Panoro Energy (PEN NO)C; Target Price: NOK23.00: BW Energy (BWE NO) provides update in Gabon – BW indicated that 4Q20 gross production from the Tortue field was ~13,500 bbl/d, as an 11 day downtime took place in October for the annual maintenance program and to comply with Gabonese production allocations to meet OPEC quotas. A drilling contract for one development well (DTM-7H) and one exploration well has been recently awarded. There is also the option for another exploration well subject to the results of the drilling campaign.
Pharos Energy (PHAR LN)C; Target Price: £0.40: Raising US$11.7 mm of new equity – Pharos has raised US$11.7 mm of new equity price at 19.25 p per share. The proceeds will be invested in Egypt to arrest production decline and boost production ahead of securing a farm in partner.
IN OTHER NEWS
ExxonMobil (XOM US): Dry hole in Guyana – The Hassa wildcat on the Stabroek block was dry.
Gran Tierra Energy (GTE LN/CN): Transaction to divest shares in PetroTal terminated – Gran Tierra, has terminated the purchase agreement with Remus Horizons regarding the proposed sale of 218,012,500 common shares in the capital of PetroTal. In a separate announcement Gran Tierra reported that 109 mm shares with private purchasers for US$14.8 mm
Kosmos Energy (KOS US/LN): Discovery in the US Gulf of Mexico – The Winterfell well on the Green Canyon Block 944 encountered ~26 meters of net oil pay in two intervals in the sub-salt Upper Miocene. The well de-risks prospectivity in several neighbouring blocks held by Kosmos, with approximately 100 mmbbl of gross potential within Kosmos' acreage position.
Pantheon Resources (PANR LN): Acquisition of acreage in Alaska - Pantheon Resources is acquiring 10.8% WI in each of the 16 leases in the 44,463 acre Talitha Unit from Otto Energy. The consideration consists of 14,272,592 shares of Pantheon. Upon completion of the acquisition, Pantheon will own a 100% WI in the Talitha Unit.
Predator Oil & Gas (PRD LN): Operation update in Trinidad – The Pilot CO2 EOR results support pre-injection desktop production plateau forecasts of 243 -547 bbl/d from the Herrera #2 Sand. The CO2 sequestration potential is confirmed. At WTI oil price of US$50/bbl, projected EBITDA net-backs for the P50 and P10 pre-Pilot CO2 EOR production profiles at plateau production are estimated to be in the range US$15 – 25/bbl.
Trinity Exploration & Production (TRIN LN): Operating update in Trinidad – 4Q20 production was 3,206 bbl/d. Trinity held net cash of US$17.5 mm at YE20.
Westmount Energy (WTE LN): Acquiring further interest in Guyana explorer – Westmount has purchased 287,500 common shares in JHI for an aggregate cost of C$718,750. Westmount holds a total of 5,651,270 shares in JHI, representing ~7.7% of the issued common shares in JHI. Drilling operations at the first well in the Canje drilling campaign, Bulletwood-1, are ongoing, with completion of the well anticipated around mid to late February. Additional Canje drilling will follow-on in 1H21.
Aker BP (AKERBP NO): Trading update in Norway – Aker BP produced 223.1 mboe/d in 4Q20. FY20 capex was US$1.3 bn, exploration spend was US$246 mm and abandonment spend was US$178 mm. YE20 net debt was US$3.6 bn.
Cairn Energy (CNE LN): Trading update – FY20 net production at Catcher and Kraken was just over 21,000 bbl/d, in line with guidance. FY20 cash capex was US$160 mm. FY21 net production is estimated to be 16,000 – 19,000 bbl/d with capex of US$85 mm (including US$10 mm at Kraken and Catcher). At YE20 Cairn held US$570 mm in cash with no drawn debt. In 2021, Cairn is planning to drill an exploration well on Block 10 in Mexico and there is an optional drilling opportunity for an appraisal well of the Saasken discovery (Cairn 15% WI). In the UK, Cairn will participate in the Shell-operated Jaws exploration well on P2380 (Cairn 50% WI). In Côte d’Ivoire, Cairn has assumed Operatorship (90% WI) in blocks CI-301 and CI-302 from Tullow which has exited both licences. The JV has exited blocks CI-518, CI-519, CI-521 and CI-522 effective end December 2020.
ExxonMobil (XOM US): Progress at selling UK assets – Media reports indicated that ExxonMobil has entered exclusive discussions with HitecVision/NEO Energy with regards to the divestment of Central and Norther North Sea assets.
Repsol (REP SM): Trading update – 4Q20 production was 628 mboe/d.
Norway: Exploration licence award – Norway has awarded 61 licences to 30 companies. Equinor, Aker BP, Lundin Energy, DNO, Neptune Energy, Wintershall DEA, OKEA Energy, Var Energy and Spirit Energy were awarded interests in respectively 17, 10, 19, 10, 6, 16, 4, 10 and 3 licences.
Serica Energy (SQZ LN): Operating update in the UK North Sea – Estimated FY20 net production from Serica's interests in Bruce, Keith, Rhum (BKR) and Erskine averaged 23,800 boe/d. With regards to the R3 operations, the removal of the 2005 completion is taking longer than anticipated due largely to the unexpectedly poor condition of the equipment being recovered from the well. As a result, R3 operations are now expected to continue into March 2021.
Union Jack Oil (UJO LN): Further acquisition of interests in UK asset – Union Jack Union is acquiring a 15% interest in PEDL253, containing the Biscathorpe project from Humber Oil & Gas, increasing its interest to 45%. The consideration consists of £0.5 mm in cash plus a contingent payment of £0.5 mm.
FORMER SOVIET UNION
JKX Oil & Gas (JKX LN): Operating update in Ukraine and Russia – FY20 production was 10,238 boe/d including 5,389 boe/d in Russia and the balance in Ukraine. JKX held US$24.5 mm in cash at YE20. IG146 was completed to the Devonian in Ignativske (Ukraine) and encountered 2.6 m of net hydrocarbon bearing thickness. After initially testing of the IG146 well at an oil rate of 497 bbl/dd and a gas rate of ~200 boe/d in November the rate declined and the well is currently producing 35 boe/d.
