Share Talk Weekly Energy Sector News – 4th September 2021

Highlights from the small-cap Oil & Gas sector this week

Ida barreled into Cuba last Friday after intensifying into a hurricane with 85 miles per hour (130 kph) winds, according to the National Hurricane Center (NHC). It could become “an extremely dangerous major hurricane,” and threaten the U.S. Gulf Coast “catastrophic wind damage,” the NHC said.

Top Gulf of Mexico oil producer Royal Dutch Shell Plc (RDSa.L) said it suspended production at seven offshore platforms and two processing plants onshore. BP Plc (BP.L) stopped work at four

platforms. Both said they were evacuating offshore workers.

Chevron Corp. (CVX.N) said it was shutting in production at its six Gulf of Mexico platforms and evacuating all workers. BHP (BHP.AX) and Equinor (EQNR.OL) pulled workers from offshore facilities, spokespeople said. read more

Oil companies had shut 59% of Gulf oil production and 49% of natural gas output, according to the U.S. offshore regulator. A total of 90 offshore facilities were evacuated and 11 drilling vessels moved out of harm’s way.

Zak Mir talks to David Minchin, CEO of Helium One, as his company announces the start of Phase 2 exploration work at its 100% owned Rukwa Project in Tanzania.

Helium One (AIM: HE1) announced the completion of its 2021 exploration drilling campaign with significant new data to move rapidly to Phase 2 exploration work at its 100% owned Rukwa Project in Tanzania.

The US Bureau of Safety and Environmental Enforcement (BSEE), reported that 95.7 percent of Gulf oil production and 93.8 percent of natural gas production had been halted at 12:30 PM ET today. Among those who moved in recent days were Shell, BP and Chevron as well as BHP and Equinor to evacuate workers from 288 out of 560 manned platforms. This region accounts for approximately 17pc total US crude oil output and 5pc dry-gas production.

Union Jack Oil PLC (UJO.L) has updated on the West Newton project, near the river Humber, where testing has identified a significant hydrocarbon column. According to the company, a column measuring approximately 118m was found after drilling at West Newton B.  A 44-meter section of Kirkham Abbey was perforated in West Newton B-1z and hydrocarbons were produced. The company described the process as good quality gas, liquid hydrocarbons, and it was rediscovered.

Union Jack holds a 16.665% economic interest in PEDL183, encompassing an area of 176,000 acres and located within the Western Sector of the Southern Permian Basin, onshore UK, North of the river Humber. PEDL183 contains the West Newton-A1 (WNA-1), WNA-2 and WNB-1z hydrocarbon discoveries.

Mosman Oil and Gas Ltd (MSMN.L) updated on the preparations for the Winters-2 well, in east Texas, where drilling is due to start soon. The rig contractor has advised of the current challenges to secure rig crew due to the ongoing effects of the COVID-19 pandemic in the USA.

As soon as a firm drill date has been confirmed, further announcements will be made in regard to the commencement of drilling. Mosman, through its subsidiary Nadsoilco LLC, is the operator of this project. It is targeting the Wilcox Formation.

Hurricane Energy PLC (HUR.L) Offer for Convertible Bonds & Company Update, the Offeror’s invitation to holders of Hurricane’s U.S.$230,000,000 7.50 per cent. Convertible Bonds due 2022 bearing ISIN: XS1641462277 (the Bonds) (of which U.S.$230,000,000 in aggregate principal amount are outstanding), to tender their Bonds for purchase by the Offeror for cash (the Offer). The purpose of the Offer is to utilise a portion of the Group’s available cash balances to purchase Bonds prior to their maturity as part of a proactive liability management exercise on the Group’s outstanding debt.

Lancaster Production Update; As of 29 August 2021, Lancaster was producing 11,100 bopd from the P6 well alone with an associated water cut of 31%. The 24th cargo of Lancaster oil, totalling approximately 505 Mbbls, was lifted in late August 2021.

Malcy’s Blog – Oil price, Jersey Oil, UJO/Reabold, Sound, Hurricane, Lamprell, Eco Atlantic, Zenith & finally

Canadian Overseas Petroleum Ltd, (COPL.L) informed investors that recently acquired Wyoming assets continue to perform better than expected. At August 31, gross oil production was 2,720 barrels per day. This equates roughly to 1,604 barrels net of COPL, and is 123% more than the April rates. COPL reported that it is 24% higher than the rates just two weeks ago.

The enhanced performance is due to an ongoing enhanced gas injection program, which began on April 1, and was also the effective date for COPL’s deal with Wyoming assets.

Arthur Millholland, President & CEO, commented: Our Wyoming assets continue to perform well beyond our initial expectations as I indicated in the August 17th operating update. Crude oil production has increased 123% from April 1st, and continues to increase weekly. In fact, crude oil production has increased by 24% from our last update just two weeks ago.

