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

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

Author @ABMckinley

Five years after being closed, the Rough storage facility will reopen. However, people could face higher energy bills to pay for it.

After granting a new license, regulators in Britain have moved to allow the largest British gas storage site to reopen. This is an important step forward in Western efforts to reduce dependence on Russian gas.

The North Sea Transition Authority has approved Centrica to store gas at the Rough Storage Site off Yorkshire’s coast, five years after it was closed down for being uneconomic.

Although there are some hopes that the facility will reopen as soon as this fall, ministers are still in discussions with Centrica about financial support. This could lead to a levy being added to consumer bills, which would increase the cost of living.

Arrow Exploration Corp. (AIM: AXL) announced that further to the announcement of Canaccord Genuity Limited as its Nominated Adviser on 28 April 2022, Canaccord has confirmed that it has completed satisfactorily its due diligence. Accordingly, a Nominated Adviser Declaration has been submitted to AIM in accordance with the AIM Rules.

Victoria Oil & Gas (AIM: VOG) Q2 2022 Operational & Corporate Update. An onshore gas producer and distributor with operations located in the port city of Douala, Cameroon, provides shareholders with a brief operations update for the second quarter of 2022 and an update on corporate matters.

Zephyr Energie PLC (AIM: ZPHR) stated that it looks forward with high confidence following 2021’s achievements, which saw it transform into a self-sustaining, carbon neutral, cash-generative oil production company.

The AIM-quoted company stated that it has a balanced portfolio consisting of both non-operated and operated assets in two oil-producing basins in the United States.

Upland Resources Ltd (AIM: UPL) Tunisian Farmout Agreement. Announce that a Farmout Agreement has been signed between Upland Saouaf, a wholly owned subsidiary of the Company, and Pennpetro Energy PLC through Pennpetro’s wholly owned subsidiary, Nobel Petroleum USA Inc (“NPUSA”), for a farm-in into Upland’s Saouaf permit area in Tunisia.

The Saouaf Permit is held in joint venture with the Tunisian state oil company, Enterprise Tunisienne d’Activités Pétroliéres (“ETAP”).

Ministers in Suffolk gave the green light for the Sizewell C project, which will help Britain expand its nuclear industry.

French energy giant EDF will build the £20bn plant that will provide power for 6 million homes over the next 60 years.

Negotiations with the Government regarding funding for the power plant are ongoing. A final decision is expected next year.

Chariot Ltd, (AIM: CHAR) announced a material rise in its gas resources offshore Morocco. This validates its decision to accelerate field development plans for Anchois.

  • Increase to 1.4 Tcf in total remaining recoverable resources (2C plus 2U) at the Anchois Project
  • Range of targets de-risked in a basin-scale exploration portfolio with multi-TCF potential

Netherland Sewell & Associate, an Oil & Gas Consultant, has reviewed the project. They have updated the resource estimates for Anchois along with other areas in the Lixus offshore license and adjacent Rissana acreage.

EQTEC plc (AIM: EQT), is a world-leading technology innovation company enabling the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and other energy production.

The company announced that its wholly-owned French subsidiary, EQTEC France SAS (“EQTEC France”) has acquired, subject to final approval, and intends to upgrade and recommission a 6.5 MWe waste-to-energy gasification plant in Villers-sous-Montrond, France (the “Plant”). The Plant, once operational, will transform c. 45,000 tonnes of mixed waste wood and refuse-derived fuel (“RDF”) to export clean electricity to the national grid.

Gazprom, Russia’s largest gas company, stated Wednesday that it still has not received the documentation from Siemens required for reinstalling a turbine in Nord Stream 1 for its gas pipeline. This is despite sanctions from Canada as well as the European Union.

Gazprom stated that the safe operation of Nord Stream 1 had been affected by the return of the turbine. It had been sent to Gazprom for maintenance.

Putin threatened to cut gas supplies to Europe via a key pipeline as high as 80% in an attempt to deepen Europe’s energy crisis before winter.

