Malcy’s Blog – Oil price, Kistos, RKH, SDX, Trinity, UOG, Petro Matad, UJO, Reabold, Longboat & Touchstone.

WTI (Nov) $93.68 +$3.29, Brent (Nov) $96.55 +$2.59, Diff -$2.87 -70c.

Author @mgrahamwood

USNG (Nov)* $2.90 +32c, UKNG (Oct) 102.0p +0.85p, TTF (Nov) €44.895 +€2.23.

* October contract expiry.

Oil price

The last couple of days have seen further gains for oil, primarily due to inventory numbers where yesterday crude drew 2.169m barrels better than expected but the market was more spooked by the draw at Cushing where stocks are now at a 14 year low. 

Bearing in mind that tomorrow is the last trading day of the week, month and quarter I would expect some good old fashioned window dressing as traders try and keep the books flat, maybe even a bit of profit taking for choice. 

Readers will notice that the usual pattern of companies waiting until the very last minute to produce interim results has again occurred. To avoid repetition I will say now that in all cases these are historic numbers and given how many announcements are made since the period end there isn’t often much to add.

Also after the production disaster that was yesterdays blog I am putting in comments on Reabold, Union Jack and Longboat again, never trust auto save on WP!


Kistos has provided its interim results for the period to 30 June 2023.



Robust end-of-period cash position

·      Net actual production for the period averaged 9,600 boepd, a 68% increase compared to H1 2022, reflecting a full six months’ contribution from the GLA and one month from Norway following the acquisition of Mime

·      Pro-forma net daily production averaged 9,200 boe/d across the UK, Netherlands, and Norway

·      Realised price decreased to €74/boe in H1 2023 from €139/boe in H1 2022, reflecting significant gas price volatility

·      Actual revenues and adjusted EBITDA decreased compared with H1 2022, driven by lower average commodity prices

·      Net cash and cash equivalents stood at €247 million at the end of the period, with net debt of €42 million following the assumption of Mime Petroleum’s outstanding bonds

Pro forma1 unaudited 6 months ended 30 June 2023

H1 2023

H1 2022

Change %

Total production2





Total production rate2










Average realised sales price2





Adjusted EBITDA3





1.Pro forma figures include the results from Kistos Norway as if it had been acquired on 1 January 2023. The acquisition completed on 23 May 2023. Pro forma figures for H1 2022 include results from the GLA as if it had been acquired on 1 January 2022. That acquisition completed on 11 July 2023. Minor adjustments have been made to comparative pro forma information following receipt of additional information after completion of the GLA acquisition and to align with the Group’s accounting policies and methodology as used in the 2022 Annual Report and Accounts.

2. Total production rate includes gas, oil and natural gas liquids and is rounded to the nearest 100 barrels of oil equivalent per day. Actual production rates include the impact from acquired businesses only from the date of acquisition completion. Sales and production volumes are converted to estimated boe using the conversion factors in the Appendix to the Interim Financial Statements.

3. Non-IFRS measure. See note 2.2.1 to the Interim Financial Statements for definition and reconciliation to the nearest equivalent IFRS measure.


Reporting production in line with guidance

·      2P reserves + 2C resources increased to 108 MMboe (end-2022) following completion of the Mime Petroleum transaction, which marked Kistos’ entry into the Norwegian Continental Shelf, and the reinstatement of the M10a and M11 licences in the Netherlands

·      Planned maintenance and workover downtime across the UK and the Netherlands reduced production uptime in H1

·      Benriach well proved sub-commercial, minimal post-tax net cost to Kistos (c.€3m) due to generous investment allowances granted under EPL

·      4D seismic acquisition campaign over the four producing GLA fields completed

·      Reinstated production at Ringhorne in May following a gas lift issue identified by the Operator in February

·      Full year production guidance maintained in 8,500 – 10,500 boepd range


Investing in the Company’s future to maximise value

·      Successful appeal to restore M10a and M11, extending licences by 5 years to August 2028 and increasing total Group estimated reserves and resources by 41%

·      Ongoing progress towards completion of the Orion oil field Concept Select phase before executing FID in 2024

·      Continuing to mature Edradour West opportunity towards FID and ongoing evaluation of 4D seismic expected to lead to additional infill opportunities across the GLA

·      Further evaluation work underway at Q10-A with a view to enhancing production from existing wells and/or pursuing infill drilling opportunities

·      Jotun FPSO upgrade remains on critical path and operator remains focused on Balder Future production start-up by the end of 2024

Andrew Austin, Executive Chairman of Kistos, commented:

“We ended the half-year in a strong financial position. Our focus on pursuing value-accretive opportunities to grow the business remains as sharp as ever. This was reflected by our entry into Norway in May, acquiring a highly experienced team with a clear path to medium-term growth, providing greater flexibility across three North Sea jurisdictions. We have also successfully progressed organic opportunities within our portfolio, such as the upcoming Orion oil project in the Netherlands, where we are progressing through the Concept Select phase, and Edradour West and Glendronach in the UK, where we are assessing development options utilising existing infrastructure to keep costs and the carbon footprint low.

“While the Benriach exploration well did not yield the desired result, it did allow for an extensive data acquisition programme, and we benefitted from enhanced capital allowances under the terms of the UK Government’s EPL. The excellent operational and HSE performance of all contractors involved with this well was of particular importance and I thank them again for their efforts in delivering a safe well, ahead of schedule.  Looking ahead, we will continue to pursue rapid, disciplined growth both organically and through acquisitions for the benefit of our shareholders.”

