Sunday Blog, 4 June 2023
PRD MATD HE1 NHE.AX DELT PANR PTHRF JOG ANGS BOIL LOGP BEY EME LBE CEG CLON
Catching up on the last couple of weeks and starting with the drilling news, Predator Oil & Gas (PRD) announced on Friday that the Star Valley Rig 101 would commence drilling the MOU-3 well within the next 24 hours. The company says a further update will be given when MOU-3 reaches its intended pre-drill total depth of 1,500 metres and prior to the commencement of wireline logging operations. The well is claimed to be targeting best estimate total gross gas resources of 1,823 billion cubic feet. PRD has been covered three times to date in the Private Blog as a company of interest: first, at around the 4p placing level to finance the MOU-1 well (the share price reached a high of 22.5p prior to the spud); second, at around the 5.5p placing level to finance the MOU-2 well (the share price reached a high of 12.3p prior to the spud); and, third, at around the 5.5p placing level to finance the MOU-3 well (the share price reached a high of 9.89p prior to the spud).
Petro Matad (MATD) announced that rig arrival and the Velociraptor-1 spud are forecast during the first half of this month. The well is expected to reach expected total depth of approximately 1,500 metres in around 30 days, following which the well will be logged and the results evaluated. In the event of encouraging results from the well, the rig contract allows for follow up with an appraisal well. All permits are in place for Velociraptor-1 and the contingent appraisal drilling. Per the company, potential recoverable resources are 200 million barrels of oil. MATD has been covered in the Private Blog as a company of interest since its placing at 2.5p to finance the drill. The share price reached a high of 7.1p subsequently.
Helium One Global (HE1) announced a new CPR for its Tai prospect. The unrisked estimate of 2U1 net helium prospective resources is 2.8 billion cubic feet, 2U1 total gas prospective resources are 212.2 billion cubic feet, 3U2 net helium prospective resources are 7.1 billion cubic feet and 3U2 total gas prospective resources are 437.8 billion cubic feet.. Helium is much more valuable than other gasses, with a global average import price of $457 per thousand cubic feet. The drilling rig is being contracted in cooperation with Noble Helium (ASX:NHE), which has said it is on track to drill its first campaign at North Rukwa in the third quarter of this year. Trading in the shares of NHE was halted at the request of the company towards the end of last week, pending an announcement. Looking at the price movement in the shares of Helium One, it may be expected to be positive, announcing completion of Noble Helium’s necessary farm-out. HE1 has been covered in the Private Blog as a company of interest since its placing at 5p to finance new drilling at the Tai prospect. The share price has been up to 7.6p since then and may well go much higher.
Deltic Energy (DELT) announced its 1 for 20 share consolidation. The directors had hoped it would provide the basis for enhanced perception of the company, improving its marketability to a wider investor group. Unfortunately, this coincided with Labour’s announcement that it plans to block all new North Sea oil and gas developments and, combined with the inevitable selling which comes with consolidations, the share price retreated. The Selene drill in partnership with Shell is still upcoming next year targeting an estimated P50 recoverable resource in excess of 300 billion cubic feet of gas and Pensacola, recently drilled and tested, represents one of the largest natural gas discoveries in the Southern North Sea in over a decade, with a P50 estimated ultimate recovery of over 300 billion cubic feet of gas. DELT was covered in the Private Blog as a company of interest at around 32p (adjusted for the consolidation) and the share price reached a high of 87p prior to the Pensacola spud.
On to some other companies, Pantheon Resources (PANR) announced the formal lease award resulting from its solitary bids in the recent State lease sale (no other companies were interested). Amazingly, the CEO says that the company had limited its public profile to reduce competition for offset acreage while it acquired the current land position (as if none of the companies operating in Alaska had noticed any of the hype and promotional pumps from their neighbours). Massive sales of shares, both from the dumps and convertible bond conversions of course brought the share price down, exactly as I forecast, and it’s now trading under its latest placing price of 17p, having fallen all the way down from over 140p.
Jersey Oil & Gas (JOG) announced final results for the year ended 31 December 2022. Key is the outlook. The NEO farm-out is said to deliver significant value to the company, securing a fully funded position through to field development plan submission and unlocking the route to monetisation of the Greater Buchan Area resources. JOG will retain a 50% working interest in the Greater Buchan Area following completion of the farm-out (with 12.5% of development costs carried by NEO, a major UK North Sea operator producing approximately 90,000 barrels of oil equivalent per day). To catalyse further shareholder value, Jersey Oil intends to farm-out additional Greater Buchan Area equity such that it ultimately retains a 20-25% fully carried interest in the development (i.e. no further cost to JOG and its shareholders).
Angus Energy (ANGS) announced a production and pricing update for the Saltfleetby field. Production has reached a steady operating state from the 3 producing wells in the field and the company is now exporting gas to the National Grid at a combined average daily rate of 9.5 million cubic feet. As the new B7T well continues to clean-up, ANGS anticipates exceeding a combined average daily rate of 10 million cubic feet on a sustainable basis. Winter 2023-2024 pricing is strong and on the basis of continued production at this level, hedge prices and published market forward prices, the company says it should be generating approximately £2.5 million of revenues on average each month for winter 2023. Next is the evaluation of storage opportunities for natural gas, hydrogen and CO2. Gazprom-Wintershall previously estimated the storage capacity of the overall field to be between 700 and 800 million cubic metres, making it the largest onshore storage facility in the UK.
Drawing to a close, Baron Oil (BOIL) announced a Chuditch PSC update. A six month extension has been granted and the company now has until 18 December 2023 to make a drilling decision. Lansdowne Oil & Gas (LOGP) issued an announcement regarding the lease undertaking application decision received by Barryroe Offshore Energy (BEY). The company will pursue legal proceedings for the purpose of protecting its investment in the Barryroe project. Empyrean Energy (EME) announced a capital raising, debt restructure and company update. £1.52 million has been raised at a price of 0.8p. Longboat Energy (LBE) announced the Lotus rig assignment. The prospect now is expected to be drilled during the third quarter of 2024. Challenger Energy Group (CEG) announced an Uruguay AREA-OFF 1 update. The company says a formal adviser-led farm-out process has been initiated and strong interest has been received. Finally, Clontarf Energy (CLON) announced a £350,000 fundraising and corporate update. The placing is at a price of 0.08p.
Thank you for reading and I wish a happy weekend to all. Please note the Private Blog (containing more) will be published this evening.