MIDDLE EAST AND NORTH AFRICA
Apex International Energy: Discoveries in Egypt – The SEMZ-1X well discovered Bahariya oil with 17 feet of indicated pay and and tested at a rate of 100 bbl/d. The well will be fracced to maximize flow rate. The SEMZ-11X well encountered 65 feet of oil pay in the Cretaceous sandstones of the Bahariya and Abu Roash G formations. Testing of the Bahariya resulted in a peak rate of 2,100 bbl/d of oil and no water.
DNO (DNO NO): Operating update – FY20 WI production was 95,100 boe/d including 17,300 boe/d in Norwar and the balance in Kurdistan. FY20 capex was US$515 mm increasing to US$700 mm in 2021. DNO held US$475 mm in cash at YE20. The KRG has put a plan in place to make payments towards DNO’s arrears (US$259 mm) such that if Brent prices exceed US$50/bbl in any month, the incremental revenue will be shared 50 50 between the KRG and the Tawke license partners.
Energean (ENOG LN): Trading update – FY20 pro forma WI production was ~48.3 mboe/d with pro forma capital expenditure (including exploration expenditure) of US$558 mm. FY21 production is expected to be 35.0 40.0 mboe/d with capex of US$515 – 590 mm,
Genel Energy (GENL LN): Operating update in Kurdistan – Gross operated production from the Tawke licence averaged 110,300 bbl/d in 2020, about evenly split between the Tawke and Peshkabir fields. FY20 production at Taq Taq was 9,670 bbl/d with a production rate of 8 mbbl/d at YE20. Sarta produced 520 bbl/d. The Sarta-3 well has produced at an average of ~5,500 bbl/d so far in 2021. Production from Sarta-2 is now expected in February. The 2021 appraisal drilling campaign is targeting a material portion of the 250 mmbbl of existing contingent resources, and prospective resources, in Jurassic formations. The Qara Dagh 2 well is expected to be spudded in 1Q21. FY21 WI Production is expected to be slightly above FY20 (31,980 bbl/d) with capex of US$150-200 mm. Genel held US$354 mm in cash (net cash of US$10 mm) at YE20. The KRG has submitted a reconciliation model for repayment of the receivable relating to the US$159 mm in unpaid invoices, whereby for each cent above a monthly dated Brent average of US$50/bbl, 0.5 cent per working interest barrel shall be paid towards monies owed.
TransGlobe Energy (TGL LN): Operating update – Production averaged 12.4 mboe/d (including 11,178 boe/d in Egypt) in 4Q20 and 13.5 mboe/d during FY20. At YE20, TransGlobe held >US$30 mm in cash and had no net debt.
BW Energy (BWE NO): Equity raise – BWE has raised US$75 mm of new equity priced at NOK27 per share, representing a 9.5% discount to the previous day close. The net proceeds will be used for capital investments in the Dussafu licence in Gabon, development of the Maromba discovery in Brazil, new ventures and for other general corporate purposes.
Total (FP FP) and Royal Dutch Shell (RDSA/B LN): Divestments in Nigeria – Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, have been sold to TNOG Oil and Gas for a consideration of US$533 mm net to Shell (30% WI) and US$180 mm net to Total (10%).
EVENTS TO WATCH NEXT WEEK
27/01/2021: Tullow Oil (TLW LN) – Trading update
28/01/2021: Lundin Energy (LUNE SS) – 4Q20 results
Companies: AKERBP CNE DNO ENOG XOM GENL GTE JKX KOS PEN TAL PHAR REP RDSA SQZ FP TGL
NQ Minerals, the base and precious metals producer from its 100% owned flagship Hellyer Mine and the 100% owner of the Beaconsfield Gold Mine, both in northern Tasmania, Australia, has submitted a draft prospectus to the UK Financial Conduct Authority for approval. The Company is considering applying for admission of its ordinary shares to the Official List of the FCA by way of a Standard Listing and to trading on the Main Market of the London Stock Exchange . Details TBA
Foresight Group , the award-winning infrastructure and private equity investment manager to IPO on the Main Market (Premium). The Offer will primarily comprise a sale of shares by existing shareholders (c.80% of the Offer) with a smaller offering of new shares (c.20% of the Offer) to be issued by the Company. Details TBA.
Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5m by way of private placement of new Common Shares to advance the United Downs copper-tin project. The Company expects that Admission will become effective in February 2021. The Company's Common Shares will continue to be listed and trade on the TSX-V in Canada.
VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments announced it intends to launch an IPO of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: TYM SQZ IIG EVG EVE ECSC RBN AVG IGE CMH
Bahamas Petroleum Company (BPC LN)C; Target: 6.7p: Further funding secures the 2021 programme - BPC is raising US$10 mm of new equity immediately with a fund managed by Lombard Odier. The placing comprises 375 mm new shares at 2.0p per share. The investor is also issued warrants to subscribe for 93.75 mm shares at 3.0p and 93.75 mm shares at 4.0p over a period of one year. If all of these warrants were to be exercised, BPC would raise a further US$8.7 mm. BPC has also the option to raise up to a further US$5 mm on the same terms within 10 days of spudding Perseverance #1 in The Bahamas. The investor has the option to double that amount to US$10 mm. If the investor has not made an aggregate return of 115% of the placing price by the earlier of (i) 60 days after the date of spudding of BPC's Perseverance #1 well or (ii) YE21, BPC would have to make a cash payment so that the Investor's aggregate return from those new ordinary shares reach 115% of the subscription price. This new funding boosts BPC’s cash position to a minimum US$27.5 mm. This is important because it means that even if Perseverance#1 cannot immediately be drilled, the company has now enough cash resources to fund its development, appraisal and exploration program in Trinidad and Suriname. Our new Core NAV and ReNAV incorporating the US$10 mm placing are respectively 2.0-2.3p and 6.7-7.1p based on a NPV10-12.5%. Importantly even excluding the Bahamas, our Unrisked NAV for the company based on the 2021 base case activity programme in Trinidad and Suriname in 2021 is 4.6-5.1p per share.