Guidance for the year remains intact after lower gas prices and maintenance work hit the first half but surely that is not what Kistos is all about? The MIME acquisition is a rarity offering growth in a number of areas, a high quality team and significant upside which will, in my view transform Kistos, if you add that to the organic growth the market is massively missing the point on what the value of the company offers.

Rockhopper Exploration

Rockhopper has announced its unaudited results for the six months ended 30 June 2023 (“H1 2023”).


Sea Lion and North Falkland Basin

·    Reworked base case project reduces costs while increasing total production

 Total barrels developed: 269mmbbls

 Production plateau: 80,000 bbls/d

 Pre first oil capex US$1.3bn, assuming leased FPSO

 Life of field costs less than US$30 per barrel

·    Sea Lion is competitive on a global scale

 Base case gross joint venture NPV10 >US$4bn at $77 Brent

·    Work to refine project phasing and financing plan continues

Ombrina Mare

·    Rockhopper awarded c.€190 million plus interest (the “Award”) in August 2022 following successful arbitration outcome

·    Italy seeking to have the Award annulled; Rockhopper contesting annulment

·    Stay of Enforcement lifted, escrow arrangements in place

·    Rockhopper exploring all avenues to secure value

·    Annulment hearing set for January 2024

Corporate and Financial

·    Continued focus on costs post completion of successful capital raise in July 2022

·    At 30 June 2023, the Group had 53.9 million unexercised 9 pence warrants in issue, with an expiry date of 31 December 2023

·    Cash and term deposit balance at 30 June 2023 of US$6.7 million

·    Highly experienced new Non-Executive Chair (Simon Thomson) and Non-Executive Director (Paul Mayland) assuming roles from 1 October 2023


·    Work continues on refining new lower cost Sea Lion development and financing plan

·    Stay on Enforcement on Award lifted – Rockhopper in a position to commence legal proceedings against Italy for non-payment

·    Navitas targeting Sea Lion FID during 2024

Keith Lough, outgoing Chairman of Rockhopper, commented:

“After nine challenging and enjoyable years, John Summers and I will leave Rockhopper in the strongest position your Company has seen for some considerable time. We have a committed, focussed, and capable partner that has already worked up a hugely impressive lower cost, highly capital efficient project at Sea Lion. In addition, the Stay of Enforcement on our €190million ICSID award is now lifted and we are working with our advisers on all avenues to monetise this award. Our 2022 capital raise allowed us to extend our licences, bring Navitas on board and continue to contest the Arbitration. Finally, we welcome Simon Thomson and Paul Mayland to the Board, bringing with them a wealth of directly relevant experience in the industry and detailed knowledge of Sea Lion.

“I wish the new Board and all holders every success for the future, and I know your Company remains in the best possible hands.”

Again nothing much to add here that wasn’t already in the public domain, probably the most interesting part of the lifting of the Stay of Enforcement is that the €190m award is now probably some €260m and unless Italy can somehow stop the monetisation of the award Rockhopper will be well set for the future.

United Oil & Gas

United Oil & Gas has announced its unaudited financial and operating results for the half year ended 30 June 2023.  A shareholder call will take place this morning, details are below.

Brian Larkin, CEO commented:

“We are pleased to be able to report progress across our portfolio as we seek to explore further opportunities for growth to deliver greater value to our shareholders.

Looking at Egypt, we successfully drilled and brought 2 development wells onstream during the first half of 2023. Notably, we maintained our excellent safety record throughout these operations. Our active drilling programme continues with the drilling of a further near field exploration well planned for the fourth quarter of the year. Simultaneously, we continue to work with our JV partners to optimise production from our existing well stock through a comprehensive programme of workovers and well intervention activity. Whilst the macroeconomic situation In Egypt remains challenging, we do continue to be paid a portion of our receivables in US dollars.

In Jamaica we are engaged in discussions with the Government and with high-quality potential farm-in partners on our exciting high-impact exploration asset. Identifying a partner with the right skillset to complement our work is of paramount importance to advancing this project and we expect to move forward to commercial discussions with a preferred partner over the coming weeks.

Whilst Quattro have not yet completed their funding process and are likely to require a further extension to the long stop date on the sale agreement for licence P2519, we are hopeful that this transaction will complete over the coming weeks, given the renewed interest in the North Sea

We enter the last quarter of 2023 well placed, and will continue to work hard on delivering on our strategy in order to return value to our shareholders.”

UOG is in flux right now, with the short term difficulties such as the delay in the Maria deal, cash shortages in Egypt and still no farm-out in Jamaica the market is without doubt giving them the benefit of the doubt share price-wise.

But they still have confidence that Maria will happen with an extension of the long-stop date, they say that they expect ‘proceeds in coming weeks’ and the fact that the licence expires this coming December only promotes getting a move on. 

In Jamaica the long list of suitors is getting shorter with one potential preferred bidder in the spotlight but the size of the project means that UOG think that the partner needs to be a supermajor so big is the potential. Probably best not to stand on one leg waiting for it but don’t rule out a transforming deal where the company can be carried for a fraction of the big number, today’s meeting was as positive on Jamaica than I’ve heard in many years.

