Share Talk Weekly Energy Sector News – 31st October 2021

Oil prices extended pre-weekend gains on Monday to hit multi-year highs, lifted by tight global supply and strengthening fuel demand in the United States and beyond as economies recover from pandemic-induced slumps.

Goldman Sachs said a strong rebound in global oil demand could push Brent crude prices above its year-end forecast of $90 a barrel. The bank estimated gas-to-oil switching could contribute at least 1 million barrels per day (bpd) to oil demand.

Despite the gas price crisis, Shell and BP oil giants reap huge profits

i3 Energy plc (AIM:I3E) The third quarter of 2021 continued with an intense level of activity across all fronts. Majid Shafiq, CEO of i3 Energy plc, commented: closed the transaction with Cenovus which added circa 8,400 boepd of production to our portfolio and, together with ongoing optimisation of our pre-existing asset base and some smaller transactions, we have managed quarter-on-quarter production growth and are currently producing circa 19,000 boepd.

We are now finalising our capital programme for the rest of this year and for 2022, following which we will commence deployment of free cash flow into an active, operated development drilling programme, which we expect to materially grow our production base into a very positive commodity price environment.

We are also extremely pleased to have commenced dividend payments this quarter and look forward to completing the payment of our H1 2021 dividend on 29 October.

Diversified Energy Company PLC ( LSE:DEC), chief executive Rusty Hutson praised today’s third quarter update as an operational and financial success. The company also confirmed a record for net daily production. The quarter’s third-quarter production was 128,000 barrels per day of oil equivalent, with an exit rate 133,000 boepd.

Hedged earnings were US$92mln, and margins were close to 50%. It stated that the quarter was characterized by higher commodity prices and favorable outlook support for its hedge strategy. It noted that 115 wells were resigned from its Appalachian territory. This is 144% less than the amount required by its agreements with state authorities.

DEC will pay an interim dividend of 4.25 cents per shares for the quarter. This is 13% more than last year.

Malcy’s Flash Blog – Oil price, Zephyr, Longboat, President/Atome, Lamprell, Arrow, Zenith & finally

Union Jack Oil PLC (AIM:UJO) update in respect of ongoing operations and landmark net revenues at the Wressle hydrocarbon development (“Wressle”), located within licences PEDL180 and PEDL182 in North Lincolnshire, on the western margin of the Humber Basin.

Landmark US$1,000,000 net revenues generated it earned from the Wressle fields in North Lincolnshire between mid-August and 20201 was “financially transformative” and that 20201 revenue will “eclipse” the previous year.

Investors were told by the oil and gas explorer that daily production is “well above” the 500 barrels per day goal. The well continues to produce in the natural flow. Union Jack said that production is very profitable at the current oil price.

Chariot Limited (AIM:CHAR) has signed a preliminary gas sales contract with an international energy group, ahead of the development of the Anchois offshore Morocco project. Chariot stated in a statement that a memorandum has been signed regarding key terms for the gas take-off and partnering deals.

Future gas sales agreements for future gas will be for 40mln cubed feet per day for upto 20 years on a take-or-pay basis. This agreement is expected to support the field development.

Shell & BP paid zero corporation taxes on North Sea oil and gas production in three years.

Angus Energy plc (AIM: ANGS) share the updated Competent Persons Report (“CPR”) for the Saltfleetby Gas Field (“SGF”) which reflects the higher revenues expected from the field. The Full Report is available for download in the Presentations section of the Company’s website. 

The CPR, performed by Oilfield International Limited, gives the net present value of the cash flows from the SGF, including the impact from the revised capex, the loan facility debt service costs, the associated royalties and the mandatory hedging. Oilfield International Limited has used a conservative discount rate of 10%. The previous February 2020 report values in parentheses, presenting the values attributable to Angus.

