WTI (Nov) $68.17 -1c, Brent (Dec)* $71.46 -15c, Diff -$3.29 +36c.
USNG (Nov) $2.93 +2c, UKNG (Nov) 95.8p -2.37p, TTF (Nov) €38.295 -€0.93.
*Denotes Brent November expiry
Oil price
Oil has done a $5 switch in just a few hours, this morning talk was about Israel about to start a limited attack on the Lebanon and then US sources have said that they are expecting Iran to launch a missile attack on Israel. The oil price is now up $2.50 and the worst is expected although maybe it is just Iran feeling the need to make a point…
Savannah Energy
Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, is pleased to announce its unaudited half-year results for the six months ended 30 June 2024.
Andrew Knott, CEO of Savannah Energy, said:
“I am pleased to report our results for the first six months of 2024, as well as the wider progress we are making developing our business. Key highlights in H1 included the delivery of US$233m of Total Income1 and the announcement of our planned acquisition of SINOPEC’s upstream assets in Nigeria. Alongside this, we are pleased to report strong progress in the development of our renewable energy business, particularly relating to our planned projects in Niger and Cameroon. Looking forward we expect to make a series of announcements around our entry into further renewable energy projects prior to year-end. We remain unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND renewable energy sectors.”
This was a good interim report from Savannah, production of 24.4 Kboepd was up 3% compared to FY2023 and the company is looking very well placed in renewables. Currently SAVE have some 696 MW of renewable energy projects in motion at the period end but they have indicated big hopes in the area and are targeting a portfolio of up to 1 GW+ of renewable projects in motion by the end of this year and up to 2 GW+ by the end of 2026.
The good performance can be seen in the delivery of an increase in Total Income of 40% to $233.4m ($167.6m) which comprises Total Revenues of $123.5m and Other operating income of $109.9m. Other operating income relates to the re-billing of foreign exchange losses incurred by Accugas as it converted historic Naira cash received into US dollars. So, operating profit was $152.3m, 130% higher than H1 2023 and Adjusted EBITDA of US$91.6 million (H1 2023: US$108.2 million). Adjusted EBITDA excludes Other operating income which when included shows a 47% increase year-on-year in Adjusted EBITDA to US$201.5 million (H1 2023: US$137.1 million).
The Stubb Creek deal is meaningful and the acquisition of Sinopec’s interest for $61.5m should complete by the year-end and will add some 4.7 Kbopd ‘within 12 months of completion’ following the planned de-bottlenecking programme. In Niger the company is continuing to progress the of ordering long lead time kit for the planned work on R3 East.
In Cameroon SAVE are making ‘substantial’ progress in their Bini a Warak hydroelectric and solar project, after a redesign project that has been approved by the Water and Energy Ministry. This project will involve the construction of a dam and now incorporates photovoltaic solar, raising its installed power generation capacity from up to 75 MW to up to 95 MW, a project expected to become operational in the 2028 to 2029 window.
Finally there are no changes to guidance, with agreed and extended gas contracts in Nigeria, visibility of earnings gets better and percentage of energy supplied to the population grows. Also the new Naira facility was signed and is already half drawn down, proving very smart treasury activity.
Production is excellent and Savannah is without doubt increasing access to energy and in the countries in which they operate, they make a real difference. I expect the company to continue its acquisition policy which will provide substantial growth for a long time.
Highlights
· Average gross daily production of 24.4 Kboepd, a 3% increase compared to FY2023 (23.6 Kboepd);
· Up to 696 MW of renewable energy projects in motion at period-end, and targeting a portfolio of up to 1 GW+ of renewable energy projects in motion by end 2024 and up to 2 GW+ by end 2026;
· Three contracts with customers agreed and extended in the year-to-date for a total of up to 105 MMscfpd;
· Strong financial performance reported in the period:
o Total Income1 increased by 40% to US$233.4 million (H1 2023: US$167.6 million), comprising Total Revenues2 of US$123.5 million and Other operating income of US$109.9 million;
o Operating profit of US$152.3 million, 130% higher than H1 2023 (US$66.2 million); and
o Adjusted EBITDA3 of US$91.6 million (H1 2023: US$108.2 million). This excludes Other operating income which when included shows a 47% increase year-on-year to US$201.5 million (H1 2023: US$137.1 million).
