WTI (Nov) $92.60 +19c, Brent (Nov) $105.28 +96c, Diff -$12.68 +77c.
USNG (Nov)* $3.11 -1c, UKNG (Oct) 180.76 -3.99p, TTF (Nov) €72.3 -€1.95.
*Denotes expiry of October contract.
Oil price
Oil is down slightly as I write, WTI is off 41.13 and Brent down 79 cents thus widening the differential to over $13. Third party talks continue between the US and Iran with Qatar diplomats trying to make a deal from New York, it is alleged that Iran have put nuclear discussions on the table which I will believe when I see it…
There are a number of stories around that more oil is getting through the Gulf than previously thought, Reuters report that Kpler have analysed September data up until now that says that on average 12.8m b/d is coming out of key states….
With Saudi Arabia apparently accounting for some 6m of that and the UAE and Iraq most of the rest they say that as much as 80% of pre-war demand is being supplied. Now I know that ship-to-ship transfers have got better and the US have de-mined the Oman side of the Strait of Hormuz but if this is true why is crude oil still $100?
Below, nice to see a big poster right outside the Labour Party Conference in Liverpool ahead of the Prime Ministers speech today…
Jersey Oil & Gas
Jersey Oil & Gas has announced its unaudited Interim Results for the six month period ended 30 June 2026.
Highlights & Outlook
- Increasing acknowledgement of the importance of domestic energy production over imports – providing the opportunity to boost UK economic growth, deliver increased tax revenue with lower carbon hydrocarbons, support energy security and anchor jobs across the UK
- Work underway to assess the optimal Greater Buchan Area (“GBA”) redevelopment solution within a re-set investment horizon – opportunity to add volumes and enhance overall value for all stakeholders
- Submission of GBA licence extension requests scheduled for later this year
- The Company maintains a solid financial position, with total cash reserves of £10.1 million and no debt – the business is right-sized for its current activities and focused on achieving its growth potential
- As a reminder, the Company’s 20% share of Buchan project expenditure is fully carried by its two joint venture partners, NEO NEXT+ and Serica Energy. A further $20 million cash payment is payable under the terms of the agreements following approval of the FDP by the NSTA and receipt of the associated regulatory and legal consents
- The Company has UK tax allowances equating to potential savings of over $60 million at current tax rates – continuing to assess opportunities to unlock this inherent value within the Company
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
“Current energy policy is driving: higher imports, job losses which are estimated to have reached 25,000 across the industry in the past two years, lower tax take, lower energy security and a loss of important domestic skills, at the same time as increasing the country’s net CO2 emissions. The cumulative actions of successive UK Governments, along with protracted delays in development project approvals, have undoubtedly damaged the UK’s oil and gas industry and actions are clearly required to deliver a sustained improvement in investor confidence. New investments into long term projects like the Greater Buchan Area redevelopment require confidence in a supportive regulatory and fiscal system that prioritises domestic energy. While the industry as a whole is seeking to tackle this issue, we are working closely with our joint venture partners in re-assessing the optimal area-wide GBA development solution, that has the potential to add volumes and enhance further value, within the context of a wider lens and longer execution schedule. We are also actively engaged with the regulator on the planned activities to support our licence extension requests, which will be submitted later this year.”
The interims are of course by the by but importantly they are all in line with expectations and on budget but as you would expect, the company has noted in their commentary, it is politics that dominate the landscape.
JOG is financially resilient and will see this through and the JV will continue its recent engagement with the NSTA and continue to design Buchan, and the greater GBA, to connect volumes around the hub and enhance volumes and value for all parties.
Petro Matad
Petro Matad has announced its unaudited interim results for the six months ended 30 June 2026.
Financial Highlights
- Petro Matad’s cash balance at 30 June 2026 was USD 2.76 million (USD 2.14 million in cash and USD 0.62 million in Financial Assets), comparing to USD 2.37 million (USD 1.7 million in cash and USD 0.67 million in Financial Assets) on 30 June 2025.
- The Group posted a loss of USD 0.59 million for the 6-month period ended 30 June 2026, which compares to a loss of USD 1.7 million for the comparable period in 2025.
- At end June 2026 the Group had an outstanding net receivable from 2026 oil production of USD 2.16 million based on the average oil price for the year to that date.
