Share Talk Weekly Energy Sector News Round-Up, Friday 3rd June 2022

Share talk spoke to Clontarf Energy plc (AIM: CLON) David Horgan, Chairman this week just before he flow offshore to join the team onboard the MS-1 semisubmersible, Sasanof-1 exploration well, Western Australia.

Author @ABMckinley

The Equus Gas Project has a historic exploration drilling success rate of 88%, with 15 discoveries from 17 wells.

Here is a list of questions used in the interview:

  • Nice to have you on the Share talk platform David, can you give our listeners a small overview of the company and current operations, please.
  • Valaris MS-1 rig is on location, with the current schedule expects drilling through the target reservoir occurring, at the earliest, between Thursday 2nd and Sunday 5th June. Do you receive daily operational updates or will the operators notify you once they reach touch down?
  • The recent acquisition for 10% of the Sasanof 1 drill under the WA-519 P license, do you have a percentage of any other upcoming drills?
  • You did a placing for £3,500,000 (before expenses) working capital in April, as the Company’s board continues to assess new projects. In particularly advanced gas exploration prospects in Australia. Can you give our listeners any clues as to how that is progressing?
  • How do you as a company see 2022 unfolding and what can investors look forward to?
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    ERCE estimates the Sasanof Prospect to contain a 2U Prospective Resource of 7.2 Trillion Cubic Feet (Tcf) gas and 176 Million barrels (bbls) condensate (P50), with a high case 3U Prospective Resource estimate of 17.8 Tcf gas and 449 Million bbls condensate (P10).

    Western Gas (519P) Pty Ltd is the holding company for Sasanof and comprises the following working interests:

    · Clontarf Energy Plc (AIM: CLON) – 10%

    · Western Gas – 52.5% (Operator)

    · Global Oil and Gas (ASX: GLV) – 25%

    · Prominence Energy (ASX: PRM) – 12.5%

    Sasanof-1 is CLON partner Western Gas’ first well drilled from its extensive exploration portfolio surrounding the existing Equus Gas Project that contains a discovered resource of 2 Tcf and 42 MMbbl (2C Gaffney Cline). 

    In other news, after receiving approval from regulators, Shell will develop the largest North Sea gas project in years as the Government scrambles for domestic energy supplies.

    Jackdaw, a project is expected to produce approximately 6.5pc of Britain’s gas output. Shell plans to begin production in the second half of 2025.

    Jackdaw’s approval comes one week after the Government dismantled the oil and gas industry by imposing a windfall tax on North Sea profits in order to help households with high energy bills.

    Russia warned on Thursday that the European Union’s decision to phase out Russian oil would destabilize global energy markets. It called it a “self-destructive” step that could backfire.

    “The European Union’s decision to partially phase out Russian oil, oil products, and to ban insurance for Russian merchant ships are highly likely to cause further price increases and destabilize energy markets and disrupt supply chains,” Russia’s foreign ministry stated in a statement.

    Tullow Oil PLC (LSE TLW ) and Capricorn Energy PLC (LSE CNEE ) have merged to form “a leading African energy company with an extensive and diverse asset base, and a portfolio that offers investment opportunities that will deliver visible production growth.”

    Capricorn shareholders will be able to receive 3.8068 Tullow shares as part of the deal. This will give them 47% ownership, while Tullow’s owners will own 53%.

    Malcy’s Blog – Oil price, IOG, Hurricane Energy, Jadestone Energy, Gulfsands, Tullow Oil, Capricorn Energy & finally

    Hurricane Energy PLC (AIM: HUR) has confirmed that it has withdrawn the license for the Greater Warwick Area, which is located near its Lancaster oil field.

    Warwick will be rescinded by management because it was determined that the appraisal and development costs required to achieve an economic development on Warwick’s discovery within the remaining license term were too high for the company.

    BHP Group Limited (LSE: BHP) announced that the all-stock merger between its oil and gas portfolio and Woodside Energy Group was complete on Wednesday.

    BHP Petroleum received 914.8mln Woodside share shares in exchange for BHP Petroleum’s sale. The former paid an in-specie dividend and distributed shares to eligible BHP shareholders.

