Sunday Blog, 28 August 2022 (Bank Holiday Edition)
PANR 88E RKH IOG ECO PTAL BOIL DELT SCIR AEX WEN PRD
Catching up on the last three weeks, Pantheon Resources (PANR) announced the conclusion of drilling operations at Alkaid #2. Next is the perforating and stimulating of the horizontal section, followed by production testing utilising a modular production kit capable of separating any oil, gas or water from the production stream before trucking this oil to a nearby production unit for sale. The company has now received an independent expert’s report from Baker Hughes, which states Pantheon has drilled a “world-class petroleum system.” Estimates that the project contains a recoverable oil resource of over 1.7 billion barrels remain solely those of the company.
Pantheon’s next door neighbour, 88 Energy (88E), announced a placement to raise A$14.9 million, equivalent to £8.59 million. The proceeds are to be used to fund the planned Icewine East well long lead, pre-planning and permitting activities. 88E is continuing to advance its planning for an Icewine East well in 2023, designed to include at least one flow test in the 4 reservoir targets, the subject of the recent Icewine East independently certified, total prospective resource estimate of 1.03 billion barrels of oil. Regardless of drill success, if you understand the timing with 88E (explained several times in the private blog) it’s invariably good for a 100% run.
Rockhopper Exploration (RKH) announced the successful arbitration outcome of its dispute with the Republic of Italy. The amount awarded is EUR 190 million, plus interest at EURIBOR + 4%, compounded annually from 29 January 2016 until time of payment. The arbitration panel unanimously held that Italy had breached its obligations under the Energy Charter Treaty entitling Rockhopper to compensation. RKH is prevented from making a distribution, but the financial implications are highly positive, building on the recent transaction with Navitas and making a material contribution towards Rockhopper’s share of the Sea Lion development costs.
IOG (IOG) announced its half-year report. Blythe and Elgood were successfully brought onstream in mid-March and gross aggregate production was 34 million cubic feet of gas per day from then to 30 June 2022 at 59% uptime. The company is enjoying strengthening gas market conditions, particularly since period end. Volume weighted average gas price was 149p per therm in the first half, rising to 254p per therm over the second half to date, and the UK gas Winter-22 contract is currently over 600p per therm with Summer-23 over 500p per therm. IOG was covered in the private blog from as low as 9p and is now standing at over 29p, having been up to 46p in March.
Eco (Atlantic) Oil & Gas (ECO) announced quarterly results. The company had cash and cash equivalents of $38.8 million as of 30 June and no debt. Upcoming is the drilling of the Gazania-1 well on Block 2B, offshore South Africa, targeting a 300 million barrels light oil resource. Following recent hydrocarbon discoveries offshore Namibia, Eco continues to assess options for progressing exploration and commercial activity on its acreage. In Guyana, Eco and its JV partners remain committed to further drilling on the Orinduik Block and continue assessing opportunities to drill at least two exploration wells into the light oil cretaceous targets as soon as practical.
PetroTal (PTAL) announced second quarter financial and operating results. It was the seventh straight quarter of production growth, generating nearly $100 million in net operating income. The company completed well 11H on 30 June, which produced over 300,000 barrels of oil over its first 30 full days on production, has paid out its capital investment, and averaged over 9,000 barrels of oil per day from 1 to 22 August. A new daily production record of 25,218 barrels of oil per day was achieved on 1 July, with production briefly reaching 26,000 barrels of oil per day. I highlighted PTAL when it was 7.6p. It’s now over six times that price at 50p, having been as high as 63.5p in June.
Baron Oil (BOIL) announced interim results. The company says that considerable technical advances have been made on Chuditch, offshore Timor-Leste, in respect of which the geoscience team are interpreting the improved subsurface image resulting from the TGS 3D reprocessing project. Likewise, in UK Licence P2478, the 3D seismic reprocessing project and geochemical studies have been received and re-interpretation commenced on schedule in July. The revised evaluation of the prospectivity of the licence, including the Dunrobin prospect, is anticipated to be delivered during the fourth quarter. Peru Block XXI has been relinquished.
Deltic Energy (DELT) also announced interim results. The potentially transformational Pensacola exploration well with Shell is due to commence drilling in October, targeting an estimated 309 billion cubic feet of natural gas. The two companies have recently committed to a second potentially company-making exploration well with the Selene gas prospect which contains an estimated 318 billion cubic feet. In the current environment of high energy prices, these two prospects will be enormously valuable if successful. DELT has been covered in the private blog from as low as 1.35p and is now standing at 3.75p, having been up to 4.1p earlier this month.
Scirocco Energy (SCIR) announced a Ruvuma disposal update. The company has now received written confirmation from the Tanzania Petroleum Development Corporation that it is not exercising its statutory right of first refusal with respect to the Company's divestment of its 25% interest in the Ruvuma asset. Scirocco maintains an active dialogue with ARA Petroleum Tanzania Limited on its intention to exercise its pre-emption right and says it will update the market shortly. The disposal was initially to be to Wentworth Resources (WEN), but falls through upon the pre-emption. Aminex (AEX) also owns a 25% (carried) interest in the Ruvuma project.
Predator Oil & Gas (PRD) announced a placing to raise £3.3 million at 5.5p per share. The purpose of the fundraise is what the company describes as high impact and high reward drilling onshore Morocco, targeting a net best estimate contingent gas resource of 295 billion cubic feet with an unrisked net present value of $592 million. The net high estimate contingent gas resources is 708 billion cubic feet and Predator aims to de-risk the contingent gas resources by establishing commerciality for CNG development. PRD has been covered in the private blog from as low as 1.21p. It’s now 6.88p, having been as high as 22.5p prior to the MOU-1 well spud last year.
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