Share Talk Weekly Energy Sector News Round-Up, 20th March 2022

After being overtaken by Russia in December 2018, Saudi Arabia has reclaimed the top spot as China’s largest crude supplier. Russian shipments fell 9% due to a reduction in import quotas, which led independent refiners in Russia to reduce their purchases.

The arrivals of crude oil from Saudi Arabia totalled 14.61 million tonnes in January-February. This is equivalent to 1.81 billion barrels per day (bpd) compared to 1.86 million bpd one year earlier, according to data from the General Administration of Customs on Sunday.

U.S. oil firms reduced the number of active U.S. oil rigs this week, even though crude prices continued to trade above $100 per barrel after Russia’s invasion of Ukraine. This has fueled global energy supply worries. This was the second drop in oil rig count over the past three weeks. It had fallen three times in the week ending March 4, rose eight in the week ending March 11, and dropped three in the week ending March 18. Despite the drop in oil rigs, the total number of rigs remained the same because drillers added some natural gases this week

Six months after being rejected by the environment regulators, Shell has presented new plans to create a large gas field in the North Sea. This will help Britain reduce its dependence on foreign suppliers. According to FTSE 100, the Jackdaw Field, located about 250 km east of Aberdeen, should be operational by 2025. It could make a significant contribution to the UK’s energy security and be developed with low carbon emissions.

LEKOIL (AIM: LEK), provided the following corporate and operational updates. Offer by Lekoil Nigeria Limited (“Lekoil Nigeria”) to purchase ordinary shares in the Company (the “Offer”) The Company notes the announcement of Lekoil Nigeria that it has suspended the Offer. The Company will update its shareholders when it has further information about this matter.

MetalNRG plc (LON: MNRG) a further update in respect of the civil legal proceedings in the English High Court against Brit Energy Holdings LLP, Pierpaolo Rocco and BritNRG Limited (together, the “Defendants”) for, inter alia, a declaration supporting the valid recission of certain agreements and the recovery from the Defendants of monies paid to the LLP in 2021.

On 24 February 2022, the Defendants asked for an extension to the deadline for the filing of defences until Friday, 18 March 2022. This is the maximum extension capable of being agreed between the parties to the proceedings without an application being made to the Court.

Malcy’s Blog – Oil price, IOG, Serica, Predator, Orcadian, Harbour, SDX, Hurricane, Prospex, Zenith & finally

Serica Energy plc (AIM: SQZ), provides an update on Rhum field production operations. Further to our announcement of 28 February, we are pleased to confirm that production has restarted from the Rhum field following the successful operation with a Diving Support Vessel (“DSV”) to replace a faulty component in the Rhum Subsea Control Module which had necessitated a temporary shutdown of Rhum production. The work was completed without incident despite the difficult weather conditions encountered.

Production from the Bruce field has continued throughout these operations and Serica’s other producing fields (Erskine and Columbus) were not impacted by this Rhum issue. During the Rhum outage, the company’s average net production has been in excess of 15,000 boe/d.

Union Jack Oil PLC, (AIM: UJO) announced that it received approval from East Riding Planning Committee to expand drilling and production at West Newton A. Union Jack also stated that an extension was granted for further exploratory drilling at West Newton B. 

The approved version will increase the number of wells on the site from 2 to 6 and the area of the site from 0.9ha up to 2.52ha. The Kirkham Abbey formation would be the target of the new wells. Up to 10 tankers would transport oil to South Killingholme’s refinery each day.

Hurricane Energy PLC (AIM: HUR) Operational & Financial Update & Notice of Results. Update on Lancaster field operations and net free cash balances as of 28 February 2022.

Lancaster Field Operations Update; The following table details production volumes, water cut and minimum flowing bottom hole pressure for the 205/21a-6 (“P6”) well during February 2022.

Predator Oil & Gas Holdings Plc (AIM: PRD), announced that it has conditionally placed 11,500,000 new ordinary shares of no par value in the Company (the “Placing Shares”) at a placing price of 9 pence each (the “Placing Price”) to raise £1.035 million before expenses (the “Placing”).

88 Energy Ltd (ASX:AIM: 88E), stated that the Merlin-2 surface hole was completed to 2,005 feet. Safety systems were also put in place before drilling to its target depth at 8,000 feet. The statement said that this is likely to happen in two weeks, with all target areas expected to be intersected.

