Sunday Blog, 2 January 2022
Today: IOG SAVE ADV PPC ATOM CHAR LBE 88E DELT AEX EME PANR PRD TRP BOIL PVR and LOGP
Happy New Year to all. The last trading week was a short one, although there was interesting news from IOG, SAVE, ADV, PPC and ATOM.
IOG (IOG) (36p) announced the spudding of the first Southwark development well. First gas is expected at Southwark in mid-2022 after the planned installation in Q1 of the 6 kilometre Saturn Banks pipeline extension to the Southwark platform. The rig is then scheduled to move on to drill the Goddard and Kelham North/Central appraisal wells while analysis of reservoir and production data from Southwark development wells 1 and 2 will inform an optimal Southwark 3 well plan. The offshore subsea and hook-up scopes for the Blythe and Elgood fields are already complete and the Saturn Bank project is about to start producing. Final pre-first gas commissioning activities are underway and sales are expected to start this month, with Phase 1 looking set to capitalise on strong gas prices. IOG is targeting a gross peak production rate of 140 million cubic feet of gas per day so potential revenues are substantial. IOG has been covered in the private blog each week from as low as 9p. It’s now up 300% from there and the current market capitalisation is £189 million.
Savannah Energy (SAVE) (22.5p) announced a successful placing and subscription at 19.35p per share, raising gross proceeds of $65 million. The net proceeds, together with the debt financing and the junior loan facility, will be used to fund the considerations payable for the Exxon and PETRONAS acquisitions. In aggregate, Savannah is acquiring: a 75% participating interest in the Doba Oil Project which comprises seven producing oil fields with 186.5 million stock tank barrels of 2P reserves and 2C resources and which produced at an average gross rate of 33,700 barrels of oil per day (25,300 net) in 2020; a 70.34% equity interest in the company which owns the 178 kilometre section of the Chad-Cameroon pipeline that runs from the Doba Oil Project to the Cameroon border; and a 70.83% equity interest in the company which owns the 903 kilometre section of the Chad-Cameroon pipeline that runs from the border plus the associated export facilities, including the Kome Kribi 1 FSO. For those interested further, the full admission document with all the detailed information is available for download at the company’s web site. Current market capitalisation is £224 million.
Advance Energy (ADV) (4.175p) announced that the Valaris JU-107 jack-up drilling rig has commenced operations at the Buffalo-10 well location, offshore Timor-Leste. Target depth is approximately 3,500 metres. ADV holds a 50% interest in the Buffalo PSC and the Buffalo-10 well is designed to test the presence of an attic oil accumulation remaining after the original development, converting the 2C resources of 34.3 million stock tank barrels to 2P reserves following re-certification. Chance of success is stated as an 85% probability of confirming a sanctionable development project based on the minimum economic field size. There is some professional scepticism regarding this, but ADV claims that in the success case, there is potential to deliver a gross production rate of around 40,000 barrels per day by the end of 2023, which in the current pricing environment would deliver exceptionally strong cash flow and significant rates of return. ADV has been covered in the private blog each week from as low as 2p. It’s now up over 100% from there and the current market capitalisation is £43 million.
President Energy (PPC) (1.95p) announced the spin-out and listing on AIM of its subsidiary, Atome Energy (ATOM) (83p). PPC’s shareholders received a dividend in specie of one share in Atome for every 169 shares in President, with the distribution worth 0.49p per PPC share at the current ATOM share price. After the distribution, President continues to hold 27.9% of Atome, an independent green hydrogen and ammonia production company. Moving forward, PPC has completed the farm-out of a 50% interest in its Pirity concession in Paraguay to CPC Corporation, the state owned energy company of Taiwan. CPC will be paying 60% of the costs of a $10-15 million exploration well scheduled to commence in the first half of this year, plus a cash payment of $4 million. The well will be targeting a complex of prospects, estimated by President to contain an un-risked resource of 230 million barrels of oil with a 30% chance of success. Current market capitalisation is £40 million.
Covered in the private blog this evening, ADV CHAR LBE PPC 88E DELT AEX IOG EME PANR PRD TRP BOIL PVR and LOGP. Click “About” for further information.