Sunday Blog, 5 September 2021
PANR PTHRF 88E EEENF RBD UJO ZPHR ZPHRF COPL XOP AEX AEXFF SCIR HE1 HLOGF LBE ADV EME
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On to the Sunday blog:
Pantheon Resources (AIM PANR OTC PTHRF) announced a corporate update and stressed that the company must complete a farm-out or funding in Q4 2021 to have sufficient resources for working capital and the anticipated winter 2021/22 drilling and testing campaign, which aims to to test all zones of Talitha #A and drill another well at either Alkaid or Theta West. Pantheon claims an Alkaid development well could start production and generate revenues shortly after completion, although a well at Theta West has the attraction of testing “a globally significant play that offers tremendous potential for value creation.” PANR says it remains focused on finding a suitable partner to farm in. Otherwise, it’s going to have to be a large, discounted placing.
That’s what 88 Energy (AIM & ASX 88E OTC EEENF) announced last week, when it reported the successful completion of a book build to raise A$23.96 million (£12.71 million) through the issue of shares at A$0.028 (1.49p). It’s now financed to drill and log the Merlin-2 appraisal well in Q1 2022, fund lease acreage payments, enable identification and execution of potential new project opportunities and fund ongoing working capital requirements and general and administrative overheads for at least 12 months. 88 Energy has been covered in the private blog from the 0.40s and reached a high of 4.7p in March.
Reabold Resources (AIM RBD) and Union Jack Oil (AIM UJO) at last announced results of the West Newton B-1z flow test. Bottom line is that “a measurable flow of hydrocarbons has not yet been achieved.” RBD admitted it, but UJO couldn’t bring itself to say so and just waffled. Both companies are going to find it hard to accept failure here, hence language such as “the WNB-1z well is expected to be suspended as a potential producer.” Next up in this category is Zephyr Energy (AIM ZPHR OTC ZPHRF), whose State 16-2LN-CC initial flow test results are expected to be announced by the end of next month.
Canadian Overseas Petroleum (LSE COPL CSE XOP) pleased its investors with the announcement of Q2 2021 results disclosing current oil production at 31 August of 2,720 barrels a day gross, 1,604 net, a 24% increase from the operations update on 17 August and an increase of 123% from the figure of 1,220 barrels a day gross, 706 net, at 1 April. Production continues to increase weekly due to the ongoing gas injection program and, COPL says, will continue to increase as the surface well site production facilities are enhanced. Further potential acquisitions in Wyoming are being reviewed.
Aminex (LSE AEX OTC AEXFF) and Scirocco Energy (AIM SCIR) announced the extension of the Ruvuma licence. It’s now expected that seismic acquisition will commence in the third quarter of 2021, with drilling of the Chikumbi-1 exploration and appraisal well expected to commence early in the third quarter of 2022. Aminex is carried for its 25% interest, but Scirocco has to pay its way. SCIR’s main interest now, though, lies within the European sustainable energy market and it further reported the completion of its investment into Energy Acquisitions Group, which in turn will acquire Greenan Generation and its 0.5MWe anaerobic digestion plant in Northern Ireland.
Scirocco’s funding has been received via some well timed sales of its interest in Helium One (AIM HE1 OTC HLOGF), which announced rather disappointing news regarding its Tai-1 and Tai-2 exploration wells. Tai-2 was completed without identifying helium gas and the share price plummeted as low as 5p. It was up to 29p before the Tai-1 and Tai-2 results, which is another reminder that with drilling ventures, one should either be out before the results, or holding shares for free, having bought lower down before the pre-drill run up and de-risked on the rise. Holding for the result is usually little more than a gamble. All this is explained in detail in the subscriber-only newsletters.
Longboat Energy (AIM LBE) announced completion of the farm-ins with Equinor, Idemitsu and Spirit. Longboat now expects to complete the drilling of four exploration wells in its seven well programme before the end of 2021 and the programme is anticipated to commence this month. The big one coming up in 2022 is Copernicus, in which LBE holds a 10% interest. This prospect is estimated to contain gross mean prospective resources of 254mmboe, with further potential upside to bring the total to 471mmboe. Chance of success is 26%. The shares moved through and above the 75p placing price on Friday with news that Richard Sneller has taken a disclosable stake.
Advance Energy (AIM ADV) confirmed the rig contract has been signed for the Buffalo-10 well, offshore Timor-Leste. Drilling is now on track to commence in eight to ten weeks. The company intends to take a promotional approach and will be providing “regular updates at all the key milestones associated with the well.” Empyrean Energy (AIM EME) also announced the award of a drilling contract, in its case for the Jade prospect, offshore China. EME is targeting a spud date in December, but will require further funding, via a joint venture, an exercise of warrants or from an equity raising to enable it to undertake the drilling. Most likely is a placing.
Remember, I’ve a lot further to say about these and other companies and not just on Sunday. If you’d like to read more, then check out the subscriber newsletters, in which I write in more detail and more often, addressing crucial trading matters also.