Pharos Energy (PHAR LN)C; Target £0.35: Readthrough from TransGlobe’s deal in Egypt - TransGlobe Energy has negotiated new fiscal terms in Egypt with a better cost recovery limit and higher profit share. In return TransGlobe is paying US$16 mm in cash on completion plus US$10 mm per year for five years. Since the announcement about a week ago, TransGlobe’s share price has appreciated by ~100%. While we understand that Pharos is also negotiating new terms with the Egyptian authorities for the El Fayum licence, the share price has barely moved since TransGlobe’s announcement. The situation at TransGlobe is different as it involves the restructuring of an entire portfolio of licences. The new terms that Pharos is aiming to secure are therefore likely to be different. Pending further details on the outcome of Pharos’ discussions, we are exploring the impact on Pharos valuation if, hypothetically, El Fayum’s terms were amended to match those secured by TransGlobe. Increasing cost recovery limits from 30% to a hypothetical 40% of revenue and contractor profit sharing from 15-18% to 30%, while paying the same cash amounts as TransGlobe, would boost our Core NAV for Pharos with only two rigs in Egypt by ~50% from £0.19-0.24 per share to £0.29-0.36 per share (NPV12.5-15%) and our ReNAV by ~30% from £0.35-0.41 per share to £0.48-0.55 per share. Importantly, even the one rig case in Egypt becomes attractive. Assuming four rigs in Egypt, our Core NAV under the TransGlobe terms would be almost £0.50-0.57 per share.
PetroTal (PTAL LN/TAL CN)C; Target: £0.45: Gran Tierra (GTE LN/CN) selling large stake in the company – Gran Tierra is selling 218,012,500 shares in PetroTal (26.7% of PetroTal’s share capital) to Remus Horizons for £21.7 mm (~£0.10 per share). Upon closing the Transaction, Gran Tierra will own 28,087,500 PetroTal Shares, representing approximately 3.44% of the issued and outstanding PetroTal Shares.
Tethys Oil (TETY SS)C; Target £0.35: Changing gear - Tethys is operator on Blocks 49, 56 and 58 in Oman. We anticipate more activities on all these Blocks in 2021. The results of the Thameen well on Block 49 (our estimates: ~15 mmbbl gross resources – Unrisked NAV of SEK9 per share) are expected in 1Q21. The involvement of EOG Resources as 50% partner on Block 49 highlights the quality and the materiality of the asset. EOG is a major player in unconventionals. Their interest in exploring the potential presence of such a play on the licence adds a further material dimension to the Tethys story. Block 56 straddles the eastern flank of the South Oman Salt Basin and the Tertiary Basin. Multiple leads associated with the proven play on the adjacent Block 6 have already been identified on 2D seismic. At Block 58, which straddles the western flank of the South Oman Salt Basin and the Western Deformation Front, a number of undrilled leads have already been identified based on Tethys’ work. The firm is to launch a share buy back programme for up to US$5 mm until early February. Thereafter the programme could be extended. We read this as a positive sign for further shareholder distributions. The current share price represents EV/DACF multiples of only 2.3x for 2021 and 1.0x for 2022 and the core dividend implies >4% yield.
Canadian Overseas Petroleum (COPL LN): Acquiring US assets – Canadian Overseas is acquiring Atomic Oil & Gas for a consideration of US$54 mm consisting of assumed debt, cash and shares. Atomic's assets are located in the Powder River Basin in the State of Wyoming, where it holds operated interests in 52,258 acres (gross) of contiguous leasehold including the Barron Flats Shannon Miscible Flood Unit (57.7% WI) and the Cole Creek Unit (66.7%) that are producing light oil and hold 24.7 mmboe of net 2P reserves. Current gross production of 1,400 bbl/d is expected to rise to 5,000 bbl/d in 2022 and ~7,000 bbl/d in 2026. The consideration includes (1) US$1 mm deposit, (2) US$8 mm (debt financed) for 15% WI in Atomic’s leasehold interests, (3) US$26 mm of assumed debt on closing, (4) US$15 mm of additional debt and cash on closing and (5) US$4 mm in shares. The 2P case assumes US$40 mm development costs in 2021, ~US$27 mm in 2022 and ~US$41 mm in 2023.
Maha Energy (MAHA-A SS): Disappointing well results and production guidance downgrade in Brazil – The Tartaruga Maha-1 well test results indicate a lower than expected oil production rate. Two zones were tight and did not flow while a third zone only flowed limited amount of oil. The last zone flowed fluid with a very high water cut. Covid-19 is also causing delays in the company’s 4Q20 Brazilian well completions programme. Therefore, the Company expects the FY20 average production to be ~3,250 boe/d (previous guidance of 3,700 - 4,000 boe/d).
Advance Energy (ADV LN): Acquiring assets in Timor-Leste – Advance Energy is acquiring up to 50% WI in the Buffalo oil field offshore Timor-Leste from Carnarvon Energy for a consideration of up to US$20 mm in cash. Buffalo has produced 21 mmbbl over 5 years in the early 2000s. The cash consideration will be applied to funding the drilling of the B-10 appraisal well and to appraise the contingent oil resource of 31.1 mmbbl with the intention for drilling to take place in late 2021. In the event Advance raises less than US$20 mm, but more than US$10m, Advance will acquire a lower interest in Buffalo. Advance’s equity level is 2.5% per US$1 mm contributed to the project.
ADX Energy (ADX AU)C: Raising new equity – ADX is raising A$1.3 mm of new equity priced at A$0.006 per share. In addition, new investors are offered an option for every two placement shares to acquire an additional share in the company at a strike price of A$0.008 per share (expiry date of 15/06/2021). ADX is also offering a share purchase plan for up to A$1.0 mm allowing shareholders to invest on the same terms as the placement.
