Share Talk Weekly Energy Sector News Round-Up, Sunday 1st May 2022

If EuropeanUnion imposes a sweeping Russian oil embargo, it could send Russia’s economy into a depression, an analyst told. Russia will have to slash its oil production because the country has very limited domestic storage capacity, said Kpler’s lead oil analyst

Germany’s announcement this week that it’s ready to stop buying Russian oil makes a sweeping European Union oil embargo much more likely — which would have devastating consequences for Moscow.

Baron Oil PLC (AIM: BOIL) A late placing and subscription announcement to raise £1.65 million was released late on Friday.

The path for Baron Oil is clear now with funding in place and the uncertainty removed from the marketplace by way of a placing and subscription of a total of 2,750,000,000 new ordinary shares of 0.025p each at a price of 0.06 pence per share.

Andy Yeo, CEO of Baron, commented:

” We now have two major projects progressing towards key evaluation points – Chuditch PSC (Timor-Leste) and P2478 (UK) – both of which are material in terms of potential value, equity interest and prospective resources, with relatively short timelines to potential drill decisions. In particular, the additional monies committed to Baron will be sufficient to reach a decision point on Chuditch.

On P2478, energy security concerns have also played a part in an evolving UK landscape, following the reversal by the UK Government to now support further oil & gas exploration and production including an intention to hold future licensing rounds. Our initial work on P2478 should be complete by the end of 2022, leaving us time to make a drill or drop decision by July 2023.”

MetalNRG PLC (LON: MNRG) Financial Results for the year ended 31 December 202. Not been a great year for investors, but we continue to watch to see if the management team can turn things around.

At the beginning of 2021, the Company held investments in International Mining Company Invest (” IMC “); Uranium in Kyrgyzstan, Goldridge Holdings Limited (” Gold Ridge “); Gold in Arizona and was contemplating an additional investment in a Gold Project in Tanzania via the acquisition of Lake Victoria Gold (” LVG “). Additionally, the Company planned, with the conversion of a Convertible Loan Note (” CLN “), to hold 50% of the equity in BritNRG Limited (” BritNRG “), a vehicle used to acquire conventional oil & gas assets onshore in the UK.

Jersey Oil and Gas PLC (AIM: JOG) may seem odd for a company focusing on the North Sea, but it’s not impossible to imagine that people don’t want the narrow English Channel made more difficult by scattered oil drilling rigs.

After it announced that its Greater Buchan Area farmout is generating widespread interest, the company’s shares gained around a third of their value this week. Jersey Oil has been engaged in initial screening and engagement with several serious counterparties of scale. Jersey Oil continues to do due diligence, including two-way collaborative workstreams.

Prospex Energy PLC (AIM: PXEN) provided an update on the production strategy of, and income from, the El Romeral power plant in southern Spain (‘El Romeral’).

El Romeral continues to provide a very healthy income from selling electricity into the spot market in Spain at near-record price levels. The Company holds a 49.9% working interest in El Romeral through its interest in Tarba Energía

Mark Routh, Prospex’s CEO, commented: El Romeral continues to generate very healthy revenues with electricity spot prices at record levels. Tarba remains ready to increase its gas to power generation capacity at El Romeral as soon as the permits to drill a portfolio of infill wells on the El Romeral concessions are received. Achieving 100% output capacity could be realised from the first two infill wells. A further increase of the plant’s generation capacity would be possible in parallel with the drilling programme.

Malcy’s Blog – Oil price, Afentra, Empyrean Energy, Hurricane Energy, Jersey Oil & Gas, PetroTal Corp & finally

The Finnish minister responsible for European affairs Tytti Tippurainen stated on Thursday that Finland would not pay for Russian gas in Russian roubles, despite Russia’s request.

“Finland is clear in its stance. She stated that she supports harsh sanctions and is ready to sanction gas. “Our policy is clear. We will not pay in roubles. This is up to the Russian counterparts to do this within their contractual framework.”

