Sunday Blog, 23 October 2022
EOG I3E ADV 88E UJO IOG BOR PRD CHAR ANGS HE1 PTAL MEN UPL BOIL
Catching up on the past two weeks, Europa Oil & Gas (EOG) [and i3 Energy (I3E)] announced the Serenity SA02 well result. The targeted Lower Cretaceous Captain sand, which contained hydrocarbons in the 13/23c-10 well, was not present, other sands in various sequences were water wet and the well was plugged and abandoned. Disappointing for those who held on, but it’s always a gamble to hold for the well result. What these plays are about is buying at, around, or even better under the placing price of the fundraising to finance the drill and selling in the run up to the spud, only holding for the well result (if you want to) with free shares.
Advance Energy (ADV), which announced final results, is another good example. The company undertook a placing at 2.6p in April last year, following which the shares were highlighted in the private blog and could be picked up as low as 2p for some time thereafter. The share price reached 5.7p in January and I cautioned de-risking prior to the result on several occasions. It was an easy double or more for private blog subscribers who did that. This is what the private blog is about and I explain everything in an ebook, “Understanding the London Speculative Markets & the Secrets of How to Profit From Them” which is sent to all new subscribers. Here’s a comment at the time from a subscriber relating to both the ebook and Advance:
Thank you for the private blog, spot on as usual with Advance Energy. The ebook you send out with the subscription changed my view on investing and financial markets. Eye opening. And so many people on the message boards cannot see it. And to be honest I am not going to tell them either. Keep up the good work Jim.
If you take the time to read the book, you’ll end up understanding exactly how to make money in these markets.
The private blog has been running for around three years now. It covers companies which meet a certain set of criteria. Here are all the companies the private blog has covered as being of interest which have completed their cycle:
88 Energy (88E) at around the 0.7p placing level to finance the Charlie-1 well. Moved up to over 1.4p prior to the spud.
Union Jack Oil (UJO) at significantly under the 0.15p placing level to finance the West Newton B-1 well. Moved up to over 0.3p prior to the spud.
IOG (IOG) at around 18p prior to its development drilling programme. Moved up to 46p thereafter.
Borders and Southern Petroleum (BOR) at around 1.4p prior to financing developments with competitors. Moved up to 8.5p thereafter.
Predator Oil & Gas (PRD) at significantly under the 4p placing level to finance the MOU-1 well. Moved up to over 22p prior to the spud.
88 Energy (88E) at around the 0.33p placing level to finance the Merlin-1 well. Moved up to 4.7p prior to the well results.
Advance Energy (ADV) at significantly under the 2.6p placing level to finance the Buffalo-10 well. Moved up to 5.7p prior to the well results.
Chariot Oil & Gas (CHAR) at significantly under the 5.5p placing level to finance the Anchois appraisal well. Moved up to 26.9p subsequently.
88 Energy (88E) at around the 1.49p placing level to finance the Merlin-2 well. Moved up to over 2.8p prior to the spud.
Europa Oil & Gas (EOG) at just over the 1.8p placing level to finance the Serenity appraisal well. Moved up to 3.3p prior to the spud.
Other companies are underway (two up over 100% already).
To quote from the book:
You need to know where the company is in its operational, financing and promotional cycle. Understanding that unlocks the door to market success, since by entering at the right point you will always be buying into upward moves. And this is the key.
Only go for what look like the certainties, even if that means fewer trades. Profits are worth nothing if they are wiped out by losses, the losses have to be eliminated. It is not just about the shares you buy, even more importantly it is about the shares you do not buy. Be selective, you do not have to be in everything. Isolate the trades that make profits and eliminate the loss making ones. Learn to ignore the marketing aimed at the less informed and focus on the points that actually are important.
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Moving on with the companies which recently issued news, Angus Energy (ANGS) announced a revised spud date and process capacity milestone. Sales gas now exceeds 6 million cubic feet per day with well pressures holding in the high forties, condensate production has stabilised at or around 120 barrels per day and side-track planning progresses with an adjustment to the spud date to 24-26 October. Ramping up production, a second compressor is expected to be delivered in December, allowing an increase up to 12 million cubic feet per day by January.
Helium One Global (HE1) announced completion of the rig audit. Mobilisation now will commence as soon as practical. Thereafter, the spud date will be dependent on mobilisation of Baker Hughes equipment, currently anticipated to be released in December, enabling drilling operations to commence during January / February 2023. Uncertain yet is whether a fundraising will be conducted before the drill.
PetroTal (PTAL) announced a third quarter operations and liquidity update. Production was constrained during this period to match reduced export capacity, which has been impacted from the continued closure of the Northern Peruvian Pipeline. Well 13H has reached its total depth and is now being completed. At an unconstrained level, PTAL expects to again have production capacity of over 20,000 barrels of oil per day that can be quickly activated once river levels normalise, and additional barges are made available. As at 30 September, the company had approximately $93 million in total cash with $18 million restricted. Accounts payable were approximately $50.6 million, and estimated accounts receivable were $123.7 million. PetroTal now expects the full bond settlement to be made by the end of the first quarter of next year, thereafter, liquidity permitting, the company expects to begin a capital return program to shareholders.
Molecular Energies (MEN) announced an operational update. The Puesto Flores facility has fully restarted and is now working up towards full production levels which is expected by the end of this weekend. The disruption has not affected the previous expectations of the Argentine business being operationally profitable in the quarter. In Louisiana, work is in progress, with full production expected imminently. Meanwhile, preparations for drilling the high impact Paraguay oil prospect progress.
Upland Resources (UPL) announced completion of the JV agreement in respect of Sarawak. The main objectives are to de-risk the petroleum system elements and upgrade understanding on the prospectivity in Block SK334. The study programme is expected to be completed by end of 2023. Block SK334 is in a prolific sedimentary petroleum basin, bordering discovered oil fields in Brunei that share similar geological settings. The company sees an ambitious future ahead.
Baron Oil (BOIL) announced an extension of the Chuditch PSC. Effectively, a decision on whether to enter the drilling phase is now required to be taken on or before 18 June 2023. Thereafter, subject to satisfactory results from the 3D seismic programme, the subsequent commitment is for a well to be drilled in the third and final year of the initial phase of the contract. Baron says that significant progress is being made on the 3D PSDM seismic interpretation. Meanwhile, the company has enhanced the subsurface image of the Chuditch-1 discovery and neighbouring analogous prospects and leads and is working to produce what it believes will be a compelling assessment of the asset.
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