Sunday Blog, 12 June 2022
I3E EOG CLON TRP LBE EME BLVN BOR IOG CHAR PRD CEG
Catching up on the last couple of weeks, Clontarf Energy (CLON) announced its not unexpected duster. The Sasanof-1 exploration well was drilled to a total depth of 2,390 metres and no commercial hydrocarbons were intersected. The well is being plugged and permanently abandoned. I stated two weeks ago that it was a pure gamble, but many were pumped into CLON to hold for the result (“110% certain” it was said) and there was understandable disappointment from some, particularly in respect of the company failing to do a follow-on interview. This was my response to that:
Some may regard this as cynical, but it’s the reality and how those behind these companies think. You can make a lot of money out of these plays, but only if you understand and accept how the financing and promotion game works.
Tower Resources (TRP) announced preliminary results to 31 December 2021. For unspecified reasons, the farm-out agreement in respect of the Thali PSC has still not been approved by the Government of Cameroon, so Tower now is looking for debt finance “to help with” the NJOM-3 drilling costs. In the meantime, TRP says it is finalising a binding letter of intent for a rig to drill the well prior to the year-end, although, as yet, there is no indication as to how the $14 million needed is to be raised. Also of interest are Tower’s 18,637 square kilometres of exploration rights in Namibia, believed to be the third largest net acreage position offshore Namibia, after Exxon and Eco Atlantic. There’s 1.4 billion barrels of oil equivalent in South Africa being touted by TRP too.
i3 Energy (I3E) announced its Serenity well engineering operator contract award. It’s with Petrofac, which has an existing contract with Stena Drilling for the use of the Stena Don, a harsh environment, semi-submersible drilling unit, and i3 has secured a well slot with a commencement date between 15 August and 15 September this year. Europa Oil & Gas (EOG) has a 25% interest in Serenity and issued a similar announcement also. In the meantime, EOG is upping its game with the appointment of Strand Hanson as Nomad, Tennyson Securities as sole broker and Vigo Consulting as communications adviser.
Longboat Energy (LBE) announced its Cambozola well result: unfortunately dry. Of the six wells drilled to date, three have resulted in discoveries and three further wells remain upcoming: Oswig and Copernicus this summer and Velocette next year. Empyrean Energy (EME) confirmed its decision to enter the second phase of exploration for the drilling of the Topaz Prospect. This second phase of exploration requires the payment to China National Offshore Oil Company of $250,000; the work obligation is the drilling of an exploration well within two years. Empyrean is now promoting Topaz “as a robust and large drilling target of approximately 891 million barrels in place (P10).”
Bowleven (BLVN) announced a change of partner and operator at the Etinde licence. The new party is Perenco, whose proven Cameroon oil and gas developments and substantial experience provide an opportunity to accelerate BLVN’s efforts to secure a final investment decision and the associated $25 million payment to Bowleven. Meanwhile, Borders & Southern (BOR) announced final results. The farm out process regarding its Falkland Islands licences continues and the company is currently evaluating different development options including an accelerated production development with the aim of ensuring the break-even oil price is below $40 a barrel.
IOG (IOG) announced an operational update. Saturn Banks gas production has been restored at an initial level of approximately 30 million cubic feet per day, with a phased build up underway to 55-65 million cubic feet per day. Drilling of the two development wells, Southwark east and west, is scheduled to continue into the fourth quarter, following which the appraisal wells at Goddard and Kelham North/Central are planned to be drilled in direct continuation. IOG was covered in the private blog from as low as 9p and is now standing at 26p, having been as high as 46p in March.
Chariot (CHAR) announced the result of a significantly oversubscribed open offer. The company received valid acceptances in respect of 61,098,316 open offer shares, representing a take-up of over 347 per cent. of the 17,597,272 shares available. The open offer has raised total gross proceeds of approximately $4 million, resulting in a total from the fundraising of $29.5 million, which includes the recently announced placing and subscription at 18p. CHAR was covered in the private blog from as low as 5p. It’s now nearly four times that price at 19.5p.
Predator Oil & Gas (PRD) announced a Trinidad update. The Company has decided to initiate a litigation process and is seeking to be recompensed $1.5 million as a result of the premature termination of the CO2 EOR project by Challenger Energy (CEG), which it should be said denies that any amount is owed. Fortunately for Predator, its main commercial focus now is Morocco, where it is aiming to drill three further wells this year. PRD has been covered in the private blog from as low as 1.21p and has been quite a spectacular performer. At 10.25p, the share price is up significantly and reached a high of 22.5p prior to the MOU-1 well spud last year.
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