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Interest in coal seam gas juniors remains strong if the potential A5.2 million takeover bid for Westside Corporation (ASX:WCL) is any indication.

The offer for Westside follows the completion of Arrow Energy’s A5 million takeover of Bow Energy in January this year and Santos (ASX:STO) doing the same with its A4 million acquisition of Eastern Star Gas in November last year.

Looking a little more closely at the offer for Westside from the as yet unnamed buyer shows the offer price of A.65 per Westside share represents a 91.2% premium over the closing price of A.34 per share on 10 February.

Since then, shares in Westside have climbed to A.57, a 14% discount from the offer price.

What it does indicate is that some (if not most) of the CSG juniors remain undervalued and that the potential for further growth has buyers willing to pay a hefty premium.

Westside’s reserves upgrade on 16 February underlines this growth potential and is a strong example of why potential buyers are acting now to secure acreage and reserves while the juniors are still available as comparative bargains.

Action plans

The juniors of course are well aware of this and have not been sitting still.

Blue Energy (ASX:BUL) has scored a bit of a coup after former Santos managing director John Ellice-Flint, who was instrumental in establishing CSG as a viable gas resource in Australia, accepted an invitation to grow its reserves in Queensland.

Ellice-Flint’s skills and expertise along with an almost overshadowed capital raising effort are aimed at increasing Blue’s current proved, probable and possible reserves from 75 petajoules to 3000 petajoules in 2014.

Comet Ridge (ASX:COI) is participating in the drilling of the first two pilot wells in ATP 337P in the Bowen Basin and is currently interpreting 2D seismic that it shot over ATP 743P and ATP 744P in the Galilee Basin.

This data will be integrated into current basin models and together with future technical studies, will have a major impact on Comet Ridge’s drilling programme in the Galilee Basin in 2012.

Comet Ridge is currently planning to drill four core holes in the two permits.

Metgasco (ASX:MEL) is planning to drill two core wells on the least mature of its three exploration permits – PEL 426 in the Clarence Moreton Basin – to further calibrate its resource model while Icon Energy (ASX:ICN) will drill two wells in the northern portion of ATP626P in April.

Red Sky Energy (ASX:ROG) continues to wait on a decision from the New South Wales Department of Trade and Investment, Resources and Energy to green light its Talma pilot well, which could provide an upgrade to its current proved, probable and possible (3P) reserves of 114 petajoules.

In addition, Senex Energy (ASX:SXY) will drill a second CSG well in ATP 593P in the Surat Basin while Dart Energy (ASX:DTE) is planning to drill 10 core holes in New South Wales.

Proactiveinvestors Australia website

Peninsula Energy (ASX: PEN) has delivered more high grade intersections from drilling at the Lance Projects in Wyoming increasing the potential for a substantial upgrade of the Inferred Resource.

Highlight intersections include:

- 3.8 metres at 1,220 parts per million (ppm) eU3O8, including 1.5 metres at 2,330ppm;
- 2.3 metres at 1,400ppm eU3O8 including 1.2 metres at 2,140ppm;
- 3.3 metres at 864ppm eU3O8 including 0.8 metres at 2,120 ppm;
- 3.2 metres at 840ppm eU3O8 including 0.9 metres at 1,780ppm; and
- 2.4 metres at 1,080ppm eU3O8 including 1.2 metres at 1,710ppm.

Peninsula is targeting a conversion of the Inferred Resource to the higher confidence Indicated category in the proposed Kendrick production unit located to the west of the Ross production unit, with a Resource recalculation planned for late March.

Ross is the most advanced area at the Lance Project, which is an In Situ Recovery (ISR) uranium project.

Peninsula is also undertaking regional exploration to locate the mineralised portions of over 312 lineal kilometres of mapped redox boundaries.

The company has completed a further 40 exploration drill holes during February for a total of 11,125 metres at the Lance Projects.

A total of 32 holes encountered mineralisation, 16 holes encountered significant mineralisation and nine holes reported multiple intersections of stacked uranium.

The most recent drilling in this area has targeted the K4 and K5 roll fronts with significant mineralisation intersected in the Fox Hills sandstones.

Drilling continues to produce thick high grade intercepts along an extensive roll front trend, and the area is now categorised as a key area for resource expansion given its close proximity to the proposed Central Processing Plant site.

Recent drilling on the K4 and K5 roll fronts has confirmed along-strike continuity of over 500 metres together with horizontal widths of up to 60 metres.

