Sunday Blog, 24 July 2022
KIST SQZ SCIR WEN AEX 88E PANR PRD HUR UPL PPP CHAR
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Catching up on the last two weeks, Kistos (KIST) announced a proposed combination with Serica Energy (SQZ). The offer for each Serica share is 0.2932 new Kistos shares plus cash of 246p. At Friday’s close, the offer is worth a total of 401p for each SQZ share. Serica has rejected the offer (talking about making an offer itself for Kistos) and closed on Friday at 357p. I first bought SQZ in 2015 at under 5p per share and this is what I said at the time (the statement applies to many promising companies).
Scirocco Energy (SCIR) announced receipt of notice from ARA Petroleum that it is exercising its pre-emption rights with regards to Scirocco's proposed divestment of its Ruvuma interest to Wentworth Resources (WEN), plus a separate letter received from the Tanzania Petroleum Development Corporation stating that it is considering exercising its statutory rights of first refusal. Bad news for WEN, but the desirability for Ruvama is excellent news for Aminex (AEX), which holds a 25% carried interest.
88 Energy (88E) announced its quarterly report. Planning is underway for a new exploration well at Icewine expected to spud in 2023, aiming at the same reservoirs as on the adjacent Pantheon Resources (PANR) acreage, where that company currently is drilling. Work also continues on the various other projects: Peregrine, Longhorn, the Umiat oil field and the Yukon leases. Cash at 30 June 2022 was A$10.5 million (around £6 million) so a placing before too long is highly likely.
Predator Oil & Gas (PRD) announced a drilling and operations update. It’s planning to drill the MOU-2 well in September/October this year, targeting 295 billion cubic feet of gas net contingent resources with an unrisked net present value of $592 million. Financing, however, remains to be clarified and this, of course, is key. Predator has been covered in the private blog from as low as 1.21p. It’s now 8.5p and went as high as 22.5p prior to the MOU-1 well spud last year.
Hurricane Energy (HUR) announced an update. As of 16 July, Lancaster was producing around 8,650 barrels of oil per day with an associated water cut of approximately 46%. As of 30 June, net free cash was $127 million, with $78.5 million of bonds due to be repaid, following which Hurricane should be holding net free cash of around $75 - 85 million. The company believes there are good investment opportunities ahead and that it is well placed to deliver significant shareholder value.
Upland Resources (UPL) announced the signing of a farm-out agreement for its Saouaf permit in Tunisia with Pennpetro Energy (PPP). The latter will farm-in for an 80% working interest and assume operatorship, leaving UPL with a 20% interest. There is no promote, although Pennpetro will reimburse Upland for 80% of its prior costs in Tunisia, amounting to £310,225, to be paid in shares. The permit is said to host up to 10 prospects and leads with multi-trillion cubic feet gross potential.
Chariot (CHAR) announced an increase in its gas resource, offshore Morocco. Its flagship Anchois field sees an 82% increase in 1C contingent resources to 365 billion cubic feet, a 76% increase in 2C contingent resources to 637 billion cubic feet and a 49% increase in 2U prospective resources to 754 billion cubic feet in three undrilled targets. Probability of geological success ranges from 49 to 61%. CHAR was covered in the private blog from as low as 5p. It’s now nearly four times that price at 19.6p.
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