- Afren [LON:AFR] was the sector's biggest faller having revealed that it is reviewing its cost base and capital expenditure plans for this year due to the rapid decline in oil prices.

It noted press chatter about a possible financial restructuring and said it has been reviewing its capital structure, liquidity and funding requirements.

As part of that process the company is in discussions with its lenders regarding amendments to its existing facilities, in addition to seeking a deferral of a $50m amortisation payment due at the end of this month.

Afren also said it continues to be in discussions with SEPLAT Petroleum Development Company plc regarding a possible combination. But is says there can be no certainty that an offer will be made or as to the terms of any offer.

* * *

TXO [LON:TXO], the AIM-quoted energy resource and clean technology investment company, has reported that it is in discussions with a UK based clean technology investment management fund and a large international bank that specialises in asset finance of large plant and equipment, with a view to expanding its existing and future investee companies.

Whilst such discussions are at an early stage, the Board is hopeful and optimistic of a positive outcome that will help the company expand its portfolio both through organic growth and acquisition.

* * *

San Leon Energy [LON:SLE] said the second well in the three-well programme, Gieraltowice on the Bielsko-Biala concession in Karpaty, has now been completed and tested and is being plugged and abandoned.

All planned targets were penetrated. Low gas rates were achieved but the thick sandstone primary target reservoir did not have a sufficient seal, and thinner sands associated with the expected coal beds were insufficient on their own to provide commercial rates during testing.

The net cost to the Company for its 60% equity in the well is expected to be below €1 million.

Separately, the decision has been made not to drill the Niwiska well in the near-term. This well, on Block 243 in the Permian Basin, Poland, was targeting oil.

San Leon would be required to pay 100% of the cost of the first well drilled on the prospect, estimated at around €1.7 million, in order to complete its farm-in to Block 243 with Celtique Energy. As a result of the current depressed oil price, San Leon has reviewed the risked economics of the prospect and has concluded that it is prudent as a farminee not to drill the well at this time.

Referring to the Rawicz and Siekierki Drilling Projects, Poland, San Leon said the Rawicz-12 appraisal well, designed to test the previously-discovered, unproduced Rawicz gas field, has reached a total depth of 1,902 metres MDBRT (measured depth below rotary table).

The well successfully drilled the target Permian Rotliegendes sandstone reservoir interval. The well will now be completed and flow tested to evaluate the commercial potential of the field.

Detailed engineering and evaluation continues on the Siekierki gas project. This ongoing work is focused on working over and recompleting the existing Trzek wells, including testing water disposal, and designing an appraisal/development programme. The primary goal is to define an updated work programme to delineate and appraise the Siekierki gas field(s) and evaluate the long-term commercial potential of the project.

Both projects are operated by Palomar Natural Resources ("Palomar") with 65% equity, and San Leon has no up-front drilling costs for its 35% equity share.

Referring to the Timahdit Oil Shale Bench Test Results, Morocco, San Leon said the results of the oil shale bench testing, from the Timahdit licence, onshore Morocco, were as follows:

· Successful proof of applicability of the Enefit retorting process to generating shale oil from Timahdit oil shale

· Trials on vVarious combinations of retort temperatures, system retention times, and grain sizes

· High yield of C5+ oil during bench tests, up to 86% of assay amount (with potential upside yield from larger-scale process)

· Approximately 10 tonnes of oil shale processed

· Relatively low retorting temperature results in reduced operating cost.

Bench testing was performed by Enefit in their Frankfurt facility, designed to test the shale oil yield of recently-acquired oil shale samples from the Timahdit licence. The oil shale, from various different rock layers, was crushed and processed under a range of conditions. The results are regarded by Enefit as positive, with the feedstock rock suitable for this process.

Details have been provided to our partner Chevron Lummus Global, who will evaluate shale oil upgrading options using their technology.

Bids from leading engineering companies to update the previous pre-feasibility study are being evaluated. Costs will be strictly controlled in light of the current oil price.

Referring to the Foum Draa and Sidi Moussa Update, offshore Morocco, San Leon said offshore Morocco, "we are reviewing next steps in the Foum Draa and Sidi Moussa licences with our partners."

