Share Talk Weekly Energy Sector News Round-Up, Sunday 24th April 2022

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Empyrean Energy PLC (AIM: EME) Updated on the Block 29/11, China – Jade drilling with an announcement drilling results have validated the pre-drill interpretation of seismic data including the presence of gas clouds over the Jade as well as Topaz prospects.

Based on the results thus far, Empyrean has upgraded its internal Geological Chance of Success (“GCoS”) over the Jade prospect from 41% to 65% and Topaz prospect from 35% to 47%.

Drilling commences at Jade prospect at 19:30 on 10 April 2022, at its 100% owned Block 29/11 permit, offshore China. The objective of drilling the Jade well is to test for hydrocarbons down to the TD of the well at 2860 metres MD. On the last update (19th April 2022)  installation of 9-5/8″ casing before drilling 8-1/2″ hole to the Total Depth (“TD”) of 2860 metres MD

At the start of the year, the share price fell below the 6p placing price, in April 2022 it hit a new 52-wk high of 13p. With all to play for in positive results.  If an oil pay zone is confirmed then the plan is to carry out flow testing operations on the oil pay zones.

All eyes are on Empyrean Energy

Savannah Energy Plc (AIM: SAVE) First Independent Power Limited GSA Extended. First Independent Power Limited Gas Sales Agreement Extended to Supply Trans Amadi, Eleme and Afam Power Plants with a total generation capacity of 391 MW.

Andrew Knott, CEO of Savannah Energy, said :

“Accugas has recorded growth in Total Revenues [1] from gas sales for each of the last five years, with a realised CAGR of 15%. New contracts, such as this morning’s announcement provide the basis for us to continue this growth into the future and we look forward to continue working with the Sahara Group on this and potentially other projects in the future.”

With the uncertainty overshadowing Oilex (ASX:AIM: OEX) after the Cambay India C-77H Re-frac Update & Revised Gas Sales Contract announcement on the 14th of April 2022.

Oilex’s Chief Executive Officer, Roland Wessel, said: Due to the higher than anticipated C-77H re-frac costs caused by a global shortage of fraccing services and equipment, and the delayed start-up of gas production on the Cambay field, Oilex plans to raise additional funds over the next approximate month.

The share price has held up quite well as investors wait on the placing price update.

2022 is going to be an exciting time for the company has negotiated a revised Gas Sales Agreement with Enertech Fuel Solutions Private Limited for the sale of gas from the Cambay field. Executed a Letter of Intent for the supply by Schlumberger of hydraulic fracturing services, coiled tubing and nitrogen services and perforation services for the planned re-frac of the Cambay C-77H well in July 2022.

Gas sales to follow, drill bit hitting the dirt in June, one for the watch list.

Russian gas flows to Europe through key pipelines broadly steady Friday morning.

Three key pipeline routes provided Russian gas to Europe, and they were generally steady Friday morning.

Yamal-Europe’s pipeline continued to be in reverse mode and sent gas from Germany to Poland at 7,472,066 Kilowatt Hours per hour (kWh/h), a decrease from the 8,362,114kWh/h at midnight. Data from Gascade, the pipeline operator, showed.

Europa Oil & Gas Holdings Plc (AIM: EOG) has signed the farm-in agreement for i3 Energy Plc (AIM: I3E), which will create a new joint venture partnership to support the Serenity project at the North Sea.

In return for funding 46.25%, the new partner in Serenity will receive a 25% interest. This is capped at £15mln. The third quarter of 2022 is scheduled for drilling. Well costs are estimated at approximately £14mln.

Serica Energy PLC (LON: SQZ)  is a North Sea oil-and-gas producer. It reported an 11-fold increase in pretax profits in 2021, thanks to an increase in oil prices.

Pretax profit rose to £135.1mln, from £12.5mln in 2020. Revenue soared more than 300% up to £514.1mln.

Commenting on the results, Mitch Flegg, Serica’s CEO stated:

“2021 was an outstanding year of progress for Serica, which demonstrated the value of our through-cycle investment strategy resulting in the R3 and Columbus projects reaching first production. This increases Serica’s gas output to over 85% of our total production, further increasing our contribution to the provision of vital lower carbon gas to the UK’s energy market.

Zephyr Energy Plc (AIM: ZPHR) has hedged 328,000 barrels of oil production from its non-operated assets portfolio in the Williston Basin for the next two years with BP.

This programme will guarantee US$30mln in forecast revenue. It includes crude oil commodity swap agreements. These are based on an average price of US$100.80 per barrel, and decreasing gradually to US82.20 at the end of the first quarter of 2024.

Diversified Energy Company PLC, (LSE: DEC) is considered a safe haven in volatile times, according to stockbroker Peel Hunt. Today, Peel Hunt reiterated a “buy” recommendation for the US-focused gas producer and oil producer.

The broker has a 160p price target and sees a 40% upside to the current share prices of 115p.

SDX Energy Plc (AIM: SDX) announced the spudding of the SD-12 East appraisal well (SDX WI 75%), targeting additional reserves to the east of the SD-12X discovery well on the Sobhi field located in the Ibn Yunus North development lease.

SD-12 East spudded on 16 April 2022 and is expected to reach TD in approximately three weeks. The primary target, which has already been encountered in the Ibn Yunus and Sobhi reservoirs, is the basal Kafr El Sheikh sand at around 6,480 ft TVDSS. The well is targeting an estimated gross unrisked P50 EUR of 7 Bcf and has a 80% chance of success. In a success case, SD-12 East will be tied-in to the CPF via the existing SD-12X flow-line and is expected to be on production by mid-July 2022.

