The fresh start also involves the appointment of several new board members with oilfield lawyer Anthony Kain taking over as managing director while non-executive director and financier Andrew Waller has opened up significant new capital channels for Anzoil.
Under these gentlemen the company intends to fund the farm in opportunity by way of a placement of 100 million shares at 2 cents per share with a 1 for 4 attaching Option (5 cents, 12 February 2006) to raise $2m before costs.
Perhaps most importantly the company’s fresh start will come with a fresh name, Nuenco NL (ASX Code NEO), which will be attached to a new updated constitution.
Under its new banner the company will take part in a drilling program starting next month in the prolific San Joaquin Basin in California. Nuenco will be farming into a 25% interest covering some 2560 acres (with the option to double that acreage) in the South East Lost Hills project area aiming to capture the southern extension of the Monterey Formation – the source rock for the large Lost Hills oilfield less than 2 kilometres to the north.
The Lost Hills field has yielded over 500 million barrels of oil (MMBO) with increasing production rates as it has been extended south east from initial discovery in the early 1900s.
Anzoil has also taken a 25% farm in interest in three more exploration blocks covering some 1900 acres in the southern San Joaquin Basin (the San Emidio project area). The total obligation to earn the farm in interests is budgeted between $1.5 million - $2.0 million but will ultimately depend on final exploration costs.
“These are relatively low-cost Monterey opportunities that have considerable reserves potential for the Company. This is the case in particular with the first South East Lost Hills well which will also test a high risk high impact Stevens sand play,” said Kain.
“All targets are at relatively shallow depths with lower technical risks which are ideal for a company our size,” he said.
“For a moderate outlay, this Californian farm in deal gives Anzoil significant exposure to material reserves potential in a proven petroleum province with high calibre partners surrounded by major oil companies. It represents a low cost start up with scope to expand in the event exploration is successful,” Kain said.
Nuenco’s partners in the San Joaquin venture are Nahabedian Exploration Group (NEG) Matris Exploration Company (Matris) and Orchard Petroleum, Inc. (Orchard). Since starting in California 2 years ago Orchard has drilled 8 wells with 3 discoveries; the McCormack Road gas discovery well located in the Sacramento Basin, as well as the Sledge Hamar 1-7 and Sledge Hamar 2-7 oil and gas discovery wells in the San Joaquin Basin.
In Australia the company will focus on its 40% interest in ATO 560 P containing the Utopia oil field in Queensland after disposing of its coal bed methane interests last year.
