IOG (IOG) announced Phase 1 progress. Recent stormy weather has hampered the final construction and leak testing programme, as a result of which the plant will not be ready to start backgassing until this week, with first gas from both Blythe and Elgood due around a week later. Following complications due to unstable seabed conditions, drilling at Southwark is expected to resume in March. Recent hold ups have been frustrating, but the delays have facilitated a safe and reliable start-up. The company is targeting a gross peak production rate of 140 million cubic feet of gas per day so potential revenues are substantial. IOG has been covered in the private blog each week from as low as 9p. It’s now around four times that price.
88 Energy (88E) announced the acquisition of Texas oil and gas production assets. The purchase price is $9.7 million and independently certified net 2P reserves are 2.1 million barrels of oil equivalent. The acquisition represents 88 Energy's first move into producing oil and gas assets and it says the strategy now is to build a successful exploration and production company. The upcoming Merlin-2 well in Alaska spuds next month, targeting 652 million barrels of oil, with a 56% geological chance of success. A delayed drilling date leaves little time for testing, so regardless of actual results, the Alaska story will continue to run. 88E has been covered in the private blog from the 0.40s and reached a high of 4.7p last March.
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PetroTal (PTAL) announced a 2022 capital budget of $120 million. The company is targeting a 100% growth rate in average oil production to between 17,500 and 19,500 barrels of oil per day, with free cash flow pre debt service of $230 million. PetroTal aims to repay $20 million of the 2021 $100 million bond issue in the first half of this year, redeem the balance of the bonds in the third quarter, reinstate a stable and rewarding return of capital programme in the fourth quarter, plus allocate $15 million in community social trust payments and direct community investment projects this year. I mentioned PTAL positively around 14 months ago when it was 7.6p. It’s now over five times that price at 39.75p.
i3 Energy (I3E) announced a Q4 2021 operational and financial update. Average production was approximately 18,229 barrels of oil equivalent per day and revenues were $57.6 million, generating $31.5 million of net operating income. Full-year 2021 net operating income is now forecast to be approximately $66 million, and $150.3 million this year assuming implementation of the 2022 capital programme. A dividend of £2.25 million was paid in October, bringing total 2021 distributions to £3.41 million.
Pantheon Resources (PANR) announced an operational update. Flow testing has been completed at Talitha #A, with a sustained rate of approximately 32 barrels of oil per day, which the company believes is highly encouraging. However, at Theta West #1, after casing was set, an error has delayed testing operations. Cement was placed inside the casing rather than outside. The company expects remedial work to be completed over the course of the week prior to conducting flow testing operations.
Petro Matad (MATD) announced an operational update. It is pushing for activity to start in the second quarter, after the winter hiatus, with the re-entry, stimulation, and completion for production of Heron 1, however, the timing of the availability of equipment and crews for the drilling of additional Heron wells has not been confirmed by the contractors. Meanwhile, the company is investigating drilling solutions for the shallow, high impact prospectivity already identified in Block V.
Eco (Atlantic) Oil & Gas (ECO) announced unaudited results and a corporate update. Total assets were $19 million with current liabilities of $2 million as of 31 December 2021. Main focus is the acquisition of 100% of Azinam Group and its South African assets in return for a 16.5% equity stake in Eco. The company is now planning and preparing the drilling of an exploration well on Block 2B in the second half, close to the recent Graff-1 discovery by Shell and Qatar Energy, subject of course to funding.
Genel Energy (GENL) announced an update on year-end 2021 oil reserves. At 31 December, 1P reserves were 62.6 million barrels of oil, 2P reserves were 104.2 million barrels and 3P reserves were 136.6 million barrels. Following the Somaliland farm-out, there is now a major drilling event coming up next year, targeting multiple stacked prospects with over 5 billion barrels of prospective resources. The technical case is said to be compelling. One prospect alone could target over half a billion barrels.
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