Hurricane Energy (HUR LN): Operational update in the UK North Sea - The 205/21a-6 well is currently producing at ~12,300 bbl/d on artificial lift with a ~23% water cut. In early November 2020, the Company decided to limit production to approximately 12,000 bbl/d for reservoir evaluation and management purposes and aims to maintain production around this level in the near-term. Hurricane could re-enter and side-track the existing 205/21a-7z well to boost production capacity in 2021. Development costs are currently estimated at ~US$60 mm. Water injection is also considered for 2022 with an estimated cost of US$75 mm for the programme. At as the end of November Hurricane held US$87 mm in net free cash. The company has appointed advisors to discuss funding options with parties including the holders of its convertible bonds.
Jersey Oil & Gas (JOG LN): Update on prospectivity in the UK – Jersey has matured four prospects to drill-ready status: Verbier Deep, Cortina NE (J64), Wengen (P2170) and Zermatt (P2497) with aggregate P50 prospective resources of 222 mmboe. Individual probabilities of geological success range from 16 to 30%. Subject to funding, a drilling campaign is planned from 2022.
OKEA (OKEA NO): Acquiring Norway assets – OKEA is acquiring 40% WI in the PL972 licence including the Vette oil discovery (30-50 mmboe) from Repsol.
Premier Oil (PMO LN): Operations and Corporate update – Chrysaor’s 2P reserves and 2C contingent resources have been respectively estimated at 491 mmboe and 388 mmboe. Premier’s production averaged 61.2 mboe/d from January to November and Premier reiterated it FY20 guidance of 61‐64 mboe/d. Premier expects FY21 production to be in the range of 61-66 mboe/d as new production from Tolmount (due on-stream in 2Q21) offsets natural decline and maintenance shutdowns deferred from 2020. Catcher oil production has been restored to rates >60 mbbl/d following a seven day unplanned outage in mid-November. In early December, production from the Solan field was shut in following the failure of the emergency generator. FY21 capex is estimated at ~US$275 mm. Net debt at the end of November was US$2.06 bn. Chrysaor’s production averaged 174 mboe/d from January to November and Chrysaor forecasts FY20 production of 174 mboe/d with 140-155 mboe/d in 2021. Capex in 2020 and 2021 is estimated at respectively US$718 mm and US$750-850 mm.
Serica Energy (SQZ LN): Operations update in the UK North Sea – During the most recent three-month period, net production from Bruce, Keith and Rhum and Erskine has averaged 26,300 boe/d. Offshore operations on the R3 Intervention Project have been slower than had been anticipated due to poor weather conditions and a technical problem with rig equipment. As a result, rig operations will not be completed before late January 2021.
FORMER SOVIET UNION
Equinor (EQNR NO): Acquiring oil projects in Russia – Equinor is acquiring a 49% stake in Krasgeonats from Rosneft for US$550 mm. Krasgeonats holds 12 exploration and production licenses for areas with conventional resources located in Eastern Siberia.
MIDDLE EAST AND NORTH AFRICA
Chariot Oil & Gas (CHAR LN): Licence award in Morocco – Chariot has been awarded a 75% interest in the Rissana licence. Rissana (approximate area 8,476km2) will completely surround the offshore boundaries of Chariot’s existing Lixus Offshore Licence (approximate area 2,390km2), which contains the Anchois Gas Discovery, as well as covering the most prospective northern areas of the previously held Mohammedia Offshore Licence and Kenitra Offshore Licence.
Gulf Keystone Petroleum (GKP LN): Operational update in Kurdistan – The PF-1 is now operating at its current maximum processing capacity of ~27.5 mbbl/d. Debottlenecking activities at PF-1 remain on-track to further increase production capacity to >30 mbbl/d during 1Q21. Gross Shaikan production is currently at ~42,000 bbl/d, ~20% above the November 2020 average rate. FY20 gross production is expected to be at, or slightly above, 36 mbbl/d, the top end of the guidance range. As at 14 December 2020, the company had a cash balance of US$142 mm.
Africa Oil (AOI SS/CN): Dividend from Prime – Africa Oil has received a net dividend payment from Prime (Nigeria) of US$37.5 mm.
Cairn Energy (CNE LN): Completing divestment of Senegal – Cairn has received US$525 mm in cash for the divestment of its assets in Senegal to Woodside Petroleum. As indicated previously the company will return US$250 mm to its shareholders through a £0.32 per share special dividend.
FAR (FAR AU): Non-binding offer to buy the company – FAR has received a conditional non-binding indicative proposal from Remus Horizons to acquire the company for A$0.021 per share in cash.
LEKOIL (LEK LN): Operational update in Nigeria - Gross production at Otakikpo for July to November was 4,519 bbl/d with FY20 guidance of 5,150 bbl/d. Production is 20% lower than during 1H20 due to bad weather, maintenance works and OPEC restrictions. As at 30 November, LEKOIL has an outstanding balance of external interest-bearing loans and borrowings of approximately US$15.7 mm and a total cash balance of US$1.6 mm. Trade and other payables stood at US$28.4 mm. The company has also extended the duration of a US$1.9 mm loan to its CEO by one year to December 2021.
Companies: SQZ PMO AOI BPC CNE XOP GTE HUR JOG MAHAA TAL PHAR TETY TETY
Serica Energy (SQZ) – Upbeat operations update | Caspian Sunrise (CASP LN): BNG continues to produce in line with guidance | ADM Energy (ADME LN): 14th lifting confirmed at Aje, offshore Nigeria
Companies: SQZ CASP ADME
Oil posted its first back-to-back weekly loss since April's rout with the end of the summer driving season and concern about OPEC's production compliance weighing on prices.
Futures in New York edged up on Friday, but prices fell 6.1% this week coinciding with a retreat in U.S. equities. Traders are also examining data indicating the United Arab Emirates since July has been regularly exceeding its quota under a deal between the Organization of Petroleum Exporting Countries and its allies.