Block Energy PLC (BLOE.L) Chair Philip Dimmock stated that the board looks forward to refocusing on operations after an activist revolt was defeated at a shareholder general meeting. The activist who requisitioned GM demanded an independent forensic investigation into company affairs. 93.7% of votes were against the resolution.

88 Energy Ltd (88E.ASX.L) has confirmed that its equity placement closed. This was the maximum amount allowed without shareholder approval. As it plans to move forward with its plans for the Merlin project and other opportunities in Alaska’s North Slope region, the Alaska-focused oil explorer initiated the placing earlier in the week. The Merlin-2 appraisal well is slated to be completed in Q1 2022.

To raise the equivalent amount of PS12.71mln, 855.8mln shares will be sold to investors at 1.49p (2.8 Australian Cents).

Chief executive Ashley Gilbert stated that “Completion this placing positions 88 Energy strongly, as planning continues for drilling the Merlin-2 appraisal well.”

TPI provides its latest research note on Zephyr Energy plc 

Zephyr Energy Plc (ZPHR.L) reported positive results from its State 16-2LN CC well in Paradox Basin (Utah), U.S.A. This yielded “strong evidence” to support further development.

Rocky Mountain oil and the natural gas company stated that the wellbore diagnostic fracture inject test (DFIT), provided strong evidence that the reservoir at Cane Creek could be developed as a hydraulically stimulated resource (HSRP). The well was described by the company as a proof of concept.

San Leon Energy PLC (SLE.L), updated about its investment in the Oza fields. A re-entry well has flowed 2,463 oil barrels per day during testing. Two more zones are being tested and the well is expected to go on commercial production.

MetalNRG PLC (MNRG.L) Operational Update included the update that BritNRG is currently producing an average of 3,500 bbls/month compared with production of fewer than 1,500 bbls/month averaged in Q1 2021. BritNRG sold 3,780 bbls in July at an average price of USD 73.88 per barrel (equivalent to USD 280,000 of gross revenue). Similar levels of sales have been achieved in August with monthly oil sales projected to exceed 4,000 bbls.

BritNRG now expects the revenues from the Whisby site to be in excess of USD 2.5 million per year at current forecast oil prices.

Westmount Energy Ltd (WTE.L) has noted the start of drilling for the Sapote-1 well, on the Canje Block, offshore Guyana. Exxon’s programme, which is being operated by the Stena DrillMAX drillship, is expected to take 60-days to complete with results expected in October. Sapote-1 can be described as an independent multi-layer prospect that evaluates several Upper Cretaceous targets. This prospect is the largest to be drilled on the Canje Block.

Westmount holds an indirect interest in this venture through a share in JHI Associates Inc., which is a minor partner in Exxon’s project.

Malcy’s Blog – Wentworth Resources, Challenger Energy & Zephyr Energy

President Energy (PPC.L), with a diverse portfolio of production and exploration assets focused primarily in Argentina, provides an update in relation to the farm-out agreement in relation to the Pirity Concession, Paraguay.

Jersey Oil and Gas PLC (JOG.L) stated to investors that it plans to develop the Greater Buchan Area Project in the North Sea as the first project fully powered by electricity.

According to the company, it stated that it has received significant interest from stakeholders in working together to make GBA Development an integral part in an area-wide project to electrify. This is a chance to enhance the environmental credentials of this project as well as a way to reduce both capex as well as opex. This is a continuing farm-out partnership process.

Empyrean Energy PLC, (EME.L) signed up a rig to explore Jade in China. The December spud date was set.

China Oilfield Services Limited (COSL), which offered a much lower drilling cost estimate at US$12.3mln compared to the prior estimate of US$18.5mln and a US$7.4mln success based bolt-on to testing, was awarded the contract. Permitting and planning are ongoing. Empyrean stated that COSL confirmed its availability, along with all technical and commercial terms.

Empyrean is the operator of Block 29/11 in China and has 100% working interest during the exploration phase. In the event of a commercial discovery, its partner, China National Offshore Oil Company (“CNOOC”), may assume a 51% participating interest in the development and production phase.

Falcon Oil & Gas Ltd. (FOG.L) provided the results of the production log test at the Amungee NW-1H well (“Amungee”). The results suggest a normalised gas flow rate equivalent of between 5.2-5.8 MMscf/d per 1,000m of horizontal section.

Amungee is located in the Beetaloo Sub-basin, Northern Territory, Australia and the testing conducted is part of the 2021 work programme which is operated by Falcon’s joint venture partner, Origin Energy B2 Pty Ltd., a wholly owned subsidiary of Origin Energy Limited (“Origin”).

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