UK Oil & Gas started the week with a Horse Hill update. So far they’ve successfully drilled 2,016 ft within the Portland reservoir’s most oil productive zone.
It’s a clever PR, because the news over the weekend was that of a rig engine fire. They’re fitting a new rig engine now, expected to be completed over the coming days, then the remaining 1,200 ft horizontal section will be drilled.
Drilling is expected to be completed by mid-November, at which point they will immediately complete, clean-up and flow test the well. The share price is still held back by Riverfort selling, but as this eases up I expect UKOG to go higher.
Rose Petroleum announced a placing to raise £1.25 million at 1.1p. The directors are buying a 10% interest in a 317-acre lease from themselves, but it actually equates to just a 2.217% working interest in the spaced drilling unit. There’s no mention of the net revenue interest either. At say 75%, they would receive only 1.66275% of revenues before state severance taxes of 6.6%. So, net 1.553%.
It’s interesting they don’t mention the word “shale” in the RNS, an area in which US companies are trying to divest. And it’s also worth remembering that these US projects which show up in London these days usually are doing so because they can’t raise funds in North America.
Bahamas Petroleum Company announced it had raised $11.4 million at 2p per share via a placing and open offer. However, the Company’s present estimate of the total cost for the drilling of the initial exploration well is in the range of $20 million to $25 million and they warn that and I quote “in circumstances where suitable funds are not raised via the Conditional Convertible Notes, or if a farm-out is not secured, the Company would likely not have sufficient cash to complete the drilling of the planned initial exploration well in 2020.” As I’ve said several times before, I wouldn’t consider this until the well is fully financed. If it isn’t drilled next year, they lose the licence.
IGas Energy has had a difficult few days following the announcement that the UK Government has announced a moratorium on “fracking” in Britain. The shares hit a low of 21.5p on Monday before stabilising in the low 30s, at which price the company is capitalised at around £40 million.
Some say the moratorium is only for the duration of the election campaign, but check out the actual betting odds for the general election and the favourite odds-on outcome now is no overall majority / a hung parliament. Does anyone really think that a Labour/LibDem/Green coalition would reinstate “fracking”?
There’s also been an interesting development at Cabot Energy, which announced the proposed cancellation of its AIM admission next month. On Monday, Eric Krafft of Monaco bought 10.96% of the company. The share price now has stabilised around 2p and further news is awaited with interest. Perhaps it’s not all over yet?
Moving on, news from all the other companies who have made announcements so far this week will be covered in the Sunday blog and I’ll be back on Saturday with another podcast focussed on whatever interesting looking news comes out in the meantime.
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