31 July 2006drilling spud● Neutral
Third-party filing by Tap: Galloway-1 (Santos 37.5% operator) was drilling at 320 m on 31 July. It is an onshore well deviated into offshore Vic/P39(v), expected to take 18 to 20 days to reach its objective.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
31 July 2006drilling spud● Neutral
Third-party filing by Nexus: Galloway-1 spudded 28 July and had set casing at 320 m. Mean recoverable oil is 28 mmbbl if successful. The Angus prospect (about 4 mmbbl) is a possible follow-up.
28 July 2006business combination● Neutral
Third-party filing by Westpac Funds Management repeating Santos's disclosure of an unsolicited rival offer for Delhi. WFML says the offer is incomplete and is still evaluating it. Issued to avoid a false market in FIELDS.
28 July 2006business combination▼ BadMajor
Santos disclosed that Westpac entities received an unsolicited third-party offer for Delhi. Westpac's WRIPL said in a 25 July letter it believes the offer is worth more than $83.25 per FIELDS and will start talks. This puts Santos's agreed deal at risk.
24 July 2006drilling result● NeutralMajor
Evans Shoal South-1 reached 4,097 m and encountered hydrocarbons in both objectives, but none reached surface. It was plugged and abandoned short of target depth because of poor hole conditions. Santos holds 40%. The rig moves to Barossa-1, then Caldita-2.
21 July 2006regulatory community update● Neutral
Santos released an operator Lapindo announcement on remedial work at the Banjar Panji well. The text provided carries none of Lapindo's content. Santos holds 18% non-operated.
20 July 2006business combination● Neutral
Third-party filing by Westpac Funds Management: KPMG was appointed independent expert on the Santos offer. Delhi met its debt cover test (1.63x against a 1.40x minimum). The August interest payment would be the last if the deal proceeds.
20 July 2006drilling progress report▲ Good
Third-party filing by Drillsearch: Talgeberry 12 was cased as an oil well with over 9 m net pay. Of 28 Tintaburra wells drilled so far (Santos 89% operator), 11 are producing, with 22 left in the first phase.
18 July 2006drilling progress report● Neutral
Third-party filing by Nexus: Longtom-3 reached 1,005 m with pilot hole total depth now due 23 July. Galloway-1 (Santos 37.5% operator) is expected to spud the week of 24 July. No results yet.
17 July 2006investor presentation● Neutral
Santos presentation on the Delhi deal repeats the announcement: $474m total, Cooper stake about 63% to 85%, 2P reserves from 774 to 841 mmboe, and an A$7.07 per boe price. Scheme meeting is planned for early October.
17 July 2006business combination▲ GoodMajor
Santos agreed a $474m acquisition of Delhi Petroleum, with FIELDS holders offered $83.25 cash each via a creditors' scheme. It lifts Santos's Cooper Basin stake from about 63% to 85% and adds about 67 mmboe of 2P reserves. Santos has debt facilities to fund it.
17 July 2006business combination● Neutral
Third-party filing by Westpac Funds Management: it agreed the Santos scheme at $83.25 per FIELDS (38% premium) and intends to recommend it, subject to an independent expert and no superior proposal. Booklet due mid-September; final payment late October.
14 July 2006resource reserve update▼ BadMajor
Santos downgraded Jeruk: the oil column is now about 145 m rather than 379 m, with an oil-water contact near 4,760 m. The most likely contingent resource falls below the 170 mmbbl estimate of January 2005. Further appraisal is needed.
14 July 2006resource reserve update▼ Bad
Third-party filing by Cue repeating Santos's Jeruk downgrade (column about 145 m, resource below 170 mmbbl). Adds that the rig will move to drill the Wortel exploration well in the Sampang PSC, and lists Jeruk interests.
12 July 2006drilling progress report● Neutral
Third-party filing by Nexus: Longtom-3 spudded 11 July (Nexus 100%), with a pilot hole expected to reach total depth by 26 July. Galloway-1 (Santos 37.5% operator) is mobilising its rig. No new results.