In Egypt we all know that dollars are hard to come by, using local currency to pay the bills is the norm and trying not to take the FX hit of getting USD is wise. Debt wise repaying the BP pre-payment facility is wise and when that is finished cash is freed up, UOG have a good name in debt markets so any replacement of that debt should be done on attractive terms and their excellent record in not approaching equity markets is a big help. 

1H 2023 Operational summary

·      1H 2023 Group net 22% working interest production averaged 1,051 bopd and 93 boepd gas with full year average net production forecast to be in the range of 930 to 1,030 boepd.

·      In Egypt

–       Active drilling programme continues with two wells drilled in 1H, and one additional exploration well planned for H2

–       Successful ASH-8 development well brought onstream in March

–       Successful ASD-3 development well brought onstream in May

–       Zero – Lost Time Incident Frequency rate and Fatal Accident Frequency rate. No environmental spills, Restricted Work Incidents or Medical Treatment Incidents

–       We continue to have a portion of our Egyptian receivable balance settled in USD

·      In Jamaica, discussions continuing with the Ministry and with potential farm-in partners with commercial discussions with a preferred partner expected to commence in Q4.

·      In the UK, whilst the current deadline for completion of the deal with Quattro has been extended to 30th September, this is likely to be extended further as Quattro have not yet completed their funding process.

1H 2023 Financial summary 

·      Group revenue for the first half of 2023 was $6.4m(1) (1H 2022:$9.8m)

·      Realised oil price of $78.19/bbl (1H 2022:$105.5/bbl)

·      Gross Profit (excluding Egypt tax gross up) $2.2m (1H 2022: $5.6m)

·      Cash Operating Expenses of $10.65/boe  (1H 2022: $8.40/boe)

·      Profit After Tax of $0.6m (1H 2022: $2.4m)

·      Cash collections in the six-month period of $7.0m (1H 2022: $8.7m)

·      Repayments on BP Pre-payment facility of $1.2 (1H 2022: $1.6m)

·      A 30% reduction in Corporate G&A to $830k (1H 2022: $1.2m) and on target to deliver the 15% full year reduction.

·      Group cash balances at period end were $0.6m (1H 2022: $3.8m)

(1)       22% working interest net of Government Take

1H 2023 Corporate summary

·      Jonathan Leather, Executive Director and Chief Operating Officer stepped down from the Board on 31 August 2023. Jonathan will continue to provide support to the company on the Jamaican farm out process on a consultancy basis.


·      In Egypt we look forward to drilling the ASD-S-1X near-field exploration well, which we expect to spud in October. This is an exciting exploration well located to the south of the prolific ASD Field. The well is targeting an estimated gross in-place mean volume of 10.1 million barrels of oil in multiple stacked reservoir targets across the productive Abu Roash and Bahariya reservoirs. 

·      The ASD-S-1X exploration well will be followed by additional development drilling on the Abu Sennan concession – likely targeting an undrained crestal area that has been identified on the ASH Field.

·      In Jamaica, we continue discussions with high-quality potential partners and expect to commence commercial discussions with a preferred party over the coming weeks. We will provide further updates to the markets in due course.

·      In the UK, we are looking to complete the transaction with Quattro on the P2519 licence containing the Maria discovery.

SDX Energy

SDX has announced that the KSR-21 well has reached its total vertical depth of 1,955 metres (1,966 metres measured depth) targeting a prospect within the Hoot formation, which is one of the main producing formations in the area. Drilling and wireline logging data confirm the presence of gas charged sands within the targeted reservoir section. 

The drilling rig will now be moved off location and the reservoir interval perforated to undergo a short testing period before being brought onto production to supply existing gas offtakers.

Short and sweet, this announcement is the bare minimum, accordingly wise just to say that being brought onto production, whatever it is should be good news…

Petro Matad

Petro Matad has announced its unaudited interim results for the six months ended 30 June 2023 and provides an operational update.

Key Company Updates

·    The Company continues to push the Government to complete the regulatory formalities to allow completion operations at Heron 1 to commence. The Provincial Government has been very slow to respond which is putting the plan to complete the well before winter at risk.

·    The local district authorities have however indicated that they are open to the Company operating in parallel with the slow-moving bureaucracy if Central Government supports the Company in doing so. This option is now being pursued as a priority.

·    The 2022/23 Mongolian Exploration Tender Round continues with Petro Matad submitting two applications for new blocks and actively looking at one more area to determine if a third application is merited.

·    Our renewable energy JV, SunSteppe Renewable Energy, is actively pursuing two projects, a battery energy storage facility and a green hydrogen project as it continues to push into the Mongolian renewable energy sector. Both projects have the potential to generate revenue in the near term.

Financial Summary 1H 2023

The Group posted a loss of USD 1.90 million for the 6-month period ended 30 June 2023, which compares to a loss of USD 1.62 million for the comparable period in 2022. The Company’s cash balance at 30 June 2023 was USD 8.39 million (USD 0.82 million in cash and USD 7.57 million in Financial Assets – which are term deposits with a term of 3 months or more), which compares to a cash balance of USD 6.62 million (USD 3.10 million in cash and USD 3.52 million in Financial Assets) on 30 June 2022.

