Sunday Blog, 28 November 2021
PPC PTAL TAL PTALF COPL XOP 88E EEENF JOG DELT KIST IOG LBE ZPHR ZPHRF TRP TRIN PHAR SAVE JSE SQZ PMG ECO EOG ADME UOG UKOG RBD UJO LEK BLOE ZEN
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President Energy (PPC) announced completion of its Paraguay farm-out. The counter-party is CPC Corporation, the state owned energy company of Taiwan. CPC and President now have equal 50% interests in the Pirity Concession, with CPC paying 60% of the costs of the exploration well scheduled to commence in the first half of next year, plus a cash payment of $4 million. The well will be targeting a complex of prospects, estimated by PPC to contain an un-risked resource of 230 million barrels of oil, with an estimated 30% chance of success. In the meantime, a subsidiary company, Atome Energy, which is targeting the potential of green hydrogen and ammonia, is to be spun out and floated on AIM next month, with PPC’s shareholders receiving a dividend in specie in respect of President's shares. PPC has been covered each week in the private blog since June.
PetroTal (PTAL TAL PTALF) announced that “social disruption” is impacting Bretana operations once more. The oil field remains safe and producing, but access to the dock is blocked, preventing the company from loading barges. If the situation persists, a full field shut down may be required within a few days due to the lack of excess storage capacity. We saw the same thing last year, when operations had to cease for a few weeks, but the only real impact will be on one quarter’s production numbers. I mentioned PTAL positively in the Sunday blog last November at 7.6p. It’s now 17p, having been as high as 26p.
Canadian Overseas Petroleum (COPL XOP) announced increased oil production at Barron Flats. Crude oil production from the Shannon Unit has increased by approximately 700 barrels per day, a 35% increase from the production number reported in the company's press release a week prior. This is due to the commissioning of facilities to reduce the surface working pressures on the most capable producing well in the field, a horizontal previously producing at a restricted rate of 150 barrels a day, which has exhibited what the company says is an exceptional response to the miscible flood scheme. Apparently, there’s quite a bit of further news coming up here.
88 Energy (88E EEENF) announced it has now selected the Merlin-2 appraisal well location, east and downdip of Merlin-1 and expected to display thicker reservoir sections and higher permeability/porosity sands. The well is targeting 652 million barrels of oil with a geological chance of success of 56%. A production test for the Merlin-2 is planned subject to results of the wireline program. Permitting and planning of Merlin-2 is at an advanced stage and the well remains on track for a scheduled spud in February 2022. Now 1.425p, 88E has been covered in the private blog from the 0.40s, reaching a high of of 4.7p in March.
Jersey Oil & Gas (JOG) announced directorate changes and a Greater Buchan Area update. Two former Ithaca Energy executives are coming on board. Graham Forbes, formerly chief financial officer at Ithaca, has been appointed as CFO and Richard Smith, previously corporate development director at Ithaca, has joined the management team as chief commercial officer. Les Thomas, also ex-Ithica and formerly a non-executive director of JOG, has assumed the role of non-executive chairman. Regarding the Greater Buchan Area, Jersey says it remains actively engaged with multiple counter-parties, including major infrastructure funders with respect to electrification. Helpfully for JOG, the macro environment has markedly improved since initial industry engagement.
Deltic Energy (DELT) announced completion of the 3D seismic survey over licence P2428 and surrounding areas. This follows Deltic’s farm-out agreement with Cairn Energy and the data collected will now be processed with the final results expected to be delivered in the second quarter of next year. The licence contains the Plymouth prospect, a large Zechstein carbonate build-up, which is analogous to Deltic's Pensacola Prospect and the Crosgan discovery. Further upside on the block is associated with the Cupertino and Richmond prospects which will also be further evaluated using the newly acquired 3D seismic data. There’s more on DELT in the private blog.
Kistos (KIST) announced the spud of the Q11-B appraisal well. It is anticipated to take a minimum of 6 weeks to drill and test, after which Kistos intends to suspend the well for future use in a Q11-B development. Estimated 2C resources for this accumulation are between 67 billion cubic feet of gas net and 155 billion cubic feet of gas net. This well follows on from the successful drilling campaign at the Q10-A field, where gross gas production has reached approximately 12,700 barrels of oil equivalent per day. The appraisal drilling is designed to start the process of converting approximately 100 million barrels of oil equivalent gross of 2C resources into 2P reserves. Appraisal of the Vlieland sandstone formation also was successful and the Q10-A-04 well tested at a maximum stable rate of 3,200 barrels of oil per day. Kistos is estimating 2C resources for this accumulation of over 70 million barrels of oil gross. There’s a lot more potential here.
IOG (IOG) announced a corporate and operational update. The offshore subsea and hook-up scopes for the Blythe and Elgood fields are now complete and the company is working to complete the reception facilities recommissioning and deliver First Gas this quarter. They admit, though, that this may be challenging. Meanwhile, the Noble Hans Deul rig is expected to re-mobilise to Southwark, with Southwark First Gas still on track for the second quarter of next year. This first phase looks set to capitalise on some very strong gas prices. Now 27.25p, IOG has been covered each week in the private blog from around 9p up.
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Rounding off with the rest of the small cap oil and gas company news, Longboat Energy (LBE) announced initiation of coverage by Auctus Advisors (more on LBE in the private blog), Zephyr Energy (ZPHR ZPHRF) announced a $36 million acquisition of non-operated production assets (it still has to raise the finance to pay for this), Tower Resources (TRP) announced a Cameroon farm-out update (more on TRP in the private blog), Trinity Exploration & Production (TRIN) announced completion of the PS-4 acquisition (this is contiguous to Trinity's block, WD-5/6 and is covered by the 3D seismic survey acquired earlier this year) plus approval for the Galeota field development plan (there’s potential to add additional peak production of around 4,000 barrels of oil per day), Pharos Energy (PHAR) announced recommencement of the El Fayum development drilling (a three-well infill development programme to help increase production), Savannah Energy (SAVE) announced an updated Nigeria CPR plus a financial and operations update (gross 2P reserves increased by 27%), Jadestone Energy (JSE) announced the acquisition of a 10% Interest in the Lemang PSC (its interest, pre local government back-in rights, will increase to 100%), Serica Energy (SQZ) announced Columbus first production (hydrocarbons started flowing on 24 November and flow rates will be issued in mid-December), Parkmead Group (PMG) announced its preliminary results statement for 2021 ( a loss of £13.8 million with cash balances of £23.4 million as at 30 June) and Eco (Atlantic) Oil & Gas (ECO EOG) announced results for the six months ended 30 September (a loss of $1.2 million with cash and cash equivalents at period end of $6.2 million).
For the sake of completeness, ADM Energy (ADME) announced it has been notified of a dispute regarding its ownership in NHNL and therefore its interest in the Barracuda Field in OML 141 (it’s actually known about this for some time), United Oil & Gas (UOG) announced a Jamaica Licence Extension (for two years), UK Oil & Gas (UKOG) announced board and management changes (Matt Gormley has joined as chief financial officer), Reabold Resources (RBD) and Union Jack Oil (UJO) announced a West Newton planning update (the operator is requesting further time to drill and test a second well), Lekoil (LEK) announced directorate changes (three appointees experienced in the Nigerian oil & gas industry), Block Energy (BLOE) announced an operations update (gas sales from well KRT-39 have commenced) and Zenith Energy (ZEN) announced the acquisition of Canadian North Africa Oil & Gas Ltd. (it holds a 22.5% interest in the North Kairouan permit and the Sidi El Kilani concession).
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