Share Talk Weekly Energy Sector News Round-Up, Sunday 17th July 2022

A round-up of the London-listed oil and gas announcements over the past week. Plus the geopolitical news from around the globe.

Author @ABMckinley


Russia’s war against Ukraine results in a reorganization of global energy markets

From January to May, crude oil exports from the United States to Europe surpassed those to Asia.

  • This is the first time that Europe has overtaken Asia in the last six years since the US lifted their ban on oil exports.
  • As Russia invades Ukraine, the market is disrupted. This causes a shift in flow.
  • Russia’s war against Ukraine has reordered global energy markets, and Europe surpassed Asia as the largest crude oil consumer for the first six years.

According to data from Bloomberg, the US exported 213.1 Million barrels to Europe in January and 191.1 Million barrels to Asia in May.

According to Ineos Group, Europe will have to ration natural gas (LNG) in order to heat winter.

In a Bloomberg Television interview, Brian Gilvary, executive chair of Ineos Energy, a UK chemical company, stated that “it looks pretty dire for the winter now. As to whether we will get to the targets for storage.” It is unavoidable that Nord Stream 1 will not return. Europe will see rationing.

Gilvary stated that companies in France, Italy, and Germany will seek to reduce their gas consumption in the event Nord Stream is shut down. This week, the pipeline that transports fuel from Russia to Germany was shut down for annual maintenance. There is concern that Moscow might keep it closed in retaliation against sanctions following its invasion of Ukraine.

Ncondezi Energy Limited (AIM: NCCL) provided an update on its solar photovoltaic and Battery Energy Storage System project in Tete, Mozambique being carried out through its wholly owned green energy subsidiary, Ncondezi Green Power Holding Ltd

The Solar Project will be located within the Ncondezi mining concession 5967C which covers over 25,000 hectares in the districts of Moatize and Chiuta in the Tete Province, which is large enough for solar PV generation potential over 5,000MW. 3 preferred site locations have already been identified, with similar climate conditions, that provide a generation potential of c.500MW each.

TomCo Energy plc (AIM: TOM), announced that the Company’s wholly-owned subsidiary, Greenfield Energy LLC has been awarded a 10-year marginal tax reduction.

With a potential aggregate value of up to approximately US$76.3 million, in relation to its planned project activities on the Tar Sands Holdings II LLC (“TSHII”) site located in the Uinta Basin, Utah, United States. This post-performance corporate incentive is part of the Utah Legislature’s Economic Development Tax Increment Financing (“EDTIF”) programme.

Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) held its Annual General & Special Shareholders meeting via conference call on Thursday, 14 July 2022.

All resolutions considered and voted upon by the shareholders at the meeting, being the election of directors, the appointment of auditors and approval of the Stock Option Plan, were approved.

SDX Energy Plc (AIM: SDX), updated on the testing of its gas discovery at the MA-1X well that targeted the Mohsen prospect, within the Exploration Extension Area of South Disouq.

The MA-1X (SDX WI: 67%) discovery, announced on 8 June, is currently in the process of being tested. As expected, the well test showed good flow rates of c. 8.0 MMscf/d commensurate with the high-quality Kafr El Sheikh Formation reservoir around the well bore, which has an average porosity of 31.9%. However, the well-head pressure decline observed over a three-day production test was higher than expected, which could indicate that a lower volume of gas is connected to the MA-1X well bore compared to pre-drill estimates.

88 Energy Ltd, (AIM:88E. ASX:88E) stated to investors that it had A$10.5mln in cash at the close of the quarter to June 30, as investors and management look for nearby third-party well drilling.

After telling investors that it had A$10.5mln cash at the close of the quarter, the oil explorer saw its shares rise 52% to 0.76p during the week. Management and shareholders are now focusing on nearby third-party well drilling.

New Alaska oil well boosts interest in Pantheon Resources Alkaid-2 well

ADM Energy PLC (AIM: ADME) shares almost doubled after a deal that involved a block of Nigeria, where it has a stake.

PetroNor E&P Limited has purchased an economic interest in OML113, which includes the Aje oil field and gas field for as high as US$26.67mln. Panoro Energy is also involved.