As previously announced, a successful fundraise totalling USD 6.6 million of gross proceeds was completed in February 2023, primarily to fund exploration drilling in the Company’s operated Block V and to advance renewable energy opportunities through a newly established joint venture. Despite the continuing frustration with the delays in progressing the development of the Heron discovery it was very encouraging that both the placing and retail offer were over-subscribed. 

Operational Summary 1H 2023

On the Company’s Block XX where the Heron discovery is ready for the first phase of development to begin, the land access issue, and thus commencement of production operations, remained delayed through the first half of 2023 subject to registration of the Exploitation Area as Special Purpose Land in accordance with Mongolia’s Land Law. Significant progress was made to secure the certification and all ministries in the Mongolian Government confirmed their support. The documentation for the certification was completed by end June for submission to Cabinet in July 2023.

In parallel, the Company finalised negotiations with DQE Drilling on a long-term drilling contract which will be submitted to industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) for discussion and approval. Commercial negotiations advanced with PetroChina for the use of its production infrastructure on neighbouring Block XIX.

On the Company’s Block V exploration PSC in central Mongolia, the Velociraptor 1 well was drilled on a high impact prospect in June/July with the full support of the local communities. The well was drilled on schedule and within budget but as has been reported previously, despite encountering more than 350 metres of good quality reservoir sections, the well was dry and it has been plugged and abandoned.

MRPAM’s 2022/23 Exploration Tender Round continued through the first half of the year and the Company has made applications for two blocks. Negotiations of the contractual terms are ongoing.

In early 2023, Petro Matad completed the formation of a joint venture company, SunSteppe Renewable Energy (SRE), to develop renewable energy projects in Mongolia with the goal of reaching construction ready status on its first projects within 24 months. Priority projects included a battery energy storage system project designed to help improve the stability of Mongolia’s electricity grid and so reduce coal consumption for power generation and allow the dispatch of more renewable energy from projects already in operation. The joint venture is also pursuing off-grid projects to supply renewable energy to mining projects where operators are keen to decarbonise their operations.

Operational Update and look ahead

Block XX: The Cabinet approved the special purpose certification of the Block XX Exploitation Area in early July, following which the Company has been pushing hard for the Government to complete the regulatory formalities and so allow completion operations at Heron 1 to commence. Whilst good progress has been made with Central Government agencies, the Tripartite Agreement between the Land Agency, the Ministry of Mining and Heavy Industry (MMHI) and the Provincial Government which regulates the management of special purpose land has yet to be finalized. The Land Agency issued the draft in July and MMHI quickly responded positively but the Provincial Government wants to complete herder compensation first and this further bureaucratic delay may jeopardise the chance to put Heron 1 on production before the winter operational shut down. In response, the Company is urging central and provincial authorities to speed up the remainder of the process and, with the special purpose certification now approved, Petro Matad has asked the district authorities to allow Heron 1 operations to go ahead in parallel with the slow-moving bureaucracy at central and provincial levels. The district representatives have signaled their willingness to consider this so long as the Central Government supports the initiative and MRPAM has confirmed its support and is preparing a letter to that effect.  The Company continues to direct all its efforts at getting Heron 1 on stream before the oilfield contractors shut down for the winter.

Block V: The post-well evaluation of Velociraptor 1 is progressing.

New acreage: In addition to the two applications lodged for new blocks earlier in the year, Petro Matad is looking at one more area in the 2022/23 exploration tender round to determine if a third application is merited.

Renewables: Post the period end, the Company’s renewable energy vehicle, SRE, has made very good progress. In consultation with the Ministry of Energy, the need for a 50MW/150MWh battery energy storage facility in central Mongolia was defined. SRE’s team has completed the required feasibility studies and the grid connection study for the project has been approved by the National Dispatching Centre. All required documentation has been submitted to and accepted by the Technology Committee of the Ministry of Energy. Once the committee’s approval is in hand, the License for Construction of the facility will be requested. SRE expects that this project can be brought to construction ready status with a power purchase agreement and tariffs in place by mid-2024. SRE has access to land already under lease for the facilities within two kilometres of the tie in point and the footprint is small. The development costs of this project are low and the project is expected to offer a double-digit rate of return and could be online and generating revenue by 2025.

A second project involving a utility scale wind farm to supply renewable energy to generate green hydrogen for use at a mine operation in the South Gobi is also progressing with a forecast timescale similar to SRE’s battery storage project. The project is designed to demonstrate the viability of green hydrogen as a fuel for use in the mining industry in Mongolia and SRE is very excited to be involved. This initiative has the strong support of the Mongolian Government and a memorandum of understanding has been signed with the Ministry of Energy.

SRE and Petro Matad will determine, once these two projects reach construction ready status, how best to fund them. Debt funding for similar projects is already established in Mongolia, leaving open the possibility that SRE can aspire to stay involved in the construction phase and establish itself as a key renewable power producer in the country.

The potential for renewable energy in Mongolia is huge with solar and wind power set to make up an increasing part of the country’s energy mix in the coming decades. This has been embraced by lawmakers, with Mongolia ratifying international conventions including the Paris Agreement. SRE has made good progress so far and has identified several other projects for consideration. We look forward to progressing this exciting new venture that has the potential to generate revenue in the near term.

