Penny Shares Guide

Irvine Energy Plc is an independent oil and gas exploration and production company focused on the development of onshore projects, both conventional and unconventional. Incorporated in the UK, the company operates exclusively in the U.S., currently working on projects within the highly prospective Kansas/Oklahoma region. Historical production in the area dates back to the 1800’s and cumulative outputs are in the billions of barrels and trillions of cubic feet for oil and gas respectively. The company currently has interests in three projects, the Niobrara project in Kansas, the Kansas project, and the Oklahoma project, jointly developed with one local partner who is also the operator for all projects. By combining conventional and unconventional plays, the company hopes to assemble a balanced portfolio of low risk and high capital yet efficient programmes.

Niobrara Project

Irvine Energy has 50 percent interest in the Niobrara project, which holds mainly shallow chalk gas. About one hundred wells have been drilled progressively over the years and many have quickly come on line to sales. The shallow nature of the gas formation makes it possible that the wells can be drilled and completed in surprisingly short periods, even less than a week, at very low cost.

Kansas Project

75 percent interest has been obtained by the company in the Kansas project. The project includes many oil-rich areas that have a prolific oil production history. What it has been lacking is the application of the state-of-the-art exploration technique, like 3D seismic. This provides significant upside potential for Irvine Energy as an exploration company. Various exploration drilling has been initiated and surveys have identified several prospects.

Oklahoma Project

The company holds also 50 percent interest in the Oklahoma project, which contains both conventional oil and unconventional gas. Some over 20 conventional production wells were included when the company purchased the property. Currently the company is focused on areas where unconventional shale gas exists. Vertical wells, and horizontal ones are being planned. Successful development of the shale could be huge with an estimate of net recoverable of over 200 billion cubic feet of gas.

Shares (IVE) of Irvine Energy Plc is currently delisted from LSE’s AIM sub-market.

Pantheon Resources Plc, incorporated in the UK, is a small, independent oil and gas exploration and production company operating mainly in the U.S. Its principal area of focus is in the onshore Gulf of Mexico region, specifically Texas and Louisiana. Such places offer lower drilling and development costs than offshore and other less-known, unproven territories. The lead times to commercial production are therefore shorter. These are the factors that the company must consider as a small player with limited capital. But a series of fund raising activities has been implemented and successful in addition to the £10 million IPO in 2006. The funds have allowed the company to pursue a portfolio of diverse projects with different risk profiles. The company’s strategy is committing to both high risk/high reward, under-explored plays with potentially high impact and lower to moderate risk, extension/development plays with current drilling success.

Projects Intended for Future Payoff

Pantheon Resources Plc initially focussed on deep geological plays with potential for major growth in reserves and production. Two farm-in agreements that the company entered into early on are the Texas Padre Island project and the South Louisiana project, both of which are large, high quality natural gas plays in the under-explored deep sections of the Gulf of Mexico region. Two wells have been drilled so far without success on Padre Island, which is near Corpus Christie, Texas, with one well later plugged and abandoned for being non-prospective on deep reservoirs and the other bringing on-stream only moderate production and shut in eventually. The South Louisiana project has experienced similar results as for now. The first well was abandoned for mechanical reasons after the drill pipe stuck in the hole twice unable to reach deeper and second well found non-commercial quantities of natural gas.

Projects Concerned with Current Cash Flow

Out of the total five projects in which the company holds various interests, the other three projects were later entered into in a shift in focus from high risk deep play to low risk development play. Two such projects are in Texas, the Tyler County project and the Project Wharton, and the third one in Louisiana, the Bullseye project. North of the company’s Tyler County project, there has been drilling success by two operators that will also operate, with interests, the company’s wells here. The area is considered an old play first discovered in the 1930s. Early success has been achieved at Project Wharton, which spread out from Houston to Corpus Christie. The project operator has a long, successful drilling history in the Gulf region. Drilling for the Bullseye project has been conducted in areas that were discovered by a predecessor of ExxonMobil back in 1944 and is producing positive cash flow from two wells with more on the play.

Shares (PANR) of Pantheon Resources Plc are listed on LSE’s AIM sub-market and were at 23.50p as of 12 July 2010.

Empyrean Energy Plc, based in London, is an energy investment company providing funds through direct participation or farm-in agreement to oil and gas exploration, development, and production projects. The company’s management team has years of experience in both the investment and energy industry. A typical financing process begins with identifying and analyzing opportunities of prospective projects. Having determined on the appropriateness of risk versus reward within a project, the company proceeds to negotiating with potential partners for a percentage funding of the project. The company seeks projects primarily in geopolitically stable environments and thus far has solely focused projects in the U.S.

Project Participation

A non-operator in its project involvements, Empyrean Energy Plc pays its share of drilling cost based on the percentage of working interest it has acquired. Partnering with various U.S. companies, Empyrean Energy is currently participating in four U.S. projects, three in Texas, and one in southern California.

The California project, Eagle Oil Pool Development, in which the company holds 48.5% interest, the most among all projects, has a recoverable reserves of 7.1 million barrels of oil and 12.3 billion cubic feet of gas. In the Texas Sugarloaf Hosston Project, which comprises of Block A and Block B, the company has interests ranging from 3% to 9% in a total of 9 different wells. Recoverable reserves from each of those wells are estimated at 2-10 billion cubic feet of gas equivalent. The company retains an equal 10% interest in the other two Texas projects with an estimated potential of 80 billion cubic feet of gas equivalent for the Riverbend Project and 21.4 billion cubic feet of gas equivalent for the Hercules Project.

Financial Backing

Empyrean Energy Plc had two placings in 2009 raising £1.54 million. The funds were used to finance the company’s investment of 10% share in the Riverbend project, as well as provide working capital. In 2010, the company is more than doubling its fund raising effort, bringing in £3.6 million and making available fund uses for any further participation in its existing Texas and California projects. The company has in the past expressed its belief in the sustainability of its project portfolio. In fact, nearly 70% of its investments have either produced or currently in production.

Shares of Empyrean Energy Plc (EME) are listed on LSE’s AIM sub-market and were at 5.75p as of 5 July 2010.