PROACTIVE NEWS SUMMARY: Range Resources, Tower Resources, Kryso Resources, GlaxoSmithKline, Dart Energy, IGas EnergyReported by Proactive Investors on Wednesday, 9 May 2012 (on May 9, 2012)
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Two of today’s main stories by Proactive Investors were dedicates to oil and gas companies *Range Resources (LON:RRL, ASX: RRS)*, which today provided an update on its operations in the Republic of Georgia, and *Tower Resources (LON:TRP)*.
According to Northland, Tower should soon get a boost from a farm-out deal in Namibia.
Tower has a 15 per cent stake in an exploration venture led by operator Arcadia Expro Namibia which, the broker says, is close to completing a farm-out deal that would help the partners move closer to drilling.
The partners are exploring large deep water oil targets offshore Namibia. Tower’s interest in the venture is carried by Arcardia.
And to support its drilling ambitions Arcadia has been seeking partners, though this process has taken longer than expected.
But, Northland analyst Andrew McGeary says the wait may soon be over as Tower revealed last week that Arcadia’s talks were now at an advanced stage.
“Whilst the Arcadia farm-out process has taken longer than hoped, the FY11 statement indicates positive signs of progress and we are hopeful those discussions may now be nearing conclusion,” the analyst said in a note to clients.
“Supermajors BP and Petrobras have taken significant assets in the (Namibian) territory and last week an article attributed to Platts highlighted potential interest from Spanish super-major Repsol in the Arcadia/Tower acreage.”
Sector peer Range told investors today that it is to switch its focus in Georgia to coal bed methane after a strategic review of its assets in the former Soviet republic.
The new strategy will focus on low-cost, shallow appraisal drilling around the Tkibuli-Shaori coal bed methane (CBM) field, which straddles the central sections of the Range's two onshore blocks VIa and VIb.
Tkibuli is estimated to contain approximately 0.4 trillion cubic feet of CBM gas, with Range’s 40 per cent interest amounting to 0.16 tcf.
Sand horizons around the coal beds could add to the resources at Tkibuli, Range said.
“By prioritising exploration around the productive coal seams, the company has the opportunity to make early discoveries, add proven reserves and look to provide revenue potential from the Tkibuli CBM play within 18 months from commencement of drilling,” it added.
Range and its partners have also signed a conditional offtake agreement with the Georgian Industrial Group (GIG) for all of the gas produced.
GIG, the country’s largest holding company, operates the 200MW gas-fired power station at Gardabani.
Range added its new strategy will reduce drilling cost, and significantly reduce the project's geological risk.
An initial pilot project will focus on appraising targets already venting methane and so ensuring a higher chance of success.
New wells will target horizons at depths between 500 and 2,000 metres and can be drilled within 45 days, Range added.
Another article by proactive covered today’s news from *Kryso Resources (LON:KYS)*, which stole the spotlight in the mining sector this morning as it revealed that gold at its Pakrut project in Tajikistan now totals over 5 million ounces, according to the latest independent report.
The new JORC compliant resource, which used a 0.5 g/t cut-off, is forty per cent higher than the previous estimate of 3.6 million ounces.
It included a 16 per cent increase in measured and indicated resources to 2.21 million ounces, with measured resources now at 1.76 million ounces.
Craig Brown, managing director of Kryso, said: “We are delighted with the overall increase in the total mineral resource at Pakrut and eastern Pakrut.
"The increase of 305,000 oz in the measured and indicated categories at Pakrut is particularly encouraging and the board is very positive that this resource will continue to increase with further drilling.
"The updated resource estimate further supports our belief that Pakrut will develop into a significant underground gold mining operation.”
On AIM today Kryso shares gained 0.88p, around 3 per cent, in a tricky market to trade at 31p each.
Brown recently told Proactive Investors that he believes total resources over the whole area of the deposit at Pakrut could eventually exceed 10 million ounces. Grades were also increasing at depth, he said.
The latest JORC estimate includes results from 13 new diamond drill holes in the main mineralised areas of Pakrut and an additional seven diamond drill holes at eastern Pakrut, five kilometres up the valley from Pakrut.
While Kryso rallied, shares in* GlaxoSmithKline (LON:GSK)* were in decline today after the blue chip pharmaceutical group went hostile with its bid to acquire the American biotech Human Genome Sciences (NASDAQ:HGS).
Europe’s largest drugs firm has lodged a US$13 a share, or US$2.6 billion, cash offer and said it won’t budge on the deal now on the table. It also said it won’t participate in HGS’ “strategic alternatives” review process.
The current HGS share price of US$14.62 suggests American investors were expecting a higher offer.
In London, the mood was a little more realistic. “We noted last month that we believed some sort of deal was likely and, in light of the broader challenges across the industry, we continue to believe it will be difficult for shareholders to ignore the certainty of a cash offer,” said Dr Mike Mitchell, analyst at broker Seymour Pierce.
At 11.10am, GSK shares were down 21 pence at at 1,403.
Going hostile with a bid runs slightly against the grain for a big pharma company such as Glaxo.
The titans of the drugs world tend to favour collaborative, joint-venture style deals or agreed mega-mergers where cost savings are the rationale behind the transaction.
So to see boss Andrew Witty taking a more combative stance has raised a few eyebrows in the City.
Proactive also published a story on coal bed methane (CBM) gas focused companies *Dart Energy (ASX:DTE) *and *IGas Energy (LON:IGAS)*.
Eytan Uliel, Dart’s chief commercial officer, told Proactive Investors that despite Dart’s extensive worldwide portfolio, its most advanced asset is the Airth project, which is in fact in Scotland.
“There we have drilled our first test wells, we have encouraging results, we have entered into a long-term gas sales agreement with Scottish Southern Energy, we have at the same time certified our first reserves and on the back of all that, we are looking to move that project into commercial development in the near-term,” Uliel said.
A pilot-to-power project will utilise pilot well gas from Airth to generate electricity and provide first revenues from the field. The generator has now been installed on-site and first electricity sales are expected in the coming months.
UK-based IGas is also a firm believer in the potential of CBM in this country.
Earlier this year, the company told Proactive Investors that CBM remains its priority despite a shale gas discovery in Cheshire.
So while shale gas is making all the headlines in the industry, CBM’s potential should not be underestimated.
And with all this potential, it may only be a matter of time before we see CBM projects popping up all over the country.
CBM is already extensively in Australia and Asia and advocates say it can do the same for the energy supply in the UK as shale has for the US.
Links:  Full news story
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