Oil Man Jim Company Oil & Gas Blog, Sunday 13th September 2020

Starting with the positive news, 88 Energy (88E) announced the final petrophysical interpretation for Charlie-1, which it says substantially upgrades net hydrocarbon pay in the well.

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A data room for the next Project Icewine farm-out is to be opened in the near term and the company also is looking to agree farm-outs on both the Peregrine and Yukon acreage with a view to drilling next year.  88E returned a nice, easy 100% profit on the run up to its last drill (an opportunity which I flagged up several times in the blog) and once farm-outs and financing are done, it has the potential to be another good one.

Independent Oil & Gas (IOG) announced a possible all-share offer for Deltic Energy (DELT).  They look like a potential good fit and an offer from IOG certainly has a much greater chance of success than the one from Reabold Resources (RBD), who was firmly shown the door.  Unsurprisingly so, given the overall poor quality of its assets, which again was demonstrated last week when it was announced that Tamaska Oil & Gas (TMK – Australia) has decided not to proceed with the farm-in transaction relating to the EX-10 Parta licence.

I mentioned three weeks ago in the blog the future funding needs of Reabold Resources and Union Jack Oil (UJO) and received quite a bit of abuse, particularly regarding the latter.  Since then the UJO share price has declined from 0.2680p to 0.1775p and it admitted last week that there is to be a fundraising.  There’s a sense of deja vu here now.

Baron Oil (BOIL) issued interim results.  Work in Timor-Leste has stalled in the absence of the original seismic data, however, once COVID issues have been resolved, it believes drilling of the El Barco-3X well in Peru should be able to move forward.  In reality, there’s probably not much going to happen here until next year.

Chariot Oil & Gas (CHAR) released what it said was a significant resource upgrade on Anchois, Morocco  The audited total remaining recoverable resource has increased by 148% to in excess of 1 Tcf for Anchois, comprising 361 Bcf 2C contingent resources and 690 2U prospective resources.  The more important point is can they find a farm-out partner and drill it.

Sound Energy (SOU), now around 1.5p, is one I’ve been warning about since it was in the 40s.  It’s nearly at the end now and the half-year report issued last week stated “material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern.”  Failure is the usual outcome for most of these companies, even those which appear to achieve success for a time: Tullow Oil (TLW) announced half-year results last week and also emphasised material uncertainties on going concern, having recorded a loss after tax of $1.3 billion, impairments totalling $1.4 billion pre-tax and net liabilities of over $138 million.  It’s so important to understand and accept reality here.  These types of shares are for short/medium term trading only.  Longer term investment will invariably result in substantial losses.

I’ve also been warning about Hurricane Energy (HUR) since the end of last year and received plenty of abuse for doing so, particularly from the promoter types who have been swarming around it of late.  Reality is it was quite easy these last few weeks and months to see what was going to happen.  Latest news is that the company’s unaudited estimate of 2C contingent resources in the Lancaster field has been reduced to 58 MMbbls remaining from 486 MMbbls in the 2017 CPR.  The share price is now down from the 30s to under 3p.

I3 Energy (I3E) issued its interim report.  Notwithstanding praise from paid sources, its shares are already trading well under the 5p price of the last financing and the only ones in profit now are those with the repriced 0.01p warrants, including the management.  Information provided by the company last time regarding its North Sea project turned out to be, shall we say, less than accurate.  I see no reason why the current information released regarding the Canadian acquisition should be any different.

In other news, Empyrean Energy (EME) announced a £640,500 placing plus the first £200,000 under the £10 million equity placement facility (this type of financing rarely turns out well), PetroTal (PTAL) announced it is ready to reopen the Bretana oil field as soon as the ongoing discussions between the communities and the Government of Peru have been ratified (unlikely to fully resolve the local issues which have been troubling them), Pharos Energy (PHAR) announced the TGT full field development plan approval (enables it to put plans in place to commence the drilling of the six new producer wells on TGT starting in Q4 2021), Pantheon Resources (PANR) announced a Talitha production unit and operational update (still hoping to conclude a farmout by the end of autumn and drill the first Talitha well this winter), Serica Energy (SQZ) announced interim results (it’s still making money and paying a dividend), Cadogan Petroleum (CAD) announced its half-year report (uninspiring) and Parkmead Group (PMG) announced its new UK offshore blocks award (it picked up interests in another four).

If you’re interested in more, in particular my actual trading ideas, try out the private blog at https://www.oilnewslondon.com/oilman-jim

(The opinions expressed here are those of the author, a columnist for Share Talk.)

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(The opinions expressed here are those of the author, a columnist for Share Talk.)

The author holds one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research. This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.


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