88 Energy Ltd ( AIM:ASX.88E), has contracted Doyon Drilling Inc to use the Arctic Fox rig for drilling the Merlin-2 appraisal well in Alaska. Merlin-2 is expected to be drilled in February 2022. The planned well will reach a depth of approximately 8,000 feet and target reservoirs that could hold up to 652mln barrels of oil equivalent.

In a statement, the company stated that it had identified numerous appraisal drilling locations east of the Merlin-1 well. These locations are where an enhanced reservoir thickness is expected and quality is possible.

Malcy’s Blog – Oil price, Diversified Energy, Chariot, Predator Oil & Gas, Hunting & finally

Oilex Ltd (AIM:ASX:OEX) September 2021 Quarterly Report & Award of Well Management Services Contract for Cambay field, India development. The company announced the execution of a well management contract with a consortium comprising Manan Oilfield Services and Bedrock Drilling.

Under the Project Management Consultant (PMC) contract, Manan / Bedrock will manage the re-fraccing of the existing C-77H horizontal well during Q1 2022 and the drilling of two new fracced horizontal wells (C-78H and C-79H) during H2 2022.

The aim of the re-fraccing of the C-77H well is to demonstrate the ability to achieve production rates of 3-5 times the well’s current production capacity, providing a model for the highest commercial returns from a full development of the EP-IV tight siltstone reservoir. The contingent resources of the EP-IV reservoir have been estimated at 930 BCF of gas and 61 million barrels of condensate.

Providence Resources PLC (AIM:PVR) informed investors that the well site survey of the Barryroe project was now imminent.

The Celtic Voyager survey ship mobilized on 24 October to Barryroe. Once underway, it will take approximately seven days. It will conduct a baseline survey of the seabed, shallow geophysical, and environmental environment. This is an initial step towards the drilling of a well.

 

 

Zephyr Energy Plc (AIM:ZPHR) announced that the US Bureau of Land Management has approved the creation of a Federal Unit of 25,000 acres in the Paradox Basin project, Utah. The Federal Unit will be operated by the company.

This unit will be called the White Sands Federal Unit (WSU) and covers all existing leases that were covered by the company’s historic 3D seismic survey. It also includes the lease that hosts the State 16-2LN CC well.

Zephyr called the move a significant milestone in the development of the Paradox project. The company can now focus on its long-term plans because it has consolidated more than 20 leases under one land agreement.

Zephyr announced Monday that production testing for the State 16-2LN CC well in Utah will start Monday. This is following a smooth and successful process. The well, located in the Paradox Basin’s oil-and-gas-rich Paradox Basin has been stimulated in 14 stages horizontally over 4,020 feet in the ten days that have passed since the last update.

Mosman Oil and Gas Ltd ( AIM.MSMN ) confirmed earlier in the week that drilling has begun at the Stanley-5 well, Polk County, East Texas. Stanley-5 is a well for development that targets the Yegua Formation. It will be drilled to a depth down to 5,000 feet.

Updated on its asset located in the Amadeus Basin, central Australia. In a statement, the company stated that it continues to explore the Amadeus Basin in central Australia. This includes the acquisition of airborne gradiometry and the related geological interpretation work.

Longboat Energy (LON:LBE) announces a minor oil discovery with the Mugnetind exploration well in licence PL906 (Company 20%) in the Southern North Sea.

The exploration well 7/11-14 S encountered hydrocarbons in the Upper Jurassic Ula Formation. The Ula formation was reached at a vertical depth of 3,985 metres below sea level and consisted of a 28 metre gross section with 14 metres of net sandstone of moderate to good quality. The reservoir section in Mugnetind is thinner than predicted as we encountered a thick coal layer immediately under the reservoir. Mugnetind was drilled on a seismic anomaly, which predrill had been identified as either hydrocarbon filled reservoir or coal.

Based on the operator’s preliminary estimates the Mugnetind discovery contain recoverable resources between 5 and 11 MMboe, which is not considered to be commercial in isolation.


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