Serica Energy PLC (AIM: SQZ) Operations Update, Bruce Field Well Interventions, North Eigg, Columbus, 2022 Production and Commodity Prices and Hedging.

Mitch Flegg, Chief Executive of Serica Energy, commented: I am delighted with the significant progress that Serica has continued to make during 2022. The impact of the substantial investment programmes undertaken in the last three years has seen increased production levels providing responsibly sourced gas to the UK domestic market, protecting security of supply, and reducing the UK’s reliance on imports as part of the transition to a lower carbon future.

Commodity prices have been exceptionally strong during the period with a resulting positive impact on income.

UK Oil & Gas PLC (AIM: UKOG) announced the following operational updates in respect of its key Turkiye and Portland Hydrogen/Energy Hub projects, together with an outline of its near-term forward strategy.

Turkiye Resan Licence (UKOG 50% interest):

Further to the Company’s announcement of 30th June 2022, continued examination of the new phase 1 seismic data has revealed a further potentially significant undrilled geological structure to the south of the Basur-1 oil discovery. The feature, currently known as Prospect B, shows the same geological structural style as the Basur discovery, bounded on its northern extent by a significant back-thrust fault.

Portland Hydrogen/Energy Hub (UKOG 100%)

Further to recent discussions with UK and international infrastructure players in relation to the Company’s planned Portland Energy Hub as announced on 30 May 2022, the Company is now investigating the feasibility of linking Portland’s planned hydrogen-ready salt cavern storage into an envisaged future hydrogen hub centred in and around Southampton by a consortium including a major energy company , whereby Portland could provide both the interseasonal and peak demand hydrogen storage necessary to provide the hub’s resilience to fluctuating demand. Via its planned LNG receiving facility, Portland could also help satisfy demand for natural gas feedstock for reforming into blue hydrogen within the hub.

On Wednesday, the European Union presented an emergency plan to reduce gas demand in three months.

This warning is made to countries that have not taken deep cuts and could face fuel shortages during winter if Russia stops deliveries.

Europe is racing ahead to fill its gas storage before winter, and to build a supply buffer in the event that Russia further reduces supplies as retaliation for European support of Ukraine in its war against Russia.

Gazprom in Russia has already stopped deliveries to certain EU states, and EU officials warned that more cuts are possible.

Malcy’s Blog – Oil price, CEG, Angus, Afentra, Hurricane, Predator, SDX & finally

UK Households face higher energy bills on windless days. As part of proposals to balance the grid more effectively, consumers who use electricity when it is windy may pay less. This was stated by the Business Department as it launched a major review on energy markets.

Ministers are also looking at lowering the charges for billpayers who live near a solar or wind farm.

The National Grid warned separately that the target to replace domestic gas boilers with heat pumps could be missed without additional support from taxpayers.

Hurricane Energy PLC (AIM: HUR) stated to investors that the Lancaster field was producing 8,650 barrels per day as of July 16th. In a monthly update, the company stated that there was no crude lifting during June and that the next shipment would be offloaded later in the month.

As of 30 June 2022, the Company had net free cash(4) of $127 million compared to the last reported balance of $139 million as of 31 May 2022. $78.5 million of Convertible Bonds remain outstanding and are due to be repaid by 24 July 2022. Following the repayment, assuming oil prices remain at over $90/bbl, at the end of July the Company is forecasted to be holding net free cash in excess of $75 million. If oil prices for the July cargo are above $110/bbl, the net free cash forecast increases to be above $85 million.

Challenger Energy Group PLC, (AIM: CEG) informed investors that the second quarter’s production was 34,159 barrels gross. This equates to 375 barrels per day, which is an increase of about 6% over the three-month prior.

Eytan Ulil, chief executive of Challenger Energy, stated that everyone in the team is working to drive our production business in Trinidad and Tobago forward. “The results of the second quarter 2022 represent steady improvement across the board – as compared with the first quarter production was higher, oil sales were up and cash flows generated in-country have increased,” he said.