· Agreements signed to consolidate our interest in Stubb Creek through the acquisition of 100% of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (“SIPEC”) for a total consideration of US$61.5 million (the “SIPEC Acquisition”). Completion of the SIPEC Acquisition is anticipated in Q4 2024, with plans in place to more than double oil production to approximately 4.7 Kbopd within 12 months of completion;
· US$45 million compression project in Nigeria remains on-budget and on-track for completion during 2024, enabling us to maintain and grow our gas production levels over the long-term; and
· Naira denominated debt facility signed with a consortium of five Nigerian banks. This is being progressively drawn down, with the resulting funds being converted to US$ to repay the existing Accugas US$ Facility.
2024 Guidance
· Guidance is reiterated at:
o Total Revenues2 ‘greater than US$245 million’;
o Operating expenses plus administrative expenses4 ‘up to US$75 million’; and
o Capital expenditure ‘up to US$50 million’.
Petro Matad
Petro Matad has announced that Heron-2, the first development well to be drilled on the Petro Matad operated Heron Oil Field in Block XX in the Tamsag Basin of eastern Mongolia, has reached TD and wireline logging has been completed.
Highlights
· Heron-2 reached a total depth (TD) of 2,908m seven days ahead of schedule.
· An oil zone of 18m gross thickness was encountered which wireline logging indicates is very likely the same stratigraphic unit as that successfully tested in the Heron-1 discovery well.
· Production casing has been run in preparation for a well testing programme.
Drilling and logging results
The Heron-2 well reached TD seven days ahead of schedule following a smooth drilling operation with no safety or environmental issues. It encountered the primary target Cretaceous Lower Tsagaantsav Formation on prognosis. Oil and gas shows were observed from the top of the formation and an 18m thick interval of sandstone was penetrated in a similar stratigraphic position to the sandstone in Heron-1 that flowed good oil rates on well test. This interval was encountered at a depth of 2816m in Heron-2, 16m shallower than in the Heron-1 well and drilling mud was lost to the formation at the top of the unit, as it was in Heron-1, indicating a zone with good permeability.
Petrophysical evaluation of the wireline logs indicates that oil is present to the base of the sand and there is net oil pay within it of more than 5 metres. Log correlation indicates that this sandstone is very likely to be the same stratigraphic unit as the one tested successfully in Heron-1. It also has similar log calculated porosity.
Casing has been run to TD and preparations are being made for a well testing and stimulation programme over the pay zone with the ambition, in the event of successfully achieving a commercial flow rate, to put the well on stream as soon as possible. Recent heavy rains in the area have caused some logistical difficulties but the Company remains focused on getting the testing programme completed expeditiously and, based on the results, will then determine if time and weather will permit getting the well on production before the 2024 winter operational shut down in late November. The well test operations are expected to be completed during the month of October.
Mike Buck, CEO of Petro Matad, said:
“We are encouraged by the results of Heron-2 so far. Reservoir variability is one of the main uncertainties in the Tamsag Basin, so to have found what looks very much like the same unit in Heron-2 that proved productive in the Heron-1 discovery well is pleasing. Testing operations will determine the well deliverability and the forward programme thereafter. We are keen to maintain the momentum generated in the last few months.”
This looks like good news but it’s all down to the testing which should be positive given the similarities to the 1 well, lets hope for the best result…
Predator Oil & Gas
Predator has announced the completion of an independent report on Helium potential by ScorpionGeoscience Limited.
Report Conclusions
The potential conventional prospective gross recoverable gas resources for the primary reservoir target in MOU-5 were previously reported as being 5.916 TCF (P50 upside case), as announced on 8 August 2024.
Potential gross estimates of in-place He for the P50 upside case are 104.31 BCF based on a global averaged scenario of 1.298% He and 598.88 BCF for the P10 upside case based on a global averaged scenario of 4.066% He.
Sources of information
The report draws on global analogues from a diverse range of available published geological settings to investigate the distribution and scale of naturally occurring He resources and seeks to determine to what extent the MOU-5 structure in Guercif could potentially yield a commercial He discovery.
