Sunday Blog, 8 January 2023
PANR PTHRF 88E EEENF CEG HE1 ANGS PRD
Happy New Year to everyone and I hope all had an enjoyable Christmas. It’s usually a quiet time for company news, nevertheless, there were still a few interesting announcements.
Pantheon Resources (PANR) announced an operational update and final results for the year ended 30 June 2022. As regular followers know, I have been a longstanding sceptic, so the news announcements and consequences were no surprise: the flow rate reached only 200 barrels of oil per day, the share price collapsed and the shorts rounded on the promoters. The financial results were equally grim: cash and cash equivalents at 28 December 2022 were reported as only $16.6 million with a loan balance due of $39.2 million. The company is now essentially out of cash with a non-economic project and limited fund raising possibilities.
Next door neighbour, 88 Energy (88E), announced the execution of a rig contract for the drilling of the Hickory-1 exploration well. Permitting and planning remain on track for a scheduled spud in late-February / early-March. Hickory-1 is said to be designed to appraise six key reservoir targets and 647 million barrels of oil. The company states that further details of the drilling program and schedule will be announced in the lead up to the spud. In the meantime, expect a placing to finance the drill. 88E has been covered three times in the private blog: first, at around the 0.7p placing level to finance the Charlie-1 well (the share price subsequently reached a high of 1.48p prior to the spud); second, at around the 0.33p placing level to finance the Merlin-1 well (the share price subsequently reached a high of 4.7p prior to the well result); third, at around the 1.49p placing level to finance the Merlin-2 well (the share price subsequently reached a high of 2.817p prior to the spud).
Challenger Energy (CEG) announced a Uruguay update. In 2020, the company successfully bid for the AREA OFF-1 block in Uruguay, securing it with a modest initial work commitment. Subsequently, in May 2022, three more blocks were awarded in a contested open round, to Shell (two blocks) and Apache (one block). Now, a further two blocks have been awarded in Uruguay in another contested open round, to each of a Shell-APA consortium and YPF. The estimated collective spend by those companies over the coming years on these activities is in excess of $230 million. Almost all available offshore acreage in Uruguay has now been taken up and, apart from Challenger Energy, all the majors have committed to very sizeable work programmes. CEG now hopes to move forward with a farm-in to capitalise on that increased interest and allow for accelerated work on its block. It could be interesting.
Helium One Global (HE1) announced a project update. The company has been informed that the current operator of the Exalo drill rig has amended their contract to allow for an extension of their operations for a period of up to twelve-months. Helium One says it had understood that the rig was due to be mobilised to its Rukwa licence area in early 2023. Consequently, HE1 is reviewing alternative rig options for Phase II Tanzania drilling operations and says it will announce an updated timeline to drilling once new arrangements have been confirmed. The delay was disappointing and hit the share price hard, but it doesn’t really change that much in the longer term.
Angus Energy (ANGS) announced quarterly Saltfleetby flow rates and an update. Average daily gas flow rates were 5.5 million cubic feet. Gas condensate production averaged 120 barrels per day, while water production was a relatively modest 20 barrels per day. The second compressor is now on site and expected to be in dynamic commissioning during the second half of January, able to process a further 6.4 million cubic feet per day of gas volumes, raising the plant's processing capacity to around 12.8 million cubic feet per day. Drilling operations on the final horizontal section of the SF-07 side track are resuming and the well is expected to be in testing mode in the latter half of this month. If successful, the SF-07V well is expected to supply sufficient gas volumes to utilise most, if not all, of the additional process capacity. So far, all looks good.
Predator Oil & Gas (PRD) announced that the rig is now at the MOU-2 well location and final preparations are being made to commence drilling. The company says a further update will be given when MOU-2 reaches its intended pre-drill total depth of 1,500 metres and prior to the commencement of wireline logging operations. Drilling operations are expected to take 12 to 15 days. It is intended that MOU-2 will be completed for rigless testing, followed by rigless testing of MOU-1. Per the company, gas sales and CNG financing agreements will be triggered by release of test results and a corporate transaction to monetise shareholder value will be considered after testing. PRD has been covered twice in the private blog: first, at around the 4p placing level to finance the MOU-1 well (the share price subsequently reached a high of 22.5p prior to that spud); second, at around the 5.5p placing level to finance the MOU-2 well (the share price subsequently reached a high of 12.3p).
To know more:
The private blog will be published this evening.