As of last week, takeover predator Eskdale Petroleum – a subsidiary of Crosby Capital Partners – had received acceptances for 37.42% of OPL.
"The feedback from shareholders is that it's a very good offer," Orchard executive director Andrew Gould told PetroleumNews.net when asked if he believed the deal, which closes on February 15, would go ahead.
Eskdale is offering shareholders a revised cash offer of 81c for each share – a 39.7% premium to OPL's closing price the day before the offer was made a month and a half ago.
But since that time, Orchard's share price has risen dramatically and on Thursday January 25 it was trading less than 2c below the offer price.
Fruitful Citrus
Meanwhile, Orchard and partner Perth-headquartered Nuenco have said wireline logs indicate good gas shows in a deeper Diatomite section with some indications of oil at Citrus-7 in California, adjacent to the partners' South East Lost Hills project.
The joint venture had originally planned to drill the well to a total depth of 4000ft.
But operator Orchard continued drilling after unexpectedly encountering good hydrocarbon shows and reservoir quality that improved as the depth increased.
Spudded on January 5, Citrus-7 was designed to appraise a shallow gas find made by Orchard on the adjacent Southeast Lost Hills acreage and intersect zones of interest in the Pliocene, San Joaquin and Etchegoin formations.
“Although gas shows were present in the shallower Pliocene sands, the review of the wireline logs showed they were wet,” Nuenco said.
“On deepening the well, Citrus 7 encountered approximately 500ft of diatomaceous formation before drilling ceased due to restrictions in the rigs capability to drill further.
“As the well approached the final drilling depth, the quality of the hydrocarbon shows and reservoir quality improved.”
Nuenco said the joint venture believes the diatomaceous formation could be considerably thicker and expect rock quality and amount of hydrocarbons would improve with depth.
Now the JV plans to contract a new rig capable of deepening Citrus-7, through the diatomaceous formation and on to the Monterey Formation.
The Monterey is a prolific hydrocarbon-producing formation in the Lost Hills Field, immediately north of Citrus-7.
Participants in Citrus-7 are Orchard Petroleum (operator with a 35% stake), Nuenco (30% and farming down to 20%), Australian private company Modena Resources (currently with no equity but earning a 10% interest from Nuenco) and other participants (35%).
