Weekly oil news round up by Oilman Jim – AEX SOLO PANR ZPHR UKOG

Aminex (AEX) announced receipt of approval from the Tanzanian Government for the transfer of a 50% interest in, and operatorship of, the Ruvuma PSA to ARA Petroleum.  As regular readers know, I said this was more likely than not to happen.  ARA certainly believed it to be the case, since they advanced $5 million to AEX over the past 12 months.  The Aminex share price has more than trebled.  It’s good news too for Solo Oil (SOLO), who hold a 25% interest in Ruyuma, which they are aiming to sell.  AEX retains a 25% carried interest.

Pantheon Resources (PANR) announced upgraded management resource estimates for Kuparuk.  This an oil bearing formation at the Talitha project and PANR itself estimates this horizon to contain 1.4 billion barrels of oil in place and a prospective recoverable resource of 341 million barrels of oil as “a most likely case.”  Some are dubious and question this company’s near quarter of a billion pounds market capitalisation, but let’s first see if anyone real actually bites on their current farm-out offer.

Zephyr Energy (ZPHR) (the old Rose Petroleum) announced a £2.25 million placing at 0.55p.  The “upcoming drill” in fact is a vertical stratigraphic research well, part funded by the University of Utah’s Energy & Geoscience Institute.  The well has “been designed to facilitate re-use,” though, which will allow the potential for future drilling of a horizontal appraisal lateral from the well-bore after the initial data acquired has been processed and evaluated.  Most likely this will require significant further funding.  The placing monies also are to be used for the funding of potential acquisitions, which to date have entailed paying top dollar for the directors’ own interests in somewhat out of favour US shale well acreage.

UK Oil & Gas (UKOG) announced that it has successfully executed the participation agreement and the joint operating agreement with Aladdin Middle East Ltd for a 50% interest in the 305 km² Turkish Resan licence and the respective oil appraisal and exploration programme.  Further to its 2 October equity raise, UKOG will now fund the key initial preparatory operations so that the first oil appraisal well, currently planned as Basur-3 can be drilled as soon as practicable in early 2021.  Noting, though, that the Basur-3 well and flow test gross costs are estimated by Aladdin at $3 million and that UKOG must pay the first $5 million of drilling and seismic costs on the licence, it is clear that yet another fundraising will very soon be needed.

That’s my take on the more interesting RNS announcements over the past week.  More in the private blog at https://www.oilnewslondon.com/oilman-jim 

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Weekly oil news round up by Oilman Jim – UJO RBD PRD IOG DELT PMO HUR RKH BOR NTOG CHAR SDX ZPHR PPC BLVN PTR NOG JKX ANGS MATD ADV ZEN

Union Jack Oil (UJO) and Reabold Resources (RBD) announced commencement of drilling of the West Newton B-1 well.  Completion is expected to take six to ten weeks.  The steam has very much gone out of the UJO share price since it fell by nearly half from 0.31p before the 0.16p placing (I was talking in the private blog about de-risking in the high 0.2s/low 0.3s).  RBD also is weak.  Romanian operations appear to have failed and investor confidence has ebbed away.  Regular readers know that I’ve warned about Reabold many times and at much higher prices than today.  If you want to gamble (and that’s all it is) on the outcome of the drill, Union Jack probably is the better bet.  RBD owns a greater percentage, but UJO has the audience needed.

Predator Oil & Gas (PRD) announced an operational update.  Reassuringly, it confirms that Morocco is the “greatest potential risk/reward prize in the Company’s portfolio and is an absolute priority for the Company to drill as early as COVID-19 restrictions allow.”  The concern now is finance, since a new MOU-4 prospect has been announced, which is located 6 kilometres from the MOU-1 drill site and offers the opportunity for additional drilling while the rig is mobilised there.

Independent Oil & Gas (IOG) announced that it does not intend to make an offer to acquire Deltic Energy (DELT) due to the absence of Deltic board engagement both on an initial approach made on 26 August, which was rejected on 2 September, as well as on a second approach made on 25 September on improved terms, which was rejected on 2 October.  DELT responded that the terms of the initial proposed merger “implied an offer value at that time which was less than Deltic’s cash balance and as such placed no immediate value on Deltic’s significant portfolio of non-cash assets, not least its interests in Pensacola and Selene.”  Per DELT, the amended proposed merger terms “included a contingent value right proposal whereby additional value could potentially accrue to Deltic shareholders…however…the maximum value which could accrue to Deltic shareholders in the event that first gas was achieved on each of Pensacola and Selene was limited to £2 million per prospect.”  There are clear synergies here, though, and to quote IOG “a transaction would have considerable industrial logic, consolidating and scaling up two complementary portfolios with a balance of near-term catalysts and longer-term upside, representing excellent value for both sets of shareholders.”  The reality of course is that board control of a public quoted company is a licence to print for the directors and all involved.  Who really would want to give it up?

