Another busy week for oil and gas company news. Starting with the most controversial, Anglo African Oil & Gas (AAOG) announced a proposed fundraising of £8.25 million in two parts.
The first part is a placing of 52,288,347 shares at 5.2p with “institutional investors,” perhaps more likely someone covering a large short position taken out because they knew the company would issue shares to them at a lower price in a placing.
The second part of the fundraising, covering not less than 106,331,011 shares, appears to be a death spiral where the “institution” sells shares in the market and pays 80% of the sale proceeds to the company. Anyone could do that, some people might think, and for a lot less than 20%, but surprise, surprise, although not disclosed, it appears that the Chairman and the “institution” are connected.
Referring back to last week’s blog, one reader said that AAOG did not claim a 100% chance of success for the work-overs of TLP-101 and TLP-102. Unfortunately, they or their NOMAD, finnCap, did. The false claim is contained in finnCap’s “Way down deep” IPO research report dated 30 January 2017, with the note: “Source: Company reports, finnCap estimates.” Investors in AAOG were being misled right from the start. Target price: zero.
Back to more normal companies and commencing with UK offshore, Rock Rose Energy (RRE) announced the completion of their acquisition of 100% of Marathon Oil’s North Sea companies, doubling RRE’s production to around 22,000 boepd. Total cash on the balance sheet is now approximately $370 million, equivalent to approximately $28 per share and trading is expected to recommence later this month at a level significantly higher than 815p, the price at which the shares were suspended in February.
Independent Oil & Gas (IOG) announced a corporate update. The rig is expected to be on location at Harvey by the end of month and is forecast to take up to two months. IOG’s core project across six discovered North Sea gas fields requires c. £450 million funding and a farm out is essential, but so far no hard news on that. RRE bid 20p per share for the company in March, but the Board of IOG rejected the offer, preferring to massively dilute the shareholders instead with a 10p placing. What might be the challenge here is what appears to be a chain of fraudulent financial backers. Avoid imo.
I3 Energy (I3E) announced a contract with Baker Hughes for equipment and service. Encouragingly, Baker Hughes has agreed that £3 million of the contract payments will not become payable until I3E has received its first oil sales revenues. In return, Baker Hughes is being granted warrants at 56.85p per share. Previously issued warrants to participants in the £22 million junior faculty and £2 million placing have exercise prices of 40.7p, 48.1p and 55.5p. Exercise of these warrants will provide development finance for the company and there should be plenty of positive news in the coming weeks to draw new buying into the market and push the share price higher.
Hurricane Energy (HUR) announced its decision to plug and abandon the Warwick Deep well. The rig will now move to the Lincoln Crestal well, the second of a three-well programme.
Still, in the North Sea, Cluff Natural Resources (CLNR) announced an update in relation to the Dewar prospect on licence P2352. Dewar is estimated to contain up to 272 million barrels of light oil with P50 prospective resources of 39.5 million barrels. The prospect is drill ready and CLNR has now commenced a farm-out process.
Back onshore, IGas (IGAS) announced plans for up to two exploration/appraisal wells, targeting 300 million barrels of oil in place within PEDL 235. These wells are being planned as a result of data from the discoveries in the Weald Basin at Horse Hill (operator and majority owner UK Oil & Gas (UKOG) and will introduce the relatively little known IGAS to a much wider investment audience.
Meanwhile, Reabold Resources (RBD) announced a placing to raise £2.65 million at 1.1p per share to fund further operations at West Newton. RBD also announced a capital reduction to enable the company to return surplus capital, undertake share buybacks and pay dividends. With no realistic possibility of any of this happening anytime soon, that announcement might be seen as a spoof.
Offshore Ireland, good news for Europa Oil & Gas (EOG), Lansdowne Resources (LOGP), San Leon Energy (SLE), Petrel Resources (PET), Predator Oil & Gas (PRD) and Providence Resources (PVR). The Government of Ireland has decided not to proceed with the Climate Emergency Bill, paving the way for further large finds such as the Kinsale and Corrib gas fields. EOG also announced that they are close to being formally awarded an offshore exploration permit on the Atlantic Margin of Morocco, subject to the completion of a bank guarantee.
Upland Resources (UPL) has already organised its bank guarantee in Tunisia and announced the formal signing of the permit documents for the 4,004 square kilometre Saouaf hydrocarbon exploration and appraisal licence.
Fellow Tunisian operator, Serinus Energy (SENX), announced news too. The company has started its first work-over of the CS-3 well at the Chouech Es Saida field in Tunisia and daily gas production in Romania now is 10.3 million cubic feet per day.
Amongst other companies, Nostra Terra Oil & Gas (NTOG) announced yet another seven-figure loss (expect yet another placing soon), Prospex Oil & Gas (PXOG) announced the failure of its Bainet-2 well, Mosman Oil & Gas (MSMN) announced the sale of its Strawn production facilities and leases, Highlands Natural Resources (HNR) announced a trading update, Lekoil (LEK) announced a MoU signed for further development at Otakikpo, Block Energy (BLOE) announced an oil storage agreement, Zenith Energy (ZEN) announced its audited annual results and 2019 CPR, ADM Energy (ADME) announced director selling, JKX Oil & Gas (JKX) announced Well 5 initial test results, Cadogan Petroleum (CAD) announced the application for a production licence, Global Petroleum (GBP) announced further appeals against environmental decrees, Predator Oil & Gas (PRD) announced a Trinidad progress update and Victoria Oil & Gas (VOG) announced an operations update.
Finally, Eco (Atlantic) Oil & Gas (ECO) announced the spudding of the first exploration well on its Jethro-Lobe prospect, offshore Guyana. It is estimated the well will take up to 40 days to drill. Jethro Lobe is the first prospect to be drilled as part of a two-well programme and will be immediately followed by the drilling of an exploration well on the Joe prospect. ECO is fully funded for its share of up to six potential exploration or development wells on the Orinduik Block. Currently 71.4p, an opportunity now presents itself to buy at significantly less than the 80p price in the recent oversubscribed placing.
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