Examples quoted include the supergiant Hassi R’Mel gas field in Algeria to the east of Guercif and known to contain helium as a byproduct of methane gas production; and the Hugoton field complex in central USA.
The geological setting of Guercif means it is potentially possible He could be sourced from crystalline basement (Tanzanian analogue), granitic intrusions (Corsican analogue), or radiogenic volcaniclastic sediments (Hugoton analogue).
MOU-5 structure
The MOU-5 structure has several potential migration pathways (fractures and faults); potential reservoirs (porous limestones) sealed by impermeable rocks; and adequate trapping in the form of a large structural closure.
MOU-5 will test the effectiveness of a potential He charge and retention.
Other considerations
Extracting helium from natural gas requires energy to cool the gas therefore the proportion of He that can potentially be produced from natural gas as a commercially recoverable product will ultimately be dependent on variables such as price and technology used.
Risking
Risking is as previously reported for prospective gas resources on 8 August 2024 and relates almost entirely to hydrocarbon gas carrier presence.
Issuance of shares to advisors
Several advisers have requested to take shares for services to show their alignment with the Company’s strategy regarding the near-term drilling of MOU-5 and the assessment of the potential for helium in a large geological structure based on global settings for the presence of helium including, but not limited to, the supergiant Hassi R’Mel gas field in Algeria to the east of Guercif.
Accordingly the Company has issued 1,491,889 new ordinary shares (“Shares”) at a price of 0.0925 pence per Share in lieu of adviser fees totalling £138,000.
Application is being made for the 1,491,889 Shares to be admitted to the Official List and to trading on the Main Market of the London Stock Exchange which is expected to be on or around 3 October 2024. These shares rank pari passu with the existing ordinary shares of the Company.
Following the issue of the 1,491,889 Shares, the Company’s issued ordinary share capital shall consist of 571,874,754 ordinary shares.
This figure of 571,874,754 represents the total voting rights in the Company and should be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure Guidance & Transparency Rules.
Paul Griffiths, Chief Executive Officer of Predator, commented:
“Given the potential size of the MOU-5 structure and its geological setting, this independent report on He potential enhances the case for the evaluation of potential helium presence in MOU-5. Although at an early stage of evaluation the opportunity to assess the ability to add value to an area development should not be missed.
The Company is delighted to have received an unsolicited proposal from advisers to take shares as a measure of the understanding and confidence that exists in the Company’s near-term newsflow activity.”
Interesting stuff indeed but this doesn’t give anything in the short term, what it does do is adds to the Predator portfolio.
SDX Energy
SDX Energy plc announces its unaudited interim results for the six months ended 30 June 2024.
The Consolidated Financial Statements of the Group for the six months ended 30 June 2024, containing full financial statements that comply with IFRS, is now available on the Company’s website.
Chairman’s Review
The first half of 2024 saw SDX continue to build on its strategy to be a best-in-class energy producer. With the sale of the Company’s West Gharib assets in Egypt, the continuation of our trade-based financing and (post-period end) the re-negotiation of the convertible loan, we have taken large steps in turning the prospects of the business around.
The focus during 1H 2024 was predominantly the sale of the West Gharib assets, which represented a milestone in the execution of SDX’s growth strategy in Morocco, where the Company is the sole independent gas producer. The Executive team and board of directors are focused on delivering long term sustainable value for shareholders.
Finance
In April 2024, SDX received the first instalment of the West Gharib sales proceeds and repaid in full the outstanding secured EBRD reserves-based lending facility amounting to $2.7 million.
The Company’s syndicated unsecured convertible loan agreement with Aleph Finance Ltd (the “Lender“) was amended in April 2024 to extend the draw down period. This granted the Company access to further gross funding of $0.75 million, which was drawn down in April 2024 to pay service providers in relation to Moroccan drilling activities and general corporate expenses. Post-period end, in September 2024, the Lender and the Company agreed to amend the terms of the existing convertible loan (the “Amended Facility Agreement”).
