Share Talk Weekly Energy Sector News Round-Up, 26th March 2022

Hurricane Energy PLC (AIM: HUR) Aoka Mizu Charter Extension and Financial Update with less than an hour to the close of trading on Friday caught a few off guard, the share price rose 20% and it should be an interesting opening on Monday.

Antony Maris, Chief Executive Officer of Hurricane, commented: Securing the extension to the FPSO contract is an important next step forward. With production continuing in line with our projections, good uptime performance on the FPSO and assuming oil prices are in the range of $90-110/bbl, we believe that post clearing our bond debt and after funding the Bluewater secured deposit account, Hurricane will have between $50-80 million of net free cash at the end of July 2022.

Russia warned the West on Friday that billing in roubles for billions of dollars of natural gas exports to Europe could be just days away, Moscow’s toughest response yet to crippling sanctions imposed by the West for the invasion of Ukraine.

With the Russian economy facing its gravest crisis since the years that followed the break-up of the Soviet Union, President Vladimir Putin on Wednesday hit back at the West, ordering that Russian gas exports should be paid for in roubles.

Empyrean Energy PLC (AIM: EME) Block 29/11, China – Rig Mobilisation and Anticipated Spud Date following update on preparations to drill the Jade prospect at its 100% owned Block 29/11 permit, offshore China.

Mobilisation of the NH9 rig to the Jade well drilling location is expected to be on or around 27 March. The Jade well is currently anticipated to spud on or around 2 April.

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.

Oil and gas prices fell after the US and European Union reached a historic deal to reduce EU dependence on Russian gas. The US stated that it would work with other countries to provide an additional 15 billion cubic metres of liquified gas (LNG), to Europe this year.

Europa Oil & Gas Holdings (Holdings), PLC (AIM: EOG) Chairman Brian O’Cathain stated that the Serenity North Sea field is a “highly interesting asset with the potential for significant near-term value”.

O’Cathain made the statement prior to the shareholders’ meeting. He highlighted the possibility as the company sought shareholder approval for its £7.02m in equity raising to fund Europa’s participation at Serenity. It would see 390mln shares issued at 1.8p each.

Russia is open to allowing “friendly” countries to pay its oil and gas using bitcoin or their national currencies, as it looks into ways to accept payments for its energy exports. Pavel Zavalny (Russia’s State Duma chairman on energy) stated that “We have been proposing China for a while to switch to settlements using national currencies for rubles or yuan.”

Merlin-2 Wireline Setup Commences  88 Energy (ASX:AIM: 88E) Rigging up and testing of tools for the wireline logging program being run at the Merlin-2 appraisal well program has commenced.

The wireline program is designed to confirm reservoir quality and to establish if mobile hydrocarbons are present with multiple runs that will include MDT for fluid sampling and flow potential measurements, sidewall cores and image logs. The program is expected to run approximately seven to ten-day.

Canada will increase oil and gas exports by 300,000. barrels per day as countries try to get away from Russian energy supplies due to the Ukraine war. Jonathan Wilkinson, minister of natural resources, says that the move would result in a 5% rise and help Canada’s allies fight “an energy security crisis” caused by the conflict in Ukraine.

San Leon Energy PLC, (AIM: SLE) 11.5%-owned associate Decklar Resources is the operator of the Oza in Nigeria. They have signed a crude handling contract to deliver oil into the Umugini pipe.

The crude oil will be transported to Umugini’s UPIL crude handling facility. It will then be shipped to the SPDC JV Forcados Oil Terminal to be exported and sold. The first oil shipments to UPIL are expected to begin in April.

Malcy’s Blog – Oil price, Sound Energy, FAR Ltd, Getech, Pharos Energy & finally

Shell PLC, (LSE: SHEL) stated it plans to invest £20bn-£25bn in UK energy over the next ten years, with 75% on low-carbon products such as hydrogen, offshore wind, and hydrocarbons. However, this is only possible if there’s enough political support. According to Shell UK, these investments have not been approved by the supermajor’s board.

Pantheon Resources (AIM: PANR) Theta West #1 Testing Update. Testing of the Lower Basin Floor Fan (“LBFF”) at the Theta West #1 location has commenced with the well flowing high-quality oil to the surface which the Company believes supports, and likely exceeds, its pre-drill resource estimates of 1.2 billion barrels of oil (recoverable).

