Malcy’s Blog – Oil price, PetroTal Corp, Touchstone Exploration, Jadestone Energy, Predator Oil & Gas & finally

WTI (Sep) $82.82 -$1.58, Brent (Oct) $86.40 -$1.15, Diff -$3.58 +43c.

Author @mgrahamwood

USNG (Sep) $2.76 -19c, UKNG (Sep) 93.25p -10.2p, TTF (Sep) €36.67 -€1.15.

Oil price

After yesterday’s fall, which was down to the build in crude inventories the news today has been a bit better. Opec cuts mean that 3Q production will be some 27.3m b/d which leaves a draw of around 2.26m b/d. I’m just waiting for the IEA monthly, the headlines show similar global demand increases of 2.2m b/d for the rest of this year.

PetroTal Corp

After results earlier this week I was delighted to be able to interview PTAL President and CEO Manolo Zuniga about the company, the results and more importantly the future. It is most exciting and I keep my 150p Target Price.

Touchstone Exploration

Touchstone has reported its operating and financial results for the three and six months ended June 30, 2023.

Selected information is outlined below and should be read in conjunction with our June 30, 2023 unaudited interim condensed consolidated financial statements and related Management’s discussion and analysis, both of which will be available under our profile on SEDAR (www.sedar.com) and on our website (www.touchstoneexploration.com). Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars.

Paul Baay, President and Chief Executive Officer, commented:

“I am pleased to provide an update on our financial and operational results for the second quarter of the 2023 financial year. The results come as we continue to focus our efforts on the commissioning of the Cascadura facility and completing production testing at Royston-1X. We look forward to providing shareholders with further updates in the near term.”

These will be the last results before Cascadura becomes fully operational and the Royston well completes testing, apart from that this is historic data, the future is extremely exciting.

Second Quarter 2023 Financial and Operational Highlights

·      Achieved quarterly production average volumes of 1,827 boe/d, representing a 29 percent increase relative to the 1,420 boe/d produced in the prior year equivalent quarter.

·      Natural gas production from our Coho-1 well averaged net volumes of 4.2 MMcf/d (703 boe/d) in the quarter and contributed $811,000 of net natural gas sales at an average realized price of $2.11/Mcf.

·      Realized petroleum and natural gas sales of $7,181,000 compared to $12,596,000 in the 2022 comparative quarter, as $811,000 in net natural gas sales were offset by decreased crude oil sales of $6,226,000, reflecting a 36 percent decline in realized crude oil pricing and a 21 percent decrease in crude oil production.

·      Generated an operating netback of $2,826,000, representing a 51 percent decrease from the 2022 equivalent quarter primarily attributed to the 43 percent decline in petroleum and natural gas sales.

·      Reported funds flow from operations of $6,000 in the quarter compared to $803,000 in the preceding quarter and $1,150,000 in the prior year equivalent quarter.

·      Recognized a net loss of $71,000 ($0.00 per basic share) and comprehensive income of $136,000 in the quarter compared to a net loss of $262,000 ($0.00 per basic share) and a comprehensive loss of $529,000 reported in the same period of 2022.

·      $5,135,000 in quarterly capital investments primarily focused on expenditures related to the construction of the Cascadura natural gas and liquids facility and two Royston-1X production tests.

·      Amended our Trinidad based loan agreement in May 2023, allowing for an additional $7 million revolving loan component that was fully drawn in June 2023 to provide liquidity while we complete construction of the Cascadura facility.

·      Exited the quarter with a cash balance of $10,138,000, a bank debt principal balance of $31,000,000 and a net debt position of $28,913,000.

Financial and Operating Results Summary

 Notes:

(1)    In the table above and elsewhere in this announcement, references to “crude oil” refer to light and medium crude oil and heavy crude oil product types combined and references to “natural gas” refer to conventional natural gas, all as defined in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Refer to “Advisories – Product Type Disclosures” for further information.

(2)    In the table above and elsewhere in this announcement, references to “boe” mean barrels of oil equivalent that are calculated using the energy equivalent conversion method. Refer to “Advisories – Oil and Natural Gas Measures” for further information.

(3)    Non-GAAP financial measure. See “Advisories – Non-GAAP Financial Measures” for further information.

Jadestone Energy

Jadestone yesterday provided the following update on operations at the Montara Venture FPSO offshore Australia.

