Sunday Blog, 22 January 2023
DELT MEN LBE TRP BOIL IOG ZPHR GENL
Catching up on the last two weeks, Deltic Energy (DELT) announced that the operator, Shell, had reported that gas has been encountered in the Pensacola reservoir and recommended a full well testing programme be undertaken. The company says it will provide a drilling update announcement in respect of Pensacola on completion of well testing which is expected to take approximately 30 days. Deltic has estimated the prospect, in which it holds a 30% interest, to contain gross P50 prospective resources of 309 billion cubic feet of gas. DELT was first covered in the private blog as a company of interest at around 1.6p and the share price reached a high of 4.36p prior to the Pensacola spud.
Molecular Energies (MEN) announced an operations and strategic update. Argentina production continues to be operationally profitable and in Paraguay, the drilling contract is being signed for Tapir-1, with an objective to spud the well by the end of this quarter. Molecular has farmed-out a 50% interest in this prospect to CPC Corporation, the state owned energy company of Taiwan, which is paying 60% of the costs of the $10-15 million exploration well, plus a cash payment of $4 million. The Tapir-1 well has an internal pMean unrisked recoverable oil in place estimate of 96 million barrels, with the entire Delray complex having a total of 306 million barrels. Chance of success is 17%.
Longboat Energy (LBE) announced the award of interests in new licences under the Norwegian 2022 APA licensing round and signing of a new exploration finance facility, increasing the facility to NOK 800 million (~£65 million) from NOK 600 million and extending the availability period to the end of 2024. The next exploration well is on the Velocette prospect (20% interest), which is due to spud in the third quarter of this year and is estimated to contain gross, unrisked mean resources of 177 million barrels of oil equivalent with a geological chance of success of 30%.
Tower Resources (TRP) announced an “institutional placing of up to $6 million” in a confusingly worded RNS stating an initial placing price of “0.36p per Share, representing a premium of approximately 130% to the closing price of Tower's Shares on 13 January 2023.” The reality will be seen to be a little different by those who read further. The only shares being issued immediately are 105,000,000 shares for free in satisfaction of a fee. The placing is said to have been structured specifically to fit alongside the intended bank financing of the NJOM-3 well, which after many months is still awaiting credit committee approval. The well is claimed to be targeting the appraisal and testing of 18 million barrels of contingent resources.
Baron Oil (BOIL) announced a UK 33rd offshore licensing round and asset update. As a joint venture non-operating partner, it has submitted an application. Meanwhile, funding partners are being sought for drilling campaigns at Chuditch and Dunrobin, both of which are available for farm out. Chuditch is said to have mean gross prospective resources in excess of 500 million barrels of oil equivalent and Dunrobin, an oil prospect, 100 million barrels. A competent person’s report for Chuditch is expected to be completed next month.
IOG (IOG) announced a Southwark update. Following stimulation of six reservoir zones, gas rates observed from the A2 well to date have been lower than expected. Along with water rates of up to 1,632 barrels per day, the results of the well clean-up are described as unexpected and disappointing. All is not lost, though, since the upcoming A1 well is expected to strengthen the production profile from early in the second quarter and with Blythe H2 and the Kelham and Goddard appraisal wells to follow, 2023 is set to be a potentially high-impact year for the company.
Zephyr Energy (ZPHR) announced a State 36-2 LNW-CC well update. Having reached the reservoir at a depth of 9,598 feet, the well is said to have experienced a significant influx of hydrocarbons, caused by the well intersecting an apparent major natural fracture network in the reservoir, a feature that could significantly enhance the overall potential productivity of the well. Per ZPHR, with confirmed hydrocarbon presence, significant reservoir over-pressure and the presence of a highly permeable natural fracture network at the location, these are all very encouraging signs for an economic and productive well. Further announcements are expected soon.
Genel Energy (GENL) announced a trading and operations update. Production in 2023 is expected to be 27,000 to 29,000 barrels of oil per day with operating expenditure of around $5 per barrel. In Somaliland, preparation continues for the drilling of the Toosan-1 well on the SL10B13 block, where GENL has a 51% working interest and is operator. The Toosan prospect contains stacked Mesozoic reservoir objectives, with multiple individual prospective resource estimates each ranging from 100 to 200 million barrels of oil. Up to 5 billion barrels in total is being talked about and a spud date is targeted in the next 12 to 18 months.
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