Mike Buck, CEO of Petro Matad, said:

“The slow pace of the completion of the regulatory process that will allow us to commence the Heron development is extremely frustrating. Whilst we are pushing hard with all agencies, and we have equipment and contractors ready to mobilise, unless the pace suddenly quickens it is now unlikely that we will get the Tripartite Agreement signed in time. However, we are working on a limited access agreement at district level and leaving no stone unturned to give us the chance to achieve our goal of getting Heron 1 onstream before winter.

Meanwhile, it is pleasing to see that our renewable energy initiative is moving ahead. The battery storage project has considerable follow-on potential since the Ministry of Energy has identified a significant need for energy storage in various locations throughout the country. The Government is very keen to see if green hydrogen can be used effectively, whilst the mine operators are looking to decarbonise their operations and SRE’s project targets these goals whilst also providing the potential for an excellent commercial return for the developer.

As ever we appreciate our shareholders’ patience as we work through the final stages of getting Heron 1 on stream and in particular, those shareholders that have been with us on this journey since the Heron discovery and before. I look forward to updating you further on our renewable energy initiative and our other ventures.”

Mike Buck’s reference to shareholder patience couldn’t be more apposite,  with the chance of any major moves in the next few months I think MATD is more of a 2024 stock at the moment. The shares are resting on the YTD low but with the 1 year low a penny below here I think the November 2022 price will probably be re-visited first. Having said that I still feel that longer term there is something out there and I’m sure Mike will be over sometime to talk me through it, it’s been a long time!

Trinity Exploration & Production

Trinity has announced its unaudited interim results for the six-month period ended 30 June 2023 

Strategic Highlights

·    Jacobin-1 was confirmed as an oil discovery on 7 August 2023. Subsequently, the Well Services Limited Rig 60 drilling rig rigged down and a heavy-duty workover rig, Rigtech Rig #9, mobilised to the wellsite to run the completion, perforate and tie the well into production facilities.  Final testing of equipment is currently in progress and initial production is anticipated within days.  Oil produced will immediately be sold to the state oil company, Heritage.

·    Trinity was successful in its bid for the onshore Buenos Ayres block, further leveraging our competitive advantage in the Palo Seco area, onshore Trinidad subject to receiving the licence from the Ministry of Energy.

·    The Company is progressing, with Petrofac, a Concept Screening study for the development of further reserves and resources in its Galeota Block.  Initial findings from Petrofac’s study are encouraging.  These concepts are now being economically assessed and ranked and, together with development studies on the existing Trintes field, will form part of an integrated approach to unlock further value from Trinity’s East Coast Asset.

·    Gas sampling and analyses that will underpin the Company’s evaluation of its Scope 1 emissions was completed during the period.  In H2 2023 analysis of gas rate quantification will be undertaken to enable the Company to quantify its Scope 1 emissions by the end of the year.

H1 2023 Operational Highlights

H1 2023 saw production levels broadly maintained against H1 2022 with a programme of recompletions and workovers. 

·    H1 2023 average net sales volume was 2,861 bopd (H1 2022: 2,974 bopd).

Sales volumes were supported by three recompletions (“RCPs”) (H1 2022: 11) and 6workovers and reactivations (“WOs”) (H1 2022: 61) undertaken during the Period including 7 workovers started at the end of 2022 completed in 2023, with swabbing continuing across the onshore and West Coast assets.  Four additional RCPs are being worked up for execution in H2 2023. 

·    The ABM-151 well in the Brighton Marine block, offshore the West Coast of Trinidad, was returned to production on 21 March 2023 following an extensive refurbishment of surface facilities and the installation of remote surveillance technology.  Between restart and the end of the period the well flowed at an average rate of 175 bopd.  The well produced on average 130 bopd during H1 2023 and Trinity continues to monitor the well closely.

H1 2023 Financial Highlights

·    Average oil price realisation of USD 65.2/bbl for H1 2023 (H1 2022: USD 90.1/bbl).  During the Period, the realised price that the Company received for Onshore and West Coast oil sales was an average discount of 20.6% to Brent; wider than the standard discount of approximately 15%.  East Coast oil sales are made under a fixed arrangement that is a 15% discount to Brent. 

The Company remains unhedged.

·    Cash balance of USD 11.3 million as at 30 June 2023 (YE 2022: USD 12.1 million) reflecting a combination of strong operating cash generation, no hedging or hedging losses incurred and limited investment in capex, including only the initial cost to support the drilling of Jacobin-1. The Jacobin-1 drilling and completion costs are anticipated to exceed initial estimates due to additional drilling days as a result of drilling challenges encountered and additional testing and data acquisition scope than originally considered. While the impact of the increased well costs will result in lower than anticipated cash balances, we remain on track to continue to invest in our growth options and commence our maiden interim dividend.

·    Strong net cashflows generated from operating activities as at H1 2023 USD 6.3 million (H1 2022: USD 2.9 million).

·    Revenues were reduced 30% to USD 33.8 million (H1 2022: USD 48.5 million) driven by lower oil prices and, to a lesser extent, lower volumes.

·    Cash operating costs of USD 20.1/bbl (H1 2022: USD 17.6/bbl) driven by supply chain increases, increased maintenance activities across the assets, including supporting labour to complete these activities, and the overall impact of lower sales production (2,861 in H1 2023 vs 2,974 in H1 2022) contributed to the higher cash operating costs (per bbl) in H1 2023 vs H1 2022.  This excludes the initial cost incurred on the Trintes Bravo fire incident in H1 2023 of USD 0.1 million. Remediation work is expected to continue into H2 2023.

