Sunday Blog, 20 March 2022
88E IOG PRD ECO UPL EME HUR PXEN
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88 Energy (88E) announced that the Merlin-2 surface hole has been successfully drilled to 2,005 feet, cased and BOP system tested. Operations are now progressing as planned with the Arctic Fox rig drilling ahead to the reservoir targets. Time to total depth of approximately 8,000 feet is estimated at up to two weeks. At this point, a wireline logging program is planned to be run, including collection of down hole samples and side wall cores. This is expected to take approximately five to seven days to complete. Testing is unlikely this season. 88E has been covered in the private blog since the share price was in the 0.40s. It’s now 2.25p.
IOG (IOG) announced First Gas from Phase 1 of its Saturn Banks Project. The Blythe and Elgood wells were safely opened up and IOG gas has started to be delivered into Bacton and on into the UK market. Phase 1 First Gas is the first step, giving IOG the operational platform and financial capacity to deliver multiple further phases of growth. The company’s operational start has certainly come at the right moment; with heightened energy security risks across Europe, there has perhaps never been a better time to bring new UK gas resources on stream. IOG has been covered in the private blog each week from as low as 9p. It’s now 39p.
Predator Oil & Gas (PRD) announced an operational update and placing to raise £1.035 million at 9p. The company has secured an option on the Star Valley Rig 101, which covers the drilling of up to three wells in 2022. Civil works to construct the MOU-4 and MOU-5 well pads will commence following receipt of approvals and a quote also has been received and reviewed for MOU-1 well testing. The company says it is perfectly positioned to take advantage of the “dash for gas” in Europe and aims to deliver an aggressive, expansive and exciting 2022 drilling programme. PRD has been covered in the private blog from as low as 1.21p. It’s now 9.75p.
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Eco (Atlantic) Oil & Gas (ECO) announced the strategic acquisition of JHI and its 17.5% working interest in the Canje Block, offshore Guyana. It’s a cashless acquisition paid for in shares, with a value of approximately $52 million at the company's current share price, and would also make Eco the sole owner of JHI's $15 million cash balance. The Canje Block is directly adjacent to the prolific Stabroek Block where ExxonMobil has discovered in excess of 10 billion barrels of oil.
Upland Resources (UPL) announced that a heads of terms agreement has been signed between the company and Pennpetro Energy for a proposed farm-in into UPL’s Saouaf permit area Tunisia, in which it holds a 50% interest in a joint venture with the Tunisian state oil company. The current residual work programme to be carried out prior to 23 December 2022 includes an obligation to complete the acquisition of 300 line kilometers of 2D seismic, which Pennpetro has agreed to meet under the farm-in.
Empyrean Energy (EME) announced partial conversion of the convertible note. £700,000 was converted into 8,750,000 shares at a conversion price of 8p per share. £3,300,000 remains outstanding on the note still to convert. The Jade spud date is now anticipated to be early to mid-April and the well will take approximately 26 days to drill. If the Jade well intercepts a hydrocarbon zone, testing is planned to take approximately a further 2 weeks and will require an additional $7.4 million in funding.
Hurricane Energy (HUR) announced an operational and financial update. As of 15 March 2022, Lancaster was producing around 9,250 barrels of oil per day from the P6 well alone with an associated water cut of around 42%. As of 28 February 2022, the Company had net free cash of $71 million with $78.5 million of convertible bonds remaining outstanding and due in July this year. There was no lifting of Lancaster crude in February; the next cargo is anticipated to be lifted in late March.
Prospex Energy (PXEN) announced production strategy at the El Romeral power project, Spain, in which the Company holds a 49.9% working interest. Agreement has been reached to continue operating the plant 24 hours per day for six days per week until further notice; over the last two weeks the power plant has been successfully operating this way securing the recent high electricity prices. Forecast revenue for this month now is likely to exceed €500,000 at current forward curve prices.
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