Catching up on the past couple of weeks, Baron Oil (BOIL) announced a placing and subscription to raise £1.65 million at 0.06 pence per share. The company says it now has two major projects progressing towards key evaluation points, Chuditch PSC (Timor-Leste) and Licence P2478 (UK), both of which are material in terms of potential value, equity interest and prospective resources, with relatively short timelines to potential drill decisions. The additional monies will be sufficient to reach a decision point on Chuditch, interpreting the reprocessed 3D seismic data and re-doubling efforts on the farmout process. On P2478, the reversal by the UK Government to now support further oil & gas exploration and production justifies completing the initial work by the end of 2022, leaving time to make a drill or drop decision by July 2023 and potentially conducting a farm-out initiative. Interesting possibilities here.
Deltic Energy (DELT) announced final results and confirmation of the company's first exploration well on the Pensacola Prospect (UK Licence P2252). Rig selection and contract process is well advanced, with the Deltic-Shell JV scheduling the drilling of the Pensacola well late in the third quarter of this year. Meanwhile, strong progress has been made since the farm-out of five licences in the Southern North Sea gas basin to Capricorn Energy, with the JV aiming to make a well investment decision in the third quarter. As at 31 March 2022, the company had cash on hand of £8.6 million, with £0.9m of the post-year end spending related to the progressing of Pensacola well planning.
Empyrean Energy (EME) announced its not unexpected duster. Eight days prior, it issued what perhaps has to be the most mendacious announcement from any of the AIM oil companies so far this year, upgrading its internal geological chance of success over the Jade prospect to 65% while drilling. I described it on Twitter as follows:
Look at the replies to this tweet and you will see how people blind themselves and lose money. The share price, which reached 13p on the company’s update of 19 April, collapsed to a low of 1.55p when the actual drill result was announced a week later.
President Energy (PPC) announced an operational and strategy update. The most exciting aspect to this company is its upcoming Paraguayan exploration well, Tapir-1, in respect of which preparatory work for the drilling continues with President's partner, OPIC, the subsidiary of CPC Corporation of Taiwan, the state owned oil company. Tapir has internal estimated PMean unrisked recoverable oil in place of 96 million barrels, with the Delray Complex having a total of 306 million barrels. An independent sub-surface study commissioned by President in March placed a 17% chance of success on the Tapir prospect. Unlike Empyrean above, the company prudently states “this means also a high chance of failure and this correctly reflects the grounded attitude which investors must adopt in relation to exploration.” The updated projected date to spud the well is now at the beginning of the fourth quarter. On the positive side, though, with macro events materially affecting the cost of hydrocarbon fuel in Paraguay, a country currently totally reliant for its liquid fuel on imports of finished product by barge through 1,000 kilometres of river system from the River Plate, the economics in the event of success have significantly improved the value of the prize and concomitantly the risk/reward ratio.
Prospex Energy (PXEN) announced an income and production update for its El Romeral gas to power plant, which continues to provide meaningful income from selling electricity into the spot market in Spain at near record price levels. Gross electricity sales revenue for the quarter ended 31 March was just over €1 million. The plant is now operating 24 hours a day, seven days a week, and is ready to increase its gas to power generation capacity further as soon as the permits to drill a portfolio of infill wells on the concessions are received. In Italy, the Selva gas field is scheduled to come into production by the second quarter of next year and with the strong European gas market backdrop, Prospex is potentially looking at additional net annual cash flows in excess of €8 million a year there.
Hurricane Energy (HUR) announced full year results. With revenues of $240.5 million from seven liftings of Lancaster crude, the company generated $135.7 million of free cash flow in 2021. Full bond repayment is anticipated in July this year, after which Hurricane estimates it will have net free cash of at least $60 million, assuming production in line with guidance and oil prices of at least $90 a barrel. The board is now starting to talk about a future for the company at last, saying it will move forward to both consider opportunities within the existing portfolio and new assets.
Clontarf Energy (CLON) announced a placing to raise £3.5 million with new investors, via several Australian based brokers, at a price of 0.25p per share. The placing shares represent approximately 61.65% of the company's issued share capital as enlarged by the placing and, in addition to funding costs associated with the company's existing assets, will also provide Clontarf with additional working capital. In this regard, the company says it has been evaluating a number of different projects across various jurisdictions, in particular advanced gas exploration prospects in Australia. Essentially, it is a shell deal with de facto control being passed to a new group. It was received well, though, and the share price closed the week at 0.41p.
Sister company, Petrel Resources (PET), could be next. This is what I said about it in the Easter blog two weeks ago:
Petrel Resources (PET) announced that the High Court injunction over the 32,086,538 shares previously held by the Tamraz Group has been lifted, following the acquisition of the shares by John Teeling and James Finn for £300,000. John Teeling has acquired 21,086,538 shares at a price of 0.935p per share, following which he is the beneficial owner of 26,501,538 shares, representing 16.88% of the issued share capital and James Finn has acquired 11,000,000 shares at a price of 0.935p per share, following which he is the beneficial owner of 12,785,385 shares, representing 8.14% of the issued share capital. After all the shenanigans with Tamraz, the share price is back to 1.65p and perhaps ready to run again. I highlighted PET as a favourite several times in 2019 at around 1p and it went as high as 26.5p thereafter, up over 25 times.
PET closed on Friday at 2.15p.
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