    Angus Energy PLC (AIM: ANGS) Holding in Company and Completion of Acquisition. The Company confirms that following admission of the Forum consideration shares on 27 May 2022 the acquisition of SEL was completed, thereby giving Angus a 100% interest in the Saltfleetby Licence.

    George Lucan, CEO, comments: The acquisition of Saltfleetby Energy Limited approximately doubles the value of Angus’ interest in the Saltfleetby Licence to approximately £50 million on the basis that the Competent Persons Report of October 2021 ascribed a conservative £25.4 million P90 valuation to Angus’ 51% interest in October after all associated debt funding was taken into account.

    Oilex Ltd’s (ASX:AIM: OEX) announcement on 4 May 2022, advising of an equity fundraise of £2.5 million (A$4.4 million), before costs to fund the refraccing of the Cambay 77H well in India and the continued development of the Company’s plans to undertake a drilling and testing appraisal program on the Cambay field.

    What can we expect short term, drill work over rig (June) re-fraccing of the Cambay 77H well is scheduled for July 2022 (with such re-fraccing now fully funded). The company said they are now fully funded for the July re-frac of C-77H and we also look forward to increasing daily production rates. Plus CCS application news is expected in June/July 2022.

    Tower Resources PLC, (AIM: TRP) stated that the potential value for all its projects increased during the pandemic.

    The AIM-listed company reported that the pandemic caused operational problems in the past two years but also highlighted the effects of years of underinvestment. The price of oil has increased significantly, which has helped Tower’s projects but also resulted in more drilling activity around the globe, with longer lead times and higher prices on rigs.

    Union Jack Oil plc (AIM: UJO) announce that the Company has been admitted as an Associate Member of United Kingdom Onshore Oil and Gas (“UKOOG”).

    David Bramhill, Executive Chairman of Union Jack commented: ” We are delighted to be able to work with UKOOG and assist in promoting the benefits of the UK onshore hydrocarbon industry.

    “Without doubt, the UK onshore arena is beginning to show activity on several fronts, evidenced by a number of new developments progressing, all of which facilitate the growth of an extremely well regulated and important part of the UK energy sector.”

    Cloudbreak Discovery PLC (LSE: CDL) has agreed that a portion of acquisition financing will be provided for the Masten Unit Energy Project in Cochran County (Texas).

    Cloudbreak will provide G2 Energy Corp with a US$2mln convertible debenture over a two-year term. In exchange, a 3.25% royalty interest in the project will be received by Cloudbreak.

    Malcy’s Blog – Oil price, SAVE, DEC, EDR, UJO, RKH, AXL, ECHO, UOG, AST, ANGS & finally

    TomCo Energy PLC, (AIM: TOM) informed investors that it is making progress in its plans for Tar Sands Holdings II. (TSHII).

    TSHII has 760 acres of land located in Uintah, Utah. TomCo also owns a 10% member interest in TSHII through its subsidiary Greenfield Energy.

    Rockhopper Exp plc (AIM: RKH) Final Results for the Year Ended 31 December 202.

    Keith Lough, Chairman of Rockhopper, commented: We are delighted to have signed legally binding documentation allowing Harbour a clean exit and bringing Navitas into the Falklands. At current oil prices and with an increased focus on the security of supply, we believe a responsibly developed Sea Lion presents an exceptional chance to create very significant value for all stakeholders.

    If the Kremlin cuts off gas supplies to Europe, electricity could be reduced. Ministers were warned that six million homes could be affected by the invasion of Ukraine by Russia.

    According to The Times, officials from Whitehall have outlined a worst-case scenario that could lead to widespread gas shortages in the event that the Kremlin cut off further supplies for Europe.

    Europa Oil & Gas Holdings (AIM: EOG) stated to investors that it was looking forward to “exciting possible catalysts”. It released two stock market statements – one confirming the approval by the North Sea Transition Authority for the Wressle Field Development and another announcing the appointment to the Serenity appraisal well program of Petrofac.

    Drilling at Serenity is scheduled to begin in September or late August.

    Arrow Exploration Corp, (TSXV: AXL; AIM: AXL) reported that its Rio Cravo Este-2 well (RCE-2), was put into production on May 23, 2022. It also reported a rise in first-quarter revenue in 2022.

