up to 20 oil wells

GBP Overview:

Global Petroleum is a junior oil and gas play. It has producing assets via an 11.25% revenue interest at the Leighton oil discovery off the gulf coast of Texas, USA. The Leighton project is led by Texon Petroleum and 2 wells are currently producing around 800 barrels oil equivalent per day. GBP’s share of the wells equates to around $1.5m in revenue a year (at current oil prices) but there is the potential for Leighton to sustain 15-20 wells.
Aside from Leighton the real ‘blue sky’ for GBP lies in a farm in, JV agreement with Tower Resources (AIM:TRP). The JV is preparing for drilling at a potentially exciting new prospect in north-western Uganda – EA5. GBP will earn a 50% interest in the EA5 Licence by funding the cost of drilling the first well of a two well program.
The area is known to host large deposits of oil and gas and the tenement is only 80km from a large discovery made by Tullow Oil. Tullow's Buffalo-1 project indicates eventual resources of over 1bn barrels of oil equivalent! Tullow recorded 100% success rates in its drilling program (22 wells) and GBP will be hoping for the same.

Executive directors, Peter Blakey and Peter Taylor own approximately 63% of shareholdings indicating management's strong belief in the potential of GBP.

The company has no debt and cash in the bank is sufficient to continue with drilling at the Ugandan tenement, of which GBP is expected to most likely spend $7.5m in initial capex and then continue with a 25% responsibility for ongoing costs.

Tullow Oil, an AIM-listed major European gas player, has tenements adjacent to GBP’s interest in Uganda, central Africa. The area has been known to host large oil and gas reservoirs and of the 22 wells drilled by Tullow in recent times, all 22 indicate commercialisation opportunities. In fact, over 600m barrels of oil equivalent resources have been discovered and there are suggestions the area could host over 1bn barrels of oil equivalent. Tullow’s recent drilling programs and 100% success rates in the area have contributed to a re-rating of the company’s share price. With GBP drilling nearby at EA5, there are hopes that results could be just as fruitful.

SP has been consolidating above 10c for the last two years. Resistance is being met at 29.5c but with strong newsflow expected in ensuing weeks due to the drilling, this level may be broken provided favourable drilling results. 29.5c would form a new support level should this take place.

with the pull back to the 21 c mark I have bought in for the 3 week run!