Premier Oil (PMO) announced its merger with Chrysaor, a transaction which will create the largest independent oil and gas company listed on the London Stock Exchange with combined production of over 250,000 barrels of oil equivalent per day.  Premier’s shareholders, though, are only expected to “own up to” 5.45 per centof the combined group and the share price has declined to just over 14p.  It’s another salutary warning that, like Hurricane Energy (HUR) which announced a further operational and corporate update last week, what appears to be immediate success can, and indeed usually does, turn into eventual commercial failure.  That is the reality of these types of companies and their shares: they are for short/medium term trading only, never longer term investing, regardless of how good the “fundamentals” may appear to you.  On the bright side, though, the PMO/Chrysaor deal could be quite beneficial for both Rockhopper Exploration (RKH) and Borders & Southern (BOR) vis-a-vis their Falklands projects.

Since I’ve seen a flurry of promotional tweets this week regarding Nostra Terra Oil & Gas (NTOG), which can only be aimed at unwary newcomers, I’ll comment on it.  The problem is that no one apart from the directors, brokers, PR companies and paid social media posters is ever going to make a profit from it.  It’s essentially a small business (with a turnover similar to a petrol station) whose operating profits, if any, can never approach covering a quoted public company’s overheads.  Even with a profit of $10 a barrel at the operational level (which is a generous assumption since many fields in the area do not even achieve operating break-even) NTOG would need 500 barrels of oil per day production just to cover administration and other expenses.  Remember, they’ve been at it for years, have achieved nothing other than massive losses for shareholders, and in the process squandered nearly $30 million of investors’ money.  There’s always an exciting new project to draw in new punters, but it always fails to reward them.  A huge avoid.

In other news, Chariot Oil & Gas (CHAR) announced the appointment of a Morocco country director (the new man is Pierre Raillard, ex Orca Energy), SDX Energy (SDX) announced a trading and operational update (it continued to perform strongly in the second half of 2020), Zephyr Energy (ZPHR) announced a Paradox well is to be spudded by year-end (in fact, it’s a stratigraphic research well funded by the University of Utah Energy & Geoscience Institute), President Energy (PPC) announced a drilling update and change of auditor (it’s moving from Deloitte to Crowe, who I suspect might be less rigorous), Bowleven (BLVN) announced a corporate update (it continues to make good progress on the Etinde development, offshore Cameroon), Petroneft Resources (PTR) announced the successful testing of a mini oil refinery (it’s quite an interesting project), Nostrum Oil & Gas (NOG) announced an update regarding subsoil use contracts (it’s the disposal of its rights and obligations for both the Darinskoye and Yuzhno-Gremyachenskoye fields), JKX Oil & Gas (JKX) announced a quarterly operations update (production is up 4% to 10,245 boepd), Angus Energy (ANGS) announced work commencing on the pipeline at Saltfleetby (principal heavy works are expected to be concluded by 6 November), Petro Matad (MATD) announced an operational update (more delays), Advance Energy (ADV) (formerly ADL, formerly CEB) announced termination of the Betun-Selo KSO agreement (I did say this was worthless at the outset and impairment results in another $604,000 of shareholder funds down the drain), finally Zenith Energy (ZEN) announced the suspension of trading in its shares (the auditors appear to be nervous). 

If you’re interested in more, in particular my trade ideas, try out the private blog at https://www.oilnewslondon.com/oilman-jim  Personally, I look for what I would call certainties.  Those shares where I think a profit is as good as guaranteed.   If you’re not yet familiar with me, I’ve been involved in the markets for quite a long time.  I bought my first shares in the 1970s and I’ve worked in the financial sector since the early 1980s.  My particular knowledge is of the stock markets and I’ve been actively involved in these, both in the UK and the US for over 40 years from both sides of the fence.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors, which enables me to see very quickly whether or not these companies are telling the truth.

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – UKOG BPC LOGP BPC FOG ZEN AEX SAVE TRP MSMN BLOE PTAL VOG SOLO PRD ADME ECHO ENW ZOL UOG JOG CHAR LEK

As expected, UK Oil & Gas (UKOG) announced its placing.  £2.2 million at 0.16p “funding initial Turkey operations.”  How well this sits with its stated aim of “increased energy security for this country” is a matter for the company’s shareholders, most of whom bought in precisely because of that objective.  It’s not really that clever a move.  Of course, it might never happen and as they state further down the RNS, “in the unexpected event that the PA and JOA are not entered into, the company will deploy the proceeds of the placing for working capital” (i.e. directors’ salaries).

Bahamas Petroleum Company (BPC) announced a £9.5 million placing at 2p.  Unfortunately, the eight figure balance required to fund the Perseverance #1 drill will have to come from convertible loan note financing, which is usually the kiss of death for a company’s share price.  Most likely there will be trading opportunities along the way, but holding for the well result would be risky, since this drill has quite a low chance of success.

