Sunday Blog, 24 October 2021
DELT IGAS PVR LOGP RBD DBRM AEX SCIR EME SDX TLOU LEK UOG MSMN UKOG GBP EOG SENX SLE
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Deltic Energy (DELT) announced that the company and its operating partner, Shell U.K. Limited, have completed the final phase of the site survey programme over the planned Pensacola exploration well location on Licence P2252 in the Southern North Sea. All site survey work is now complete and Pensacola remains scheduled to be spud in Q2 2022. Shell has confirmed that a rig is available. Per DELT, the Pensacola prospect contains gross P50 prospective resources of 309 billion cubic feet of gas (with a P90-P10 range of 39 billion cubic feet of gas to 1,181 billion cubic feet of gas), which will rank Pensacola as one of the highest impact exploration targets to be drilled in that basin in recent years. The geological chance of success associated with the prospect is 55%. More on Deltic Energy in the private blog.
IGas Energy (IGAS) announced signature of an agreement with Iona Capital for solar farm development. The first of what are expected to be several similar scale projects is to be situated in southern England and will be 25-40MW in size. IGas will contribute its planning and infrastructure expertise and Iona will provide non-recourse project finance, with costs shared and IGas and Iona each owning 50% of the project. IGAS sees this as example of how it can leverage existing operational expertise as the UK's largest onshore operator and use its existing business platform to play a role in the “transition to net zero.” The share price went as high as 38p last month on earlier renewable energy announcements. Now back at 15.35p, the market capitalisation is a relatively modest £19 million.
Providence Resources (PVR) announced the resignation of its CEO, Alan Linn, who last Monday “stepped down” from the Board and all subsidiary companies with immediate effect. Here’s what I said about PVR back in April:
“…Providence Resources (PVR) cleaned investors’ clocks again as their latest farm out collapsed. Regular blog readers will know of my scepticism regarding SpotOn Energy Limited, PVR’s £1 capital counter party. Money may have been made by some, however. SpotOn acquired £500,000 of shares at 1.5p and the share price went as high as 8.5p on the ramp. It would be interesting to know whether SpotOn (and others close to the company who subscribed at that level) still have them…”
That was the second time a farm-out of Barryroe collapsed with the counter-party turning out to be worthless. The previous one was with a company called APEC Energy Enterprises Limited and the previous Providence CEO, Tony O’Reilly, also resigned shortly thereafter. PVR really always has been one for those who can play it for what it is: a Dublin stock promotion. There’s more on Providence Resources and its partner, Lansdowne Oil & Gas (LOGP), in the private blog.
Reabold Resources (RBD) announced that it is both attempting to find a buyer for Corallian Energy and selling its assets in California to Daybreak Oil and Gas Inc. (DBRM), a US OTC traded company. Daybreak has achieved a similar level of success to Reabold, losing $29.6 million to date, and is insolvent to the tune of $5.3 million with oil and gas assets of just $615,568. RBD will receive up to 46.5 per cent of Daybreak in return for its California assets into which it has invested well over $10 million. The business flaws at Reabold have been explained regularly in the Sunday blog over the last couple of years and its shares have provided excellent returns for those on the short side.
Aminex (AEX) announced a Ruvuma operations update. The JV has approved the 2022 work programme, which will concentrate on shooting 3D seismic on the licence area and drilling the Chikumbi-1 well. The associated project budget is approximately $25 million and under the farm-out agreement with ARA Petroleum Tanzania Limited, Aminex is fully carried for its 25% participating share. APT, the operator, has confirmed that mobilisation of the seismic team has commenced, and the first phase of the seismic shoot will begin on 15 November. The team will then complete the second phase of the seismic shoot in the first quarter of 2022 after the Tanzania rainy season and the Chikumbi-1 well is expected to commence drilling in the third quarter next year. Mapping and management estimates suggest mean risked gas in place for the Ntorya accumulation of 3.02 trillion cubic feet and a mean risked recoverable gas resource of 1.99 trillion cubic feet. More on Aminex in the private blog.
Scirocco Energy (SCIR) announced a Tanzania operations update. It is broadly similar to the Aminex announcement, except that Scirocco is not carried and will have to pay the estimated share of costs, net to its 25% working interest, of $6.25 million. SCIR also announced a further investment of $1 million into the company by way of a prepayment of ordinary shares under the Prolific Basins Investment Facility, however, Scirocco’s focus now is on the European sustainable energy / circular economy markets and Gneiss Energy Limited, owned by Carolyn Fitzpatrick and Jon Fitzpatrick (a former SCIR director), has been retained to assist in the disposal of its Tanzania oil and gas assets.
Empyrean Energy (EME) announced various exercises of its 12p warrants, plus an extension to the deadline for exercise of the warrants (and the entitlement to a substitute 12p warrant and a bonus 18p warrant) from 22 October until 12 November. Empyrean previously completed a £5.02 million placement at 6p per share in preparation for the December drilling of the Jade prospect, offshore China, and funds raised in that placing are primarily being used to secure a suitable drilling rig and order long lead items, however, as confirmed in the company’s news announcement of 2 September, EME will require further funding, via a joint venture, exercise of warrants or from an equity raising in order to enable it to undertake the drilling. To date only £297,000 has been raised from the 12p warrants, which is unsurprising considering the price in the market is just 7.9p, and a further placing appears likely to fund the drill. More on Empyrean Energy in the private blog.
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In other news, SDX Energy (SDX) announced the spudding of the MSD-21 development well, Tlou Energy (TLOU) announced signature of a power purchase agreement, Lekoil (LEK) announced a loss for the year of $119 million, United Oil & Gas (UOG) announced commencement of production at ASX-1X, Mosman Oil & Gas (MSMN) announced a Stanley-5 well update and a Winters-2 drilling update, UK Oil & Gas (UKOG) announced the Isle of Wight Council has rejected its Arreton application, Europa Oil & Gas (EOG) announced a loss for the year of £718,000, Global Petroleum (GBP) announced a loss for the year of $3.9 million, Serinus Energy (SENX) announced approval of a new evaluation phase in Romania and San Leon Energy (SLE) announced an update on its investment in the Oza Field in Nigeria.