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The good news continues to flow from Providence Resources’ (LON:PVR) Barryroe well.

A week after confirming Ireland’s first commercial offshore oil find, the company unveiled a second round of results, which once again exceeded expectations.

Barryroe, which is in the Celtic Sea, off the coast of southern Ireland, flowed 7 million standard cubic feet of gas a day from a second, 17-foot thick gas bearing section in the upper part of the Wealden sandstone.

It also produced 1,350 barrels of oil a day, giving a combined total of 2,516 barrels of oil equivalent a day.

Providence had previously tested a 24-foot thick lower basal interval, which produced a combined 4,000 barrels of oil and gas – more than double the rate needed to ensure Barryroe is economic.

The initial estimates suggest the well will flow at a combined, or co-mingled rate of 6,183 barrels of oil equivalent a day.

Providence chief executive Tony O’Reilly said: “We are very pleased to confirm that the gas zone was far more productive than we had anticipated. 

“The well lies just three kilometres from installed pipeline infrastructure which may provide a future route to monetise any surplus Barryroe gas production. 

“It is particularly pleasing to note that both the oil and gas zones have far exceeded our pre-drill expectations, both in terms of reservoir development and more importantly, oil and gas flow rates. 

“I once again wish to express our thanks to all involved in this testing programme, which has demonstrated such a substantial cumulative flow rate potential from this vertical Barryroe appraisal well.”

For Providence, the well dispels any lingering scepticism over the oil field which was first discovered by Esso in the 1970’s.

It is actually the sixth to be drilled at Barryroe, but crucially it is the first to assess the field against a back-drop of high oil prices, or using modern technology.

In regards to flow characteristics and oil quality, the findings from the Barryroe well were at the better end of expectations.

Providence now knows much more about the field, which spans a 320 square kilometre area, and this has positive implications in terms of future oil recovery estimates.

CEO O’Reilly said that Providence’s first well was really about validation and confidence, and now, armed with greater knowledge of the field the company plans to move in another direction – sideways.

“We’ve always known the actual development of the Barryroe field will not be through vertical wells. Instead they would be horizontal,” he said in a recent interview with Proactive Investors.

“But there was no point in us trying to sell that concept into a market that was already sceptical about Ireland as an oil producing region, and about Barryroe and those negative issues from the past.”

While all this oilfield development talk seems very alluring, O’Reilly has no intention of letting the Barryroe appraisal success distract Providence from its primary goal of establishing a whole portfolio of commercial oil projects off the Irish coast.

He believes the success to date will have captured the attention of larger international E&P companies.

So the plan is pursue development partners that have greater expertise, and deeper pockets, who can take on the Barryroe project.

Proactiveinvestors Australia website

From North America: Canadian oil and gas producer Pengrowth Energy Corp (TSE:PGF)(NYSE:PGH) said Friday that it will buy NAL Energy Corp (TSE:NAE) in a deal valued at about .9 billion, including debt, to add light oil assets.

NAL stockholders will receive 0.86 of a Pengrowth share for each share held, owning 26 percent of the combined company after the deal closes.

Based on March 22 closing prices of Pengrowth and NAL, the exchange ratio reflects a premium of 9.7 percent for NAL shareholders.

The boards of both companies urge their respective shareholders to vote in favour of the deal.

“The combination of Pengrowth and NAL represents the continued execution of our value creation strategy. The addition of the NAL assets will enhance our cash flow base and further augment our robust light oil drilling inventory,” Pengrowth chief executive Derek Evans said.

“The larger inventory of high netback light oil opportunities of the combined asset base enables us to high grade our investment
opportunities which should lead to improved capital efficiencies going forward.”

NAL Energy’s president and chief executive Andrew Wiswell said: “Bringing Pengrowth and NAL together provides the combined company with greater size, liquidity and access to capital. Part of the attraction to us is Pengrowth’s commitment to its dividend paying business model.

“This transaction provides NAL shareholders with exposure to a larger entity with an excellent portfolio of unbooked light oil development opportunities at Swan Hills and in the central Alberta Cardium play, in addition to a substantial long-term growth asset like the Lindbergh SAGD project.”

Pengrowth is an intermediate Canadian producer of oil and natural gas. Its focus is on the development of conventional and unconventional resource-style plays in the Western Canadian Sedimentary Basin.

The company’s projects include the Swan Hills light oil play in north-central Alberta, the Olds light oil and gas play in south-central Alberta, the Lindbergh Steam Assisted Gravity Drainage (SAGD) project in east-central Alberta and the Groundbirch gas play in north-eastern British Columbia.