As a side note, if either of these placings took you by surprise, I’d suggest the Special Trading Course, which explains exactly how these small cap markets really work and how you can spot what’s going on at these companies in advance.  The link for that is https://www.oilnewslondon.com/course

Lansdowne Oil & Gas (LOGP) and Providence Resources (PVR) announced interim results, which also commented on their principal asset, Barryroe, which they say is is one of the largest undeveloped offshore oil and gas fields in Europe.  They’re continuing to finalise the work programme and commercial agreements with a view to concluding a binding farm-out agreement during the period of exclusivity ending 31 October.  The issue here, of course, is funding and how much they will be carried for.  Discussions with the “consortium of world class services companies” concern deferring a portion of their normal fees into the production phase of the project.

In terms of significant announcements, that’s it for the week.  In other news, Falcon Oil & Gas (FOG) announced a technical update of Kyalla 117 N2-1H ST2 (early stage gas flow rates are expected in the coming weeks), Zenith Energy (ZEN) announced preliminary unaudited annual financial results (loss of C$8,439,000), Aminex (AEX) announced its half-yearly report (loss of $1,151,000), Savannah Energy (SAVE) announced its half-year results (profit before tax of $1,224,000), Tower Resources (TRP) announced interim results (loss of $457,687), Mosman Oil & Gas (MSMN) announced an update on Falcon and Stanley Drilling (the production number perhaps should be taken with a pinch of salt),  Block Energy (BLOE) announced interim results (loss of $2,668,000), PetroTal (PTAL) announced the recommencement of oil production at the Bretana field (how long now until the next problem?), Victoria Oil & Gas (VOG) announced audited final results (loss of $110,280,000), Solo Oil (SOLO) announced unaudited interim results (loss of £1,270,000), Predator Oil & Gas (PRD) announced interim results (loss of £784,156), ADM Energy (ADME) announced half-yearly results (loss of £975,000), Echo Energy (ECHO) announced its half-year report (loss of $5,747,099), Enwell Energy (ENW) announced a legal dispute update (its appeal in respect of the Arkona acquisition was successful), Zoltav Resources (ZOL) announced final results (loss of 3,124,063,000 Russian roubles), United Oil & Gas (UOG) announced its interim financial statement (loss of $339,765), Jersey Oil & Gas (JOG) announced interim results (loss of £1,168,529), Chariot Oil & Gas (CHAR) announced first-half results (loss of $68,840,000) and Lekoil (LEK) announced that it is in discussions with Optimum regarding a deferment of the payment due on 30 September of $2,000,000.

If you’re interested in more, in particular my actual trading ideas, try out the private blog at https://www.oilnewslondon.com/oilman-jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – UJO RBD 88E BPC PANR SLE PXEN BLOE COPL BOR AST ANGS MSMN LBE PPC CORO IGAS NTOG UKOG PTR UPL TLOU PET FOG

Union Jack Oil (UJO) and Reabold Resources (RBD) announced the West Newton B-1 rig mobilisation.  Equipment will be rigged-up over a period of one to two weeks prior to drilling operations commencing, which are then expected to take six to ten weeks to complete.  UJO is now trading at 0.1575p, below the recent 0.16p placing price, and as readers of the private blog know, I was talking about de-risking when it was in the high 0.2s/low 0.3s.

88 Energy (88E) announced that advanced seismic attribute work has identified several similarities between the key prospects at Project Peregrine (the Alaska acreage it recently acquired with the XCD Energy acquisition) and existing discovered fields nearby.  The fluid factor at the Merlin and Harrier Prospects is analogous to that at the large Willow oil field north of 88E’s lease position.  It says that farm-out discussions at Peregrine are progressing well, on track for Q1 2021 drilling.  88E has been a regular earner over the years, but only as a play on the run up to the drill once fully financed.  I highlighted it a number of times last year around the 0.7p placing price and it ran up to over 1.4p prior to the spud.

Bahamas Petroleum Company (BPC) announced receipt of formal notification from Stena Drilling nominating the Stena IceMAX as the intended drill rig for the upcoming Perseverance #1 well and indicating the start of the contracted window (commencing 15 December 2020) as the approximate time for the arrival of the drill ship, with well spud three to four days later.  All that’s needed now is the money to pay for it.

Pantheon Resources (PANR) announced receipt of an independent resource report for Talitha. Lee Keeling & Associates have confirmed a prospective resource of 302 million barrels of recoverable oil for the SMD horizon and PANR is engaging with a number of parties regarding a farm-out, with hopes to drill in Alaska this coming 2020/21 winter season.  It’s already very generously capitalised at £230 million, though, and while it has been a strong performer of late and could indeed go higher yet, there’s serious downside at this level if they don’t close a deal soon.