Hurricane Energy PLC (AIM: HUR) stated to investors that it sold its latest batch of crude oil at US$60.5mln due to higher Brent prices.

According to a statement, the UK offshore oiler stated that the 524,000 barrel shipment was cancelled on March 22nd. The sale price was set at US$116 per bar (representing the average price over the previous five days).

i3 Energy PLC (AIM: I3E) Serenity Farm-in Agreement Execution; Further to the Company’s announcement of 2 March 2022, i3 confirms that it has executed the Farm-in Agreement (“FIA”) with Europa Oil & Gas Limited (“Europa”) (company number 03093716) following Europa’s completion of its equity fundraising to fund its share of the upcoming Serenity appraisal well.

Mosman Oil and Gas Ltd. (AIM: MSMN) confirmed higher production in the quarter ending March 31.

According to a statement, production was up 65% over the previous quarter. Production reached around 11,756 barrels (or equivalent) versus 7,123 boe for the quarter ending December 31.

Oilex Ltd Management Team (ASX:AIM: OEX) Q&A Update – shareholder’s questions

Challenger Energy Group PLC, (AIM: CEG). stated to investors that it had increased production by 10-15% using a fast programme of well completions.

According to the Trinidad-focused company, four well recompletions had been completed since March. The addition of 40-60 barrels per day (bopd), has boosted overall production to around 400 bopd.

UK Oil & Gas PLC (London AIM: UKOG) announced that seismic processing of the 55 km of new Basur-Resan 2D seismic has been completed and has been received from Abu Dhabi based BGP.

Following an initial review, the Company believes the new data is an improvement on the prior 1982-92 seismic data, further confirming the prospectivity of the Basur-Resan hydrocarbon accumulation. As originally planned, the new data will help facilitate the correct placement and design of the future Basur-3 sidetrack (“B-3S”) and Resan-6 (“R-6”) appraisal wells.

Canadian Overseas Petroleum Limited, (LSE: COPL), has raised US$13mln via a bookbuild at 20p per share. This is around a 15% discount from the previous close.

Each share includes a warrant that can be exercised at 24p for a whole warrant within six months.

Malcy’s Blog – Oil price, Arrow Exploration, Empyrean Energy, Rockhopper Exploration, Trinity Exploration & Production, United Oil & Gas & finally

Southern Energy Corp, (AIM: SOUC) the Mississippi-focused producing oil and gas company, announced that it increased its earnings for the full year 2021 and decreased its debt.

The oiler reported fourth-quarter and full-year figures up to December 31, 2021, in a statement. This was compared to 2020’s net loss of US$7.8 million.

Halliburton Co, a firm that provides oilfield services, reported an 85% increase in its first-quarter adjusted profit Tuesday. This was due to a rise in crude prices which boosted demand.

Crude futures rose to their highest levels in over a decade during this quarter, after oil sales from Russia’s second-largest exporter were disrupted by a series of Western sanctions. Brent futures are currently at $111.76 per barrel, while U.S. West Texas Intermediate costs $106.95 per barrel.

Arrow Exploration Corp. (TSX:V: AXL. AIM: AXL). shares surged in Tuesday morning’s deals. After reaching its target depth of 9,674ft, the well in Colombia recorded some 80m of net pay.

According to the company, the Rio Cravo Este-2 well was able to reach five producing horizons.

Rockhopper Exploration PLC, (AIM: RKH). shares rose as high as 17% during early trading. This was due to a deal in Falklands between Harbour Energy and Israeli oil company Navitas Petroleum.

Navitas has acquired Harbour’s share in the Sea Lion oilfield development project (35% owned By Rockhopper). This transaction is expected to unlock the project, which had been on the back burner for Premier Oil.

Empyrean Energy PLC, (AIM: EME) claims that the Jade project has greater chances of success because data from ongoing drilling seems to support pre-drill forecasts.

According to Empyrean, the presence of methane gas clouds at the Jade well’s expected depths validates Empyrean’s pre-drill interpretations of seismic data.

United Oil & Gas PLC, (AIM: UOG). stated that it is on track to meet its production guidance of 1,500-1.650 barrels per day (boepd), as more wells are added at Abu Sennan in Egypt.

The average daily output for the three months ending March 2022 was 1,567 barrels per day (1,267 bopd crude oil and 300 boepd natural gas), net.

U.S. Natural Gas Surges To A 13-Year High Upon Global Supply Crunch

As a result of strong demand, U.S. natural gasoline prices soared to their highest intraday levels in more than 13 years.

  • Despite a drop in backup inventories, production is still flat
  • Strong demand from Europe has almost pushed LNG exports to the limit

Futures rose to $7.558 per million British Thermal Units, surpassing January’s -fueled the rally. This was roughly twice the level at the beginning of the year.

Canadian Overseas Petroleum Limited, (LSE: COPL), expands its acreage in Wyoming through the acquisition of Cuda Energy. This was funded by a US$20mln loan bridge and a US$10mln share placement.

Cuda is currently in receivership and has an interest the Barron Flats Shannon fields (27% WI); Barron Flats Federal(Deep), Cole Creek, and other non-unitized land (27.5%-33.333% Wi) that COPL purchased last year through the acquisition of Atomic Energy.

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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