Prospex Energy PLC (AIM: PXEN) Production Strategy at El Romeral Power Project. The owners of Tarba (Prospex and Warrego Energy Limited) have agreed to operate the El Romeral power plant 24 hours per day for six days per week until further notice. The reservoir performance and the operating regime are being monitored closely and the Tarba management is confident that the right balance is being achieved between ultimate recovery of remaining reserves and maximising electricity output and therefore income at this time.

Over the last two weeks the power plant has been successfully operating 24 hours a day, six days a week securing the recent high electricity prices. The power-plant automation and operational procedures have now been fully tested to enable continuous operation whenever required.

Pennpetro Energy PLC (AIM: PPP) Proposed Farm-In. Has signed a heads of terms (“HoT”) agreement with Upland Resources Limited (“Upland”) for a proposed petroleum farm-in (“Farm-In”) to its Saouaf permit area Tunisia (“Saouaf Asset”) held in joint venture with the Tunisian state oil company, Enterprise Tunisienne d’Activités Pétroliéres (“ETAP”).

The HoT signed for Nobel Petroleum to farm-in for 80% working interest and assume operatorship, subject to ETAP approval. The current work programme needs to be carried out prior to the current expiry of the Saouaf Permit (“Permit”) on 23 December 2022 (“Expiry Date”) with extension negotiations having already been initiated referencing the Hydrocarbon Code of Tunisia, and consists of an obligation to acquire 300km of 2D seismic.

Oilex Ltd (ASX:AIM: OEX) Cambay India Update; Following the Government of India Ministry of Petroleum and Natural Gas approval of the transfer of assignment of the 55% Participating Interest in the Cambay Field PSC held by Gujarat State Petroleum Corporation Ltd (GSPC) to Oilex (taking the Company’s interest to 100%), the Company is finalising the completion accounts in conjunction with GSPC personnel with a view to completing the transaction at the end of March 2022

United Oil & Gas PLC (AIM: UOG) ASD-2 Well Update; Announce an update on the drilling of the ASD-2 development well (ASD-2) in the Abu Sennan licence, onshore Egypt. United holds a 22% working interest in the licence, which is operated by Kuwait Energy Egypt.

LONDON, March 14 (Reuters) – Russian gas will continue to flow to Europe through Ukraine as long as the operators of Ukraine’s gas networks are able to function, the head of Ukraine’s state energy firm Naftogaz told Reuters on Monday. Russia is the European Union’s top gas supplier and its invasion of Ukraine has led to concerns over possible disruptions, sending prices to record highs.

Sound Energy PLC (AIM: SOU) Phase 2 – Pipeline Interconnection Agreement; The GME Pipeline, which was transferred to Moroccan state-owned entity ONHYM by the previous operator on 1 November 2021, is owned and operated by ONHYM. Pursuant to the Pipeline Tie-in Agreement, ONHYM has now approved the connection of the Tendrara Production Concession via a gas export spur pipeline to the GME Pipeline.

Union Jack Oil plc (AIM: UJO) a UK focused hydrocarbon production, development and exploration company advises that an application to extend the existing planning to drill the North Kelsey-1 exploration well was refused at today’s meeting of the Lincolnshire County Council Planning Committee. Union Jack holds a 50% economic interest in PEDL241 which contains the North Kelsey-1 well site.

Executive Chairman of Union Jack, David Bramhill commented: “A rather odd and disturbing decision taking into consideration current world events and the clear need for the UK to secure new indigenous energy supplies.

“A compelling case was presented by the Operator and a positive recommendation was made by Lincolnshire County Council`s Planning Officer.

“An appeal will be made against this decision and further updates will be provided in due course”.

IOG PLC (AIM: IOG) Phase 1 First Gas Update & Video. Andrew Hockey, CEO of IOG, commented: I am delighted to confirm that Saturn Banks Phase 1 First Gas has been achieved. Yesterday the Blythe well was safely opened up and IOG gas has started to be delivered into Bacton and on into the UK market. The Elgood well is expected to follow in the next two days.

The Board of Shell plc (“Shell”) announced the pounds sterling and euro equivalent dividend payments in respect of the fourth quarter 2021 interim dividend, which was announced on February 3, 2022, at US$0.24 per ordinary share.

Shareholders have been able to elect to receive their dividends in US dollars, euros or pounds sterling. Holders of ordinary shares who have validly submitted US dollars, euros or pounds sterling currency elections by March 4, 2022, will be entitled to a dividend of US$0.24, €0.2181 or 18.28p per ordinary share, respectively.

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