Two drill rigs are currently in operation with one dedicated to the along strike exploration and one to intersecting the high grade nose of the roll front.

Peninsula is looking to become a uranium producer in late 2012 to 2013 having completed Feasibility and Economic Studies of its Ross and Lance uranium Projects.

Advancing Towards Approvals

Peninsula announced earlier this week it is not expecting delays to the Nuclear Regulatory Commission’s (NRC) review and approval of its Ross ISR uranium project following a decision to grant standing to the objections.

Under NRC’s governing federal statute, the Atomic Energy Act of 1954 and NRC regulations and policy, NRC Staff have stated that it issues licences when their review is complete – this would apply to the Ross ISR Project.

Late last month the NRC issued Requests for Additional Information to support its environmental and technical review of Peninsula’s wholly owned subsidiary Strata Energy’s application for a Source and 11(e).2 Byproduct Material License ahead of schedule.

Early issuance of the RAIs marks another significant milestone in the overall process and a speedy response is expected to have a positive impact on the permitting schedule.

Another major plus for the project is the acquisition of the site for the proposed central processing plant by Peninsula, announced last week.

The 0.97 square kilometre (240 acre) site acquisition ensures the necessary owner’s consent to mine required by the Wyoming Department of Environment Quality is now finalised.

The department will issue the Permit to Mine once Strata Energy lodges the financial surety.

Proactiveinvestors Australia website

Much has been made about North American shale gas and how it has proven to be a game changer, satisfying most if not all of the continent’s gas demand and all but extinguishing liquefied natural gas (LNG)import plans.

However, its very success seems to be a double edged sword.

The resulting gas glut has resulted in U.S. Henry Hub spot prices currently hovering about US.50 per million British Thermal Units (MMBtu) – roughly 1000 cubic feet of gas, a far cry from the $US4.50 per MMBtu price that gas was asking for at the beginning of 2011, and a level which some believe is so low that producers are losing money on marginal shale gas fields.

Indeed, BHP Billiton (ASX:BHP) is now flagging that it will cut back on gas exploration and development and focus on oil.        

BHP had last year spent almost US billion on acquiring shale gas, first snapping up Chesapeake Energy’s acreage in the Fayetteville Shale for US.75 billion in February 2011 before committing itself to shale with its US billion acquisition of Petrohawk Energy in July.

The high prices paid by BHP in its shale investments were questioned by major investors with some feeling that the world’s largest miner had come a bit late to the party.

BHP itself has admitted that gas prices ranging from US to US per 1000 cubic feet are required to break even at the average well in the Fayetteville and Haynesville shales though the company claims it holds the thickest, most productive shales in those areas with slightly better economics.

The light at the end of the tunnel appears to be the oil-rich Eagle Ford Shale and Permian Basin acreage. Oil after all is still trading close to US0 per barrel, allowing shale oil producers to maintain a healthy margin.

Going for the oil

It is little wonder the junior oil and gas companies are also targeting oil with their unconventional gas efforts in the U.S..

Empire Energy Group (ASX:EEG) is waiting on New York State’s Department of Environmental Conservation to begin issuing new permits for fracture stimulation work once it completes a review on fraccing.

This is expected in Spring this year, allowing Empire Energy to access the estimated 70.3 million barrels of oil on its Marcellus shale acreage, which covers (890.3 square kilometres)220,000 acres.

Meanwhile, Sun Resources (ASX:SUR) is moving closer to completing its acquisition of the Delta Oil Project in the Eagle Ford, Texas.

While the company has since flagged it might stop short of the 10,000 acres it had originally planned to acquire, it has already secured 6803 acres of the project.

Delta Oil has estimated unrisked net prospective oil resources of 10 million barrels in one sand unit with potential upside to increase this by up to 200%.

Over in the Mississippi Lime play, World Oil Resources (ASX:WLR) is preparing to fracture stimulate and test the first modern horizontal well on the Welch-Bornholdt Wherry (WB-W) field in Rice and McPherson counties, Kansas.

This promises both greater production and oil recoveries compared to historic wells drilled in the area.

Other players include Red Fork Energy (ASX:RFE), which is embarking on an aggressive program in Oklahoma, and AusTex Oil (ASX:AOK).

Gas future

Despite the general move towards liquids-rich shales, shale gas still has a future and may yet make a recovery.

