Antrim Energy (fka ATGYF)

[kraftdinner]

Thanks to frans1 on Stockhouse for posting this link to the following article

http://www.oilbarrel.com/home.html

Antrim Steps Up Work Rate In Argentina But The Main Prize Lies In Australia
Antrim Energy is gearing up to start workover drilling on its Puesto Guardian field in northwest Argentina. The rig is due to arrive on May 1 when it will get to work on a number of wells that were suspended in the 1980s due to scaling problems.

“We have done quite a bit of research in the lab to get the right treatment for these wells,” CEO Stephen Greer told oilbarrel.com.

The company plans to bring the wells back on line, in order to ramp up field production from its current daily gross level of 1,200 barrels per day.

The lift in production will be a welcome contrast to last year, when the company battled increased gas production and mechanical problems at Puesto Guardian. The dip in production, wedded to costly remedial work to get output back on track, hit the Calgary-headquartered company’s 2003 financials with revenue down from the 2002 level of C$6 million to C$5.1 million. Capex almost tripled on 2002 levels to stand at C$4.4 million and the company posted a loss for the year of C$2.9 million.

With the troubles of 2003 now firmly behind it, Antrim is keen to exploit the opportunities in its portfolio. One key opportunity for future growth will be tested this autumn when exploration drilling gets underway on the WA-306-P and WA-307-P permits in the Barcoo sub-basin on Australia’s North West Shelf. The company last week contracted the Sedco 703 semi-submersible to spud its first wildcat in Australian waters, an event that could prove a company-maker. The two permits include the 80 km Galapagos-Shark trend which, according to Antrim’s 2003 seismic, holds a string of attractive look-alike structures.

The South Galapagos-1 well, due to spud in the first week of September, will probe a 100-150 million barrel prospect in waters 345 metres deep and some 200 km southwest of the 20 trillion cubic feet and 30 million barrel Scott Reef and Brecknock gas and condensate fields. Antrim, however, is hoping to find oil.

“There are live oil seeps on the surface and good oil shows in the wells in the basin,” said Greer. “It’s always possible we might find gas but it wouldn’t be a huge downside for a small company like us to have a large gas find sitting on our books.”

The company is cautiously optimistic about its chances of making a major oil strike and recently struck a deal with its previously 50/50 partner Magellan to carry 100 per cent of the drilling costs in return for 87.5 per cent of the equity. The increased exposure is a mark of Antrim’s hopes for the South Galapagos well.

“It’s a high risk wildcat but given the size of the prize it’s worth taking that risk,” said Greer. “And the important thing is that there’s a string of these structures to follow. If we are successful on the first one then it virtually guarantees success for some of the other structures.”

The dry hole costs of the well are put at US$5 million and for a completed well about US$8 million. The North West Shelf is Australia’s most prolific production region, containing oilfields with up to 400 million barrels of recoverable oil. Most of the fields on the shelf range in size from 20 million to 200 million barrels of recoverable oil, a reserve base that would leap frog AIM-quoted Antrim into a new E&P league.

The company has other promising assets in its portfolio, among them 100 per cent of the North Pemba prospect in Tanzania. Antrim had hoped to use the rig drilling Nyuni-1 for Aminex plc to spud an exploration well on North Pemba but, given the extensive delays at Nyuni, may now delay its plans.

“We had hoped to use that rig because a lot of the cost of drilling in these frontier regions is mobilising and demobilising rigs,” explained Greer. “If Aminex has a spectacular find then we would accelerate our plans but for now we are just keeping an eye on their programme.”

Antrim has also made a leap into the UK North Sea, winning 20 per cent of two new “promote” licences in the Southern North Sea gas basin. The company is swapping seismic data with a number of larger parties it hopes to attract to the licences before drilling the first well. It also operates the South Larne block onshore Northern Ireland.

Following its debut on AIM in July 2003, Antrim is keen to beef up its position in the UK and is in, according to Greer, “continuous discussions” to build a larger asset base in the country. “We expect to conclude something this year,” said Greer, adding: “We have the backing of investors who like exploration and exploration risk and there are not that many small companies in the UK who fill that niche, so that gives us a competitive edge. We are able to take on that additional risk whereas a lot of companies in the UK sector are going down the bank financing route and swapping and reselling assets, but at some point in the UK North Sea people will have to go out and start exploring again.”

And that, Greer hopes, is where Antrim Energy will come in…