Oil Man Jim Company Oil & Gas Update’s 29th September 2019

Three companies currently are underway with their exploration drilling programmes: I3 Energy (I3E)Petro Matad (MATD) and Hurricane Energy (HUR), the latter of which announced the spud of its Warwick West well last week. MATD awaits the test results of Heron-1 and the initial drill results of Gazelle-1. I

I3E is awaiting the spud of its Serenity exploration well, with the Liberator appraisal well delayed pending the processing and interpretation of new seismic data. Pending the outcome of the drills, I think the latter two are purely for trading.

Another company operating in the North Sea, Independent Oil & Gas (IOG) announced the settlement of its 100 million Euro bond raise, fully funding them for their core project next year. In the meantime, data acquired from the Harvey well is now undergoing analysis to generate a revised technical assessment of reservoir gas volumes and deliverability.
IOG also announced interim results and set out their future news flow which will include: completion of the farm-out to CalEnergy Resources; first investment decision and commencement of Core Project Phase 1 project execution; full Harvey appraisal well results; and CalEnergy Resources option to farm into Harvey. I’m starting to warm towards IOG and it’s also encouraging to see Lombard Odier keep buying too.
Onshore UK, Alba Mineral Resources (ALBA) and UK Oil & Gas (UKOG) announced the arrival of the rig at Horse Hill. The spud of the Portland horizontal well is expected imminently and drilling operations are expected to be completed in approximately 60 days. UKOG also announced the conversion of a further £400,000 of the Riverfort/YA II loan into shares, reducing the loan balance to £4.5 million.
Empyrean Energy (EME) and Coro Energy (CORO) announced the mobilisation of the jack-up rig from Singapore, which is now en route to the location for the first well offshore Indonesia. The campaign will comprise of two wells, one to appraise the Mako gas field discovery and one to both appraise the Mako gas field at another location and test the deeper Tambak prospect. EME also announced a £365,580 raise before costs.
Petrel Resources (PET) announced the appointment of Michel Fayad to the Board. They now aim to acquire and fund a big project in the Middle East & North Africa region. I stated Petrel as favourite several times in the blog at around 1p, it’s now at 8p – and perhaps going higher still.
Block Energy (BLOE) announced an operations update  No surprises in it though for readers of this blog.  Instead of the touted 1,100 barrels of oil per day, production actually turned out to be 230 barrels of liquid a day with a water cut of 78%. That’s just 50 barrels of oil per day, but still outdoes Reabold Resources (RBD), who after a year of supposed production and announcements of wells coming in at several hundred barrels a day, we’re only able to announce current net production of 20 barrels of oil per day. Again, no surprise to blog readers. RBD also released interim accounts showing average production in California of 42 bopd in the first half with costs consuming 56% of revenue. They claimed production of 142 boepd for July and August, but how much was gas, which in the US currently is worth very little? Unlike the first 6 months of the year, they didn’t state oil production numbers for July and August and why did they disclose only 20 bopd net as current production in a September RNS? Further questions asked in this blog in July regarding the £3 million offshore purchase of the California earn-in agreement also are being asked by others now, so let’s see what comes out.
Chariot Oil & Gas (CHAR) announced its first-half results. The 30 June cash position was $12.1 million, with no debt and all commitments fully funded. The market capitalisation, by comparison, is £14 million, so their licences in Morocco, Brazil and Namibia are in the price for very little considering the Lixus licence alone has audited total remaining recoverable resources in excess of 2 trillion cubic feet of gas. They’re looking to farm out all these licences and, given their ability to farm-out prospects previously, there is big upside here.
Borders & Southern (BOR) announced results for the six months ended 30 June and the company is now actively pursuing a farm-in partner for its Darwin project. Industry reach has been extensive and they continue to present what they say is their robust technical and commercial proposition to new companies. If they can pull off a farm-out of their Falkland’s licences, the potential is huge. The market capitalisation is just £7 million, but assets in the balance sheet are over $296 million
Bahamas Petroleum Company (BPC) announced interim results. They’ve entered into a framework agreement with Seadrill for the provision of a rig in the first half of 2020; they’ve appointed Halliburton for integrated well services and BakerHughes for provision of various well-related equipment. There’s a £10.25 million conditional convertible loan note to underpin finance necessary for the drilling of the well if required, and additional finance sources are being evaluated. They say the farm-in process continues.
To give them insurance, they’ve now got AGM approval for the temporary authority for issue of new shares to further contribute to the financing of drilling, if required. I said last weekend that the most likely outcome here is a large discounted placing and that the shares were looking expensive. Now they’ve come off quite a bit since then (the market cap was,£41 million a week ago, it’s £32 million now), but it still looks expensive on an un-financed basis. I do think it could be interesting once the fundraising is done, so it’s one very much to keep an eye on
Lansdowne Oil & Gas (LOGP) announced interim results. As they stated, “The key issue facing the Company is the delay in the delivery of the loan funds from APEC, as called for under the Farm-Out Agreement.” The last extended backstop date is this Monday and it won’t be looking good for them if the cash has still not arrived.  Same applies to Providence Resources (PVR) too.
Anglo African Oil & Gas (AAOG) issued its half-year report. Well re-entry operations have started and with an operational team in place and a funding package finalised, they’re now concentrating on signing a rig contract for the sidetrack into the Djeno. Difficult to know what’s going to happen here, but it’s always worth keeping an eye on, just in case they actually do pull it all together.
In other news, RockRose Energy (RRE)Serica Energy (SQZ)Union Jack Oil (UJO)Prospex Oil & Gas (PXOG)United Oil & Gas (UOG)Jersey Oil & Gas (JOG)Lekoil (LEK) and Curzon Energy (CZN) announced interim results, Attis Oil & Gas (AOGL) announced interim results and an update on investee company, Petroteq (PQE, PQEFF)Columbus Energy Resources (CERP) announced updated prospectivity for its Saffron prospect, Cabot Energy (CAB) announced an update on Italian assets, Oilex (OEX) announced termination of arbitration proceedings, acquisition of Cooper-Eromanga acreage and commencement of the Cambay sale process, Range Resources (RRL) announced its annual financial report, Andalas Energy & Power (ADL) announced an operations update, Aminex (AEX) announced a Ruvuma farm-out update and acceleration of drilling, Solo Oil (SOLO) announced a Ruvuma update and interim results, and Europa Oil & Gas (EOG) announced the Irish UN Climate Action speech and the statement by the Irish Offshore Operators’ Association.

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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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