Oilex Ltd (ASX:AIM: OEX) March Quarterly Report 2022 was released, with the uncertainty of a placing and at what price the company will raise. The share price has looked to find a support line circular 0.20 as investors, markets wait for more clarity.

During the Quarter the Company was focused on restarting gas production cycling between two existing production wells in its Cambay PSC, the success of which was achieved and announced on 8 April 2022. The agreement to purchase GSPC’s 55% PI in the Cambay PSC has enabled it to accelerate field development of the Cambay field’s c.930 BCF 2C gas resources (100% gross).

Oilex plans to re-frac the existing C-77H well to demonstrate a reliable fraccing methodology for two new wells planned for calendar H2 2022 and calendar H1 2023, subject to securing the necessary funding. Following the re-frac, the Company will seek to identify a new joint venture partner for the Cambay PSC in order to mitigate the funding requirement.

Angus Energy PLC (AIM: ANGS) Update on Brockham Oil Field. Finally, we are seeing positive decision making from local councils and the political landscape has changed forever due to the current energy crises.

The Planning Committee of Surrey County Council on Wednesday passed a resolution to approve the Company’s plan to abandon the Kimmeridge layer and reperforate the Portland layer in well BRX4-Z subject only to a unilateral undertaking to secure a routing agreement on HGV movements.

Angus’ existing Environment Agency permit requires minor variation to allow production from the Portland as opposed to the Kimmeridge in this well and the Company is in discussion with officers of the Agency in this regard. Following such variation the Company would proceed to reperforate at the earliest opportunity.

We expect to update the market on existing production from BRX2-Y now supported by water injection in the coming fortnight.

“Angus is within touching distance of finally delivering, been a long road, board changes, yet Brockham Oil Field is back on the menu, Saltfleetby news in June, the company comms are second to none on social media, things are looking up for the company moving forward.”

On Wednesday, the EU’s chief executive criticized Gazprom’s decision to stop supplies to some European customers as “blackmail”. However, he said that the bloc was working to coordinate its response to Moscow’s escalation.

Gazprom stated that it had stopped supplies to Poland, and Bulgaria because they failed to pay gas in roubles. This is Moscow’s most severe response to the West’s sanctions on the conflict in Ukraine.

Pantheon Resources (AIM: PANR) Shareholder Presentation and Q&A session 26th April 2022

During the Webinar the management discuss the latest resource upgrades from the successful Theta West and Talitha drilling and testing operations this season, implications for future project definition and development, as well as next steps in the operational programme including an insight into the Alkaid #2 well which has both important commercial implications via the extended production test but also via the appraisal/exploration potential.

Empyrean Energy (AIM: EME) had a difficult week. It said that it would reevaluate all drill data from the Jade prospect offshore China. The well log showed no oil in the target reservoir. According to the company’s statement, no oil pay was seen while drilling in the wireline logs.

Empyrean CEO, Tom Kelly, stated:

“We are extremely disappointed with the results of the well, particularly after conducting a systematic and comprehensive technical analysis followed by running a safe drilling operation. We would like to thank CNOOC for all their support, CNOOC EnerTech for managing a successful operation and COSL for conducting a safe drilling operation. We plan to conduct a thorough analysis of well log data before deciding the next step in Block 29/11”.

Over the course of the week, the shares lost three-quarters of their value.

Angus Energy PLC (AIM: ANGS) Update on Installation Schedule at Saltfleetby. Delivery and installation dates remain substantially unchanged with the bulk of the last skids arriving shortly after the bank holiday weekend, although it is possible that the Joule Thomson skid could be delayed to the following week as a consequence of a potential delay in the delivery of an accessory.

Wet commissioning is expected to begin at or around 18 May and we are pleased to be assisted in this by an experienced team led by OSL and Inspec. We continue to aim for a short wet commissioning programme and a target date of First Gas of 1 June. This would allow for one full month of production at current high spot prices before the Company’s obligations to deliver volumes at the hedge price commence at the end of June.