As previously reported on 31 July 2023, production at Montara was temporarily shut in following a gas alarm within the FPSO’s 4S ballast water tank.

Since then, tank 4S has been emptied and cleaned, with an inspection commencing on 8 August 2023.  The initial inspection has identified the location of a small defect between tank 4S and oil cargo tank 5C, which poses no safety or structural risk, nor any risk of a hydrocarbon leak to sea.

The Company is now focused on the following activities to address the defect in tank 4S, including:

• final inspections in ballast water tank 4P prior to returning this tank to service as part of the overall ballast and stability requirements for the FPSO;
• offloading crude oil from tank 5C to allow for cleaning and access to permit an inspection; and
• re-entry to 4S to finalise the inspection of the tank and carry out the necessary repair.

The Company continues to keep key stakeholders, including the National Offshore Petroleum Safety and Environmental Management Authority and its reserve-based lending facility banks, regularly updated on these activities.  The RBL includes the requirement for borrowing base assets, such as Montara, not to have production interrupted for a continuous period of 60 days or more.  The Company will also be working with the RBL banks to assess how the shut in might impact the clauses and covenant under the RBL facility.

The Company will continue to update shareholders as appropriate.

This Montara update was the last thing that we all wanted to see although after the previous announcement it might have been worse. They have found the leak and the tank needs draining and repairing before it can get back into service. I Assume that these tanks are being checked just in the unlikely event of another leak being found because as they say,’Once is happenstance, twice is coincidence, the third time it’s enemy action’.

Now its a matter of how long it will be out of action for, the key here is whether the RBL interruption clause of 60 days is triggered and if so will they give a waiver of some sort so the fact that it looks like being pretty short outage is pretty key. Overall yet again we can give the company the benefit of the doubt, that won’t always be the case…

Predator Oil & Gas

Predator yesterday announced the publication of a (“Prospectus”) dated 10 August 2023.

The Prospectus has been approved by the Financial Conduct Authority and is available to view on the Company’s website: https://www.predatoroilandgas.com/investors/documents-circulars/ and at the National Storage Mechanism:  https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Prospectus has been published to enable the admission to trading of 90,909,090 new ordinary shares pursuant to a placing announced on 1 August 2023 and 45,189,580 replacement shares issued to Paul Griffiths and Lonny Baumgardner, directors of the Company.

The Placing raised £10m at 11 pence per share before costs and the net proceeds will be used for MOU-4 well costs, rigless well testing of MOU-1 and MOU-3 and MOU-4 and a compressed natural gas proof of concept study.

The Replacement Shares have been issued pursuant to the repayment terms of the stock lending agreements entered into between Paul Griffiths and the Company dated 17 August 2022,16 March 2023 and 28 June 2023 respectively and between Lonny Baumgardner and the Company dated 28 June 2023.

Applications will be made to the FCA and the LSE for Admission of the Placing Shares and Replacement Shares which is expected to take place on or around 15 August 2023. These shares rank pari passu with the existing ordinary shares of the Company.

On Admission, the Company’s issued share capital will comprise 562,502,088 ordinary shares of nil par value, with each ordinary share carrying the right to one vote. Accordingly, the total number of voting rights in the Company will be 562,502,088 and this figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA’s Disclosure Guidance and Transparency Rules.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

Technical details following placing etc.

And finally…

Tomorrow sees more rugby warm-up matches, England host Wales at 17.30 and after last week things can only get better but Steve Borthwick has even resorted to playing players not actually selected for the World Cup, what a fool…Later France host Scotland at 20.05.

England’s women are back in action tomorrow, they play Colombia in the QF at 1130.

And what is worse is that the Premier League is back, tonight the Noisy Neighbours start the ball rolling at Burnley. Tomorrow the Gooners host Forest, the Hammers go to the Cherries, the Seagulls host the Hatters, the Cottagers go to the Toffees, the Blades host the Eagles and the Bar coders entertain the Villa. Sunday sees the Bees host Spurs and the big fixture is Chelsea v Liverpool. By then Liverpool will likely have signed Caicedo from the Seagulls for a record 111m of your english pounds.

And the dreadful Ascot Day of match racing takes place, what a bore…

Author @mgrahamwood

Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. The writer may or may not hold investments in the companies under discussion

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