The uncertainty over how much supply OPEC+ is returning to the market adds another wrench in the recovery for oil prices still reeling from the pandemic-driven blow to consumption. While U.S. supplies had grown tighter in past months and producers were expected to restrain production amid a weak financial backdrop, stockpiles rose again last week for the first time since mid-July.
Companies: XOM HES JSE 88E ADV CAD CHAR ECHO ENOG EME I3E PMG RBD SQZ SOU TLW VGAS WTE PHAR
PetroTal (PTAL LN)C; Target price £0.40: Important development in Peru – On August 28, 2020, the Government of Peru announced a Supreme Decree approving the financial Gap Closure Plan within a number of provinces in northeast Peru, including Loreto, the area where PetroTal operates the Bretana oil field. The decree provides for a six year financial commitment of approximately US$1.7 bn to the communities. This is important as the decree specifically addresses the local community participation criteria, that have been a recurrent key area of contention for years with some communities in Peru. US$46 mm will be designated for economic development of the localities over the next four months by the Peruvian government. Since the announcement of the Decree, government and municipality representatives have been consulting with the community representatives . After meeting with the Bretana community in the coming days, it is expected that PetroTal will restart oil production shortly thereafter.
IN OTHER NEWS
88 Energy (88E LN/AU): Update in Alaska – The final petrophysical interpretation from the recently drilled Charlie-1 well provides an increase in net pay from 280’ to 398’, with the largest contribution coming from the Lima discoveries in the Seabee Formation. These improvements are despite using higher cut-offs for both reservoir and net pay.
Alvopetro (ALV CN): Update in Brazil - In August, total sales were 1,867 boe/d. Total aggregate gross prospective resources identified at the B1 prospect (block 183) and the C1 prospect (block 182) are estimated at 59.4 bcf.
Echo Energy (ECHO LN): Operating update in Argentina - Net 2020 production at Santa Cruz Sur over the period 1 January to 7 September was 2,040 boe/d.
Exxon Mobil (XOM US): New discovery in Guyana - ExxonMobil has made its 18th discovery at the Redtail-1 well on the Stabroek Block with 70 meters of high-quality oil bearing sandstone.
Total (FP FP): Dropping operatorship of Brazilian exploration blocks – Total is resigning from its role of operator for five exploration blocks, located in the Foz do Amazonas Basin. These exploration blocks are referenced as FZA-M-57, FZA-M-86, FZA-M-88, FZA-M-125 and FZA-M-127.
Westmount Energy (WTE LN): Increasing stake in JHI Associates - Westmount has purchased 1.55 mm common shares in JHI by way of the issue of 18.3 mm new ordinary shares in Westmount, which will represent approximately 12.7% of Westmount's enlarged issued share capital. JHI holds a 17.5% carried interest in the Canje Block, offshore Guyana, where ExxonMobil is the operator. At the completion of the transaction, Westmount will hold 6.9% in JHI.
Hibiscus Petroleum: Raising ~ US$480 mm to acquire upstream assets – Hibiscus is raising up to US$480 mm from a private placement of convertible redeemable preference shares to acquire oil and gas assets.
Jadestone Energy: 1H20 results – 1H20 WI production in Australia was 12,116 bbl/d. Net cash at the end of June was US$78.3 mm. FY20 production guidance has been reduced to 11.0–12.5 mbbl/d from 12.0-14.0 mbbl/d previously, as a result of a slowdown in well interventions. Jadestone reiterated its FY20 capex guidance of US$30 35 mm. A maiden interim dividend of 0.54 US cents/share has been declared, representing a total distribution of US$2.5 mm, in line with the lower end of the FY guidance of US$7.5–12.5 mm, split approximately one-third/two-thirds between interim/final. The company anticipates to be debt free by the end of 1Q21. Most approvals are now in place with regards to the New Zealand acquisition and Jadestone expects final government approvals in 4Q20 post the upcoming general election. In Vietnam, discussions are continuing with the government on the FDP and a future gas sales agreement.
Hurricane Energy (HUR LN): Reserves downgrade in the UK – 2P reserves have been reduced from 30.7 mmbbl to 9.4 mmbbl (as of 01/09/2020) with 2C contingent resources cut from 486 mmbbl to 58 mmbbl at Lancaster and from 565 mmbbl to 45 mmbbl at Lincoln. Lancaster EPS production for September to December 2020 is expected to average 12,000-14,000 bbl/d. The company held net debt of US$123 mm at the end of June.
Reabold Resources (RBD LN) and ADX Energy (ADX AU): Partner not farming in Romania assets? – Tamaska Oil & Gas has decided not to proceed with the farmin transaction relating to the EX-10 Parta Exploration licence in Western Romania held by Danube Petroleum (49% ADX, 51% Reabold). Tamaska does not intend to proceed with the planned acquisition of 3D exploration seismic.
Serica Energy (SQZ LN): 1H20 results – 1H20 production in the UK North Sea was 21,600 boe/d. First gas at Columbus continues to be expected by the end of 2021. Serica held £101 mm in cash at the end of June.
The Parkmead Group (PMG LN): Licence awards in the UK – Parkmead has been offered 50% WI in Blocks 14/20g & 15/16g situated in the Central North Sea, adjacent to Parkmead's extensive Greater Perth Area. Two further licences have been offered to Parkmead as part of the 32nd Round. Block 14/20c (Parkmead 100%) is located in the Central North Sea and contains extensions to the Lowlander oil field and the Fynn Beauly oil discovery. Block 42/28g (Parkmead 100%) is situated in the Southern North Sea near the Tolmount gas discovery.
FORMER SOVIET UNION
Cadogan Petroleum (CAD LN): 1H20 results – 1H20 production in Ukraine was 230 bbl/d. The company held US$11.6 mm in cash at the end of June.
MIDDLE EAST AND NORTH AFRICA
Chariot Oil & Gas (CHAR LN): Resources update in Morocco – Anchois is now expected to hold 361 bcf of contingent resources (2C) and 690 bcf of prospective resources (P50).
