Sunday Blog, 21 November 2021

CHAR COPL XOP PTAL TAL PTALF PPC I3E ITE AEX SCIR HE1 KIST HUR PANR 88E EEENF DELT EME ADME WEN NOG CORO VOG SOU JKX SEPL TLW SDX PHAR LEK CNE

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Chariot (CHAR) announced the signing of partnership terms with Total Eren, which sets out the relationship from 1 January 2022 for the joint origination and development of wind and solar projects for mining clients in Africa. The partnership will last for three years, with the option to extend for a further two years and Chariot will have a right to invest between 15% and 49% into the co-developed projects. In the meantime, drilling operations at Chariot’s Anchois appraisal well, offshore Morocco, targeting a total remaining recoverable resource in excess of 1 trillion cubic feet of gas, are expected to commence next month. Currently 7.91p, CHAR has been covered in the private blog over the last few months from around 5p up.

Canadian Overseas Petroleum (COPL XOP) announced third quarter results and an operations update. Net oil sales in the third quarter before royalties averaged 1,077 barrels per day compared to 796 barrels per day in the second quarter, the Miscible Flood is performing ahead of expectations, an oil discovery at the Barron Flats Federal (Deep) Unit is confirmed, completion operations for production are underway on the Dakota sand and a large conventional light oil resource play in the Frontier sands is indicated across the company's leasehold. Operations were loss making, but COPL is, as always, about future potential. The company says it “has elected to keep the full results of the discovery well confidential for competitive reasons.”

PetroTal (PTAL TAL PTALF) announced third quarter financial and operating results. Production was 9,508 barrels of oil per day, with a record daily oil production of 16,140 barrels on September 24. Well 8H attained payback within 40 days of completion and well 9H first production is estimated in early December. Fourth quarter production guidance is approximately 12,500 barrels of oil per day. 2021 EBITDA guidance is between $105 million and $110 million and the company has now achieved continued net income for the sixth consecutive quarter with $15 million in Q3 2021. I mentioned PTAL positively last November at 7.6p. It’s now 21.7p.

President Energy (PPC) announced approval of the cancellation of its share premium account, enabling the distribution by way of dividend in specie of shares held by the company in Atome Energy in conjunction with its spin out. Approximately 75% of President’s current holding (approximately 65% per cent of the current issued share capital of Atome) will be distributed and dealings in the ordinary shares of Atome will commence on the London Stock Exchange in mid-December. The other big event coming up is completion of the farm-out of a 50% interest in President’s Pirity concession to what it says is “a substantial Northern Hemisphere state-owned energy company,” which will be paying 60% of the costs of a $10-15 million exploration well scheduled to commence in the first half of next year. More on PPC in the private blog.

i3 Energy (I3E ITE)  announced the appointment of Stifel Nicolaus Europe as a joint corporate broker and the Carlingford division of GFI Securities as its mandated transaction arranger to assist i3 in issuing a new debt facility by which it expects to expand through asset development and/or potential acquisitions. The company is looking to Stifel to raise its profile amongst current and potential equity investors and utilise Carlingford to introduce leverage onto the balance sheet to expand and accelerate development of the Canadian assets and bolster the company's ability to capture what it describes as material inorganic opportunities as they arise. There is likely to be some significant further progress here.

Aminex (AEX) and Scirocco Energy (SCIR) announced receipt of the Kiliwani North gas receivables. $1.85 million net for Aminex and $150,000 net for Scirocco. Their more significant assets in Tanzania are 25% interests each in the Ntorya field, where the Chikumbi-1 well is scheduled to commence drilling in the third quarter of next year. Aminex is carried, but Scirocco has to pay its own way and is currently looking to raise cash from disposal of the interest. Scirocco’s main cash source of late, Helium One Global (HE1) also issued news last week of the commencement of Phase II 2D seismic acquisition. This aims to enable the company to define further drillable prospects with potential for stacked targets to be tested in a planned 2022 drilling campaign. There’s more on AEX in the private blog.