Under the terms of the Amended Facility Agreement, the Lender will provide a term loan facility in the amount of up to $6,500,000, such total amount to be confirmed by the Lender (the “Loan”), to the Company to be repaid by 23 July 2025. Following repayment of the existing convertible loan, the Company intends to draw on approximately $2.0 million of the remaining balance of the Loan. Following the repayment of existing financial indebtedness owed by the Company to the Lender under the existing convertible loan and other agreements, the Company will apply the balance of the monies borrowed under the Amended Facility Agreement towards capital expenditure in Morocco and general corporate creditors. The Loan will be secured against the Company’s shares in SDX Energy Morocco (Jersey) Ltd and Sea Dragon Energy (Nile) B.V. and a debenture over the Company, including assignment of intercompany loans and security over HSBC bank accounts in England and various receivables. On 14 October 2024, the Company plans to convene a general meeting to ask shareholders to vote on the Amended Facility Agreement (the “General Meeting”). The completion of the Amended Facility Agreement is conditional upon the Company’s shareholders voting in favour of the resolutions at the General Meeting.
Additionally, CITIC Dicastal subsidiary, DIKA MOROCCO AFRICA (“DMA”), continued to prepay each quarter for gas deliveries during Q1, Q2 and Q3 in Morocco.
Operations
During the first half of 2024, in Morocco, the Company produced approximately 407 million cubic feet (68,000 barrels of oil equivalent), averaging 2.3 MMscf/d (1H 2023: 581 million cubic feet averaging 3.2 MMscf/d).
In January 2024, we tied-in the Ksiri-21 (“KSR-21”) well in Sebou Central of the Gharb Basin, Morocco and, in April 2024, we received the necessary approvals to commence production of gas. In April 2024, we also commenced drilling the Beni Malek-2 well (“BMK-2”) in the Rharb Basin, Morocco, approximately 1.5 km from the BMK-1 discovery well. In May 2024, we completed operations at BMK-2, encountering a 9-metre interval that demonstrated strong gas shows of up to approximately 100 times background gas readings. The well has been left temporarily suspended with a plug set to allow the well to be sidetracked.
Despite challenging capital market conditions and the Board’s focus on completing complex transactions, SDX has successfully delivered on the aims of its drilling campaign, with a new well, KSR-21, entering production at the beginning of the year and a new well at BMK-2. The Company is making solid progress towards its goal of transitioning into a hybrid energy producer and infrastructure operator, providing gas to a region with an urgent need to fuel its continued growth.
The Atlantic Free Zone and Kenitra industrial region are of strategic importance not only for SDX, but also for Morocco’s long-term growth plans. As the sole independent gas producer in Morocco, and the operator of local pipeline infrastructure, the Board believes SDX is uniquely positioned to power a region that has experienced double-digit growth year-on-year and a commensurate increase in energy demand. We continue to work closely with our partners in the region, including CITIC Dicastal’s Moroccan subsidiary, part of a trillion-dollar global group.
To conclude, we thank our shareholders and all our stakeholders for their continued support over this period of transformation and transition for the Company. We maintain our promise to work diligently and energetically to revitalise SDX and leverage the unique position in which the Company finds itself to create significant, sustainable value for our shareholders.
Jay Bhattacherjee
Non-Executive Chairman
27 September 2024
The change over in management has not gone very well so far, protracted negotiations over the debt have taken all the management time, I’m not sure I know their plans and haven’t met the new CEO yet. But on the other side anything Jay is involved in would normally be given the benefit of the doubt by me…
Coro Energy
Coro Energy PLC, the South East Asian energy company with a natural gas and clean energy portfolio, announces its unaudited interim results for the six month period ended 30 June 2024.
Highlights
Operational
· The Company signed a binding 14-year power purchase agreement (“PPA”) with Mobile World Group (“MWG”) to deliver power at the first ten C&I rooftop solar sites as a pilot phase with a capacity of 430kw.
· Signature of a second binding PPA with MWG for the next 30 sites with a capacity of circa 1MW.
· Second Wind Energy Service Contract (WESC) secured in the Philippines.
· Conrad Asia Energy Limited, the holder of a 76.5% operated interest in the Duyung Production Sharing Contract, in which the Group has a 15% interest, signed binding key terms for the sale and purchase of the domestic portion of the Mako gas field with PT Perusahaan Gas Negara Tbk.
· The Company received a letter from two lenders holding 68% of the Company’s Luxembourg listed Eurobonds which were due to expire on 12 April 2024 granting a conditional standstill on the repayment of the Company’s current debt obligations whilst the ongoing constructive discussions with the Company in respect of the Eurobonds continue.