Malcy’s Blog – Oil price, Diversified Energy, Chariot, Egdon Resources, Union Jack Oil, Zephyr Energy & finally

Egdon Resources PLC (AIM: EDR) Replacement – Interim Results. Production during the period increased by 116% to 36,714 barrels of oil equivalent (“boe”) equating to 200 boe per day (“boepd”) (H1 2021: 16,928 boe and 92 boepd)’ instead of an increase of 156% to 43,420 boe equating to 205 boepd. This earlier figure having included the production for February 2022 in error.

Wressle production has significantly exceeded the original 500 barrels of oil per day (“bopd”) expectation and is currently producing at permit constrained rates of 760-800 bopd following upgrades to the production facilities. Oil and gas revenues increased by 500% during the period to £2.551 million (H1 2021: £0.424 million) as a result of significantly increased production and strengthening commodity prices

Arrow Exploration Corp, (TSX:V: AXL) is a Colombia hydrocarbon basins-focused producer. It earned a net income for the year ended December 2021, as opposed to a loss for the full-year 2020. This is because the firm realized high oil and gas prices and increased output.

The company presented its operating and financial results for the fourth quarter, and the full year up to December 31, 2021. It also disclosed its year-end reserves.

This is a company that is starting to show up on peeps radars and the early birds’ investors are already 100% + from early January 2022, one for the watchlist, in production and 2022 could be an exciting year for this small-cap.

Diversified Energy Company PLC (LSE: DEC) has purchased a series of gas-producing assets from East Texas. This’s the fifth acquisition in the US’s central region.

The FTSE 250 group will hold a 52.5% working share (WI) in new wells. This means that the consideration can be contributed 50% or US$50mln. Oaktree Capital, a partner, will give 5% of its WI as a DEC.

Zephyr Energy PLC (AIM: ZPHR) announced the results from an updated Competent Person’s Report (“CPR”) on its assets in the Paradox Basin, Utah, U.S.

CPR highlights the significant scale and long-term production potential of the Paradox Project. Inaugural Paradox Proved Reserves booked. Substantial increase in Contingent Resource estimates with Maiden Prospective Resource estimates on overlying reservoirs

Everything starting to come together and a company is worth watching as the year unfolds.

Canadian O’Seas Petr (LON: COPL) New Investor Presentation & Video

United Oil & Gas PLC, (AIM: UOG). saw its revenues double and profits quadruple as higher oil prices impacted the bottom line.

The year ended December 2021 saw an increase in production of 6% to 2,327 net oil barrels per day. However, UOG’s realized oil price rose 82% to nearly US$69 per barrel and operating costs remained flat.

Union Jack Oil PLC (AIM: UJO) US$5 Million Net Revenues Landmark Reached at Wressle Production Development alongside a Financial Update.

The numbers don’t lie, amazing cash delivery for the company, what a journey from a company to date. l have highlighted and followed since 2014. I even went on a site visit to Wressle back in the day, tucked away from the B-Road, behind a farm,  along a track and you would miss it if you blinked. Anyone who follows UJO will know it is not a one-trick pony and a re-rate IMHO is due as the ££££ keep stacking up.

Union Jack holds a 40% economic interest in this producing hydrocarbon development.

Executive Chairman of Union Jack, David Bramhill commented: The revenues from the Wressle development continue to highlight the sea change in the financial robustness of Union Jack, as the figures above illustrate.

“We are still in the early stages of the process of unlocking the significant upside potential at Wressle with the future monetisation of the natural gas at the Ashover Grit reservoir plus the substantial future revenue opportunity offered by the Contingent Resource present in the Penistone Flags reservoir that remains untapped.

“Given the future prospects at our core projects at Wressle, West Newton, Keddington and Biscathorpe, the Board of Union Jack believes the Company remains on a material growth trajectory which augers well for the future of the Company and its shareholders.”

Hope you enjoyed the Sunday blog, found it informative, have to shout out to EME holders, as we all know it is a high-risk game “exploration” but hopefully it won’t put you off and as you can see above, a lot to look at, think about in the Oil & Gas game, enjoy your bank holiday everyone.

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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