Operational Highlights
- Production from Heron-1 and Gazelle-1 wells continued throughout with a total of 41,941 barrels of sales crude oil offloaded at the Block XIX processing facility during the reporting period. Water-cut at Heron-1 remained very low while at Gazelle-1, where early water breakthrough had been observed, it stabilised at c.20%.
- Negotiations of the 2026 Oil Sales Agreement with Block XIX operator PetroChina Daqing Tamsag LLC (PetroChina) were completed in April but PetroChina HQ delayed implementation so no sales revenue payments were made during 1H 2026.
- Farm-in partner discussions for Block XX and Block VII were conducted with several international and Chinese entities and these were ongoing at the end of the reporting period.
- SunSteppe Renewable Energy (SRE), the Company’s renewable energy joint venture secured exclusivity on three new projects totalling 290MW and intends to participate in a tender for another 100MW project. Of the new projects, two have been prioritised by the Mongolian government and SRE has already received approval of the Feasibility Studies and Licences to Construct for both.
Financial Summary 1H 2026
Production from the Heron-1 and Gazelle-1 wells in Block XX, eastern Mongolia, during the first half of 2026 averaged a combined 241 barrels of oil per day (bopd) with a total volume of sales crude (after accounting for water-cut) of 41,941 barrels offloaded at the TA-1 processing facility in Block XIX operated by PetroChina. The 2026 Oil Sales Agreement which was very similar to the 2025 agreement under which Block XX crude was sold and paid for was drafted in October 2025 and finally agreed by PetroChina Mongolia in April 2026 after Petro Matad had brought in representatives of the industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) and the General Tax Authority to allay all concerns raised. However, PetroChina’s Head Office legal and compliance departments raised and re-raised a number of issues and despite the Company rapidly addressing all of these, the agreement was still not executed and effective at the end of the reporting period. Notwithstanding this, PetroChina continued to accept crude from Block XX for storage in Block XIX but without an executed Oil Sales Agreement no 2026 oil revenues were received during 1H 2026.
In order to carefully manage its cash resources, the Company delayed operational activity on its oil assets other than the continuing production operations pending receipt of 2026 revenue. In early 2026, PetroChina paid the monies it had withheld from 2025 oil sales revenues.
The Group posted a loss of USD 0.59 million for 1H 2026, which compares to a loss of USD 1.70 million for the comparable period in 2025. The Company’s cash balance at 30 June 2026 was USD 2.76 million (USD 2.14 million in cash and USD 0.62 million in Financial Assets), which compares to a cash balance of USD 2.37 million (USD 1.70 million in cash and USD 0.67 million in Financial Assets) on 30 June 2025.
The cash balance on 30 June 2026 included USD 0.9 million in cash that is payable to MRPAM for its production share and royalties per the PSC. Payments to MRPAM continue to be withheld pending resolution of all issues relating to the crude Oil Sales Agreement and receipt of revenue from PetroChina. At the end of June 2026 there was a net receivable owed to the Company of USD 2.16 million for oil delivered to Block XIX.
Operational Summary 1H 2026
Considerable effort was expended during the reporting period on finalising the 2026 Oil Sales Agreement. Implementation was still delayed at the end of June pending approval by PetroChina’s Head Office. In parallel with this long running delay, Petro Matad chose to continue to produce based on PetroChina’s advice that a positive resolution was coming soon.
Production from the Heron-1 and Gazelle-1 wells was continuous during the period with 265 loads of crude oil, totalling 41,941 barrels of sales crude, delivered and offloaded at the TA-1 processing facility. During the period there were no HSES incidents related to Petro Matad’s production operations.
Both wells were produced continuously throughout the period via artificial lift by means of surface beam pumps. Heron-1 achieved an operational uptime of over 99% with production performance as per the Company’s forecasts and averaging 123 bopd over the period. Water cut remained very low at less than 5%. At Gazelle-1 well performance continues to exceed expectation by some 46%. With the expected drawdown of reservoir pressure as oil is removed, the daily pumping hours at Gazelle were gradually reduced during the period to ensure that the fluid level in the well is always maintained above the pump inlet port to avoid damage to the pump. Even so, operational uptime was good at c.95% and the well averaged 118 bopd through the period. Early water breakthrough observed in Gazelle-1 was addressed with careful management of pumping hours and surface pressures and the water cut stabilised at c.20%.