That’s it for the week in terms of significant announcements.  In other news, San Leon Energy (SLE) announced interim results (loss of $20,335,000), Prospex Energy (PXEN) announced its half-year report (loss of £1,047,717), Block Energy (BLOE) announced an operational and corporate update (first gas on schedule for Q4 2020, but remember the previously claimed 1,000 bopd production), Canadian Overseas Petroleum (COPL) announced an operations update (confident it will receive confirmation of its exploration licence extension during Q4 2020), Borders & Southern Petroleum (BOR) announced its half-year report (loss of $721,000), Ascent Resources (AST) announced interim results (loss of £1,243,000), Angus Energy (ANGS) announced a placing and proposed debt facility (placing at 0.9p), Mosman Oil & Gas (MSMN) announced Falcon and Stanley drilling (academic really, because no matter how good the outcome, it won’t even begin to cover administration/lifestyle expenses), Longboat Energy (LBE) announced results for the half-year ended 30 June 2020 (loss of £1,108,131), President Energy (PPC) announced a work-over and drilling update (first well in drilling programme spudded with results due mid-October), Coro Energy (CORO) announced its half-year report (loss of $6,712,000), IGas (IGAS) announced interim results (loss of £40,861,000), Nostra Terra Oil & Gas (NTOG) announced a Permian Basin farm-in agreement (yet more investment which is highly unlikely to produce any commercial return), UK Oil & Gas (UKOG) announced a volumetric study confirming a significant gas resource (relates to the Loxley Portland discovery), Petroneft Resources (PTR) announced final results (loss of $6,042,454), Upland Resources (UPL) announced a Tunisia update (new play identified), Tlou Energy (TLOU) announced final results (loss of $12,950,601), Petrel Resources (PET) announced its interim statement (loss of €252,000) and Falcon Oil & Gas (FOG) announced a Beetaloo operational update (fracture stimulation of the Kyalla 117 N2-1H ST2 well, extended production testing to follow, initial production test results expected Q4 2020).

If you’re interested in more, in particular my actual trading ideas, try out the private blog at https://www.oilnewslondon.com/oilman-jim

Contact me on Twitter @Oilman_Jim 

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – UJO DELT IOG RBD IGAS CASP ADME RMP ENW GBP PMO COPL RKH PPC CLON

Union Jack Oil (UJO) announced a placing and subscription to raise £7 million at 0.16p.  At half the share price a few weeks ago, it would have been hugely profitable for all those connected to the company who knew about it and were able to short in advance.  For private investors, the issue now is how much was sold short by insiders and covered in the placing and how much was actually taken by new money  If  mainly the former, the price should start moving back up; if mainly the latter, then there’s a lot to shares to churn first.  If this placing took you by surprise or shocked you, I’d suggest the Special Trading Course, which shows you how to spot all this beforehand.  The link for that is https://www.oilnewslondon.com/course

Deltic Energy (DELT), which Independent Oil & Gas (IOG) is interested in acquiring, announced further details of its new North Sea licences.  These, they say, “are a key part of the Company’s exploration focussed strategy which is based upon a steady ‘conveyor belt’ of licences which can be matured  and feed a long-term programme of exploration wells with any discoveries supporting the longevity of existing infrastructure and the development of new gas production hubs.”  Essentially they are turning into an ongoing exploration (and hopefully development) business, thus making a case for an increase in DELT’s value.  IOG’s approach has a much greater chance of success that that of Reabold Resources (RBD), though, who were firmly shown the door by DELT and its major shareholders.  Unlike RBD, whose CEO couple perhaps still don’t understand the difference between geological chance of success and commercial chance of success, Independent Oil & Gas is a professionally run company undertaking a major offshore development project with substantial financial backing.  Certainly DELT are not criticising it as they did the previous suitor.

IGas (IGAS) announced the acquisition of a geothermal energy business with a district heating project in Stoke-on-Trent.  There is big money now in the renewable energy sector, not so much from the commercial aspect, but rather the huge government subsidies.  IGAS sees this transaction as an entry point to a fast emerging sector that through the energy transition could result in it seeing significant growth.  Given its other assets, it doesn’t look expensive at a £16 million market cap.

In terms of significant announcements that’s it for the week.  In other news, Caspian Sunrise (CASP) announced interim results (there’s still significant doubt about its ability to continue as a going concern), ADM Energy (ADME) announced the submission of a bid in the Nigeria marginal field round (as a partner of a Nigerian oil and gas service management company), Red Emperor Resources (RMP) announced final results (they remain committed to identifying suitable assets for listing purposes), Enwell Energy (ENW) announced interim results (average daily production from the MEX-GOL, SV and VAS fields is up 8%), Global Petroleum (GBP) announced a placing and subscription to raise £1.4 million (at 0.75p), Premier Oil (PMO) announced a statement regarding press speculation (confirming it has been in discussions with a number of third parties regarding alternative forms of transactions to secure the long term refinancing of debt facilities), Trinity Exploration (TRIN) announced its half-year report (says it’s “positioned” to grow production, revenues and profitability), Canadian Overseas Petroleum (COPL) announced second quarter results (nothing new in them), Rockhopper Exploration (RKH) announced its half-year report (completion of the Navitas farm-in is targeted late this year), President Energy (PPC) announced an operational update (drilling operations are expected to commence before the end of the month) and Clontarf Energy (CLON) announced its interim statement (as always, ongoing discussions with the Ghanaian authorities to finalise ratification of the signed petroleum agreement on the Tano 2A Block).