Predator O&G Hldgs (AIM: PRD) Drilling and Operations Update. The Company is in the process of completing local permitting for the second of two alternative locations for the step-out well to the MOU-1 well which was completed for rigless testing in 2021. The final location will be agreed following the integration of reprocessed 2D seismic data that have recently been received. Civil engineering works will commence this month to construct the well pad for the step-out well now designated MOU-2.

Long lead equipment including well heads, casing, cement, chemicals, drill bits mud motors and downhole tools as well as mud and cementing services have been sourced out of the UK, France, USA, Canada, Egypt and the Netherlands.

The well is anticipated to be drilled and completed for rigless testing between September and October this year. The drilling window will be updated as well inventory arrives in Morocco from overseas. Star Valley Rig 101 is prepared to commence drilling operations on instructions from the Company.

The geological well programme and drilling programme are currently being updated.

Angus Energy PLC (AIM: ANGS) Progress Update at Saltfleetby. Input/ output testing on the remaining electrically powered systems including re-boilers, switchgear, air compressors and lighting is expected to conclude on Wednesday (20th July) when system-wide testing of the SCADA begins.

We expect to introduce live gas as far as the test separator on Friday (22nd July) as part of the commissioning schedule and will advise further on a precise date for export and nominations thereafter.

SDX Energy PLC, (AIM: SDX) merger into Canada’s Tenaz Energy Corporation has been put into doubt by group shareholders who say they will vote against it.

Aleph Commodities is a global investment and trading company that it describes as 25.65%. SDX stated in a statement that Aleph Commodities has indicated it will not support the SDX board’s recommendation to approve the deal.

According to Gazprom’s July 14 letter, Reuters saw Monday and found that Gazprom had declared force majeure over gas supplies to Europe to at most one major customer.

Gazprom, having a monopoly over Russian gas exports via pipeline, was informed in a letter that it could not fulfil its supply obligations due to “extraordinary” circumstances beyond its control.

The force majeure clause, which is a clause that is invoked when a company is struck by something beyond its control, was effective as of June 14th.

Malcy’s Blog – Oil price, SDX Energy, Trinity Exploration & Production, Gulf Keystone Petroleum & finally

Challenger Energy Group PLC, (AIM: CEG) stated Timothy Eastmond has resigned from his position as chief financial officer and director of the company. This was due to personal reasons.

His resignation will be effective immediately. Challenger’s chief marketing officer Gagan Khurana will act as interim CFO until a permanent replacement is found. The oil and gas company released a statement.

ATOME Energy PLC (AIM: ATOM) UK Ambassador To Paraguay Release Of Presentation To Analysts.

ATOME CEO, Olivier Mussat, commented: “ATOME continues to demonstrate its intent to be the accelerator in the field of green hydrogen and ammonia with work on the ground already commencing to provide Paraguay with its first-ever commercial green hydrogen mobility solution in less than a year from now.”

Oilex Ltd (ASX:AIM: OEX) Cambay C-77H Re-frac Operations Update No2.

All of the equipment necessary for the re-frac operation has arrived onsite with the exception of the coiled tubing unit (CTU) which has been delayed by monsoon season-related rain. The CTU is expected to arrive onsite tomorrow after which the initial stage of the re-fraccing operation, perforating the zones to be hydraulically fractured, will commence.

The actual fraccing operation is anticipated to last 7 days and will be followed by flow-back and testing. We currently expect to be able to announce the results of the re-frac operation in August 2022.

EQTEC plc (AIM: EQT) announced that it has selected Petrofac as its front-end engineering design (“FEED”) contractor for its multi-technology, a waste-to-energy project at Haverton Hill, Billingham, Teesside, UK (the “Project”). The Company and Petrofac (together, the “Parties”) have signed a Letter of Intent (“LoI”) to formalise their joint commitment to collaborating on the FEED and as potential EPC partners for the development and delivery of the Project.

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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