    According to the company, it was also able to successfully drill the next well RCS-1 (Rio Cravo Sur-1) on the same day in Tapir Block in Rio Cravo Este 2’s Rio Cravo Este 2 area. It is located in the Llanos basin of Colombia.

     

     

    The UK’s North Sea Transition Authority has approved the field development program (FDP), for Wressle, in Lincolnshire. It is owned by Union Jack Oil PLC, (AIM: UJO), (40%), Europa Oil & Gas (30%), and Egdon Resources (30%).

    Wressle was also approved by the NSTA to enter its production phase. This will continue until 2039.

    Echo Energy PLC (AIM: ECHO) provided an operational update regarding the Company’s producing Santa Cruz Sur assets, onshore Argentina.

    The Company confirms that daily gas production has materially increased in the Oceano field, following a successful facilities maintenance and upgrading programme focussed on improvements in efficiency, reliability and load capacity of the gas facilities at Oceano, which delivers gas to residential suppliers. As part of the Company’s plan to increase production, the Oceano field was temporarily shut-in in April 2022 to allow for maintenance and upgrades to the compressor and associated infrastructure.

    Caspian Sunrise plc (AIM: CASP) confirm that the UK’s new windfall tax on oil companies applies only to companies operating in the North Sea or the Continental Shelf and therefore does not apply to Caspian Sunrise.

    On 27 May 2022 the High Court of England and Wales approved the draft order to effect the Company’s cancellation of its share premium account and its deferred shares. A final hearing is expected to be held before the end of June 2022, where the Company expects the High Court will confirm the cancellation can proceed, clearing the way for Caspian Sunrise to make dividend distributions to shareholders.

    It is the Company’s intention that such dividend distributions commence on a quarterly basis starting in July 2022

    UK Oil & Gas PLC (AIM: UKOG) announced that its wholly-owned subsidiary, UK Energy Storage Ltd has signed an Agreement to Lease (“A2L”) with Portland Port Limited covering two sites at the former Royal Navy port in Dorset, with the intent to develop, subject to new planning consent and securing necessary development finance, a planned integrated Energy-Hub, centred around hydrogen-ready gas storage and a future green hydrogen generation capability.

    i3 Energy PLC (AIM: I3E) told investors that it had contracted Petrofac to provide well engineering, operations management, and operator services for drilling the Serenity appraisal well in the North Sea.

    It is a three-year contract. This contract is in addition to an existing Stena Drilling contract for the use of the Stena Don semisubmersible drilling machine later this year.

    Diversified Energy Company PLC (LSE: DEC) informed investors that it had closed asset-backed security (ABS), of substantial amounts of its remaining upstream producing natural gas or oil in Appalachia.

    Lenders were issued a US$445mln ABS Note with a fixed coupon of 5.88% and a December 30th maturity.

    Union Jack Oil PLC (AIM: UJO) NSTA Approves Wressle Field Development Plan. Announced that the NSTA has approved the Wressle Field Development Plan. The Wressle hydrocarbon development is located within licences PEDL180 and PEDL182 in North Lincolnshire on the western margin of the Humber Basin.

    Executive Chairman of Union Jack, David Bramhill commented: “The approval of the FDP by the NSTA is another significant and important milestone in the history of Wressle.

    “Wressle-1 is currently amongst the most productive wells in the UK, and to date has produced over 170,000 barrels of high-quality oil.

    “Focus now turns to completing the installation of the few remaining permanent production facilities and progressing the planning, permitting and implementation of the gas monetisation plan.

    “My thanks go to our Joint Venture partners Egdon Resources U.K. Limited (Operator) and Europa Oil and Gas plc, whom, along with Union Jack have made the FDP approval process a success.”

    The loophole could allow North Sea oil and natural gas giants to reduce the UK’s windfall tax bill

    National Grid has held emergency talks with companies in order to increase gas pipeline capacity following the rejection of crucial shipments of liquified petroleum gas.

    The Grid has committed to addressing concerns from the industry about the grid’s insufficient capacity so that it can supply the energy needed to combat the European crisis.

    Author @ABMckinley

    The opinions expressed here are those of the author

    Disclaimer: This blog is provided for general information and It does not constitute investment advice, not buy or sell shares, warrants or bonds in any companies written about within the blog. Information is taken from publicly available sources and any comment is that of the author.


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