I’ll be back next week with more.

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round-up by Oilman Jim – 88E IOG DELT RBD TMK UJO BOIL CHAR SOU TLW HUR I3E EME PTAL PHAR PANR SQZ CAD PMG

Starting with the positive news, 88 Energy (88E) announced the final petrophysical interpretation for Charlie-1, which it says substantially upgrades net hydrocarbon pay in the well.  A data room for the next Project Icewine farm-out is to be opened in the near term and the company also is looking to agree farm-outs on both the Peregrine and Yukon acreage with a view to drilling next year.  88E returned a nice, easy 100% profit on the run up to its last drill (an opportunity which I flagged up several times in the blog) and once farm-outs and financing are done, it has the potential to be another good one.

Independent Oil & Gas (IOG) announced a possible all-share offer for Deltic Energy (DELT).  They look like a potential good fit and an offer from IOG certainly has a much greater chance of success than the one from Reabold Resources (RBD), who was firmly shown the door.  Unsurprisingly so, given the overall poor quality of its assets, which again was demonstrated last week when it was announced that Tamaska Oil & Gas (TMK – Australia) has decided not to proceed with the farm-in transaction relating to the EX-10 Parta licence.

I mentioned three weeks ago in the blog the future funding needs of Reabold Resources and Union Jack Oil (UJO) and received quite a bit of abuse, particularly regarding the latter.  Since then the UJO share price has declined from 0.2680p to 0.1775p and it admitted last week that there is to be a fundraising.  There’s a sense of deja vu here now.

Baron Oil (BOIL) issued interim results.  Work in Timor-Leste has stalled in the absence of the original seismic data, however, once COVID issues have been resolved, it believes drilling of the El Barco-3X well in Peru should be able to move forward.  In reality, there’s probably not much going to happen here until next year.

Chariot Oil & Gas (CHAR) released what it said was a significant resource upgrade on Anchois, Morocco  The audited total remaining recoverable resource has increased by 148% to in excess of 1 Tcf for Anchois, comprising 361 Bcf 2C contingent resources and 690 2U prospective resources.  The more important point is can they find a farm-out partner and drill it.

Sound Energy (SOU), now around 1.5p, is one I’ve been warning about since it was in the 40s.  It’s nearly at the end now and the half-year report issued last week stated “material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern.”  Failure is the usual outcome for most of these companies, even those which appear to achieve success for a time: Tullow Oil (TLW) announced half-year results last week and also emphasised material uncertainties on going concern, having recorded a loss after tax of $1.3 billion, impairments totalling $1.4 billion pre-tax and net liabilities of over $138 million.  It’s so important to understand and accept reality here.  These types of shares are for short/medium term trading only.  Longer term investment will invariably result in substantial losses.

I’ve also been warning about Hurricane Energy (HUR) since the end of last year and received plenty of abuse for doing so, particularly from the promoter types who have been swarming around it of late.  Reality is it was quite easy these last few weeks and months to see what was going to happen.  Latest news is that the company’s unaudited estimate of 2C contingent resources in the Lancaster field has been reduced to 58 MMbbls remaining from 486 MMbbls in the 2017 CPR.  The share price is now down from the 30s to under 3p.

I3 Energy (I3E) issued its interim report.  Notwithstanding praise from paid sources, its shares are already trading well under the 5p price of the last financing and the only ones in profit now are those with the repriced 0.01p warrants, including the management.  Information provided by the company last time regarding its North Sea project turned out to be, shall we say, less than accurate.  I see no reason why the current information released regarding the Canadian acquisition should be any different.

In other news, Empyrean Energy (EME) announced a £640,500 placing plus the first £200,000 under the £10 million equity placement facility (this type of financing rarely turns out well), PetroTal (PTAL) announced it is ready to reopen the Bretana oil field as soon as the ongoing discussions between the communities and the Government of Peru have been ratified (unlikely to fully resolve the local issues which have been troubling them), Pharos Energy (PHAR) announced the TGT full field development plan approval (enables it to put plans in place to commence the drilling of the six new producer wells on TGT starting in Q4 2021), Pantheon Resources (PANR) announced a Talitha production unit and operational update (still hoping to conclude a farmout by the end of autumn and drill the first Talitha well this winter), Serica Energy (SQZ) announced interim results (it’s still making money and paying a dividend), Cadogan Petroleum (CAD) announced its half-year report (uninspiring) and Parkmead Group (PMG) announced its new UK offshore blocks award (it picked up interests in another four).