Post Balance Sheet Events
· Conrad Asia Energy Limited, the holder of a 76.5% operated interest in the Duyung Production Sharing Contract, in which the Group has a 15% interest, signed a binding Gas Sales Agreement for the sale and purchase of the export portion of natural gas from the Mako gas field with Sembcorp Gas Pte Ltd, a wholly-owned subsidiary of Sembcorp Industries Ltd, a leading energy and urban solutions provider, headquartered in Singapore.
· Third binding PPA with MWG entered into and initiated construction at the next 50 sites with MWG with an aggregate capacity of c.1.9MW which brings the total contracted capacity to 3.3MW across 90 sites.
· Six month US$500,000 secured convertible loan note with River Merchant Capital and Fenikso Limited secured.
· Harry Beamish appointed as an independent non-executive director of the Company.
Waiting for Duyung is the main thing for Coro holders but the rest of the portfolio could engender something if it had investment from the gas field sale.
United Oil & Gas
United Oil & Gas has announced its unaudited results for the period ending 30 June 2024.
Brian Larkin, United Chief Executive Officer commented:
“In January 2024, we received confirmation of our Jamaican licence had been extended for two years, until 31 January 2026. To strengthen our team, we appointed Herona Thompson as Jamaican Country Manager to oversee the agreed work programme with the Ministry of Science, Energy, Telecommunication, and Transport (MSETT). Jamaica remains our primary driver for growth, with the licence offering significant exploration potential. Our focus is now firmly on advancing the project and progressing the ongoing farmout process to unlock its value, and currently working with a number of interested parties.
United faced a challenging start to 2024, largely due to foreign exchange issues in Egypt, which ultimately led to the company receiving a default notice from the operator of the Abu Sennan concession. Although we were in discussions to sell our 22% stake, legal advice prevented us from finalising the draft Sale and Purchase Agreement (SPA) despite efforts to reach a mutually acceptable deal.
United agreed settlement terms with its debt provider, enabling the company to finalise the paperwork required for withdrawal from the Abu Sennan concession. This settlement is subject to finalisation of the withdrawal paperwork and we are working with our joint venture partners to complete the process.
In March 2024, we successfully raised £1 million (gross) through an equity placement to support our operations and subsequently received a payment of $1 million from EGPC. On 16 April, we announced that we had receivable balance of $0.5 million, however after a working capital reconciliation, that balance increased to approximately $0.8 million net from EGPC.
In April 2024, our Waddock Cross licence was extended by a further five years securing its long-term potential. We continue to progress plans for the redevelopment, which has the potential to provide a low-risk, high margin opportunity for the Group.
Outlook
“As we move forward, our primary focus remains on Jamaica, which we believe offers transformative potential for United. The planning and permitting processes for the piston core sampling is advancing, with permits expected in early 2025.
We remain engaged with a number of interested parties as we continue to progress the farmout process.
We are fully focused on advancing our core assets and look forward to updating the market as these opportunities develop in the coming months.”
UOG are not without ambition but at present are fairly limited in their opportunities, all chips are on Jamaica and whilst it is a potentially massive structure there is plenty of work to be done, not the least is partnering with someone rich…
1H 2024 Corporate and Operational Highlights
• Two -year licence extension granted in Jamaica
• Appointment of Herona Thompson as Jamaican Country Manager
• In March 2024, £1 million (gross) raised through equity placing and 1 warrant issued for every 3 shares, expiring 31 December 2024
• Default notice received from Operator on the Abu Sennan Concession
• Five-year licence extension granted on Waddock Cross Licence in which United has a 26.25% working interest
1H 2024 Financial Highlights
• Operating Loss – $1.384 million (2023 restated: loss $1.282million)
• Loss after tax continuing operations – $1.386 million (2023 restated: loss $1.292 million)
• Discontinued operations loss $0.230 million (2023: profit $1.891 million)
• Loss for period – $1.616 million (2023: profit $0.599 million)
• Settlement terms agreed with Debt provider
• Cash and cash equivalents at 30 June – $0.755 million (2023: $0.553 million)
• $1 million received from EGPC in April 2024
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