BHP believes it is a matter of time and that the U.S. will make increasing use of gas, driving gas prices up to economic levels.

It adds there would also be increasing pressure to export U.S. to Asian or European markets in the form of LNG.

This gas future might not be far off as can be seen in PetroChina’s acquisition of a 20% stake in Shell’s Groundbirch shale gas project in Canada.

While Groundbirch, which produces 1 billion cubic feet of gas equivalent per day, will continue to meet customer demands in North America, the Chinese energy giant has clearly stated that it is looking into LNG export opportunities, presumably to meet growing demand back home.

US independent Apache Corporation (NYSE:APA) is also reportedly set to go ahead with developing its Kitimat LNG plant in British Columbia soon, a project that had originally been intended as an LNG import terminal.

Proactiveinvestors Australia website

IMX Resources (ASX: IXR) has welcomed John NItschke to the role of non-executive chairman, following the resignation of Johann Jacobs.

Nitschke has more than 35 years’ experience in the resources industry, and has previously held senior executive roles with Normandy Mining, Oxiana and OZ Minerals (ASX: OZL).

He is currently a non-executive director of Toro Energy (ASX: TOE) and Venturex Resources (ASX: VXR) and is chairman of Continental Nickel (TSXV: CNI).

Nitschke will lead IMX as it focuses on developing iron ore projects close to its Cairn Hill Mine.

Earlier this month IMX announced that alternative sales agreements had been secured for magnetite ore production from the Cairn Hill iron ore and copper mine.

The new agreements have been made at better prices, boosting the project’s economics.

In other company news, initial Davis Tube Recovery testwork indicates that IMX will be able to achieve a 65% iron concentrate at a coarse grind size from the Tomahawk iron ore prospect.

Tomahawk is part of IMX’s Mt Woods Iron Project, and is located 25 kilometres southeast of Cairn Hill.

Proactiveinvestors Australia website

Norseman Gold (LON:NGL, ASX:NGL) said its negotiations with a potential strategic partner are ongoing and it will update investors on its operations and corporate restructuring “as soon as possible”.

Back in December, the group revealed that it was in negotiations with a potential strategic partner which was looking to take an active role in the development of the group.

This potential partner has experience in operating at Norseman, particularly the Harlequin and Bullen mines, and understands the ore bodies and their potential.

Norseman’s main project is the Norseman mine in Western Australia. At the end of 2011, the company reported that it had reached the targeted hard rock ore at the North Royal open pit, enabling more ore to be added to the overall treatment plant feed.

This should result in an increase in the ounces produced as more tonnes will be able to be treated.

With a direct focus on cost, the company has decided to suspend mining at the OK Decline to reduce expenditure and focus on the areas of the mine that are performing and/or producing profitable ounces.

A detailed review of both the Bullen and Harlequin underground mines and how production and profitability at these mines can be improved is also ongoing with an update expected this year.

The progress report on the Bullen and Harlequin review will also include guidance on gold production for the full year.

At the end of January, the company requested and was granted a trading halt and later voluntary suspension on the Australian Stock Exchange (ASX), pending an update on its operations and corporate restructuring.

Proactiveinvestors Australia website

Condoto Platinum (ASX:CPD) received strong institutional support in its successful A.2 million share placement to fund the exploration and bulk sample testing of its Condoto gold and platinum project in Colombia.

The placement – managed by Veritas Securities – of more than 5.95 million shares price at A.70 each received strong support new and existing Australian and international intuitional and sophisticated investors.

The shares represent the maximum Condoto can issue without shareholder approval.

Condoto said the exploration and bulk sampling work will allow it to assess and potentially develop the alluvial fields, which stretch out over 270 square kilometres.

Funds from the placement will also be used to locate the prospective hard rock source of platinum and gold in the Condoto area.

The company has also granted some directors 1.5 million options subject to shareholder approval and has returned to trading on the ASX.

The Condoto area has a history of platinum and gold production dating back to the 17th Century.

It is located about 80 kilometres east of the Pacific Ocean and 200 kilometres southwest of the city of Medellin.

The project is accessible via an airport in Condoto or by road from Medellin though access within the project area is restricted to poor quality local roads or by boat through the rivers and tributaries in the region.

Condoto had in the last quarter completed its base camp in the township of Novita and established a good working relationship with the locals.

Proactiveinvestors Australia website

U.S. equity markets were lower Friday afternoon as investors digested a weaker-than-expected economic growth report with the eurozone debt situation still very much in the background.