If you’re interested in more, in particular my actual trading ideas, try out the private blog at https://www.oilnewslondon.com/oilman-jim

Contact me on Twitter @Oilman_Jim 

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – ADV DELT IOG JOG PMO RBD SQZ UOG TRP SOLO PANR 88E PPC LEK I3E SOU

A number of companies announced provisional awards (in some cases to subsidiaries) in the UK’s 32nd Offshore Licensing Round: Advance Energy (ADV) was awarded interests in five blocks, Deltic Energy (DELT) was awarded interests in 12 blocks, Independent Oil & Gas (IOG) was awarded interests in four blocks, Jersey Oil & Gas (JOG) was awarded an interest in one block, Premier Oil (PMO) was awarded interests in six blocks, Reabold Resources (RBD) was awarded interests in four blocks, Serica Energy (SQZ) was awarded interests in four blocks and United Oil & Gas (UOG) was awarded interests in two blocks.

While some are good and have a value due to the applicants’ infrastructure (current or planned) in these areas, remember with the licences containing discoveries that other companies surrendered them since they believed the resources to be non-commercial.  They can of course be spun and promoted, but there’s something called geology too.  All blocks are not equal.

Last week was a short week with many not yet back at their desks (office or home), but there still was some other news too.  It should get busier this coming week.

Tower Resources (TRP) announced a financing update.  It’s conducted a $200,000 placing and entered into $500,000 loan facility, convertible into equity in the event of default.  These additional funds are purely for working capital, drilling of the NJOM3 well on the Thali licence still needs to be financed.  It all really hinges on that.

Solo Oil (SOLO) announced 2019 full-year results.  It says there is a formal process ongoing to explore value realisation for Solo’s assets in Tanzania with an encouraging level of interest and a new company strategy to identify assets within the European energy market for long-term sustainable growth in line with which it continues to screen business development opportunities.  Let’s see.

Pantheon Resources (PANR) announced an Alkaid production unit and operational update.  The application to form the unit of 22,804 acres is complete and eligible for approval, and the Alaska Department of Natural Resources has opened a 30-day public comment period on the application and must make a decision on the application within 60-days.  Drilling this coming winter is Pantheon’s objective, but that requires them to conclude a farm-out by the end of autumn.  Again, let’s see.

88 Energy (88E) announced its interim report.  Permitting of the Yukon acreage now is underway ahead of potential drilling in 2021, subject of course to a farm-out.  President Energy (PPC) issued an operational update.  It says it’s made “an encouraging preliminary start.”  Lekoil (LEK) issued a TR-1.  Metallon Corporation has increased its stake to 15.1%.  There are some interesting developments coming up here.

I3 Energy (I3E) reported completion of the Gain acquisition/Harvard sale and announced that certain of its loan noteholders have exercised warrants over 6,788,945 shares.  They’re shy about mentioning the price, though, and no wonder: it was £0.0001 per share, raising £678 for the company and generating a profit of c. £370,000 for the noteholder.  Management also recently repriced their own warrants to the same £0.0001 level (private investors have paid up to 12,800 times more for their shares) to guarantee substantial profits for themselves regardless of commercial success.  The issue with I3E always has been its management.  Any return to shareholders is entirely discretionary and private investors particularly appear to be seen only as a resource.

Sound Energy (SOU) announced a notification from the Moroccan tax authorities, who have assessed additional corporate and value-added tax liabilities totalling approximately $14 million.  Obviously Sound dispute it publicly, but it’s good news in a way for the board, since it would enable them to put the Morocco subsidiary company down, while blaming “corrupt North African bureaucracy.”  Directors’ lifestyles could still be funded through the parent quoted company.

If you find this blog helpful, try my fact based trading course, which really will open your eyes.  It vastly expands on some of the principles I outline here and provides information that most will never have heard before.

I cover everything you won’t read elsewhere, particularly subjects which others either don’t understand, or even know about, or even if they do, are unwilling to talk about openly.  I set out exactly how it all works in detail.  Exactly how the insiders make their profits.  And how you can profit too.  Lots of money can be made if you know how it all actually works, and what goes on behind the scenes may be completely different to what you think.

I’ve been involved in the markets for a long time.  I bought my first shares in the 1970s and I’ve worked in the financial sector since the early 1980s.  My particular knowledge is of the stock markets and I’ve been actively involved in these, both in the UK and the US for over 40 years from both sides of the fence.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors.  

It’s not theory in this course, rather how it all actually works in the real world, keeping it practical and realistic, so that everyone can use the information for their own advantage regardless of the level of their trading or investment.

Small cap speculative companies exist to enrich their insiders, not their investors, and everything those involved do is for their benefit, not yours.  The vast majority lose with these companies, but for the whole scheme to work, some investors have to profit, and you can be one of those too.  The link is https://www.oilnewslondon.com/course 

Contact me on Twitter @Oilman_Jim 

Click “SUBSCRIBE” to receive these blog posts by email 

The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – PRD EDR LEK PHAR PTAL IOG

Predator Oil & Gas (PRD) issued a statement in response to its recent downward share price movement, noting recent speculation on two investment bulletin boards suggesting there would be an imminent fundraising by way of an equity placing.  PRD has denied this and reconfirmed it is fully-funded for its drilling operations in Morocco and ongoing operations in Trinidad.  The company is ready to drill in Morocco as soon as it is safe to move personnel in and out of the country.

