of natural gas in PNG will become economically viable. We are very excited about the notable exploration successes in PNG and are looking forward to the upcoming year's opportunities.


Planned activity in 2011

In 2009, LNG Energy announced an aggressive work program involving all 5.5 million acres in PNG. The 2010 the company successfully completed an exploration work program which consisted of acquiring high resolution airborne magnetic and gravity data over substantially all of LNG Energy's petroleum prospecting licenses, ("PPL"). Post acquisition magnetic and gravity data modeling, 2D seismic, identified a portfolio of exploration areas of interest for high grading and possible further investigation to maturity of a drilling inventory. In 2011, LNG Energy will conduct further seismic studies in PPL-319, where several areas of interest were identified in 2010. The 2011 seismic program will be conducted in two phases with the goal of identifying a portfolio of drillable prospects in PPL-319 and PRL-13.

This seismic program consists of approximately 60 km in the alluvial river flats in the south of the license around the Kikori River, with 40 km in the karst limestone and 10 km in the volcanic areas. This program has been planned in order to upgrade leads to drillable prospects in the western area of the license which could be similar to discoveries at Barikewa. A subsequent program is planned for the end of this year. Gama Projex Pte. Ltd., a PNG based seismic company is managing this project.

The seismic programme is in the early stages consisting of camp construction which will be followed by line cutting, the drilling of shot-holes and then recording the data. If there are no delays due to unforeseen circumstances the data should be acquired by late June or early July.

Activity in prior years

In 2009, LNG Energy engaged a specialist, third party to provide a complete range of secure, accessible data archival and management services. Presently, the LNG Energy team can promptly access this data, as needed, from anywhere in the world where internet access exists.

Activity in prior years

In 2009, LNG Energy engaged a specialist, third party to provide a complete range of secure, accessible data archival and management services. Presently, the LNG Energy team can promptly access this data, as needed, from anywhere in the world where internet access exists.

 

                                                                                                                                                                                                                                                                   

Click to enlarge

A total of $20 million including over $11 million on the development of PRL 13 and over $2 million on PPL 319 and PPL 322 has been expended to date. LNG Energy has also recently expended an additional $2 million preparing to drill a new well on the Kuru anticline, the site of two gas discovery wells located on PRL 13. PPL 319 and PRL 13 lie on PNG's major hydrocarbon trend (see Licence Location Map) and are located only 30 km southeast of the Southeastern Gobe oil and gas field.

Over several years, LNG Energy has built a management team that is concentrating on working with government officials and local villagers to ensure that the various stakeholders are kept fully informed of the Company's plans and activities as part of its commitment to involve the local communities in its work program.LNG Energy Ltd. ("LNG") holds a 20% net interest in Saponis Investments Sp. Z.o.o,, "Saponis", comprising of approximately 734,000 gross acres (2,972 km2) of prospective shales in the Baltic Basin of Poland. Saponis is operated by BNK Petroleum Inc. (27%), with both Sorgenia E&P S.p.A. (27%), and Rohol-Aufsuchungs Aktiengesellschaft (26%) as additional working interest owners LNG acquired its interest through ownership of BWB Exploration, LLC ("BWB") which held the option to participate for up to a 20% interest and has exercised the option to participate in full. The three concessions, Starogard, Slupsk and Slawno, are located in Northern Poland and total approximately 734,000 acres (2,972 square kms), for an approximate net 146,800 acres to LNG.

On February 7, 2011, LNG announced that its wholly owned subsidiary, Kaynes Capital S.a.r.l. ("Kaynes"), had entered into an agreement to acquire a 50% interest in two oil and gas concessions in Poland for US$4 million. The two concessions are held under the Joyce and Maryani Investments Sp. Z.o.o. subsidiary titles, "Joyce & Maryani", and total approximately 360,000 acres in which the Company will have an additional 180,000 net acres in Poland. This acquisition was closed on February 17, 2011. The company's total gross acreage in Poland is now approximately 1.1 million acres.

Recent industry activity

Concurrent with LNG Energy's notice of participation with BWB, 3 Legs Resources plc's Polish subsidiary, Lane Energy Sp. z.o.o, announced (August 6th, 2009) that it had reached a farm-in agreement with ConocoPhillips on their acreage offsetting those lands held by Saponis. Subsequently, interest levels in pursuing Gas Shales in Poland has elevated substantially with additional international majors; Marathon, ENI, Talisman, Chevron and ExxonMobil, having announced their acreage holdings and interest to exploit Gas Shales in Poland.