·    General and administrative costs of USD 6.3/bbl (H1 2022: USD 6.6/bbl) mainly due to lower consultancy fees incurred and levies driven by lower oil prices.

·      Average operating break-even for H1 2023 was moderately increased at USD 34.5/bbl (unaudited) (H1 2022: USD 32.4/bbl) resulting from a higher operating cost and slightly lower sales volume.

·    The Group had drawn borrowings (overdraft) of USD 2.0 million at 30 June 2023 (YE 2022: USD 2.7 million).

Corporate Highlights  

Inaugural Dividend

As announced in the Company’s 2022 Full Year Results on 1 June 2023, the Group will pay its first interim dividend of 0.5 pence per ordinary share to be paid on 26 October 2023 to all shareholders on the register on 6 October 2023 (the “Record Date”).

The Dividend will be paid by electronic transfer.  The Company’s Registrar will provide an option for non-UK shareholders to receive payments in another currency. 

Increased Overdraft Facility from USD 5.0 million to USD 8.0 million

Trinity agreed to an upsized credit facility with FirstCaribbean International Bank (Trinidad & Tobago) Limited (“CIBC FirstCaribbean”) on 25 August 2023, providing for an increase of the facility from USD 5 million to USD 8 million. 

The increased facility will provide Trinity with the flexibility to follow-up on the play-opening Jacobin-1 well, targeting further onshore activity and to progress development planning for the Company’s material Galeota East Coast offshore asset. 

Jeremy Bridglalsingh, Chief Executive Officer of Trinity, commented:

“The first six months of 2023 saw Trinity progressing important catalysts within our refreshed strategy.

First, our Jacobin-1 well successfully intersected multiple oil-bearing sands.  Success with Jacobin increases our confidence in the portfolio of Hummingbird prospects that forms a cornerstone of our revitalised onshore strategy.

Second, in June we were successful in our bid for the Buenos Ayres block which lies immediately to the west of our existing Palo Seco licences.  We have started the acquisition of the Buenos Ayres EIA ahead of the formal award of the licence to progress this strategic option with pace.

Third, we appointed Petrofac to undertake a Concept Screening study for the development of further reserves and resources on our Galeota East Coast asset, using a low cost, more flexible approach than originally envisaged.

Lastly, our maiden interim dividend will be paid in October, representing an important aspect of our capital allocation policy that was designed to provide our shareholders with a cash return, in addition to the growth options currently being pursued.

I look forward to continuing to update shareholders on our further progress at a very busy and exciting time for Trinity“.

Low growth Trinity is going to struggle when compared to even local peers where growth is speedy and production, reserves and revenues are increasing rapidly. Jacobin is a success but won’t move the needle that much and the company are facing the unusual double whammy of paying a maiden dividend whilst also at some stage having to boost the capital in the balance sheet.  

Reabold Resources

Reabold has announced that the Environmental Agency permit for the use of oil-based drilling fluids at the West Newton B-2 well has been approved.

The EA has issued the variation of the permit for the West Newton B wellsite which allows for the use of oil-based fluids within the Permian formations during drilling and testing operations. 

Plans for the proposed horizontal well from the West Newton B site are underway and commencement of operations are targeted for H1 2024. 

Well path selection and the engineered design have been completed, wellbore casing purchased and the Operator, Rathlin Energy (UK) Limited, has approached drilling rig and other key service contractors to determine their availability. 

As announced on 29 September 2022, the Competent Person’s Report on West Newton confirmed gross 2C unrisked technically recoverable resources of 197.6 bcf of sales gas, with an estimated 86% geological chance of success.

Reabold holds a ca. 56% economic interest in West Newton and PEDL183 via its ca. 59% shareholding in Rathlin, which, in turn, has a 66.67% interest in PEDL183. In addition, Reabold has a 16.665% direct licence interest in PEDL183.

Reabold’s balance sheet has sufficient funding for its direct share of the planned drilling on the licence and the Company will also support Rathlin in exploring funding options to enable the drilling of this well in H1 2024. Reabold may be in a position to provide additional funding to Rathlin following receipt of the second tranche payment from Shell relating to the sale of the Victory asset.

Sachin Oza, Co-CEO of Reabold, commented:

“We are delighted to receive approval from the EA for the West Newton B site. Our studies have clearly demonstrated that the use of oil-based drilling mud will be a key factor in enhancing flow rates from wells in this field, and therefore this is an important step for the drilling of the B-2 horizontal well next year.

West Newton is potentially one of the largest hydrocarbon fields discovered onshore UK and we remain focused on developing and unlocking the significant resource potential of this asset.”

This is very good news indeed for Reabold on a number of fronts. Firstly the EA approval for the use of oil based mud is crucial, for a long time it has been known that this was necessary to ensure that the B-2 horizontal well delivers the necessary results. 

It certainly seems that with the necessary pre-drill operations and capital spending under way that the drill bit will be spinning on this hugely important horizontal well in 1H 2024, important because the Competent Person’s Report on West Newton confirmed gross 2C unrisked technically recoverable resources of 197.6 bcf of sales gas, with an estimated 86% geological chance of success.

