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Slick rumours spread

AMID persistent rumours that small local listed oil and gas companies are “at risk” of not being able to continue to trade, Cliff Head junior partners, Voyager Energy and Norwest Energy, have this week denied being in danger.

At first focused around the recent West Oil upheaval, the rumours have now centred on Perth Basin players and have been linked with the potential effects of drilling outcomes in the current quarter.

However, support came from other industry locals, with one experienced manager musing: “All these rumours people come out with are just crazy”.

“We are viable, and we have not lost the support of our large and loyal shareholders,” Norwest CEO Ivan Burgess said.

Norwest is trading at $0.041, lower than its price before the initial Cliff Head find, and despite an industry-acclaimed flow-rate from Cliff Head-3.

The company’s cash position at the end of the March quarter was $1.5 million.

Mr Burgess confirmed it was vital Norwest retained cash capacity, and the company was “keeping its powder dry”, with no major expenditure before a possible Cliff Head announcement.

Voyager director Ray Barnes said the company remained bullish in outlook but he acknowledged that people preferred certainty over the Cliff Head development.

Voyager, which has declared final cash for the March quarter at $2.4 million, is trading at around $0.155.

Bounty Oil & Gas, also a junior Perth Basin player and trading at under $0.10, this week announced a new chairman.

Managing director Tom Fontaine was keen to point out it was a logical transition for new chair Leith Wale, and suited former chair Ted Ellyard, whose responsibilities as Hardman Resources managing director were growing.

Despite the rumours, including CEOs looking for new positions, industry sources believe four companies trading below $0.03 – Eagle Bay Resources, Empire Oil & Gas, Victoria Petroleum and West Oil – are keen to remain viable.

Victoria is considered a survivor, West Oil’s new management is regarded as capable of raising capital, Eagle Bay is looking at becoming a minerals outfit, and Empire management would put up a good fight to keep the company intact, onlookers said.

But Empire’s position is also viewed as a potential West Oil scenario.

Empire is currently drilling the long-awaited onshore Eclipse-1, a 3.6 kilometre gas exploration well 60 kilometres north of Perth, and one considered crucial for the company’s viability.

Empire and partner CalEnergy Gas (Australia), have been banking on between 90 and 255 billion cubic feet of gas, but in need of a farmin for the $3.8 million well, were forced to postpone plans until Victorian listed company Nexus Energy bought in at 10 per cent in March.

While gas indications were reported as encouraging earlier this week, any development will first require additional wells, and contracted customers.

Nonetheless the industry view is that commercial gas from this reservoir, would be “very good” for the Perth Basin in general.

The 2002 Cliff Head discovery and its 2003 appraisal has produced a first – a likely commercial oil discovery in the offshore northern Perth Basin – but a decision on any commercial development of the field remains unlikely to be made in a hurry.

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