Osamede Okhomina, CEO of ADM Energy, said: “The conclusion of PetroNor’s acquisition of Panoro’s interest in OML 113 marks a significant event for the Joint Venture as it now allows us to further concentrate on accelerating the development plans for Aje. PetroNor’s decision to acquire a stake in the Aje field is a strong endorsement of the quality and considerable potential of the asset and we look forward to working with them to take Aje to the next stage.”

ADM Energy holds a 9.2% profit interest in the Aje field in OML 113, which covers an area of 835km 2 offshore Nigeria.

Malcy’s Blog – Oil price, Serica Energy, Sound Energy, Wentworth Resources, Angus Energy, Getech & finally

Serica Energy PLC, (AIM: SQZ) confirmed that it had rejected the merger proposal by Kistos PLC. and dismissed it as undervaluing Serica Energy and increasing its risk to its balance sheets.

Following careful consideration, the Board of Serica, together with its financial advisers, unanimously rejected the Kistos Possible Offer on 1 June 2022, on the basis that the Board strongly believed it significantly undervalued the Company and its prospects and was not in the best interests of shareholders or other stakeholders.

Oilex Ltd (ASX:AIM: OEX) Results of General Meeting. All resolutions put to the General Meeting were decided by a poll with all resolutions passed.

Further to the approval of Resolution 1, a separate announcement will be made in due course regarding the timetable for effecting the change of the Company’s name to Synergia Energy Ltd under a new ticker code of ‘SYN’ across the two exchanges (ASX and AIM) on which the Company’s shares are traded.

Tullow Oil PLC, (LSE: TLW) has maintained its production guidance of 59,000-65,000 barrels per day (boepd), for the entire year prior to its merger with Capricorn Energy.

The oil company released a trading statement ahead of the publication of interim results in September. It stated that it had generated approximately US$800mln in revenue in the first half. This was supported by an oil price of US$107/barrel (averaging US$87/barrel after hedging), and its realised oil price was US$107/barrel.

Angus Energy (AIM: ANGS) announce that the Company, together with specialist contractors and commissioning agents are making good progress with the testing and inspection of the totality of the facilities.

Whilst mechanical integrity is now complete, electrical and control circuitry continues to be tested both individually and as a whole to ensure that the SCADA control system functions in all eventualities – most particularly those emergency cases.

Progress is good and we expect to complete these tests and verifications before Monday 18 July 2022 at which time live gas can be introduced to the plant, if not before. First Gas Export into the grid (commercial sales) will be made under the offtake with Shell shortly thereafter. Anticipated production during Q3 comfortably exceeds the hedge amount as advised on 28 June 2022.

Kistos PLC (AIM: KIST) is proposing a merger with Serica Energy PLC (AIM: SQZ) in order to create “an independent North Sea champion”, and urging Serica shareholders to encourage constructive discussions with its management.

Kistos provided a stock market statement detailing a timeline for approaches and negotiations throughout the months of May June and July. In which the companies were discussing non-disclosure arrangements (NDAs), and Serica made an offer.

Malcy’s Blog – Oil price, San Leon Energy, Kistos, Touchstone Exploration, Serica Energy & finally

Kistos plc (AIM: KIST) announced the completion of the acquisition of a 20% interest in the Greater Laggan Area (“GLA”) producing gas fields and associated infrastructure alongside various interests in certain other exploration licences.

lncluding a 25% interest in the Benriach prospect, from TotalEnergies S.E. (“TotalEnergies”) (the “Acquisition”). The effective date of the Acquisition is 1 January 2022.

Completion of the Acquisition marks Kistos’ entry into the United Kingdom Continental Shelf (“UKCS”), adding about 6,000 boe/d (net) to Kistos’ production in 2022, with 2P reserves increasing by 6.2 MMboe. This substantially increases Kistos’ total production base to approximately 12,000 boe/d.

Serica Energy plc (AIM: SQZ) announced that the North Eigg exploration well has spudded.

Well, 3/24c-NE1 was spudded at 04:30 this morning by the Transocean Paul B. Loyd Jr. harsh environment semi-submersible drilling rig. Serica is the operator and 100% interest owner in this High Pressure, High Temperature (HPHT) exploration well targeting Upper Jurassic turbidite sands, similar to those encountered in the nearby Serica-operated Rhum field.

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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