Secondly, the formal addressing of the financing of the B-2 well is extremely important, we know that UJO has the funding as has RBD but the fact that ‘the Company will also support Rathlin in exploring funding options to enable the drilling of this well in H1 2024′ is of significance. Also the fact that ‘Reabold may be in a position to provide additional funding to Rathlin following receipt of the second tranche payment from Shell relating to the sale of the Victory asset’ is very important. 

This is not just because it looks like RBD will move heaven and earth to get Rathlin over the line but also I have not seen the company so confident about the receipt of the Shell money, even in my confident note last week for a long time. There was never any doubt about it but the timetable may now be firming up a bit and given some of that is earmarked for shareholders they too will be pleased, this is confirmed by the tone of the interim statement today. 

There is significant and I mean very significant upside for RBD from West Newton and the announcement yesterday in my view has upgraded the likelihood of the well being drilled in H1 next year which if the CPR is in any way accurate could produce a value that would dwarf the Reabold share price, on a risk reward basis it looks like option money with massive upside…

Reabold today announces its unaudited interim results for the six months ended 30 June 2023.


·    Good progress with onshore UK licence, PEDL183:

 The PEDL183 Joint Venture partnership (the “JV”) agreed a specific well path for the West Newton B-2 (“WN B-2”) well, which has been approved by the East Riding of Yorkshire Council. The operator has received the necessary permit variation from the Environmental Agency for the use of oil-based fluids at the A and B sites. Drilling and testing of the B-2 well is expected by June 2024, once Rathlin (UK) Energy Limited’s (“Rathlin”) funding solutions have been confirmed as operator of the licence.

 Reabold identified Crawberry Hill, a significant potential discovery, on PEDL183, which was drilled by Rathlin in 2013 and could add materially to the already significant resource within the licence.

·    Acquisition of 16.2% equity interest in LNEnergy Limited (“LNEnergy”) which was further increased to 17.6% post period end for a total consideration of £2.5 million, £1.0 million of which was in cash and £1.5 million of which was satisfied via the issue of 810,810,811 new ordinary shares of 0.1p each in the capital of the Company (“Ordinary Shares”). Recent indicative national and regional approvals have enabled the Colle Santo gas field to enter operational phase:

 LNEnergy’s primary asset is an exclusive option over a 90% interest in the Colle Santo gas field, a highly material gas resource with an estimated 65bcf of 2P reserves[1], with two production wells already drilled. The field is development ready, subject to approvals and permits.

 LNEnergy expects all the necessary approvals to be received in order to carry out the Early Production Programme allowing early revenue generation from the Colle Santo project.

 Reabold retains an option to increase its stake in LNEnergy to 26.1% for consideration of £1.8 million, which expires on 29 December 2023.

·    Reabold North Sea licences portfolio management:

 Post period end, Reabold announced the high-grading of its UK North Sea offshore licences and will retain its interests in four key licences in the North Sea, including the key Dunrobin prospect on licence P2478.

 A CPR prepared by RPS was released in April 2023 covering all four retained licences, which included 201 mmboe[2] aggregate gross unrisked[3] Pmean Prospective Resources on licence P2478.

 Completed acquisition of Simwell Resources Limited (“Simwell Resources”) in January 2023 which provided valuable data and added to Reabold’s understanding of the Zechstein play, which is fundamental to the Company’s onshore assets of West Newton and Crawberry Hill.

·    Commencement of a share buyback programme in April 2023 for a maximum amount of £750,000 as part of the proposed £4.0 million return to shareholders announced via RNS on 3 October 2022[4].

·    Net cash of £2.6 million at 30 June 2023. Cash inflows expected in Q4 2023 as part of the contingent consideration receivable arising from the sale of Corallian to Shell. For further details of the contingent consideration receivable, please see Review of Operations – UK offshore, and Note 11.

Sachin Oza and Stephen Williams, Co-CEOs of Reabold, commented:

“We are encouraged with progress made across the Reabold portfolio in 2023. The prospects for LNEnergy have developed rapidly since May 2023, when we re-invested part of the proceeds from the disposal of the Victory asset in the Colle Santo project. The post period end indicative approvals from both the regional and national regulators are key steps to unlocking the material potential of the Colle Santo gas field and to near-term production. We also made good progress with UK onshore licence PEDL183 and anticipate commencement of drilling at the well during H1 2024. The identification of an existing discovery, Crawberry Hill, also on PEDL183, confirms the significant prospectivity in the licence.

“The next 12 months will be exciting for Reabold with anticipated newsflow on our key assets and the expected receipt of the £9.5 million contingent payment from Shell (as the balance of the consideration for the Victory project). We will continue with our disciplined strategy to allocate capital to undervalued oil & gas assets where their development benefits from being close to existing infrastructure and there is a clear path to monetisation.”

Union Jack Oil

Union Jack has provided an update on West Newton PEDL183, in which the Company holds a 16.665% economic interest.

The Company has been informed that the Environment Agency has issued the variation of the permit for the West Newton B wellsite, which allows for the use of oil-based fluids within the Permian formations during drilling and testing operations.

Independent technical studies have clearly demonstrated that the use of oil-based drilling fluids will be a key factor in enhancing flow rates from wells drilled in the West Newton field.

Plans for the proposed horizontal well from the West Newton B site are underway and commencement of operations is targeted for H1 2024.