The Company had plans to conduct some other operational activities in 2026 including the acquisition of a new 3D seismic survey covering the entire prospective area of Block XX. The most experienced contractor in country offered a very competitive and flexible commercial package but whilst payment for production remained outstanding this programme along with plans to return to the Heron-2 well for further reservoir stimulation operations and a well test at Gobi Bear-1 have been deferred. Meanwhile, low cost in-house work on Block VII continued throughout the period including analysis of drill cuttings recovered from the well drilled by the previous operator of the block.
The farm-out process for Block XX and Block VII continued with several international and Chinese parties reviewing data.
SRE, the Company’s renewable energy Joint Venture, made good progress during the reporting period. Changes at cabinet level within the Mongolian government saw the rapid development of a new and dynamic environment for renewable energy. SRE was able to secure exclusivity on three new projects, two of which have been sanctioned by the government to be prioritised for early commencement of construction. They are the Dundgobi and Uvurkhangai Solar Powered Battery Energy Storage System projects of 100MW capacity each. Proof of the government’s intentions to expedite these projects has been demonstrated in that SRE’s Feasibility Studies for both projects have already been approved by the Ministry of Energy as have the Licences to Construct.
The third new project was secured when an SRE consortium was ranked first in the tender for development of the 90MW Hunnu Solar Powered Battery Energy Storage System project. This project will provide power to Ulaanbaatar to strengthen the reliability and sustainability of the capital’s electricity supply.
Post Reporting Period
Post the reporting period, on Block XX PetroChina confirmed by letter in August that implementation of the 2026 Oil Sales Agreement had been sanctioned and that crude oil export would start and payments would begin in September but they did not live up to this commitment and PetroChina HQ is still reviewing the contract. In September, with storage tanks approaching capacity PetroChina instructed Block XX to shut in production. Petro Matad has raised the issue of the long delay to Oil Sales Agreement approval with all stakeholders and is receiving full support and assistance from MRPAM, the Minister of Industry and Mineral Resources and the Office of the Deputy Prime Minister to seek a rapid and positive resolution.
Production operations continued without incident up until the September shut down whilst other operational activities remained on hold pending receipt of revenue. Discussions with potential farminees continue.
On renewable energy, SRE’s high priority projects are progressing well. Tariff and power purchase agreements are under negotiation and based on preliminary figures are estimated to deliver an attractive double digit rate of return. SRE has agreed commercial terms with a major international renewable energy company giving them first right of refusal to join the projects once the power purchase agreements are finalised. This company is working with the SRE team to ensure all aspects of the projects are internationally bankable. The agreed terms set out the milestones and development premia payable should SRE exit but also gives SRE the chance to participate in construction and power production at a significant working interest if it so chooses. Such a decision will depend on funding availability at the time.
On the Hunnu project, the SRE consortium is waiting to be called by Ulaanbaatar Municipality to start negotiations and will target ready to build status on this project in 2027.
In addition to these three projects, SRE has agreed to join a consortium led by an internationally renowned renewables company that is participating in the tender for a 100MW wind project being managed by IFC. Meanwhile, wind data gathering continues at SRE’s 200MW Hybrid project.
SRE is well placed to crystallise value from the Mongolian renewables sector and the Company will make a presentation on Mongolian renewables and SRE’s ambitions on the Investor Meet Company platform in October. Details of this event will be circulated to shareholders in advance.
Mike Buck, CEO of Petro Matad, said:
“We are very pleased to have proven that Block XX is capable of reliable and commercial production, with both the Heron-1 and Gazelle-1 wells performing consistently and in line with or ahead of expectations. This strengthens our position as we continue discussions with potential farm-in partners to accelerate the development.
It is beyond frustrating that the delay on oil sales continues and we are working on resolving this as our top priority.
Our renewable energy initiative has made excellent progress, securing exclusivity on three new projects, two of which have already received government prioritisation. We are focused on crystallising value from this growing portfolio and look forward to sharing more details with investors in October.”
There is not much I can add to my comments from this day last week when the company announced that the Oil Sales Agreement with PetroChina was off and with no invoices being processed and no oil being sent, the production had to be shut-in as the tanks are full.
It looks like an investor presentation is planned for next month so I guess that until then, and in the absence of any money coming in things remain in abeyance. at that stage I’m presuming that the renewable initiative will be presented with some concrete plans for when the company will make any money from it.
And finally…
Last night in the Nations League Northern Ireland drew 0-0 with Hungary whilst tonight the Czech Republic host England B and Scotland host Switzerland.
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.
