Catching up on the last couple of weeks, IOG (IOG) announced another positive operational update. Blythe and Elgood production is currently stabilising at 55-65 million cubic feet of gas per day and 800-1,000 barrels per day of condensate, with steadily improving uptime rates. Meanwhile, drilling progress continues at Southwark while IOG prepares for the two follow-on appraisal wells at Goddard and Kelham North/Central, which are expected to spud in the fourth quarter. The company is targeting a gross peak production rate of 140 million cubic feet of gas per day so potential revenues are substantial. IOG was covered in the private blog each week from as low as 9p and is now standing at 28p, having been as high as 46p in March.
Predator Oil & Gas (PRD) announced an operations update and directorate changes. Purchase orders are being issued for sourced long-lead well items, including 4 wellheads, the schedule for rigless testing of MOU-1 is to be aligned with the mobilisation of drilling services with the option to include additional shallower sand for perforating, environmental impact assessments for MOU-4, MOU-5 and MOU-NE well locations have been approved, a civil works contract has been awarded to build the first well location, a Star Valley rig option has been secured as previously negotiated for the MOU-1 drilling contract, MOU-4 and MOU-5 are to potentially prove up a high estimate of 708 billion cubic feet of gas net recoverable, MOU-NE prospect seismic mapping has confirmed an area of closure of 102 square kilometres for the Jurassic target, the company is fully funded to meet all well planning and well preparation activities in Morocco and two potential farminees for the Guercif Licence have been selected from initial responders for further discussions. It’s all go now if they can negotiate terms. PRD was covered in the private blog each week from as low as 1.2p and is now 9.05p, having been as high as 22.5p in June last year prior to the MOU-1 well spud.
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After raising £3.5 million via a placing of 1,400,000,000 shares at 0.25p, Clontarf Energy (CLON) announced its deal, an acquisition of 10% of the Sasanof prospect, offshore Western Australia. Consideration will consist of $4,000,000 cash and 100,000,000 shares valued at £480,000 as at the 6 May close. In the event of a discovery being declared at the Sasanof-1 well, the consideration will be further increased by 150,000,000 Ordinary Shares, up to a maximum of £8.7 million, being 80% of the market capitalisation at the 6 May close. The Sasanof prospect is estimated to contain a P50 prospective resource of 7.2 trillion cubic feet of gas and 176 million barrels of condensate with a 32% Chance of Success. Drilling operations are expected to start on 24 May. Meanwhile, sister company Petrel Resources (PET) is up from 1.65p four weeks ago, when I highlighted it as ready to run again, to 3.8p at the close on Friday, having been as high as 5.1p the previous week.
Longboat Energy (LBE) announced its farm-in to two exploration wells targeting combined gross unrisked mean resources of 223 million barrels of oil equivalent (45 million barrels of oil equivalent net to Longboat’s 20% working interests). Oswig and Velocette are material gas prospects close to infrastructure in Norway anticipated to drill in summer this year and the second quarter of 2023 respectively. The transaction increases LBE's net unrisked mean resources by 68% to 110 million barrels of oil equivalent with additional, on-block follow-on potential of 55 million barrels of oil equivalent. The company now has four firm exploration wells drilling in the next 12 months, including the currently drilling Cambozola well (25% Longboat interest).
Tower Resources (TRP) announced a Cameroon update. It sounds as though the farm-out to Beluga Energy has fallen through. Tower is now talking about discussions with local banks in Cameroon regarding debt financing. The objective it says is to conclude a revised transaction in the third quarter and the company does not intend to comment further on these discussions until they are completed. Meanwhile, TRP expects to complete shortly a letter of intent with Shelf Drilling to cover the drilling and testing of the NJOM-3 well in the fourth quarter. The overall budget for the well now is around 20% higher than the original figure of $15 million, but with some $4 million of the cost already incurred and all long lead items already purchased, Tower currently estimates the remaining cost at around $14 million.
Empyrean Energy (EME) announced a capital raising and debt restructure. £1.83 million has been raised at 1.5p per share and, to persuade the convertible note holder to forbear, the face value of the convertible note has been increased from the actual outstanding amount of £2.2 million to £3.3 million, with the interest rate potentially rising to 10% per month. Hope for the company and its shareholders now lies in the Mako gas field and the Topaz prospect, which the company has until 2024 to drill.
Petro Matad (MATD) announced an operational update. Covid-19 related lockdowns and travel restrictions in China continue to impact Mongolia. Regarding the Block XX exploitation area, local officials remain reticent to discuss applications due to lobbying on social media by what the company describes as a vocal minority protesting against industrial activity. The priority is to get Heron-1 on stream, but with the current suspension of all oil production and export from PetroChina's Blocks XIX and XXI and with all on site storage full, MATD needs oil export to restart in order to optimise the start-up sequencing. Shareholders will need to be patient.
Eco (Atlantic) Oil & Gas (ECO) announced TSXV approval for the closing of the Azinam acquisition. The company will now issue the remaining 17,874,174 shares of Eco to Azinam Group Holdings, plus 40,000,000 warrants exercisable in the case of a producible commercial discovery on Block 2B or Block 3B/4B at prices of CAD$1.00 and CAD$1.50. Meanwhile, the 64,885,496 shares issued in the recent 30p placing continue to churn, closing on Friday at 26.75p. Drilling of the Gazania-1 well on Block 2B, offshore South Africa is expected to commence in September.
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