Sunday Blog, 20 February 2022
88E LBE PANR PPC HUR ZPHR WEN PTAL
88 Energy (88E) announced the completion of an A$32 million share placement at 1.8p. I wrote about this last weekend since the initial announcement came out a few days prior. The company also released a new presentation last week. It covers the various projects in Alaska and flags their new venture opportunities, including Project Longhorn, in respect of which 88 Energy has executed a memorandum of understanding to acquire producing assets in Texas for around $9 million. The upcoming Merlin-2 well in Alaska spuds next month, targeting 652 million barrels of oil, with a 56% geological chance of success. 88E has been covered in the private blog from the 0.40s and reached a high of 4.7p last March.
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Longboat Energy (LBE) announced director share purchases. The directors say they believe there is significant value creation potential in the existing Egyptian Vulture discovery and the upcoming drilling programme, with the Kveikje, Cambozola and Copernicus wells all due to spud over the next few months testing 69 million barrels of oil equivalent net to Longboat. Chances of success of the three wells are 55%, 15% and 26% respectively. Market capitalisation is £33 million.
Pantheon Resources (PANR) announced a Theta West #1 operational update. The well reached total depth at 8,450 feet, encountering approximately 1,160 gross feet of hydrocarbon bearing reservoir. The company is now preparing to set casing prior to flow testing the target horizons over the coming weeks. Convertible bond holders are starting to sell. $2 million was converted last week at 78p and there’s another $53 million to go. Hard floor on the convertibles is 65p.
President Energy (PPC) announced 2021 key trading highlights. Turnover was $34.2 million, with average group production of 2,473 barrels of oil equivalent per day and free cash generation from operations after work-overs and treasury income of $14.5 million. The big event coming up is President’s new exploration well in Paraguay, expected to be drilled in the coming months, targeting prospects estimated to contain an un-risked resource of 230 million barrels of oil with a 30% chance of success.
Hurricane Energy (HUR) announced an operational and financial update. The average oil rate is 9,639 barrels of oil per day, with an average water cut of 40% (that number is increasing). As of 31 January 2022, the Company had net free cash of $85 million. $78.5 million of convertible bonds remain outstanding and due in July this year. Now 7.1p, shareholders are certainly doing better than under the board’s proposed restructuring plan (defeated by Crystal Amber), which valued the shares at just 0.1p.
Zephyr Energy (ZPHR) announced completion of its $36 million Williston Basin acquisition. The company has bought 6.2 net producing wells, 0.72 net drilled but uncompleted wells and 1.88 net locations to be drilled in the future. Proved reserves are estimated to be 2.7 million barrels of oil equivalent. December 2021 production averaged 1,105 barrels of oil equivalent per day. The company says it plans to hedge a substantial portion of this production to lock-in current prices.
Wentworth Resources (WEN) announced its 2021 reserves report. 2P reserves as at 31 December 2021 are estimated to be 135.2 billion cubic feet of gas with an after-tax net present value, discounted at 10%, of $108.1 million. Gross full-year 2021 production was 29.8 billion cubic feet of gas, an approximate 24% increase over 2020 production volumes. The company says the numbers reconfirm the long-term potential at Mnazi Bay. Market capitalisation is £39 million, with a dividend yield of around 7%.
PetroTal (PTAL) announced increases in its 2021 year-end oil reserves, with a 68% increase in 1P Reserves to 37 million barrel, a 53% increase in 2P Reserves to 78 million barrels and a 39% increase in 3P Reserves to 147 million barrels. Net present value before tax, discounted at 10%, is $724 million for the 1P reserves and $1.39 billion for the 2P reserves. I mentioned PTAL positively around 14 months ago when it was 7.6p. It’s now over five times that price at 41p.