Sunday Blog, 27 March 2022
88E PANR EME LBE HUR PMG CHAR ECO
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88 Energy (88E) announced on Wednesday that the Merlin-2 well had successfully reached total depth of 7,334 feet and all three target reservoirs were penetrated with elevated gas readings. Wireline logging is set to commence to confirm whether mobile hydrocarbons are present as well as to evaluate the reservoir quality and flow potential of target zones. The company says a further update on the evaluation of the Merlin-2 results will be provided following completion of the wireline logging program, including with respect to further evaluation activities planning. I suspect it will be too late for testing, which will have to be deferred to the 2022/23 winter season.
Pantheon Resources (PANR) announced a Theta West #1 testing update. The well flowed at 57 barrels of oil per day over 2.5 days. Ultimate commerciality, of course, will require long term production testing. Next up is the spudding of the Alkaid #2 horizontal well which is estimated for July 2022. By utilizing a gravel pad immediately adjacent to the Dalton Highway, the company will operate without being limited to winter operations. This will allow a horizontal well with stimulation, long-term flow testing and, if successful, oil sales. Pantheon touts a resource in excess of a billion barrels of recoverable oil, but without any expert independent opinion to back it.
Empyrean Energy (EME) announced the rig mobilisation and anticipated spud date for the Jade well, offshore China. Mobilisation is expected to occur today and the current estimate for the spud date is on or around 2 April, depending on prevailing weather conditions to ensure the safe anchorage of the rig at the drilling location. From the spud date, the well is anticipated to take approximately 26 days to drill to total depth. If the Jade well intercepts a hydrocarbon zone, as the company hopes, then testing is planned to take approximately a further 2 weeks. That will cost an additional $7.4 million and this amount is yet to be raised.
Longboat Energy (LBE) announced 2021 full year results. The operational summary confirms four wells drilled to date: Egyptian Vulture, with a material discovery and significant upside potential, Rødhette, with potential commercialisation via existing infrastructure, Mugnetind, with a sub-economic discovery and Ginny/Hermine, dry. Three high-impact exploration wells are upcoming over the next ~6 months, targeting a net 69 million barrels of oil equivalent and a total net upside of 254 million barrels of oil equivalent. The result of the Kveikje exploration well targeting 36 million barrels of oil equivalent gross is expected in the coming days.
Hurricane Energy (HUR) announced extension of the Aoka Mizu charter to cover the remaining economic life of the Lancaster field. The company also has negotiated with BP a facility that will allow for cash to be advanced ahead of a lifting, assisting working capital. Now, Hurricane can continue production beyond repayment of the bond and based on current oil price and field performance predictions, the company forecasts this to be at least 18 months from June. Shorter term, after clearing the bond debt and after funding the secured deposit account relating to the Aoka Mizu charter, Hurricane will have between $50-80 million of net free cash at the end of July this year.
The Parkmead Group (PMG) announced interim results for the six-months ended 31 December 2021. Revenue tripled, gross profit was up 389% and profits were recorded at both the operating and pre-tax levels. Cash balances were $32.2 million at 31 December 2021, equivalent to 22.1 pence per share, with total assets of £80.5 million at that date. The strong recovery in gas prices continued further during the period with prices in June 2021 of around €25/megawatt hour increasing to around €95/megawatt hour in December 2021. Due to ongoing geopolitical events, the current gas price has reached €160/megawatt hour in March 2022 and Parkmead is 100% unhedged.
Chariot (CHAR), now positioning itself as an Africa focused transitional energy company, announced that along with Total Eren, it has entered into a newly established partnership with First Quantum Minerals to advance the development of a 430 megawatt solar and wind power project for First Quantum’s mining operations in Zambia. The project is interesting and aims to provide power generation around the clock, with solar produced during the day and wind mainly at night, also fitting with Zambia's hydropower resource seasonality: the project's energy mix reaches its production peak during the dry season when the country is most exposed to droughts.
Eco (Atlantic) Oil & Gas (ECO) announced a new competent person's resource report on its assets offshore Guyana, Namibia and South Africa. Attributable, best estimate, prospective resources net to Eco are for Guyana (Orinduik Block) 681 million barrels of oil and 544 billion cubic feet of gas, for South Africa (Blocks 2B & 3B/4B) 864 million barrels of oil and 309 billion cubic feet of gas and for Namibia (4 Blocks) 6,705 million barrels of oil and 6,565 billion cubic feet of gas. The planned well for the third quarter of this year in South Africa now is being followed by work on the potential to drill in the Orange Basin plus offshore Guyana, subject to available funding.
More in the private blog this evening: