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Share Talk Weekly Energy Sector News Round-Up, Sunday 25th September 2022

September 25, 2022

Been a couple of weeks since our last blog, but look how the landscape has changed with a new Prime Minister in number ten.

Author @ABMckinley

Fracking is no longer a swear word, the green gang has been pushed right onto the back burner and it is chock away, squadron 617 Dambusters raid to hydrocarbon dreamland. Fossil fuel companies account for seven of the top ten performing stocks on London’s junior Aim Market. More of that later in the blog!

As part of Liz Truss’ dash to new energy supplies, regulators are working to reduce red tape in the North Sea. The North Sea Transition Authority is trying to find areas that can be developed quickly, as they have known reserves. They are also close to existing pipes.

Insiders point out the “urgency” of getting new supplies online in light of a renewed focus on energy supplies throughout Whitehall. Russia’s war against Ukraine continues to cause chaos across the energy markets. This highlights how important it is to ensure future fuel supplies.

Onto the Small-Cap space, in no particular order or preference.

Union Jack Oil (AIM: UJO) who have flagged on more than one occasion took a hammering on Friday, market makers swallowed up any shares they could grab and are now sitting pretty as the company news flow should kick off in late September/October.

https://twitter.com/ABMckinley/status/1573621731952136193?s=20

 

  • West Newton will have the potential to meet the daily gas demands of over 380,000 homes in the UK for many years to come.
  • Additional Prospects PEDL183 Onshore UK Competent Person’s Report (“CPR”) Due for the East Yorkshire West Newton drill site sooner than later. Rathlin has made applications to the Environment Agency for use of oil-based drilling fluids within the oil and gas-bearing Permian section, for both the West Newton A and B sites.
  • Wressle expects to generate ‘well over’ £200 million in the next decade from oil alone.
  • Biscathorpe Hearing/appeal starts on the 11th of October 2022, Best Western Kenwick Park Hotel, LN11 8NR.

Egdon/Angus

Positive news on fracking should have helped companies in the space, although for the likes of Egdon (EDR), the old stock market adage of it being better to travel than arrive seemed to rule the day. Sticking with the urgent need for us to have a solid domestic source of energy, we saw Angus Energy (ANGS) shares hold their recent gains, as Managing Director George Lucan continue his recent PR offensive. Happily, this has taken on the appearance of being something of a lap of honour.

On TomCo (AIM: TOM), the shares have recovered the 0.5p, on apparent hopes that the US oil development group is close to completing its financing.

After the UK government lifted its ban on fracking, shares in IGas Energy PLC(AIM: IGAS) and Egdon Resources PLC(AIM: EDR) rose on Thursday.

Although the moratorium on fracking was in effect since 2019, it has been lifted by the government to encourage gas production in the UK. The UK is home to a strong community that supports the industry.

Longboat Energy PLC (AIM: LBE) Oswig exploration well delivers positive initial results. The company announced that hydrocarbons have been encountered in the OMV-operated exploration well 30/5-4S (Company 20%) and that a decision has been taken to drill a sidetrack well and perform a drill stem test.

The further operations are expected to take between six and eight weeks to complete and remain subject to the granting of the associated regulatory approvals.

Partners in licence PL1100 are OMV (Norge) AS (40%, operator), WintershallDEA Norge AS (20%), Source Energy AS (20%) and Longboat Energy Norge AS (20%).

Rockhopper Exploration plc (AIM: RKH), an exploration and production company with key interests in the North Falkland Basin, is pleased to announce that, further to the signing of definitive documentation as announced on 19 April 2022.

The transaction enables Harbour Energy plc to exit and Navitas Petroleum LP through its UK subsidiary to enter the North Falkland Basin with a 65% stake in, and operatorship of, all of Rockhopper’s North Falkland Basin licences, has completed.

Jersey Oil and Gas PLC, (AIM: JOG). Chief Executive Andrew Benitz highlighted “great progression” in the North Sea junior’s interim results for the six-month period ending 30 June 2022.

The company noted that the favourable macroeconomic and fiscal developments in recent months have boosted interest in the Greater Buchan Area (GBA).

Union Jack Oil plc (AIM: UJO) notes the West Newton Community and PEDL183 update presented to the West Newton Community Liason Group by Rathlin Energy (UK) Limited (“Rathlin”) on 23 September 2022, of which the full wording is presented here

IGas welcomes the Government’s support and commitment to the timely development of domestic gas as laid out in the Written Ministerial Statement (WMS) released today from the Department of Business, Energy and Industrial Strategy.

We particularly welcome the commitment to “more exploratory sites in order to gather better data and improve the evidence base”. IGas looks forward to assisting with this process and will gladly provide the government with its detailed proposals for accelerated development.

The full text of the WMS can be found at https://questions-statements.parliament.uk/written-statements/detail/2022-09-22/hcws295

Petro Matad Ltd (AIM: MATD) Interim results for the six months ended 30 June 2022 and Operational Update.

· The Company has finalised the detailed Heron 1 completion plan with expert engineering input.

· Contract in place with DQE Drilling (DQE) and negotiations underway to substantially expand the size of the programme in order to accelerate development drilling and further reduce costs.

· Heron 1 surface facilities and power generation equipment is either at the border or ready to be shipped from China, subject to Covid-19-related lockdowns.

· Petro Matad continues to push the government on the land access issue with the Company urging the Ministry of Mining and Heavy Industry to expedite certification.

https://twitter.com/Share_Talk/status/1572901084334546946?s=20

i3 Energie PLC (AIM: I3E) stated it has spudded Serenity’s appraisal well. This is the first North Sea well under the new UK prime minister Liz Truss and one of only a few to have been drilled since the coronavirus pandemic.

Block 13/23c. i3 owns a 75% working interest in the field. The drilling programme is expected to last approximately 30 days. The well will be plugged and abandoned after completion of all drilling operations.

The 75% licence that includes Serenity, P.2358 Block 13/23c is owned by a Canada-focused oiler, while the remaining 25% is owned by Europa Oil & Gas. (AIM: EOG)

Synergia Energy Ltd (ASX:AIM: SYN) Cambay India & UK CCS Update with respect to its Cambay India operations and the Medway Hub CCS project in the UK.

Cambay India – C77H workover

The liquid loading of the C-77H wellbore was confirmed by an echometer survey prior to the arrival of the workover rig on September 16th. The workover rig was immediately rigged up and to date the temporary frac tree has been replaced with the production “Christmas” tree. The production tubing will be re-installed over the next 24 hours prior to the resumption of production. Nitrogen lift equipment has been placed on standby in anticipation of lifting the fluids in the wellbore with nitrogen.

UK CCS

The Company has submitted applications under the North Sea Transition Authority’s (“NSTA”) 1st carbon storage licensing round. Synergia has made two separate license applications covering depleted gas fields in the UKCS, which if successful will provide c.100 MT of CO2 storage capacity to complement the Company’s Medway Hub CCS project. Development of the project would be subject to the Company securing the necessary funding.

 

Pantheon Resources plc (AIM PANR) Director/PDMR notifications: Following the exercise of share options, Jay Cheatham, a Director and PDMR of the Company, has sold 1,300,000 shares at an average price of £1.234 per share. Following the completion of the exercise and sale, his ultimate beneficial ownership is unchanged and remains at 3,529,464 shares representing 0.5% of the Company’s total voting rights.

Prospex Energy PLC (AIM: PXEN), note an announcement made by Po Valley Energy Limited (ASX: PVE)  released on the ASX on Monday 19 September 2022 and provides an update on the Podere Gallina Licence located in the Po Valley onshore in northern Italy, in which lies the Selva gas field within the Selva Malvezzi Production Concession.

The Company holds a 37% working interest in the Podere Maiar licence with the Operator holding the remaining 63%.

Further to a resolution of the shareholders at its AGM on 27th July 2022, the Board of Providence Resources P.l.c. (AIM: PVR), the Irish-based energy company, confirms that its name change to Barryroe Offshore Energy plc is anticipated to take effect on 27th September 2022.

The Company’s new ticker will be BEY as of 27th September 2022 and the website address, (including the investor relations content and the information required by AIM Rule 26), will be available at www.barryroeoffshoreenergy.com

Europa Oil & Gas (Holdings) plc,  announce, further to its announcement of 30 May 2022, The Stena Don drilling rig is now on contract and that the rig is on location at Production Licence P.2358, Block 13/23c (“Serenity”). It is expected that the Stena Don will begin drilling operations on the SA-02 appraisal well at Serenity later this week, which is expected to last approximately 30 days.

Simon Oddie, CEO of Europa, said :

“We are pleased to announce the start of operations at Serenity where the well objective is to prove up additional volumes of hydrocarbons beyond those encountered in the original discovery well, which alone the Operator considers commercially viable. Serenity is a late-stage appraisal and development asset that provides our shareholders with exposure to a very exciting asset that could deliver significant value to our shareholders. This is an exciting time for Europa and I look forward to providing further updates in due course.”

Majid Shafiq, CEO of i3 Energy plc, commented:

“i3 is very pleased to have commenced the appraisal of the Serenity discovery. The well is designed to prove the extension of the reservoir to the west of the discovery well 13/23c-10 and so prove up additional hydrocarbon volumes in place. This will enable optimisation of any necessary further appraisal and a development plan for the field. Further updates will be provided in due course.”

 i3 owns a 75% working interest in the field.

After Uniper SE was nationalized by the German government, 41% of the UK’s electricity production is done by Eurozone countries.

According to Uniper’s website, Uniper has seven power stations in the UK and operates a fast-cycle storage facility for gas and two high-pressure pipelines.

Fossil fuel companies account for seven of the top ten performing stocks on London’s junior Aim Market. UK small cap fossil fuel companies have seen their share prices rise and some are now able to make rare profits due to high energy prices.

The top performing 10 stocks on London’s junior Aim stock market are all fossil fuel companies. Four of them focus on UK oil production as the market reacts to the rise in prices following the invasion by Russia.

Companies such as IGas Energy and Union Jack Oil, Angus Energy, and Egdon Resources have been among the top performing stocks on Aim over the past year, with share prices more than doubling, albeit from a low starting point.

Union Jack Oil made its first profit in six months, oil revenues increased by over 1,000% during 2021 and IGas posted a net profit of £19.4mn. This compares to a £12.2mn loss during the same period last year.

George Lucan, chief executive at Angus Energy, stated that the point is not the soaring gas prices we have seen over the past months but the fact that long-term gas prices are not returning to the 10-year average.

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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