Serial prospector David Bramhill floated another oil and gas exploration company on AIM today. Mr Bramhill is executive chairman of Bristol-based Bluebird Energy which will raise £2.5m through a placing of 200m new ordinary shares in the company priced at 1p each.
Bluebird is also aiming to raise up to £558,168 by way of an open offer at 1p per new ordinary share as soon as practicable following admission to fund exploration and development of shale gas deposits in the US.
Mr Bramhill has more than 40 years' experience in the natural resources industry. He has directed and managed several energy companies and was the former managing director of Oil Quest Resources until its reverse takeover of the Encore Oil group which he followed with the formation and successful flotation of Nighthawk Energy on AIM.
Bluebird Energy also owns 11.28 per cent of Wessex Exploration – another company headed up by Mr Bramhill – that has shares listed on AIM.
Bluebird's Centurion project in south Kansas is an oil producing asset although only a small proportion of the acreage has been developed to date. Six wells are producing through two separation and tank chains. Produced water flows into a water disposal well. Further production wells are being drilled or re-opened. Regional analysis indicates that further exploration drilling across the remaining acreage using traditional oilfield techniques has a 30% chance of success.
Mr Bramhill said: "It’s a development project and we own 50% of it. Each well we drill is called a development well – we’ve got three wells in production which is giving us about $350,000 a year – and we are drilling another seven wells. We drilled the first one last week, which was a discovery. We have 15,000 acres, which gives us the scope for 1,500 wells on 10-acre space, so you can see the size of the project.
"Our aim upon flotation is to extract 100 barrels a day and financially it will give us £1m cashflow a year."
Bluebird Energy's current US interests are worth £19.24m. In addition to Centurion, they include:
Revloc in Pennsylvania which has potential for coal bed methane production. Seven exploration and pilot scheme wells were drilled in 2008; production tests on three of the wells over a period of 2 months have shown gas flows. Pipeline rights of way have been negotiated and a tap distribution site is owned.
The company also holds rights to the Marcellus Shale in the same geographic region as Revloc. Recent deals in the region for prime Marcellus Shale with a significant contiguous acreage position have been recorded at around US $7,000 per acre, with even higher values paid for acreage with production facilities.
Extensive acreage at Solitaire in eastern Colorado has some historic drilling data including gas flows from the shallow Niobrara Carbonates, which is believed to be the primary target formation in the region.
Finally, in southern Montana Big Sky contains exploration leads in cretaceous age greybull sandstone channels. The area also has potential for CBM production.
The expected last date for applications to be received in respect of the open offer is 11am on July 27 2011. An application will then be made to the Stock Exchange for the new ordinary shares to be admitted to trading on AIM and it is expected that the admission will become effective and that dealings will commence at 8am on 2 August 2011.