Saponis: LNG, in conjunction with its partners in Saponis, shot two 10 km 2D seismic lines through the planned well locations on each of the three concessions in order to avoid faults so that all targeted intervals will be encountered in the first test well on each concession. The additional work program was proposed in concession amendments and approved by the Polish Ministry of Environment in late June 2010. The concession amendments also included an extension of the spudding deadline on the first well in the Slupsk concession (Lebork S-1) to June 2, 2011 and on the first well in the Starogard concession (Starogard S-1) to December 2, 2011 to allow the Company to utilize both the new seismic data and the information gathered on the Wytowno S-1 well on the Slawno Concession which was spudded in December 2010. The amendments also extended the deadline of drilling the 2nd well on the Slupsk concession to December 2012 and the 2nd well on the Starogard concession to June 2013.

The first well, Wytowno S-1, in the Slawno concession was spudded in December 2010. The well has been drilled to its total depth of 3,580 meters and successfully run and cemented casing to TD. Approximately 200 sidewall cores have been taken for analysis of the physical parameters of the rock. These core samples will be analysed to obtain; porosity, permeability, total organic carbon, rock evaluation pyrolysis, thermal maturity, gas composition, micropaleontology, and mechanical properties. The Company estimates that it will take about 45 days to do a complete analysis of this core data after which a fracture stimulation design of the wellbore can begin.

The rig was immediately relocated to the Lebork well location on the Slupsk concession to begin drilling operations. The Lebork drill site has already been completed and all permits are in place and this well was completed in May 2011. The third well in the Starogard concession will be spudded in the second half of 2011. All three wells drilled in 2011 are engineered to be vertical, with the primary objective being to gather all core, petrophysical and completion test data to characterize the shale gas deliverability a for horizontal development plan.

The opportunity

The opportunity is primarily targeting a Silurian and Ordovician aged resource play within the Baltic Basin, consisting of gas shales with a minimum gross thickness of 1000 ft (300m) and a maximum gross thickness of 3300ft (1100m) over all five concession areas. The resource presence is defined by wells that have been extensively cored (core intervals exceed 1000 m) for both scientific and exploration purposes by Polish research institutes over the last 50 years. Preliminary core test results and resource characterization, of the existing cores, have been extremely encouraging relative to known US shale gas arenas and provided the technical rationale for participation. However, modern shale gas analysis requires new core testing and petrophysical measurements, undertaken by laboratories familiar with characterizing North American based shale gas resource plays, to design the horizontal well development plans.


LNG Community Relations - click to watch video (Polish with English captions) Currently, Poland does not have sufficient internal natural gas production to meet its domestic demand requirements and must import additional natural gas from trans-European gas pipelines supplied by Russia. Two thirds of Poland's domestic requirements are met by imports from Russia, Uzbekistan and Germany (Source: Ministry of Economy, Republic of Poland). Consequently, all gas production is anticipated to be purchased within the domestic marketplace at prices substantially greater than those available within North America.

LNG Energy Ltd. has entered into an exclusive term sheet with TransAtlantic Worldwide Ltd., a wholly owned subsidiary of TransAtlantic Petroleum Ltd. (TSX: TNP)(NYSE-AMEX:TAT) ("TransAtlantic") to earn a 50% interest in a future gas shale formation production concession in northwest Bulgaria (the "Transaction").

LNG intends to finance the Transaction as well as its existing work program through an equity financing and has filed a preliminary short form prospectus in connection with an overnight marketed public offering of the common shares of LNG ("Common Shares") (the "Offering"). The Offering will be conducted through a syndicate of underwriters led by Paradigm Capital Inc. and including Canaccord Genuity Corp., Fraser Mackenzie Ltd. and GMP Securities L.P. (the "Underwriters").

Summary of the Transaction

The term sheet contemplates that LNG will initially fund up to US$7.5 million to immediately drill, core and test a 3,200 meter (approximately 10,500 foot) exploration well on the A-Lovech exploration license in Bulgaria targeting the Middle Jurassic Etropole shale formation. As required in Bulgaria, on a successful result from this well, TransAtlantic's subsidiary, Direct Petroleum Bulgaria EOOD ("Direct Bulgaria"), will apply to the government of Bulgaria for a production concession (the "Etropole Concession"). The Etropole Concession is expected to cover an area up to 1,640 square kilometers (405,080 acres) for a term of up to 35 years.