Energean (ENOG LN): 1H20 results – 1H20 pro forma production (including Edison E&P) was 52.1 mboe/d, with FY20 production guidance unchanged at 44.5 - 51.5 mboe/d. The acquisition of Edison E&P is expected to be completed during 4Q20. The FY20 pro forma capex guidance has been reduced by US$75-125 mm to US$635 - 705 mm, primarily due to (i) the rescheduling of expected milestone payments under the Karish EPCIC contract; and (ii) expected timing of capital expenditure on Edison E&P in Egypt. Net debt at the end of June was US$597 mm.
ShaMaran Petroleum (SNM CN): Receives payment from Kurdistan – ShaMaran has received a net payment of US$6.5 mm from the Kurdistan Regional Government for Atrush oil sales invoice entitlements for the month of July 2020.
Tethys Oil (TETY SS): Production update in Oman – WI production in August was 10.8 mbbl/d.
Zenith Energy (ZEN LN): Acquisition in Tunisia – Zenith is acquiring a 26% interest in the North Kairouan permit and the Sidi El Kilani Concession, which contains the Sidi El Kilani oilfield for US$0.3 mm.
Africa Oil (AOI/SS CN): Extension of Kenya licences – The partners on the 10BB and 13T licences have been given the right to extend the second exploration period until 31 December 2020, with a further extension until 31 Dec 2021.
Kosmos Energy (KOS US/ LN): Selling frontier exploration assets for US$100-200 mm – Kosmos is selling interests in blocks offshore São Tomé & Príncipe, Suriname, Namibia, and South Africa to Shell. The consideration consists of an upfront cash payment of ~US$100 mm, plus contingent payments of US$50 mm payable upon each commercial discovery from the first four exploration wells drilled across the assets, capped at US$100 mm in aggregate. Three of the four wells are currently planned for 2021.
Tullow Oil (TLW LN): 1H20 results – 1H20 production was 77 mboe/d. Net debt at the end of June was US$3.0 bn. FY20 production guidance has been narrowed from 71-78 mbbl/d to 73-77 mbbl/d following good well performance in Ghana. During 1H20, Jubilee and TEN produced 84,700 bbl/d and 50,900 bbl/d gross respectively. This strong performance is a result of (1) increased gas offtake nominations, (2) permission to temporarily increase flaring, (3) higher than forecast facility uptime of over 95% at both FPSOs and (3) greater reliability and redundancy in the water injection facilities on the Jubilee FPSO. The Ntomme-09 production well came on stream in August and is adding c.5,000 bbl/d gross to TEN oil production. FY20 free cash flow is forecast to break even at the current Brent forward curve. The semi-annual RBL debt capacity redetermination is expected to complete in early October 2020. The next redetermination will be in January 2021. Drilling of the Goliathberg-Voltzberg North well in Block 47, Suriname, is planned for 1Q21.
Companies: 88E AOI ALV ENOG XOM HUR JSE KOS PMG TAL RBD SQZ SNM TPL FP TLW
Serica Energy (SQZ LN): Production shutdowns and commodity price correction hits 1H 20 financials | Jadestone Energy (JSE LN): Cash balance doubles, maiden dividend confirmed
Companies: Serica Energy PLC (SQZ:LON)Jadestone Energy, Inc. (JSE:LON)
Companies: FLTA AEG RNWH CTG UFO SYME THW SQZ
I3 Energy (I3E LN): i3 completes Gain Energy asset acquisition | Serica Energy (SQZ LN): Four new blocks awarded in the 32nd UKCS Licensing Round
Companies: i3 Energy Plc (I3E:LON)Serica Energy PLC (SQZ:LON)
Diversified Gas & Oil (DGOC LN): DGO raises US$86m to part finance two acquisitions | Vaalco Energy (EGY LN): 1Q20 results, production in line with guidance, large impairment recognised | Serica Energy (SQZ LN): R3 intervention slated for 4Q20
Companies: DGOC EGY SQZ
GeoPark (GPRK US)C; Target price US$20: Delivering on plan; boosting balance sheet | PetroTal (PTAL LN/TAL CN)C: Operation update | 88 Energy (88E AU/LN): Update in Alaska | Trinity Exploration and Production (TRIN LN) | Empyrean Energy (EME LN): Equity raise cancelled, launching open offer | Jadestone Energy (JSE LN): FY19 results | Aker BP (AKERBP NO): 1Q20 update in Norway |Dry hole in Norway |ENI (ENI IM): 1Q20 results | Equinor (EQNR NO): Reducing dividend | i3 Energy (I3E LN): Need to negotiate with noteholders |Serica Energy (SQZ LN): FY19 results | Gulf Keystone Petroleum (GKP LN): FY19 results and update in Kurdistan | SDX Energy (SDX LN): Flow rate results at exploration well in Egypt | ShaMaran Petroleum (SNM CN): Update on payments in Kurdistan | Sound Energy (SOU LN): Update in Morocco and FY19 results | Zenith Energy (ZEN LN/ZEE CN/ZENA-ME NO): Acquisition in Tunisia | Tullow Oil (TLW LN): Selling Uganda | Wentworth Resources (WEN LN): FY19 results
Companies: 88E AKERBP ENI EQNR GKP GPRK I3E JSE TAL SDX SNM SOU SQZ TLW TRIN WRL ZEN
Oil posted the biggest weekly plunge since 2008, capping its most dramatic week in recent memory as major producers prepare to drench the market with supply just as the coronavirus crushes demand. But prices jumped following the close, after President Donald Trump said the U.S. would fill the nation's strategic reserve. Losses for the week totalled 23% after the collapse of talks between members of the OPEC+ group triggered the biggest crash in a generation. Instead of reaching a deal to cut output to mitigate the fallout from the virus, producers led by Saudi Arabia and Russia embarked on a war for market share and pledged to pump more.
