Another flash blog as I’m out today but as with yesterday I will comment on Monday if further information etc is received. The Sound and Savannah news is from yesterday, it hadn’t got to me when I published it, apologies.
Europa Oil & Gas
Europa has announced that it has assumed operatorship of licence PEDL343, which holds the Cloughton gas discovery.
Operatorship of the licence was transferred from Egdon Resources U.K. Limited (“Egdon”) to Europa and approved by the North Sea Transition Authority, the industry regulator, with effect from 27 July 2023. The partners in PEDL343 are Europa (40 per cent), Egdon (40 per cent) and Petrichor (20 per cent).
The Cloughton field was discovered in 1986 and encountered gas throughout the Carboniferous section. The well tested at rates of up to 40,000 scf/day on natural flow, however with the right completion and production optimisation techniques, the Company believes that a well could flow at 6 mmscf/day. The gas is good quality sweet gas with >98% methane and ethane.
The discovery well encountered 60 metres of Carboniferous net sandstone reservoir with high gas saturations. Given the large areal closure and net sand present within the well there is a large volume of gas in place that has already been discovered. Cloughton is therefore a gas appraisal opportunity with the critical challenge being to obtain commercial flowrates from future production testing operations. A location for an appraisal well pad has been identified and following successful testing operations, the field would be monetised by connecting to the nearby gas grid. Such developments remain subject to securing necessary permits and approvals.
Will Holland, Chief Executive Officer of Europa, said:
“We are very pleased to be assuming the operatorship of what we believe to be a material licence and plan to progress the asset to appraisal drilling operations as quickly as possible. This initially involves engaging with the various stakeholders to secure the necessary permits and approvals.
The Europa technical team is now working through the subsurface data to calculate a range of probabilistic recoverable gas volumes and will produce a conceptual development plan for the field, which we believe will demonstrate the material potential value of the licence. There is undoubtedly a significant volume of gas within the structure, which could be brought online relatively quickly and would displace imported gas volumes. Domestically produced gas generates employment, local and national tax revenues and has a lower carbon footprint than imported gas. As such development of Cloughton is fully aligned with the UK Governments British Energy Security Strategy and Net Zero 2050 goals.
I look forward to updating shareholders of our progress as we work through the asset data, refine our estimates for the gas volumes and establish a conceptual development plan.“
An exciting prospect and if the data gathering and various permissions are achieved this should be good news for EOG, more later.
Sound Energy
Sound yesterday advised that it has received conversion notices to issue 22,222,222 Ordinary Shares at a conversion price of 2.25 pence per Share under an existing £2,500,000 Convertible Loan Note Agreement, the terms of which were announced on 13 June 2023. The Partial Conversion reduces the amount owing on the Convertible Notes by £500,000, with £2,000,000 remaining.
An application has been made for the Shares to be admitted to trading on AIM. The Shares will rank pari passu with the existing ordinary shares in issue and it is expected that Admission will occur on or around 8.00 a.m. on 1 August 2023.
Following Admission, the Company’s enlarged share capital will comprise 1,882,329,117 ordinary shares of 1p each, each with voting rights. 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, securities of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.
This partial debt conversion looks very good indeed coming as it does c.60% above the current mid price. Handy to drop the debt and with an estimated saving of some £500/- on the interest payment, very tidy bit of business indeed.
Savannah Energy
Further to its announcement on 8 June 2023 the Company continues to advance the various workstreams required to complete the acquisition of PETRONAS International Corporation Limited’s energy business in South Sudan (the “PETRONAS Acquisition”) and now intends to publish an AIM Admission Document in respect of the PETRONAS Acquisition on or before 30 September 2023, following such point the Company will seek restoration to trading on AIM of its ordinary shares.
Nothing much to add to this unless I hear from the company that there is something behind it, if so I will write more.
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