After the initial encouraging oil flow rates, the Theta West #1 well was shut in due to the arrival of the storm. The well flowed high quality, light 35.5-38.5 degree API gravity oil at rates that averaged over 57 barrels of oil per day (“BOPD”) with peak rates exceeding 100 BOPD over 2.5 days. Over the final day prior to shut-in, the well was averaging approximately 59 BOPD.

An oil pipeline rupture on Russia’s Black Sea coast halted oil exports Wednesday, pushing up crude prices and increasing fears that Moscow might disrupt energy supplies. This happened just as Joe Biden arrives in Europe for talks on the war in Ukraine.

Roland Wessel, CEO and Director of Oilex Ltd (ASX:AIM: OEX) Interview

Tullow Oil PLC (LSE TLW) announced that Jonathan Swinney will be joining the company as chief financial officer, and executive director, later in the year. Richard Miller, the group’s financial controller, will be acting as interim CFO.

Hydrogen Utopia International (AQSE: HUI) provided this market update as to the implications it anticipates for its business as a consequence of the current invasion of Ukraine by Russia.

Aleksandra Binkowska, CEO of HUI, commented: ” This tragic war is a cold shower and a lesson to Continental Europe, nevertheless I am confident that it will provoke the creation of a New World Order. In that order, independence will be crucial and I am proud that HUI’s technology has the potential to help European cities and businesses to become and remain self-reliant. I hope that European Governments and Investors will understand that our technology is an important piece of the puzzle in creating their new energy strategies for many years to come.”

88 Energy Limited (ASX:AIM: 88E) Merlin-2 Well Reaches Total Depth. Merlin-2 has successfully reached a Total Depth of 7,334 feet and drilling has now ceased.  Observations of cuttings samples have revealed oil shows (under both white and ultraviolet light) over all target intervals.

Wireline logging is set to commence shortly to confirm whether mobile hydrocarbons are present as well as to evaluate the reservoir quality and flow potential of target zones.

Falcon Oil & Gas Ltd. (AIM: FOG) Shareholder Information. According to public disclosure of shareholdings, Lamesa Holding S.A. (“Lamesa”) holds 16% of Falcon’s issued share capital. Mr. Viktor Vekselberg is a beneficiary of the foundation which holds 100% of the shares of Lamesa. Neither Lamesa nor Mr. Viktor Vekselberg have any influence or control over the operations of Falcon and/or its subsidiaries and their businesses.

Angus Energy PLC (AIM: ANGS) announced that the Environment Agency has issued its Variation Notice for the existing Saltfleetby gas field permit. The site permit now encompasses the new activities of processing and compressing of gas for direct export to National Grid. No further regulatory or planning permissions are required before First Gas.

Additionally, Angus has received an updated permit for the Brockham oil field allowing, inter alia, for the re-injection of produced water at its Brockham oil site. On completion of an upgrade project to meet DSEAR ( Dangerous Substances and Explosive Atmospheres Regulations 2002) requirements, production from BRX2-Y will resume at Brockham in May with associated water injection.

Russian gas deliveries to Europe on three key pipeline routes were broadly steady overall on Tuesday morning, with flows via the Nord Stream 1 pipeline rising, having fallen earlier in the day. Flows to Germany through Nord Stream 1 across the Baltic Sea were at 64,501,098 kilowatt hours per hour (kWh/h) on Tuesday, up from 58,658,878 kWh/h in the early hours of the morning data from the pipeline operator showed.

Eastbound flows into Poland from Germany along the Yamal-Europe pipeline were steady at 2,365,830 kWh/h at the Mallnow border point, data from operator Gascade showed.

SDX Energy Plc (AIM: SDX), announced a gas discovery at the SD-5X exploration well which targeted the Warda prospect in the South Disouq development lease.

SD-5X (SDX:36.85% WI) spudded on 4 March and reached TD at 7,855ft MD on 16 March which was on time and within budget. The primary basal Kafr El Sheikh target was encountered at 6,973ft MD and discovered 55.5ft of net pay gas sand with an average porosity of 26.3%, all of which were in line with pre-drill estimates. SD-5X will now be completed, tested and tied-in via the existing SD-4X flow-line to the CPF and it is estimated that the well will be on production in June 2022. An announcement concerning the results of the testing of SD-5X will be made in due course.

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX ‐ V: EOG) announced the publication of an updated NI 51-101 compliant Competent Person’s Report (“CPR”) on its assets Offshore Guyana, Offshore Namibia and Offshore South Africa. The CPR was compiled by WSP USA Inc., of Boulder Colorado, USA, an independent third-party auditor.

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