As at 2.10pm EDT, the Dow Jones Industrial Average fell 68.04 points, or 0.5%, to 12,667.04, the S&P 500 declined 2.64 points, or 0.2%, at 1,315.79 and the NASDAQ was 8.51 points higher, or 0.3%, at 2,813.79.

Earlier Friday, US gross domestic product grew at a 2.8% annual rate in the fourth quarter of 2011 – below expectations. Reuters analysts expected the US economy to grow at a 3% rate.

Inventories increased .0 billion, contributing 1.94 percentage points to GDP growth in the fourth quarter. Excluding this, the US economy grew at just a 0.8% rate.

The results are in line with the Federal Reserve’s decision Wednesday to keep ultra low interest rates on hold until late 2014, on expectations for soft growth and potential risks ahead, indicating the eurozone debt crisis could still take its toll.

Indeed, Fitch Ratings cut the credit ratings of Italy, Spain and three other eurozone countries later Friday, saying they lack financing flexibility in the face of the regional debt crisis.

Anxiety also continues to loom over Greece’s ongoing negotiations with private-sector creditors in an attempt to reduce its debt burden. Without an agreement, the country jeopardizes its access to bailout funds and might not be able to make a 14 billion euro debt payment due March 20.

In corporate news, Ford (NYSE:F) posted 2011 profit of .2 billion US – its biggest since 1998 due to a one time tax gain. But for the fourth quarter, earnings missed forecasts.

Chevron (NYSE:CVX) reported a drop in its fourth quarter earnings on Friday, as rising oil prices could not offset the decline in its production and sales volumes.

Procter & Gamble Co.’s (NYSE:PG) fiscal second-quarter earnings plunged 49%, hit by higher materials costs and business write-downs as the consumer products giant lowered its full-year guidance.

Biotech giant Amgen (NASDAQ:AMGN) said fourth-quarter profits fell 8.5% as its expenses for taxes and for producing and selling drugs rose faster than revenue.

Data network equipment maker Juniper Networks (NASDAQ:JNPR) said fourth-quarter earnings fell 49% on weak router sales. The company posted earnings of .2 million, or 18 cents per share, down from 0.2 million, or 35 cents per share, a year earlier as revenue slipped 5.8% to .12 billion.

On the economic front, confidence among US consumers rose more than forecast in January to the highest level in almost a year, on signs of improvement in the job market.

The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 75 from 69.9 at the end of December.

Economists had been expecting a reading of 74, according to Bloomberg.

Commodities

On the NYMEX, crude futures edged up 4 cents to .74 a barrel while gold futures rose .50 to ,729.20 an ounce.

Europe

European markets finished broadly lower today with shares in France leading the region. The CAC 40 was down 1.32% while Britain’s FTSE 100 was off 1.07% and Germany’s DAX fell lower by 0.43%.

Proactiveinvestors Australia website

Gold Anomaly (ASX: GOA) has increased the strike length of gold mineralisation at its Crater Mountain Project in Papua New Guinea to over 800 metres after a drill hole at the Nevera Prospect intersected anomalous gold throughout the entire hole.

Nevera is the most advanced of four prospects and has a 790,000 ounce Inferred gold Resource.

The hole – which was drilled at the south‐western extent of Nevera, about 400 metres southwest of the existing resource boundary – returned a best intercept of 4 metres at 0.71 grams per tonne (g/t) gold from 150 metres.

Wide zones of gold above 0.25g/t gold and copper mineralisation were intersected in the hole compared to a previous hole drilled.

This could indicate that either a different mineralising system has been encountered, or the mineralisation at Nevera continues past the previous hole and that it was drilled in an area that was either faulted away or disrupted by a diatreme.

Besides the anomalous gold mineralisation, the latest drill hole intersected anomalous copper mineralisation, with individual 2 metre samples assaying at above 0.2%, which is associated with the gold.

Base metals such as lead and zinc, which were prevalent in many of the other holes at Nevera, are markedly lower in the hole.

There were nine, 2 metre copper intersections grading above 0.15%. The copper mineralisation also occurs throughout the hole, but does seem to become more persistent with depth.

Previous exploration to the west of the recent drill hole has demonstrated copper anomalism, which Gold Anomaly plans to investigate at a later date.

Two holes are currently being drilled at Nevera. The second 1000 metre plus deep drill hole, has now reached a depth of 958 metres.