Egdon Resources (EDR) announced a Shell farm-in update.  The OGA has approved the transfer of a 70% interest plus operatorship in both licences and the farm-in has completed.  The farm-out terms for EDR are rather poor, but on the bright side, the licences remain alive and Shell’s involvement lends credibility.

Lekoil (LEK) announced final results.  The loss for 2019 was $12.0 million and the cash balance at 31 July 2020 was $0.6 million.  Money is needed and LEK says that plans are underway, subject to the securing of funding, for a five to seven well drilling programme at Otakikpo.  There are plans for the Ogo appraisal drilling programme too, with well locations selected and funding discussions currently are underway with industry partners.

Pharos Energy (PHAR) announced interim results for the half-year to 30 June 2020.  The net loss was  $268.3 million, including a non-cash impairment of $265.5 million, which was primarily oil price related.  The loss per share was 70.9 cents.  With the decks cleared, it’s perhaps now one to look at for those who believe in fundamental orientated investment.

PetroTal (PTAL) was the subject of an interesting article in Argus.  They are not really in a position to restart production until the government pays off the protestors via their social investment plan, which has not happened and, even if it does, will still not be enough to satisfy them.  Indigenous leaders say tempers could flare up again if nothing is done (the last protest resulted in three dead plus 17 injured) and the field remains shut in.  Such are the perils of ill-informed investment in the developing world.

Independent Oil & Gas (IOG) announced interim results.  They’re certainly well financed for their development and production project, with a  cash balance at period end of £104.1 million, a further £36.7 million of uncalled development carry available from partner CalEnergy Resources (UK) Ltd. and £10.4 million drawn down from the senior secured bond escrow account for development expenditure, leaving £60.2 million remaining to be drawn at three further operational milestones.  First gas is expected next year.

That’s the material news this week.  Expected, starting next week, is a return to normal news flow.  There are an exciting few months coming up, which undoubtedly will be dominated by Coronavirus/Economy, US Presidential Election and, in the UK, EU Trade Agreement news.  Trading opportunities, long and short, will abound.  Many talk about the importance of having an “edge” in trading.  Some have that via access to inside information, but most who have it in the London small-cap markets do so simply by having a better understanding than others of human nature.  Subscribe to the Private Blog or the Special Trading Course to learn more.

Contact me on Twitter @Oilman_Jim 

Click “SUBSCRIBE” to receive these blog posts by email 

The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – MATD 88E UJO RBD PTAL FOG EME HUR

Petro Matad (MATD) announced interim results.  It’s still waiting for the Block XX exploitation licence to be approved and it doesn’t sound like that’s going to happen anytime soon.  In the meantime, it reported a loss of $2.35 million for the six-month period ended 30 June 2020 and a cash balance at that date of $2.08 million.  The company says it is pursuing a number of options to fund the next stage of its activities, but I think a placing is inevitable.

88 Energy (88E) announced it has completed the acquisition of all the outstanding ordinary shares and listed options in XCD Energy in accordance with the compulsory acquisition process and now owns 100 per cent.  Coming up is the drilling of two wells on the new acreage next year.  This one is a regular money maker if you know how to play it.

Union Jack Oil (UJO) and Reabold Resources (RBD) issued West Newton operations updates.  Union Jack published the full operator’s notice, stating “drilling operations will commence.”  Reabold edited out that part and stated “drilling operations…have commenced.”  Shows how you need to be careful with this particular company’s RNSs.  They both also announced a screening request for additional West Newton sites to determine whether planning application submissions for West Newton C and West Newton D will require environmental impact assessments.  In light of other commitments, it’s perhaps time to think about the future funding needs of these two.

PetroTal (PTAL) announced second quarter 2020 financial & operating results.  PTAL’s troubles are well known, but with production halted it now appears insolvent.  “At August 17, 2020,” it says, “PetroTal has cash resources of $13.5 million, with accounts payable and accrued liabilities of approximately $37 million.”  Can they actually establish continuous production generating sufficient free cash flow to fund further development is the question.

Falcon Oil & Gas (FOG) announced a Beetaloo operational update.  Subject to COVID-19 related conditions, fracture stimulation of Kyalla 117 is expected to commence before year end, with extended production testing of the well to follow.  Final well results are expected by the end of the first quarter next year.  It’s an odd one, being incorporated in British Columbia, Canada, headquartered in Dublin, Ireland, with a technical team based in Budapest, Hungary, and operating in the Northern Territory, Australia.  Its activities generate little, if no, discussion at all on social media.

Empyrean Energy (EME) announced final results.  Everything is on hold due to COVID-19, but of concern is the £10 million equity placement facility entered into with Long State Investment Limited.  This in my view makes it a no go from an investment perspective.

Hurricane Energy (HUR) announced the appointment of CEO Designate, Antony Maris, the former Chief Operating Officer of Pharos Energy.  He is expected to formally assume the role in mid-September and, as the company says, his technical experience and knowledge of the behaviour of fractured basement reservoirs makes him the ideal candidate to lead Hurricane.  Let’s see if he can sort things out.