12 July 2006business combination● Neutral
Santos confirmed it is negotiating with Westpac entities to possibly acquire the Delhi group and its FIELDS securities. Talks have run for some time with no agreement yet, and completion depends on terms satisfactory to Santos.
11 July 2006farm in farm out completion▲ Good
Third-party filing by Icon: ATP 626P was renewed, so the March 2006 farm-out to Santos can complete. Santos's subscription for 10m Icon shares at 6.76c is now unconditional. Stitch No.1 (about 2,000 m) is unlikely to spud in August.
6 July 2006drilling progress report● Neutral
Third-party filing by Drillsearch: Gimboola 4a (about 1.5 m pay) was cased as a producer, while Classic 1 was tight and abandoned on 1 July. Endeavour 9 and Bilberry 1 are drilling in Tintaburra (Santos 89% operator).
30 June 2006drilling result▲ GoodMajor
Santos announced an oil and gas discovery at Dua-4X in Vietnam Block 12E, where it takes 37.5% via farm-in. Wireline tests recovered oil, with no flow test. A further sidetrack follows, then the Blackbird well.
30 June 2006drilling spud▲ Good
Third-party filing by Cue: SE Gobe 14 began drilling on 29 June, expected to add 1-2 million barrels of gross oil reserves. Unit boundary extended south-east with participation factors unchanged (Santos 9.39%).
30 June 2006regulatory community update● Neutral
Santos clarified that investigations into the Banjar Panji-1 incident (Santos 18%, non-operated) are ongoing with no final conclusions. Mud and water still flowing, so damage cannot yet be quantified and media speculation is premature.
27 June 2006investor presentation● Neutral
Santos released the 'Options for Growth' presentation for European investors. It repeats known facts such as 774 mmboe 2P reserves and 2005 results, and carries no new announcement in the readable text.
27 June 2006drilling scheduled● Neutral
Third-party filing by Nexus: Galloway-1, drilled onshore into VIC/P39(v), is due to mobilise in early July, with Santos operating at 37.5% after farm-in. Nexus puts mean recoverable oil at 28 million barrels if found. Longtom-3 is Nexus-only.
27 June 2006regulatory community update▼ BadMajor
Santos disclosed a 29 May well control incident at Banjar Panji-1 in Java, where it holds 18% (non-operated). Mud and water flowing from vents has affected nearby villages. Cause is under investigation; Santos says it has insurance but gives no cost figure.
23 June 2006drilling progress report● Neutral
Third-party filing by Cue: a 7 inch liner was cemented in Jeruk-3 ST1 at 5,085 m MD. Drilling continues in 6 inch hole to evaluate the reservoir, with flow testing and coring as required (Santos 40.5% operator).
22 June 2006drilling progress report▲ Good
Third-party filing by Drillsearch: Gimboola 5 (about 3 m pay) and Endeavour 8 (about 6 m) were cased as producers in Tintaburra (Santos 89% operator). Classic 1 and Chancett 1, two near-field exploration wells, were drilling.
21 June 2006drilling result▼ BadMajor
Third-party filing by Cue: Herbras-1 is being plugged and abandoned at 2,515 m after finding no significant hydrocarbons in its primary objective. A dry hole in the Sampang PSC (Santos 40.5% operator), following Dukuh-1 in May.
20 June 2006investor presentation● Neutral
Managing Director Ellice-Flint's UBS conference presentation repeats known facts: Cooper oil targets of 4,200 bopd by end 2006 and 13,000 by end 2007, Jeruk-3 at 2,750 bbl/d and Jeruk-4 late Q3. No new announcements stated.
19 June 2006drilling progress report● Neutral
Third-party filing by Cue: Jeruk-3 ST1 reached 5,086 m MD after cutting a core with oil shows, and drilling continues to find the oil/water contact. Herbras-1 was at 2,428 m, drilling ahead (Santos 40.5% operator).
19 June 2006drilling result▲ Good
Third-party filing by Tap Oil: Amulet-3 found a 15 m gross oil column up-dip, about 700 m south-east of Amulet-1, likely connected to the Amulet-2 oil. It will be plugged and abandoned as planned; further drilling is likely later.