Sunday Blog, 6 March 2022
CHAR IOG 88E PTAL ECO PANR I3E EOG
Now is very much the time for energy shares. Click below to receive this newsletter free in your inbox each week:
Chariot (CHAR) announced the signing of the Rissana licence, offshore Morocco. With an approximate area of 8,489 square kilometres, it surrounds the offshore area of Chariot's existing Lixus offshore licence, where the company, in January 2022, announced the conclusion of successful drilling operations at the Anchois field, including significant new gas discoveries. The new licence also reinstates the highest potential areas of the former Mohammedia offshore area into Chariot's portfolio. CHAR undertook a placing at 5.5p in May last year, following which Chariot was covered in the private blog as a company of interest and could be picked up as low as 5p. The share price now is 9.2p, having been up to 12.75p in January.
IOG (IOG) announced an update on gas sales arrangements and the start of backgassing. The company has terminated its gas sales agreement with Gazprom and will sell the Elgood and Southwark gas to an alternative buyer. IOG has a separate gas sales agreement in place with BP for the Blythe gas. Backgassing, which involves the reverse flow of gas from the terminal to pressurise the pipeline system up to the safe operating window for start-up, has commenced and first gas should be received onshore this week, following the final function tests of equipment and safety systems. There really couldn’t be a better time to start producing. IOG has been covered in the private blog each week from as low as 9p. It’s now four times that price.
88 Energy (88E) announced that Merlin-2 pre-spud operations are on track. The Arctic Fox rig has been mobilised and spud is scheduled for this week. 88 Energy also issued a Project Icewine update, noting that light oil has been recovered by Pantheon Resources at Talitha-A, 2.8 miles north of 88E's Icewine acreage (more on that below) and preliminary mapping shows highly correlatable reservoir sequences between the two. A resource update for Icewine is planned soon. 88 Energy undertook a placing at 1.49p in September last year, following which the shares were highlighted in the private blog and could be picked up as low as 1.3p for some time thereafter. The shares closed at 2.5p yesterday; the price was as high as 2.817p last month.
PetroTal (PTAL) announced a reduced production level due to social unrest. Essentially, the locals are after money. PTAL is aiming to resolve this by allocating approximately $15 million a year in community social trust payments and direct community investment projects, on the basis that there are no disruptions to PetroTal's ability to produce or sell oil through the ONP, Brazil, Iquitos, or other sales routes planned in the future. In early 2022, Petrotal became the largest crude oil producer in Peru and is targeting an average production rate range for the year of between 17,500 and 19,500 barrels of oil per day. I mentioned PTAL positively around 14 months ago when it was 7.6p. It’s now over five times that price at 39.5p
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Eco (Atlantic) Oil & Gas (ECO) announced signature of a rig contract in relation to Block 2B, offshore South Africa for the upcoming drilling of Gazania-1 planned in October. Eco will become Operator and hold a 50% interest, subject to completion of its 100% acquisition of Azinam Group. Gazania-1 is located in the Orange Basin, which straddles the offshore waters of Namibia and South Africa, where major discoveries have recently been announced. More on ECO in the private blog.
Pantheon Resources (PANR) announced an operations update. Testing has been suspended at Talitha, where a small amount of oil was produced, and it most likely will resume next season. In the meantime, remedial works within the well bore at Theta West have been completed and the well is ready for testing, awaiting arrival of the equipment from Talitha. Big question now is will Alaska turn out to be a repeat of Texas for Pantheon Resources? More on PANR in the private blog.
i3 Energy (I3E) announced a partial farm-out of Serenity. Europa Oil & Gas is acquiring a 25% non-operated working interest in a sub-area of P.2358 Block 13/23c (containing the Serenity discovery) by funding 46.25% of the costs for one appraisal well, which are estimated to be around £14 million. I3E has been in discussions with other potential Serentity farminees and says these other discussions may result in the farm-out of additional working interests. More on I3E in the private blog.
Europa Oil & Gas (EOG) is on the other side of deal and last week announced a £7 million placing at 1.8p to fund its share. i3 Energy’s carry is capped at a gross well cost of £15 million, of which Europa’s's interest will be £6.94 million; thereafter each party will fund its respective interests in accordance with their interest in Serenity. The farm in documents are said to be standard, in near-final form and will be executed once the fundraising is complete. More on EOG in the private blog.