Good news twice for Amadeus Petroleum

ON the eve of reporting record results for the 2000-01 financial year, Amadeus Petroleum has received a further boost in the form of an independent valuation upgrading its proven Texas reserves to $US13 million.

The best news, however, is that the $US0.6 million upgrade by petroleum and environmental engineers, Pollard, Gore and Harrison, does not include a promising 50 per cent working interest acquisition earlier this year in a 20,000-acre Oklahoma oil prospect.

Twenty miles north of the Oklahoma-Texas border, the lease covers the same geological arch from which 25 regional wells produced during the 1940s and 1950s.

Traditionally, Amadeus has gone for proven producing fields in Texas, but the company believes the Oklahoma acquisition may prove the extension of a producing field to the south-east of the lease.

Hence, Amadeus used cash reserves to fund a 3-D seismic shoot in June, final interpretation of which is due this month, and for which data and reflection quality has been reported as above average.

The survey has earned Amadeus a 44 per cent net revenue interest and the company plans to drill 4 locations in October, each with a potential 500,000 barrels of oil.

“We could prove up this field very economically,” Amadeus executive finance director Anthony Short said.

“In terms of Texas drilling, this is quite shallow and with multiple targets. The costs are lower and the upside higher.

“If a hole comes in, we can test it quite cheaply. To drill and complete a hole will cost us $US100,000, but we’ll get our cash back in six months, with each hole estimated to have a life of up to 35 years.”

Mr Short said Amadeus remained well placed to make more characteristic production acquisitions.

“We’ve retained our security position and our lines of credit are in place. We remain well placed to make a $6-7 million acquisition,” he said.


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Total value as at the date of the transaction
Source: Morningstar

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