Malcy’s Blog – Oil price, Genel Energy, Union Jack Oil, Block Energy, Advance Energy & finally

WTI $78.23 -67c, Brent $80.87 -88c, Diff -$2.64 -21c, NG $4.08 +16c, UKNG 199.0p -9.0p

By Malcolm Graham-Wood

Oil price 

Nothing to add again today, some of the hotspots on the geopolitical front are easing a bit, the news pictures from Kazakhstan last night seemed less tense and production is rising. In Libya there is also some increase in production.

Retail gasoline prices in the US are equally quiet, a gallon of Exxon’s finest will rush you $3.295 up just 1.4c w/w, down 2 cents m/m and is now up only 98.7c y/y.

Genel Energy

Genel has announced that Esa Ikaheimonen, Chief Financial Officer, has advised the Board of his intention to leave the Company on 16 March 2022, following the announcement of the Company’s 2021 financial results the day before.

A search for a suitable replacement is ongoing and an announcement will be made in due course.

Bill Higgs, Chief Executive of Genel, said:

“Our financial results will be a testament to Esa’s time at Genel, as they will show a Company in a strong financial position, with a resilient and proven business model and the flexibility to utilise the balance sheet to grow the Company. On behalf of everyone at Genel I would like to wish Esa all the best in his future endeavours.”

Esa Ikaheimonen, Chief Financial Officer of Genel, said:

“Genel has strong leadership and finance teams, a robust financial position, and a lot to look forward to, and I wish the Company every success for the future.”

I would also like to wish Esa all the very best for the future, it has been a pleasure working with such an erudite, smart guy and on his watch has overseen two well timed refinancing’s, solidified the resilient business model and overseen introduction of the dividend. 

Union Jack Oil

Union Jack Oil has announced that material landmark net revenues have been achieved from the Wressle hydrocarbon development, located within licences PEDL180 and PEDL182 in North Lincolnshire, on the western margin of the Humber Basin. Union Jack holds a 40% economic interest in this development.

Highlights

·    US$2,000,000 revenues generated to Union Jack at Wressle since re-commencement of production on 19 August 2021

·    Well is producing under natural flow

·    Production remains constrained on a restricted choke

·    Zero water cut

·    Staged site upgrades ongoing

·    For the first time Union Jack is now cash flow positive covering all corporate, administrative and project operating costs

·    As at 11 January 2022, cash balances of £6,270,045 and receivables of £1,568,521

·    Debt free

Executive Chairman of Union Jack, David Bramhill, commented:

The revenues of in-excess of US$2,000,000 to Union Jack, whilst under test production, are highly positive for the Company which remains in prime financial health as the above figures illustrate.

“We believe that Wressle holds considerable further upside which will be demonstrated over the foreseeable future and we look forward to reporting on progress in due course.

“As well as Wressle, the Company has three other cash generating projects and under current oil prices, for the first time is now cashflow positive and covering all of its outgoings, including corporate, administrative and project operating costs.”

This is an incredible report and deserves to be described as a landmark for the company especially since this has happened only since 19th August  last year. That can be further lauded as the stake was increased  at a time when it wasn’t obvious that it was the best thing to do. What has emerged is a very profitable, cash producing development and at a time when it added to the portfolio significant value and demonstrated significant management skill which in my view has yet to be recognised in the share price. 

I am looking forward to writing another report on Union Jack in the next few days in which I will be looking at the rest of the portfolio. In the meantime the shares should be a lot higher. 

Block Energy

Block has announced its operations update for the three months ended 31 December 2021.

Highlights

·    Over 110,000 operational man-hours worked in Q4 2021, with no LTIs

·    Drilling of well JKT-01Z reached target depth (TD) of 2,565m measured depth (MD“)

·    Significant mud losses observed relative to the WR-B1 well, indicating initial geological objectives have been achieved

·    Q4 production of 34.6 Mboe (Q3: 34.6 Mboe) or an average of 376 boepd

·    Q4 revenue of $2,550,000 (Q3: $901,000)

o  oil revenue of $2,441,000 (Q3: $742,000)

o  gas revenue of $109,000 (Q3: $159,000)

Block Energy plc’s Chief Executive Officer, Paul Haywood, said:

“We are pleased with the progress being made at JKT-01Z. Having encountered hydrocarbons and experienced significant mud losses whilst drilling, the early signs are encouraging. If JKT-01Z proves to be successful, side-track operations funded by production revenue will be initiated back at WR-B01, adopting the same geological approach employed at JKT-01Z. Strong sales, stable production and the ability to take advantage of enhanced sales pricing during the quarter, combined with encouraging initial signs from JKT-01Z, all add to the Board’s confidence in the Company’s ability to improve performance as we look to the year ahead”.

CEO Paul Haywood must be pleased, when I last looked I thought that the well was struggling a bit, he will be please to ramp up production and take the revenue upside.

Advance Energy

Yesterday I was very fortunate to find Leslie Peterkin, CEO of Advance Energy ready for my Core Finance CEO interview. The link is below and very timely as the well is drilling and ADV has just joined the Bucket List.

Core Finance CEO Interview: Leslie Peterkin, Advance Energy

And finally…

The Red Devils beat the Villa last night 1-0 in the FA Cup and will face the ‘boro in the 4th round.

The opinions expressed here are those of the author

Malcolm Graham-Wood

Disclaimer: Malcy’s Blog is provided for general information about the international oil and gas industry and the companies that operate within it. It does not constitute investment advice and Malcy does not buy or sell shares, warrants or bonds in any company written about within the blog. Information is taken from publicly available sources and any comment is that of the author who does not take any third party comment in the blog


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