Kistos (KIST) announced an operational update. Borr Drilling's Prospector-1 jack-up drilling rig has left the Q10-A field and arrived on location at the Q11-B discovery. The spudding of the appraisal well is expected later this week. Kistos has estimated 2C resources for this accumulation of between 67 and 155 billion cubic feet of gas net. At Q10, the drilling campaign is completed and the appraisal well flowed oil to surface at a maximum stable rate of 3,200 barrels per day. Gross gas production has now reached approximately 12,700 barrels of oil equivalent per day. Hurricane Energy (HUR) also announced an operational (and financial) update. As of 14 November, Lancaster was producing around 10,150 barrels of oil per day from the P6 well alone with an associated water cut of around 37% and, as of 31 October, the company had net free cash of $99 million. I said in September that the HUR share price could be looking cheap and it’s nearly doubled since then.

Pantheon Resources (PANR) announced a short term $1.5 million draw down facility to secure equipment, since the company is yet to complete the necessary farm-out or funding to have sufficient resources for the winter 2021/2022 drilling and testing campaign. Pantheon says it is actively engaged in negotiations for a potential farm-out, as well as other options to ensure it is funded for these operations, but it has always struggled in this area compared to its direct peer, 88 Energy (88E EEENF), which raised nearly A$24 million in September and already has a spud date scheduled for its Merlin-2 well in February 2022. Now 1.5p, 88E has been covered in the private blog from the 0.40s, reaching a high of of 4.7p in March.

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Rounding off with the rest of the small cap oil and gas company news, Deltic Energy (DELT) announced the appointment of Peter Nicol as a non-executive director (more on DELT in the private blog), Empyrean Energy (EME) announced receipt of a further £40,000 from the exercise of the 12p warrants (the next news is expected to be somewhat more substantial, further on this in the private blog), ADM Energy (ADME) announced a fundraise (£475,000 at 1.5p per share), Wentworth Resources (WEN) announced a Vitol carbon offsetting partnership (to partially offset the impacts of its emissions footprint at Mnazi Bay), Nostrum Oil & Gas (NOG) announced nine month 2021 results (revenues are up to $142.7 million and cash has increased to $142.1 million), Coro Energy (CORO) announced a Vietnamese solar acquisition (an 85% equity interest in a newly formed joint venture in exchange for initial funding of $500,000 to develop a 5 megawatt pilot rooftop project), Victoria Oil & Gas (VOG) announced an update on Logbaba well La-108 (it has supplied up to 5.7 million cubic feet of gas per day of production, with a flowing wellhead pressure of over 200 barg), Sound Energy (SOU) announced a proposed non-executive director appointment (Christian Bukovics, a former board member of JKX Oil & Gas (JKX)), Seplat Energy (SEPL) issued a board announcement (co-founder and chairman, Dr. Orjiako has decided to step down), Tullow Oil (TLW) announced a trading statement (full year production guidance remains unchanged with a range of 58,000 to 61,000 barrels of oil per day and the Ghana drilling programme continues to be successful), SDX Energy (SDX) announced financial and operating results for the third quarter of 2021 plus the commencement of drilling operations in Morocco (the company ended the period with a net cash position of just under $10 million, which fully funds its work programmes for 2021 and 2022), Pharos Energy (PHAR) announced a Vietnam operational update (it has successfully completed the TGT well intervention and development drilling campaign), Lekoil (LEK) announced an operational update (Otakikpo oil production in October 2021 was around 2,044 barrels of oil per day net) and Cairn Energy (CNE) announced a share repurchase programme (up to £20 million, with a larger buyback to come following receipt of the Indian tax refund).

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These are opinions only of the individual author.  The contents of this piece do not contain investment advice and the information provided is for educational purposes only and no discussions constitute an offer to sell or the solicitation of an offer to buy any securities of any company.  All content is purely subjective and you should do your own due diligence.  No representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness or reasonableness of the information contained in the piece is made.  Any assumptions, opinions and estimates expressed in the piece constitute judgments of the author as of the date thereof and are subject to change without notice.  Any projections contained in the information are based on a number of assumptions and there can be no guarantee that any projected outcomes will be achieved.  No liability is accepted for any direct, consequential or other loss arising from reliance on the contents of this piece.  The author is not acting as your financial, legal, accounting, tax or other adviser or in any fiduciary capacity.