SP – 1.6c
Shares – 101m
Options – 48m
Cash – $548k
Although results from the Sidi Dhaher well flow tests were unsuccessful, the company’s remaining assets have significant prospectivity. The Board and management of Xstate are focused on using remaining cash reserves to realize maximum value from the significant Contingent (Discovered) and Prospective Resources within the company’s existing exploration assets and to seek new projects to recapitalise the company.
REVISED OIL AND GAS RESOURCES SUMMARY
Xstate is assessed to have resources of over 268 million barrels of oil equivalent (net to its interest) in its exploration assets.
SIDI DHAHER WELL TEST RESULT
The onshore Sidi Dhaher 1 exploration well was drilled in September and October 2011 and after logging and recovering oil samples, the well was cased to make it safe for temporary plugging and future re-entry for flow testing. Flow testing was carried out in June 2012. Despite the indications of oil noted above, the well flowed only water due to low oil saturation, and the well has been plugged and abandoned.
ONSHORE CHORBANE PERMIT
The onshore Chorbane Permit Area is less than 50 kilometres from the oil industry support centre at Sfax, and is conveniently located relative to a major oil export facility and connecting oil pipelines with available ullage, and also gas transmission pipelines which provide connections to European gas markets. This infrastructure could facilitate early development of any discovery in the permit.
Enhanced Chorbane Permit Prospectivity
Despite the failure to flow on production test, the recovery of oil at Sidi Dhaher on wireline tests has enhanced the prospectivity of almost the entire permit area. It is also noteworthy that part of the Chaal gas discovery is mapped to extend onto the Chorbane permit.
A number of attractive prospects for drilling in the future are currently being reviewed.
OFFSHORE KERKOUANE PERMIT – upgraded prospectivity (XST – 10% with Option to Increase to 20%
over all but 150 km² around the Lambouka Discovery)
The Kerkouane and Pantelleria Permits offshore Tunisia and Italy cover 3,725 km² and contain three (3) discovery wells (Dougga, Kerkouane and Lambouka) and no dry holes have been drilled on this permit.
Assessment of potential drilling targets for 2013 continues.
Anticipated September Quarter Activities
Offshore permit activities in the next quarter will continue to be focused on the method by which the discovered oil and gas potential and the enhanced prospectivity can be fully appraised in the most efficient manner.
Xstate will pursue a strategy to realize value from the gas discoveries in the offshore permits.
Approximately 20% of the Chorbane Permit will be relinquished as a condition of renewal of the Permit until July 2015.The prospectivity of the remaining onshore Chorbane permit will be reviewed and a plan for future exploration activity developed in the September quarter.
CORPORATE
The company continues to seek and review new exploration projects and /or merger opportunities that enhance shareholder value. In recognition of the current financial position of the Company, the Board has instituted changes that will see corporate and administration costs reduced by approximately 40% until such time as the Company is successfully recapitalised.
In June the Chairman, David Whitby, resigned and as a cost mitigation measure he will not be replaced.
On 13 July 2012 escrow restrictions were lifted on 4,483,268 fully paid ordinary shares and 9,840,237 options expiring on 30 June 2013.
On 24 May 2012 shareholders approved the Company placing up to 25 million shares by 24 August 2012.