San Leon also said that further to its announcement on 26 September 2013, the Company has completed the sale of Island Oil & Gas Limited ("Island Oil & Gas") to Ardilaun Energy Limited ("Ardilaun").

* * *

Bowleven [LON:BLVN], the Africa focused oil and gas exploration group, has issued an update on its two well exploration drilling programme on the Bomono permit.

At the Zingana well site civil engineering activities have been completed and the first surface casing string has been driven in place. Civil engineering activities continue with the preparation of the second well site, Moambe.

Under the lump sum drilling contract, AODL is responsible for the provision of the rig, equipment and ancillary services. AODL is now assembling the rig which will be integrity tested prior to commencing drilling operations. The first well, Zingana, is now due to be spudded in February following some minor logistical issues which have now been resolved.

* * *

Cairn Energy [LON:CNE] has completed the farm out agreement to Dyas UK for the sale of a 10% interest in the Catcher development and adjacent acreage in the UK North Sea for a carry of Cairn's exploration and development costs up to a cap of US$182m effective 1 January 2014. The Catcher development is on track for first oil from 2017.

As a result of the transaction, Cairn has reduced its forward capital expenditure to the end of 2017 by ~US$380m. Cairn retains a 20% working interest in the Catcher licence.

Cairn, through its wholly owned subsidiary Capricorn Norge AS, has also been awarded the following non-operated interests in five licences in the Norwegian 2014 APA Licensing Round. These licences do not carry firm well commitments and are in locations adjacent to current areas of interest in Norway.

* * *

Tower Resources [LON:TRP], the AIM-listed Africa-focussed oil and gas exploration company, has issued an update on drilling operations for the Badada-1 well, Block-2B, onshore Kenya.

Tower says it has received formal notification from Lion Petroleum Inc, the wholly-owned Kenya-based subsidiary of Taipan Resources Inc and operator of Block-2B (Tower 15%, Premier Oil 55% and Taipan 30% working interests) regarding the status of the Badada-1 well as at 24:00 GMT on 20 January.

The Badada-1 well was spud at 14:00 GMT on 7 January and has been drilled to a total depth of 918 metres MDBRT (Measured Depth Below the Rotary Table) intersecting the Neogene sequence. A 20-inch casing point has been set at 298 metres MDBRT and the well is currently drilling ahead with the 17½-inch section to the next casing point. The well is planned to be drilled to a total depth of between 3,000 and 4,000 metres in order to test primary targets in Tertiary age reservoirs. The operator expects the well to take up to 70 days to complete.

The company will provide the next operational update in approximately two weeks when Badada-1 has progressed further. A comprehensive update will also be provided once operations on the Badada-1 well have been fully completed and analysed.

At 4:23pm:

[LON:AFR] Afren PLC share price was -4.94p at 20.85p

[LON:AUR] Aurum Mining PLC share price was 0p at 1.2p

[LON:BOR] Borders Southern Petroleum PLC share price was +0.13p at 5.88p

[LON:CHAR] Chariot Oil Gas Ltd share price was +0.08p at 8.4p

[LON:CNE] Cairn Energy PLC share price was -0.05p at 181.65p

[LON:DGO] Dragon Oil PLC share price was +7.25p at 530.25p

[LON:ENQ] EnQuest Plc share price was -0.12p at 27.88p

[LON:FOGL] Falkland Oil Gas Ltd share price was -0.5p at 21.5p

[LON:GKP] Gulf Keystone Petroleum share price was -1.75p at 54.25p

[LON:GPX] Gulfsands Petroleum PLC share price was 0p at 30.5p

[LON:INDI] Indus Gas Ltd share price was -0.12p at 156.38p

[LON:PET] Petrel Resources PLC share price was -0.5p at 4.5p

[LON:RKH] Rockhopper Exploration PLC share price was -1.62p at 56.63p

[LON:RPT] Regal Petroleum PLC share price was -0.58p at 3.74p

[LON:SLE] San Leon Energy PLC share price was -0.04p at 0.86p

[LON:TRP] Tower Resources PLC share price was +0.08p at 0.63p

[LON:TXO] TXO PLC share price was -0.02p at 0.13p

[LON:XEL] Xcite Energy Ltd share price was -0.37p at 33.63p

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