The hole is testing the porphyry intrusion identified by an earlier drill hole, some 200 metres below it.

These deep holes are intended to determine the nature and size of the porphyry, and provide information on whether it is the feeder zone responsible for the gold mineralisation defined within the shallower mixing zone.

Proactiveinvestors Australia website

Queensland based Citigold Corporation (ASX:CTO, FSE:CHP) has agreed to a staged investment by Reignwood International Investment Group to invest million in Citigold to fund development of Citigold’s 10 million ounce gold mine at Charters Towers, Queensland.

Reignwood, which is a diversified group with investments in food and beverages, real estate, energy and resources, and operates in Mainland China will initially subscribe for 274 million fully paid shares at .09 to raise .66 million.

This will provide the investment company with a 19.9% stake in Citigold.

This represents a 22% premium to Citigold’s share price based on a 30 trading day volume weighted average price (VWAP) of 7.4 cents per share.

Shareholder approval will be sought by Citigold to issue to Reignwood a three-year convertible note valued at million at an interest rate of 8% per annum. The notes will be convertible into fully paid ordinary shares in Citigold at a price of 12.45 cents per share at any time during the three year period.

Funds raised will be used to advance the development of Citigold’s JORC compliant 10 million ounce (23 million tonnes at 14 grams per tonne)* Charters Towers gold deposit, specifically for re-commissioning the Central (City) mine.

The company will hold an Extraordinary General Meeting (during the first quarter of calendar 2012 to seek shareholder approval.

Proactiveinvestors Australia website

- adds broker comment

Anglo Asian Mining’s (LON:AAZ) Gedabek gold mine in Azerbaijan has the potential to produce one million ounces over the next fifteen years, its broker said today.

Shares in Anglo Asian rose today after the Azerbaijan miner reported increased gold production and a strong selling price in the last three months of 2011.

The miner produced 15,292 oz of gold from Gedabek in Azerbaijan in the quarter to December.

That was the highest quarterly output in 2011 and up from 13,166 ounces in the previous three months.

House broker Fairfax said: “The Gedabek gold mine is performing ahead of expectations and is performing well in terms of costs and cash generation. 

“Mined grades are been better than forecast and we anticipate a decent upgrade in the calculated JORC gold resource for the year on the back of the recent drilling and evaluation program.”

“We expect the JORC resource to define a portion of what we see as a much larger ore body and we see this as a first step to proving that this mine could eventually produce around 1moz of gold from its inception over the next 10-15 years,” Fairfax added.

Total production for the year was 57,068 oz gold, with Anglo achieving an average sale price of US,573. In the fourth quarter the average price it received was US,688.

The cash cost of production was US5 per oz excluding the Azerbaijan government’s share and US0 per oz with it.

Chief executive Reza Vaziri said: “Solid gold production and a favourable gold price has provided for a strong performance in 2011 for Anglo Asian.” 

“Our strong operational performance has enabled us to accelerate the repayment of loans, reduce debt ahead of schedule and build a strong cash position, which stood at US.8 million at 31 December 2011.”

Total net debt at the year-end was US3.2 million, down from US25.6 million at the same time in the previous year.

Vaziri added: “We are also focused on increasing the company’s total resource base, which based on data available at June 2010 stood at 791,000 oz of gold, 49,300 tonnes of copper and 7,597,000 oz of silver for all categories, by the first quarter 2012 and in turn to calculate a JORC compliant reserve estimate thereafter.”

During the final quarter, Anglo Asia transferred 190,737 tonnes of dry ore onto the leach pad with an average gold content of 3.22 g/t. Over the year, it transferred 842,751 tonnes of dry ore with an average gold content of 3.29 g/t.

Anglo Asia added that due to changes in the physical characteristics of the ore being transferred to the leach pad it had accelerated waste removal and was crushing the ore finer and stacking the ore lower to increase the leaching rate.

Fairfax  added that a new agitation leach process is being considered to boost gold recovery rates.  The agitation leach tanks should also shorten residence times while also enabling mining of ore from the area underneath the heap leach pads, the broker added.

Silver dore production in the fourth quarter was 6,841 oz and for 2011 totalled 39,086 oz.

Copper concentrate production from the Anglo’s Sulphidisation, Acidification, Recycling, and Thickening (‘SART’) plant was 611 tonnes, with 134,240 oz silver and 200 oz of gold.

Shares added 1p to 35.75p. 

Proactiveinvestors Australia website