Canoro raises $8.1m to finance E&P in India

Vol 8, PW 15 (20 Oct 04) Exploration & Production

Canoro Resources of Canada has raised $8.1m to finance its E&P activities in India.

On 29th September the firm raised the money through a private placement of its equity shares. Net proceeds will be used to enable Canoro to bid for new exploration licences in India and to fund ongoing exploration, workover and drilling expenditures on the Amguri development and AA-ON/7 exploration block in the Assam basin, said the firm.

Canoro initially planned to raise $5.4m but this increased to $8.1m because of enthusiastic investor response and the need for more funds for the companys India operations. Canoro has a 60% participating interest in the 53-sq km Amguri development block plus a 65% interest in the 1934-sq km AA-ON/7 exploration block.

The Canadian firm is often criticised in India for lack of financing and experience. The company doesnt have any worthwhile bank balance, comments one industry source.

How can it fulfil its work commitments It doesnt even have technical expertise to do E&P. Undeterred, Canoro is going ahead with its work.

We have completed the planned acquisition of 158-km of new 2D on AA-ON/7, a company source tells this report. This fulfils all three phases of Canoros seismic obligations.

Canoro believes AA-ON/7 is sitting on several interesting and significant prospects based on preliminary evaluation of 200-km existing and earlier seismic and is equally upbeat about the Amguri block, which has an oil and gasfield, discovered in 1970 by ONGC. Canoros work programme consists of re-entering and establishing oil production from three of nine existing wells at Amguri.

A workover programme is finalised and the company has begun tendering for equipment and services. Canoros workover program will most likely begin in the fourth quarter of 2004.

Preliminary results from the currently producing well 8A indicate that it has considerable potential to produce additional gas, adds a source. Canoro has begun the process of looking for additional markets for this production.