Well path selection and the engineered design have been completed, wellbore casing has been purchased and the Operator, Rathlin Energy (UK) Limited, has approached drilling rig and other key service contractors to determine their availability.

As announced on 29 September 2022, the Competent Person’s Report on West Newton indicated gross 2C unrisked technically recoverable resources of 197.6 bcf of sales gas, with an estimated 85.5% geological chance of success.

Union Jack is fully funded for the drilling and testing of the horizontal well.

David Bramhill, Executive Chairman of Union Jack commented: 

“A future West Newton development will benefit from being located in an area that provides access to substantial regional infrastructure and could deliver significant volumes of on-shore low-carbon sales gas into the UK’s energy market.

“Domestically produced natural gas will remain a much-needed part of the energy mix, as the UK seeks to reduce its reliance on imported products.

“Union Jack looks forward to the drilling of a 1,500 metre horizontal well and unlocking the significant potential of the West Newton project.”

For Union Jack the situation is much simpler but the upside remains as exciting from West Newton where their stake also makes the current share price look unbelievably low. With recent Governmental actions appearing to be supportive of the UK hydrocarbon business, as Chairman David Bramhill points out above I see the combination of both capital and income attractions of UJO to be quite outstanding. 

Longboat Energy

Longboat has announced its unaudited interim results for the period to 30 June 2023.

Helge Hammer, Chief Executive Officer of Longboat Energy, commented:

“Earlier this year, Longboat announced a transaction with Japan Petroleum Exploration Co, Ltd to form a joint venture company in Norway which involved JAPEX making a substantial investment in our Norwegian subsidiary and providing a financing facility, thereby significantly strengthening the Company’s financial position.  The transaction completed in mid-July and the now jointly controlled company was renamed Longboat JAPEX Norge AS.

Longboat JAPEX will pursue a growth-led strategy on the Norwegian Continental Shelf to create value predominantly through the acquisition of production and development projects and growing 2P reserves to reach a significant production level within three to five years. Furthermore, the joint venture will continue to pursue exploration and appraisal opportunities with the target of drilling one to three wells per year.

In early August the drilling of the OMV operated Velocette well commenced targeting a large gas-condensate prospect on the eastern flank of the Utgard High in the Norwegian Sea. In mid-September we announced a minor gas discovery where the well encountered hydrocarbons in the primary target in Cretaceous turbidite sands in the Nise formation. While the discovery is not considered to be a commercial prospect, the licence contains numerous other prospects which have been de-risked by the presence of gas in good quality reservoir in the Velocette well.

Earlier this month we announced an expansion of our operations in SE Asia through the acquisition of privately held Topaz Number One Limited, thereby increasing our interest in Malaysian 2A PSC to 52.5% which includes the giant Kertang target, with James Menzies and Pierre Eliet also joining the Company to lead our growth in the region.”

Longboat is changing, with the JAPEX JV in Norway giving necessary bulk in that region and with a starter pack of acreage should be able to accelerate the process. But more importantly is now the push into SE Asia which will be crucial, I don’t know Pierre Eliet but I do know James Menzies and if anyone can do well there then he can.

Operational Highlights 

Formed a joint venture company in Norway with Japan Petroleum Exploration Co, Ltd (“JAPEX”). JAPEX made a significant investment with an initial $16 million subscription, with a further $4 million contingent payment, and providing a $100 million financing facility


Entered into an agreement through the new Norwegian joint venture to acquire its first producing assets in Norway

 4.80% unitised interest in the Statfjord Øst Unit

 4.32% unitised interest in the Sygna Unit

This acquisition, when completed, represents long-term cash flow with the fields expected to produce until late 2030s

Expanded our business in SE Asia with the entrance into Malaysia through the award of a production sharing agreement for Block 2A. Later announced the acquisition of a further interest in Block 2A and the employment of two senior executives, James Menzies and Pierre Eliet


Announced a small non-commercial discovery in the Velocette well which, through the presence of reservoir and hydrocarbons, has de-risked the other prospects on the licence


Announced the award in the APA licensing round of a 30% licence interest in a firm well on the Kjøttkake Lotus prospect, building our position in the prolific Kveikje area



Financial Summary


Longboat Energy plc had gross cash at 30 June 2023 of £2.1 million (30 June 2022: £22.5 million), which excludes cash of £2.2 million in Longboat Energy Norge AS (shown on the balance sheet as “held for sale” pending completion of JAPEX JV (completed post period end, 14 July 2023)


Longboat Energy Norge AS had exploration financing facility (“EFF”) drawings of £33.7 million (30 June 2022: £15.7 million) resulting in a net debt position of £31.5 million. The majority of EFF drawings (£32.0 million) will be repaid from the Norwegian Government’s tax rebate of £35.5 million, due in November 2023 


Longboat Energy plc’s post-tax loss for the period was £6.2 million (30 June 2022: £1.6 million), total comprehensive loss for the period of £7.9 million (30 June 2022: £1.7 million).  Includes write off of Egyptian Vulture of £10.5 million


 Touchstone Exploration

Again in any case you didn’t see the blog yesterday I was delighted to be able to spend some time in the studio with Touchstone CEO Paul Baay. The link to what was a fascinating chat is below.

Core Finance CEO Interview: Paul Baay, Touchstone Exploration

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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