NAL Energy acquires, produces and sells crude oil, natural gas and natural gas liquids from assets based in southeastern Saskatchewan, central Alberta, and northeastern British Columbia.

Amongst the benefits that a combination of both businesses bring are an expanded asset base of high quality conventional and unconventional opportunities with over 100,000 barrels of oil equivalent (boe) per day of current production and 434 million boe of proved plus probable reserves using Pengrowth and NAL’s year-end 2011 reserves.

This represents an approximate 12-year reserve life index.

The transaction gives exposure to leading western Canadian light oil plays with an inventory of over 730 locations across the Swan Hills Trend, the central Alberta Cardium and southeast Saskatchewan. The operating scale achieved in these areas will allow Pengrowth greater flexibility to further consolidate these areas, the company said.

Friday’s deal will also provide increased access to capital to fund Pengrowth’s Lindbergh SAGD oil sands project. Lindbergh is estimated to contain 783 million barrels of bitumen and a 1,000 barrels per day pilot project is currently in the process of injecting steam.

Proactiveinvestors Australia website

Bullabulling Gold (ASX: BAB) hit the boards of the ASX this morning, debuting at a price of A.28 and reaching a high of A.295 in intraday trade.

Shares in Bullabulling slid back to close at A.29, with more than 170,000 Bullabulling shares traded on its first day.

Bullabulling Gold was formed as part of a merger between joint venture partners Auzex and GGG, to manage the development of the Bullabulling gold project.

The project, located 70 kilometres from Kalgoorlie in the Eastern Goldfields, hosts a large tonnage, low grade deposit with high grade shoots, associated with the regional Bullabulling shear zone.

A JORC Resource upgrade in February left Bullabulling with 102.8 million tonnes at 0.96 grams per tonne (g/t) for 3.2 million ounces of gold.

Bullabulling is targeting an initial Reserve in excess of 1 million ounces of gold, to begin production in 2015.

A Scoping Study based on the previous Resource of 2.6 million gold ounces, the Bullabulling project could run for 10 years producing about 230,000 ounces of gold annum.

This study also gave an internal rate of return of 29% at A,500 per ounce, or 42% at A,700 per ounce and capital costs of A6 million.

Reductions in capital and operating costs are likely in the Pre Feasibility Study stage.

The implementation date for the merger between Auzex and GGG is proposed for Tuesday, March 27, 2012.

Proactiveinvestors Australia website

DGR Global (ASX: DGR) is edging closer to tapping the vast potential for shale gas in the Northern Territory via its subsidiary Armour Energy, which has lodged a prospectus for the float of the company.

CEO Armour Energy, Phil McNamara said the company currently has 11,500 square km of granted tenements and another 113,000 square km under tenement applications.

McNamara said it was important to note their was an historic gas flow within one of their granted tenements. “That gas flow analysis from that shows that we have some real prospectivity for production of liquids.”

The company is preparing to float the 50% owned subsidiary in April, once it has successfully completed an IPO to raise A million through the offer of 150 million shares at .50 each. 

The completion of the IPO and ASX listing of Armour Energy is expected to deliver a substantial increase in the asset base of DGR Global.

Armour Energy is focused on exploring for petroleum gas and liquids in a new province in the Northern Territory and northern Queensland, with the company’s permit areas covering 126,000 square kilometres of the McArthur, South Nicholson and Georgina Basins.

Importantly, these basins demonstrate analogous characteristics to U.S. shale gas basins, with the company optimistic that these characteristics will prevail across the permit areas and in turn imply potential for large scale gas and associated liquids fields.

About Armour Energy

Late last year Armour Energy reached a share placement and farm-in agreement with Lakes Oil (ASX: LKO) to subscribe to A.25 million in Lakes Oil shares and farm-in to highly prospective onshore Gippsland and Otway basin tenements. 

Armour Energy purchased 900 million shares at .25 per share, providing the company with a 15% interest in Lakes Oil. 

The DGR subsidiary will also have the right to earn up to a 51% interest and assume operatorship of the PEP169 tenement in the Otway Basin and PEP166 tenement within the onshore Gippsland Basin.

Armour Energy’s IPO is underwritten to million.

DGR Global’s Portfolio 

DGR Global currently holds:

- 50 million shares (30.6%) in Mt Isa Metals (ASX: MET) currently exploring for gold in Burkina Faso;

- 33.2 million shares (11.7%) in Solomon Gold (LSE: SOLG) currently exploring for gold and copper in the Solomon Islands and Queensland;

- 59.8 million shares (41%) in AusNiCo (ASX: ANW) exploring for nickel sulphides, cobalt, gold and silver in southeast Queensland; and

- 27 million shares (29%) in Navaho Gold (ASX: NVG) exploring for Carlin style gold in Nevada and Queensland.