Subject to certain conditions, including the issuance of the Etropole Concession, LNG is expected to form a subsidiary in Bulgaria ("LNG Bulgaria") which will fund up to an additional US$12.5 million, of which US$7.5 million is expected to be used to drill a second well or for other exploration activities on the Etropole Concession. In return, and subject to Bulgarian government approval, LNG Bulgaria will acquire a 50% undivided interest in the Etropole Concession. LNG is currently negotiating definitive agreements with TransAtlantic in respect of the Transaction.

In connection with the term sheet, LNG has paid a non-refundable deposit of US$1.5 million and has been granted the exclusive right to negotiate and finalize the definitive documentation in respect of the proposed Transaction until September 23, 2011. The non-refundable deposit will be applied against the initial US$7.5 million which is payable by LNG to fund the costs of the exploration well on the A-Lovech exploration license.

The Etropole Formation, especially its organic-rich lower part (Stefanetz Member), is the targeted interval for a gas resource. This formation is the proven source rock for major oil and gas fields in northwestern Bulgaria. The Etropole formation is a thick, black organic rich source rock lying at depths ranging from less than 2500 meters to greater than 5000 meters; it shows appropriate maturity for gas generation and is also over-pressured throughout much of the region. The Etropole shale is calcareous in nature similar in characteristics to the Upper Jurassic Haynesville shale in the US.

The proximity to an established gas market, an existing gas pipeline infrastructure and gas prices of over $10/mcfg make the Etropole play an economically attractive target. Significant gas shows were detected while drilling the Etropole formation in the most recently drilled well by Direct Bulgaria (Deventci R-1). Many older wells have also encountered shows while drilling in the play area. Given the rock properties of the Etropole, it is believed that it will respond favorably to modern completion and stimulation techniques and may yield significant economic gas resources.

Summary of the Equity Financing

The Offering will be priced in the context of the market with final terms of the Offering to be determined at the time of pricing. The Offering is scheduled to close on or about September 14, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange and the securities regulatory authorities.

                               



                                      




LNG
Last 0.16
Change 0.025
Change % 18.5%
Time 2012-01-12 05:25:50
Bid 0.16
Bid Size 3
Ask 0.165
Ask Size 212
Day Low 0.135
Day High 0.165
Open 0.135
Prev Close 0.135
Volume 0
 
 
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September 2011
Issued & Outstanding: 338,519,365
Options Outstanding: 20,450,000
Fully Diluted: 358,969,365
 
 
LNG Energy Ltd.





                                                                                                                                      

 

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#19   Esrey Energy Ltd. changed to Esrey Resources Ltd. Renee 10/13/17 04:25:59 PM
#18   LNG Energy Ltd. changed to Esrey Energy Ltd., Renee 11/15/13 05:46:03 PM
#17   HMMMMMM....:) MarginMagic 08/16/12 07:44:30 AM
#16   500k in dallor volume... TR4GEDY 08/15/12 04:47:14 PM
#15   Hello? jegroup2 08/15/12 04:46:22 PM
#14   Wth!!! jegroup2 08/15/12 04:45:52 PM
#13   What's going on here?? TR4GEDY 08/15/12 04:39:56 PM
#12   Good time to bottom feed, imo. SCREAMING EAGLE 05/08/12 08:20:14 AM
#11   Buy it now and hold it for later. SCREAMING EAGLE 04/12/12 08:42:24 AM
#10   It just takes time. WildcatDriller 03/03/12 11:32:12 AM
#9   This is a very promising company with some SCREAMING EAGLE 02/26/12 04:28:39 PM
#8   Back at it again.. SCREAMING EAGLE 01/13/12 12:20:52 PM
#7   A bargin to be had. WildcatDriller 01/12/12 01:25:29 PM
#6   The shale drilling prospects should be low risk WildcatDriller 01/12/12 01:24:58 PM
#5   This is another high quality play with a WildcatDriller 01/12/12 01:24:07 PM
#4   Glad I took the jump, the price is WildcatDriller 01/12/12 01:23:22 PM
#3   That is a starter for some info. I SCREAMING EAGLE 01/12/12 08:49:15 AM
#2   Hey King! I'm very excited about this company. SCREAMING EAGLE 01/12/12 07:24:40 AM
#1   Soooo Screaming Eagle... Whats going on with King Zulu 01/11/12 04:05:17 PM
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