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Orchard banks on Nahabedian connection

ORCHARD Petroleum was in town last week ahead of the company’s first annual general meeting since relisting in May.

The former Games R Us raised $A11.48 million through 20-cent shares on the promise of a five-well program in the Sacramento and San Joaquin basins through to the end of this month.

Two wells have been drilled, one deemed non-commercial and the other dry, but the company’s share price remains at around 16 cents.

Technical consultant Robert Rosenthal holds three-year Orchard options through his alliance with Orchard, with different packages priced at 25 and 40 cents.

Mr Rosenthal, who will also be paid a spud fee for new exploration wells, said he was nonetheless confident in the company’s future success.

Mr Rosenthal does not appear to be alone in his view.

Orchard executive director Stephen Warrener said a survey of those holding former Games R Us shares, which came out of escrow last week, revealed 80 per cent of holders were not intending to sell.

Other shareholders holding 17.41 per cent of the company approached Orchard last month to escrow their holdings until September 2003.

The company’s confidence and selling points on its Australian tour were based largely on extra territory gained around one of the prospects it held on listing and on a new gas joint venture.

Mr Warrener said the company was now where it wanted to be, gaining a substantial prospect inventory.

“With not just five or six wells, but, say, 50 prospects, we can carry a technical problem or well failure,” he said.

The Rio Bravo prospect, on a historically successful and significant structure, and in which Orchard has a 25 per cent interest, has been extended.

By how much company the was not able to say last week.

Final formalities were still in progress, Mr Rosenthal said.

All Orchard’s planned exploration is in joint venture with private US company Nahabedian Exploration Group, and the company is clearly banking on this association.

“We have a long-term California focus, and NEG’s reputation and expertise can get us into places,” Mr Rosenthal said.

Territory is difficult to obtain in California and the recent acquisitions are a coup for both companies.

Within hours of announcing the new gains, NEG had received location detail inquiries.

The gas acquisition and associated seismic has excited Orchard, not least because NEG has achieved a 12-from-15 success rate in the region, and because Orchard has the money in the bank now to be able to drill a deep well this year.

Orchard’s annual general meeting is scheduled for October 28.

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