Sunday Blog, 11 September 2022
LBE PANR 88E CHAR IGAS ANGS AEX SCIR WEN KIST SQZ
Catching up on the past two weeks, Longboat Energy (LBE) announced the commencement of drilling operations on the Copernicus exploration well, offshore Norway, which is expected to take up to eight weeks to drill. This is the second of three fully-funded, gas-focused exploration wells, with the drilling of the Oswig well, the first well in the series, also currently underway. The company’s pitch is that the programme offers shareholders a “unique” opportunity to gain gas weighted drilling exposure, targeting a net mean prospective resource potential of 70 million barrels of oil equivalent, with an upside case of 142 million barrels of oil equivalent.
Pantheon Resources (PANR) announced an operational and corporate update. The rig used to drill the Alkaid #2 well has been demobilised, and wireline and completion equipment is now on location where completion operations have commenced. The well will be perforated, stimulated and plugged off in sections, prior to the commencement of flow testing expected in early October. In anticipation of success (or to ramp the share price further, depending upon your perspective), the company says it has upgraded the capacity of the production facilities currently enroute to the North Slope, increasing capacity to process oil production from multiple wells.
Next door neighbour 88 Energy (88E) announced the selection of the drilling location for its first half 2023 exploration well, Hickory-1. The well will test the reservoir units which are interpreted to extend from Pantheon Resources' acreage onto 88 Energy’s acreage. Planning and permitting for drilling of the Hickory-1 well has commenced. The location is adjacent to the Trans Alaskan oil pipeline route and the Dalton Highway, the main north-south all-weather road. Regardless of drill success, if you understand the exact timing with 88E (explained several times in the private blog, since it does this virtually every year) the share price is invariably good for a 100% run.
Chariot (CHAR) announced that it has signed a pipeline tie-in agreement with the Office National des Hydrocarbures et des Mines securing access to the Maghreb Europe gas pipeline in Morocco. The pipeline runs from eastern Morocco through to Tangiers in the north and subsequently across to Spain, enabling the gas produced from the Anchois gas project, offshore Morocco, to be transported via the pipeline to different potential offtakers, making Anchois a highly strategic asset given the continued volatility of global energy markets. Chariot was covered in the private blog from as low as 5p. It’s now nearly four times that price at 19.6p.
IGas Energy (IGAS) issued a response to the Government statement regarding the shale moratorium. The company says it has always believed that the science, as well as the need for increased domestic production of gas, supports a lifting of the moratorium. It states that the data it has collected in the Gainsborough Trough over the past five years shows that it has a world class shale gas resource which is now, given the energy crisis, a strategic national asset and, given the heightened world challenges, the need for the UK to secure further indigenous supplies of energy to reduce its reliance on imports and reduce spiralling energy prices is evident.
Angus Energy (ANGS) announced Saltfleetby flow rates: from well A4 of 4 million cubic feet of gas per day and over 4.5 million cubic feet of gas per day from well B2. Current capacity to process gas is 4.6 million cubic feet per day and the aim is to raise this process capacity, such that in the coming days the plant will reach a minimum steady state of 5.5 million cubic feet of gas per day, which would meet the company's hedge obligations for the fourth quarter. Stabilised condensate production also has started at around 50 barrels per day. Meanwhile, Krzysztof Zielicki, ex BP and Rosneft and Richard Herbert, ex BP and Frontera, have been appointed to the board.
Aminex (AEX) and Scirocco Energy (SCIR) issued Ruvuma updates. Over half of the seismic data has been acquired at Ntorya and the data required to evaluate the drilling location is expected mid-September. The full programme is anticipated to be completed by mid-October. It’s all academic for Scirocco, which the day before announced that the sale of its interest to ARA Petroleum Tanzania was proceeding following exercise of pre-emption rights and the initial planned sale to Wentworth Resources (WEN) was firmly cancelled. Meanwhile, and in relation to many other matters too, disgruntled shareholders have requisitioned a general meeting.
Finally, Kistos (KIST) announced interim results for the six months to 30 June and Serica Energy (SQZ) announced notification of its interim results for later this month. Kistos pro forma EBITDA for the six million period was €261.0 million, which compares favourably to a market capitalisation of £481 million. The offer by Kistos for Serica is no longer happening, but both companies’ share prices have moved higher since that announcement was made, with KIST closing on Friday at 580p and SQZ at 390p. As mentioned in the blog a few issues ago (with a Tweet from 2015 displayed) I first bought SQZ at under 5p a share. It just shows what potential is out there.
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