Companies: TGL TXP VLE EGY GTE CNE DGOC ENQ SQZ UKOG TRIN TLW PHAR
Abal Group (formerly on AIM) to relist as Supply@Me, a growing innovative "inventory monetisation" platform, having originated more than EUR300m of prospective "inventory monetisation deals" in its first six months of operating (to June 2018). In the first half of 2019, an additional prospective EUR300m was originated. As at the date of the publication of the Prospectus and Circular to Abal shareholders, dated 4 March 2020 , EUR972m of prospective contracts have been originated. Raising £2.2m. Due 23 March.
The Proof Of Trust has announced its intention to list on the Standard Market. The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes. Transaction details TBC.
Companies: LVCG MSYS MRL SIM SQZ ORPH VLG
Union Jack Oil* (UJO LN), STRONG BUY – 0.70p TP: Acquisition of further interest in Keddington | Tower Resources* (TRP LN): Placing to raise £500k | Nostrum Oil & Gas (NOG LN): UOG gas delivery delayed | Serica Energy (SQZ LN): Production from Bruce, Keith and Rhum fields restarts
Companies: UJO TRP NOG SQZ
Research Tree provides access to ongoing research coverage, media content and regulatory news on Serica Energy PLC.
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Trinity has proven the sustainability and resilience of the Company's business model, increasing both production and cash despite significant challenges in 2020. FY20 average production volumes increased 7% on 2019 to 3,226bopd despite no new drilling activity in 2020. Cash at 31 December 2020 was US$20.2m, a 27% YoY increase – driven by strong operating cash flow, and achieved despite a 36% reduction in average oil price realisations versus 2019. Average production volumes in Q4/20 increased by 2% on Q3/20 to 3,206bopd, with Trinity offsetting natural production declines through its rigorous approach to production management. Post-period, the Trinidad and Tobago Government lifted the threshold for the imposition of SPT for small onshore producers from US$50/bbl to US$75/bbl in 2021 and 2022, providing a considerable boost to Trinity's cash generation potential. With a high number of growth initiatives underway across the energy spectrum, Trinity is well positioned to broaden its portfolio and create further value as it looks to further scale the business. We increase our price target to 34p (from 32p), almost 3x the current share price and reiterate our BUY recommendation.
Companies: Trinity Exploration & Production Plc
Gas composition data from the Kyalla 117 well has confirmed the presence of liquids-rich gas within the Lower Kyalla Shale, with less than 1% CO2. Analysis of the Kyalla 117 well has shown that the gas stream contains c65% methane gas, with c33% being other liquid gases such as ethane and butane. The analysis also supports the view that the Kyalla gas stream will have elevated LPG and condensate yields. Operations are scheduled to recommence at Kyalla 117 at the beginning of the dry season in Q2/21 and will initially focus on flowing back sufficient hydraulic fracture stimulation water to allow the Kyalla 117 well to flow continually without assistance.
Companies: Falcon Oil & Gas Ltd.
Oil slid by the most in three weeks as a stronger dollar and weak US economic data stoked concerns over an economic rebound.
Futures in New York tumbled 2.3% on Friday after a rally in oil earlier in the week pushed the benchmark into overbought territory. The US dollar strengthened, reducing the appeal of commodities priced in the currency. US consumer sentiment cooled more than forecast in January and other economic data such as sluggish retail sales and producer prices also portray the obstacles still facing the country as it emerges from the pandemic.
Meanwhile, President-elect Joe Biden said he will ask Congress for $1.9 trillion to fund immediate relief for the US economy that has been pummelled by the pandemic. But the large price tag and inclusion of initiatives opposed by many Republicans set up the aid package for a drawn out legislative battle.
Despite the pullback in oil futures, vaccine breakthroughs and Saudi Arabia's pledge earlier this month to deepen output cuts are expected to support prices. JPMorgan Chase & Co said a “nasty deficit” could emerge in the oil market later this year.
Meanwhile, technical indicators had been flashing warnings signs all week. The 14-day Relative Strength Index for both US and global benchmark crude futures traded above 70 this week in a sign they were overbought, though both slipped under that level Friday.
West Texas Intermediate for February delivery fell $1.21 to settle at $52.36 a barrel. Futures rose less than 1% this week.
Brent for March settlement lost $1.32 to end the session at $55.10 a barrel. The contract fell 1.6% during the week.
The market's structure has also softened. Brent's prompt timespread dipped back into contango on Friday, a bearish structure where nearby prices are cheaper than later-dated ones.
This week has seen the annual commodity index rebalancing take place -- a move that was expected to see as much as $9 billion flow into the oil market. Since it began last Friday, there has been a surge in so called trading-at-settlement volumes, an instrument often used by participants with index exposure. For Brent, average volumes over the last five days have reached a record.
Other oil-market news:
Companies: FO PRP 88E DGOC EME TRIN UOG
Foresight Group , the award-winning infrastructure and private equity investment manager to IPO on the Main Market (premium). The Offer will primarily comprise a sale of shares by existing shareholders (c.80% of the Offer) with a smaller offering of new shares (c.20% of the Offer) to be issued by the Company. Details TBA. Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5 million by way of private placement of new Common Shares (the "Fundraising") to advance the United Downs copper-tin project. The Company expects that Admission will become effective in February 2021. The Company's Common Shares will continue to be listed and trade on the TSX-V in Canada. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: TYM W7L BEG CRPR EUZ IRR CMCL FARN KETL AUG
Jubilee put out an intraday press release yesterday updating on the performance in the first half (ending Dec 2020) of the FY 2021. Once again Jubilee delivers; significantly increased revenues and profits from its chrome and PGM division in South Africa and a small, but important, contribution from Zambia. Notably this improvement isn't just from commodity price performance; rather increased production, productivity, throughput, renegotiated contracts and all set alongside the strong performance of commodity prices –rhodium, palladium and platinum. We see this as still only the start for Jubilee as we look forward to the first copper oxide concentrates from the Roan project in Zambia to the Sable Refinery – where the Roan plant is currently under construction. Once again we are struck by the speed at which Jubilee moves to advance its projects and, with its South African cash engine showing no signs of slowing down. Jubilee can choose to move its wider ambitions in Zambia forward from internally generated cash flow. On the back of the strong performance we put our forecasts under review.