Another fairly short blog this week, due to the August news hiatus.  The markets carry on regardless though, fuelled by new speculative money, although I detect a sense of weakening in London now.  America could continue powering ahead until the November elections and it’s virtually just as easy to trade shares there as it is in the UK if you’re interested.  An additional advantage for traders who prefer small caps is that British style placings, which can suddenly hammer a share price, are not allowed in the US.

Now, if you find this blog helpful, try my fact based trading course, which really will open your eyes.  It vastly expands on some of the principles I outline here and provides information that most will never have heard before.

I cover everything you won’t read elsewhere, particularly subjects which others either don’t understand, or even know about, or even if they do, are unwilling to talk about openly.  I set out exactly how it all works in detail.  Exactly how the insiders make their profits.  And how you can profit too.  Lots of money can be made if you know how it all actually works, and what goes on behind the scenes may be completely different to what you think.

I’ve been involved in the markets for a long time.  I bought my first shares in the 1970s and I’ve worked in the financial sector since the early 1980s.  My particular knowledge is of the stock markets and I’ve been actively involved in these, both in the UK and the US for over 40 years from both sides of the fence.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors.  

It’s not theory in this course, rather how it all actually works in the real world, keeping it practical and realistic, so that everyone can use the information for their own advantage regardless of the level of their trading or investment.

Small cap speculative companies exist to enrich their insiders, not their investors, and everything those involved do is for their benefit, not yours.  The vast majority lose with these companies, but for the whole scheme to work, some investors have to profit, and you can be one of those too.  The link is https://www.oilnewslondon.com/course 

Contact me on Twitter @Oilman_Jim 

Click “SUBSCRIBE” to receive these blog posts by email 

The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – PTAL RBD DELT I3E BPC CERP TRP TXP

PetroTal (PTAL) started the week off, announcing the closure of the Bretana oil field due to “social disruption.”  Sadly, this was not the variety of protest that UK oil companies are used to, rather a firefight that left a dozen people injured and three dead.  A criminal investigation is underway and the “crime scene” is locked down.  Whatever next?

Reabold Resources (RBD) issued a statement regarding Deltic Energy (DELT).  It has  withdrawn its takeover offer, which was simply not being taken seriously by Deltic’s major shareholders.  Better things perhaps are to come for DELT, who announced a material increase in the estimated volume of gas compared to previous estimates as well as a significant increase in the chance of success in relation to the Selene prospect.  All here comes down to Shell’s willingness to take the prospects forward to the drill stage.

I3 Energy (I3E) announced a £30 million placing and a return to trading.  It’s now a Canadian oil and gas producer.  Whether management will be any more successful with this than with prior ventures in which they were involved remains to be seen.  Their North Sea development project, in respect of which investors purchased many tens of millions of pounds worth of I3E shares at vastly higher prices, now appears to have been completely forgotten.  And if investors were misled regarding the North Sea project, why should anyone believe what they say about Canada?  I suspect it could become one of the numerous small cap oil shares where investors focus on supposed “fundamentals” blind to the deeper problems and end up losing large amounts of money.  As regular readers know, I have warned in the past about many such companies. 

Bahamas Petroleum Company (BPC) completed its merger with Columbus Energy Resources (CERP).  The speculative focus here though and indeed its market capitalisation depend on the upcoming Bahamas drill, which in turn depends upon financing.  Sadly, last week’s operational and corporate update did not address that critical point.  

Tower Resources (TRP) previously announced that the Company had an agreement with OilLR to farm in to the PSC to provide up to $7.5 million for the NJOM-3 well.  Unfortunately, they had to announce on Friday that OilLR has not yet made the payment into escrow contemplated by that agreement.  Tower are now talking about discussions for a loan, but whether that might be possible is highly uncertain.

Finally, Touchstone Exploration (TXP) announced second quarter 2020 results and an operational update.  The most interesting point was that they spudded the Chinook-1 exploration well on Thursday, which marks the next phase of their Ortoire block exploration program.

A fairly short blog this week, since there rarely is that much meaningful news mid-August and what good news there is tends to be held back to September after the holidays are over.  The market carries on regardless this year though, now fuelled by the cash and credit of newcomers buying whatever is being ramped on social media.

Personally, I look for what I would call certainties.  Those shares where I think a profit is as good as guaranteed.  My trade ideas are in the private blog each week and the link for that is https://www.oilnewslondon.com/oilman-jim 

If you’re not yet familiar with me, I’ve been involved in the markets for quite a long time.  I bought my first shares in the 1970s and I’ve worked in the financial sector since the early 1980s.  My particular knowledge is of the stock markets and I’ve been actively involved in these, both in the UK and the US for over 40 years from both sides of the fence.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors, which enables me to see very quickly whether or not these companies are telling the truth.

Contact me on Twitter @Oilman_Jim 

Click “SUBSCRIBE” to receive these blog posts by email 

The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.