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A licence to drill

North Sea exploration activity should increase after the 27th licensing round achieved record results.
October 31, 2012

Three of our favoured specialist North Sea plays - Ithaca Energy (IAE), Faroe Petroleum (FPM) and Trap Oil (TRAP) - were among the beneficiaries of the 27th licensing round, while both Valiant Petroleum (VPP) and Parkmead Group (PMG) will also need to update shareholders on some new prospects.

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Prospects for junior North Sea oil explorers have also been fuelled by news that Abu Dhabi-owned TAQA Bratani "encountered an oil accumulation that is expected to correspond to 10-30m barrels" from the Contender exploration well, located near its existing North Cormorant platform in the northern reaches of the North Sea. If confirmed, it not only represents a significant find in itself, but it will provide a boost to its partners in the prospect: Bridge Energy (BRDG), Dana Petroleum (DNX) and Antrim Energy (AEY). In fact, Bridge Energy, which only joined Aim in September, scored another exploration hit within a matter of days through the Garantiana well in the Norwegian sector. The market newcomer has also been awarded two licences under the new round, while the prospect of Dana Petroleum achieving its daily production target of 100,000 barrels by 2016 were enhanced when it secured 22 full and partial blocks over seven areas in the North Sea.

Perhaps the biggest winner under the new licensing round was Parkmead Group. The Aberdeen-based driller secured six new licences with interests in a total of 25 blocks, but for now investor attention will focus on results from the Spaniards East Well, in which Parkmead has a free-carried interest of 12.6 per cent.