DGR is also currently progressing the corporate development of Archer Resources, focusing on copper-gold‐silver porphyry systems, and IronRidge Resources. 

IronRidge is undertaking project research and identification for iron ore in west Africa.

Capital raisings and stock exchange listings for these companies are in planning for 2012.

Proactiveinvestors Australia website

Samson Oil & Gas (ASX: SSN) has signed up two rigs from Frontier Drilling to carry out its upcoming drilling programs in North Dakota and Wyoming.

The program in the North Stockyard field in North Dakota will add to the existing producers there while the Wyoming program will take another shot at the targets the company failed to reach with the Spirit of America well.

The newbuild Frontier 24 rig is due to be completed in May or June this year and will drill 1 well before starting the 18 month contract with Samson.

The 1500 horsepower diesel electric top drive rig is mounted a box on box substructure and is capable of being skidded between wells on a single Eco Pad that allows Samson to batch drill 4 wells from a single drill pad, which reduces mobilisation costs.

Samson had previously noted that it plans to drill 4 infill wells at North Stockyard this year and another 2 in 2013. All wells will target the Bakken shale and will add to the 6 existing Bakken producers.

Bakken wells have produced at initial rates of up to 3000 barrels of oil per day.

Meanwhile, the 1000 horsepower diesel electric top drive Frontier Rig 11 will drill the Spirit of America II well to assess Permian and Pennsylvanian aged targets that were mapped from 3D seismic acquired as part of the Hawk Springs project.

The drilling engineering plan for this well has been extensively revised since the original well was drilled and will use a combination of an oil based mud, higher density mud and deeper set casing to combat the shale problem previously encountered above the target zone.

Rig 11 will drill 1 firm well but will be available to drill the next Niobrara lateral in the event that Samson’s farm-in partners elects to drill that well.

Spirit of America II is expected to spud in the first half of April.

Proactiveinvestors Australia website

Quest Rare Minerals (TSE:QRM) reported Thursday it has hired two operations personnel for its Strange Lake B-Zone rare earth development project in Quebec.

The new project members, Colin Lindsay and Mike Robart, will report to the vice president of operations, the company said in a statement.

With more than 30 years of experience in the mining sector, Lindsay holds a bachelor of science in the field of extractive metallurgy.

After 12 years in plant operations in the African Copper Belt following graduation, Lindsay moved to Namibia to join Rossing Uranium, as a technical and operations superintendent.

For the last six years Lindsay has been engineering manager for the Kabanga Nickel project.

Under his new role, he will be in charge of overall implementation and the execution of a prefeasibility and feasibility study, the company said.

The second new member, Robart, will participate in the planning and execution of metallurgical testing programs for the Strange Lake deposit.

He will also assist in analyzing the results of the metallurgical testing programs, as well as with the development of process flow sheets and the selection of process design criteria for the selected flowsheet.

Robart has expertise in solvent extraction metal recovery process development and also has hands-on experience in design and execution of pilot plant programs for the mining industry, Quest said.

“The addition of these new members to the operations team greatly strengthens the technical expertise that is being brought to bear in the development and advancement of the Strange Lake B Zone deposit through the study phases,” Reno Pressacco, vice president of operations, said in a statement.

Quest’s Strange Lake, B-Zone deposit is located in Quebec and is one of the largest heavy rare earth resources in the world.

The mineral deposit is exposed at surface and amenable to a low-cost open pit mine with the potential to provide a long-term, stable supply of separated and refined heavy rare earths.

With its unique resource, the Strange Lake deposit has the potential to contribute to lessening of the projected supply deficit in critical rare earths.

Rare earths are a group elements critical in the development of clean energy technologies including electronics, hybrid vehicles, permanent magnets, green energy platforms and advanced technologies for national defence.

Proactiveinvestors Australia website

Gulf Keystone Petroleum said today that latest data from the Shaikan-4 appraisal well in the Kurdistan region of northern Iraq reinforced its view that the prospect is world class.

Proactiveinvestors Australia website

China will establish two or three large rare-earth enterprises by consolidating companies in the sector according to Miao Wei, minister of industry and information technology.

The first large rare-earth enterprise had already been created in the Inner Mongolia autonomous region by consolidating 14 related companies under the leadership of Baotou Steel Rare-Earth Hi-Tech Co.

The plan involves an industry regrouping that will cover firms in more than 10 provinces. 

The domestic industry’s value stands at an estimated 40 billion yuan (.35 billion).