Companies: Jubilee Metals Group PLC
Bluejay Mining* (JAY LN) – BUY, Valuation 29.4p – Bluejay agrees jv with Rio Tinto over the Enonkoski Project in Finland
Bushveld Minerals* (BMN LN) – BUY - Valuation 37.7p – Ferro-Vanadium prices jump 11.6% in the US
Edenville Energy* (EDL LN) – Funding agreement refinanced and £900k raised
Kodal Minerals* (KOD LN) – Further progress at West African gold assets
Lucara Diamonds (LUC CN) – Karowe mine yields 341 carat diamond
Serabi Gold* (SRB LN) –Q4 production results continue modest recovery of Q3
Companies: LUC JAY BMN EDL KOD SRB
Central Asia Metals (CAML LN) has reported Q4 2020 production with 3,365t of copper taking full year output to 13,855 in line with our forecast of 13.9kt and at the top end of guidance. Q4 lead output was 7,442t meaning 29,741t over the full year, up 2% YoY and in line with our forecast of 30kt while zinc output of 5,848t took full year output to 23,815t again in line with our forecast of 24kt and up 2% YoY despite the disruption at Sasa which CAML has overcome rapidly as we expected.
Companies: Central Asia Metals Plc
Salt Lake Potash Lake Way Project is nearing completion with the Process Plant and NPI well advanced. The overall project, including all on-lake infrastructure, was 81% complete on 31 December 2020.
The Project remains on track for first SOP production in March 2021 and first SOP sales in April, with the project capital budget unchanged at A$264m. Funds from the first US$105m tranche of the Project Development Facility have been received enabling repayment of the US$45m Bridge Facility and completion of project construction.
The Process Plant was 88% complete on 31 December 2020 (on an earned value basis). Approximately 27kt of potassium rich kainite and schoenite salts have been harvested for commissioning plant feed from the Train 1 cells. Harvesting activities will re-commence in March ahead of plant commissioning. Process Plant commissioning is expected to commence in February with introduction of first feed salts to the plant in March.
Companies: Salt Lake Potash Limited
Companies: AAZ AAU CNR GLEN RIO TSG CCZ IRR
Results from the 2020 soil-till sampling campaign have been reported today and are positive with widespread anomalous gold values, including the highest soil-till assay results to date, along strike to the east and west of BAM Gold for a total length of 8 kilometres. Numerous new drill targets have been identified which have the potential of being advanced into additional resources to continue the rapid growth of the BAM Gold Project. Drilling has commenced in the area to the west and has intersected similar geological lithology and mineralisation to BAM Gold.
The drilling programme for 2020-21 at the BAM Gold Deposit is progressing as planned with a total of 6,518 metres of HQ diamond core, comprising 30 drill holes, completed to date. All drill holes have successfully intersected prospective mineralised zones associated with the BAM Gold Deposit. The drill core has been logged, processed, and sent to ALS Minerals of Thunder Bay for analysis to date. Assay results are pending, with increased exploration activity in Canada, the labs are full, with assays now taking 7-8 weeks. The current funded drilling programme is expected to complete in April 2021.
Companies: Landore Resources Limited
AEX Gold Inc (AEXG LN) –Operational update
Cornish Metals* (CUSN LN) – AIM Admission – Writing the next chapter in Cornwall's long mining history
Cornish Metals* (CUSN CN) – CLICK FOR PDF
Europa Metals Limited (EUZ LN) – Drilling starts at Europa's Toral zinc, lead, silver project in Spain
Caledonia Mining* (CMCL LN) – Record mine production at Blanket
GoldStone Resources (GRL LN) – Settlement of Claim by Former Director
IronRidge Resources* (IRR LN) – Further results from Zaranou gold exploration project, Cote d'Ivoire
Oriole Resources (ORR LN) – Exploration projects update
Tertiary Minerals* (TYM LN) – New copper exploration project in Nevada
Companies: CUSN CMCL AEX GRL ORR TYM EUZ IRR
Pantheon announced that it is acquiring the 10.8% of the Talitha Unit it does not already own, bringing its interest to 100% in the unit. The vendor, Otto Energy Alaska, will be provided with 14,272,592 shares in Pantheon Resources as consideration. The company continues to drill ahead with the Talitha#A well. The transaction is value accretive for Pantheon and we increase our fair value estimate to 89p from 83p. As a reminder, our fair value estimate includes 25% of our successcase valuations in respect of two of the four targets that the Talitha#A well is intended to evaluate, namely, the Talitha Brookian Shelf Margin Deltaic and the Talitha Kuparuk
Companies: Pantheon Resources plc
Anglo Asian Mining* (AAZ LN) – STRONG BUY – Update on Restored Contract Areas
Chaarat Gold* (CGH LN) – Kapan production beats guidance and delivers $19m EBITDA
Sunstone Metals (STM AU) – Drilling results from the Espiritu gold-silver prospect in Ecuador
Tertiary Minerals* (TYM LN) – Sale of data on Finnish project
Versarien* (VRS LN) – Interim results
W Resources (WRES LN) – La Parilla Q4 production
Companies: AAZ CGH WRES TYM VRS STM
Today's news & views, plus announcements from RIO, EXPN, BLND, GLEN, PFD, HMSO, WG, WJG, HOTC, KAPE, QTX, BOOM
Companies: Rio Tinto plc
Antofagasta (ANTO LN) – Q4 production highlights strong quarter
BHP (BHP LN) – Record iron ore production, workforce reductions in Chile for Covid and continuing focus on copper exploration
IronRidge Resources* (IRR LN) – Call notice for exercise of warrants
Shanta Gold (SHG LN) – Reserves/Resources update replaces mined ounces
SolGold* (SOLG LN) – Nick Mather steps aside to allow search for new CEO to lead Alpala block-cave financing and development
Companies: ANTO BHP SHG SOLG IRR