Although its rare-earth deposits account for only 35 percent of the world’s total, China remains the world’s largest rare-earth exporter. It accounts for more than 90 percent of global output of the 17 rare-earth metals, which are used in the electronics, defense and renewable energy industries.

The country said last year it would tighten up regulations on exploration, processing and environmental protection related to rare-earth exports, with officials saying that the move was primarily motivated by environmental concerns and was in compliance with World Trade Organization rules.

According to Miao, after the rationalization, export quotas will be set in accordance with the annual production amount, which is also in line with WTO rules.

Miao said that the rare-earth export quota in 2012 would be the same as in 2011. The full-year quota for 2011 was 30,184 tons, but actual exports amounted to just half of the quota.

He said “it is totally groundless to blame China for not selling or controlling rare-earth exports. The fact is that many foreign firms are cutting their usage.”

Foreign response

In response to China’s rare-earth regulations, foreign countries are stepping up new policies to cope.

Japan, the world’s biggest importer of rare earths, will provide 5 billion yen ( million) in subsidies for projects that reduce the need for the elements as it aims to cut its reliance on imports to meet demand.

The funds will support projects that reduce the consumption of magnetic products that use dysprosium and neodymium, improve recycling and develop new technologies, according to a statement from the Ministry of Economy, Trade and Industry in February.

Proactiveinvestors Australia website

Central Asia Resources (ASX: CVR) is progressing towards gold sales from the company’s Dalabai Gold Project in Kazakhstan after beginning the gold extraction process.

Cyanide leaching began on February 24, and gold in solution has now reached concentrations that allow for the transfer to resin.

The return solution gold concentration is at levels of 1.3 milligrams per litre, and the company is putting gold to resin at a rate of 10 grams per hour.

An additional cell has been brought in for processing to the initial 40,000 tonnes, doubling the gold collection rate.

Central Asia is targeting a 160,000 tonne leach pad for Dalabai and plans to gradually increase processing levels over the next six months.

The Dalabai project has a total Indicated and Inferred Resource of 3.98 million tonnes at 0.97 grams per tonne for 124,000 ounces of gold.

Central Asia is undertaking a million exploration program to potentially increase production and extend the mine life.

Gold production at Dalabai was delayed by extreme winter temperatures in Kazakhstan and fouling problems with the heat exchangers, which are required for temperatures of minus 20 degrees Celsius.

As the weather warms up, these exchangers can be pulled out of duty for cleaning.

million capital raising

Early in February Central Asia announced a share placement, which will primarily be used to ramp up gold processing at Dalabai.

The company has received placement commitments to raise around A million from professional and sophisticated investors.

The placement will comprise 80 million shares at .025, and will be completed under the company’s placement capacity.

Proactiveinvestors Australia website

Mineral explorer Tirex Resources (CVE:TXX) has appointed Jeffery Griffin to the board of directors, the company announced Friday. 

The appointment comes as Tirex transitions from exploration to copper and gold mining production in six areas of the Mirdita volcanogenic massive sulphide district after investing more than US million into Albania over five years.

Griffin’s has a business administration in economics from Tuft University, and also served in the United States Army. 

From 2001 to 2010, he was president and chief executive of the Albanian-American Enterprise Fund. A enterprise created by the U.S. to enhance the private sector of Albania’s economy and also designed to promote a transparent “capitalist” economy under “democratic” rule.

In addition, Griffin was elected as the chairman of the board of the American Chamber of Commerce of Albania from February 2001 to 2007. 

During this time, the chamber developed regulations that were adopted as law to support land title registration, corporate share ownership.

Under his six year tenure, the chamber membership grew from 40 people to more than 220 members, the company said in a statement.

Griffin has held number high level positions in finance such as managing director for Caspian Securities, and was also president and CEO of American Security Capital Corp.

Further, from 1999 to 2001, he was vice president for Investment Funds, Overseas Private Investment Corporation, a U.S. Government agency charged with investing in emerging markets to support private enterprise development.

In this position, Griffin was the senior officer responsible for 28 international private equity funds with total capital of
billion, which comprised one-third of the corporations operations.

In October, the company said that it submitted its application for mining permits in the Mirdita District, in Albania.

Vancouver-based Tirex is seeking permits in the areas known as Central Gurthi, North Gurthi, South Gurthi and Letitna zones, as well as Fushe-Arres and Paluca.

The company has submitted documentation to the Ministry of Environment and Forestry, as well as mining plans to the Ministry of Economy, Trade and Energy. The applications received official support from all the host communities where the mining permits are located, Tirex said.

Proactiveinvestors Australia website