Weekly oil news round up by Oilman Jim – 88E BLOE PANR PTAL PMG BPC LEK UJO

Interesting political and economic times.  In the US, Trump continues to refuse to concede, until, it appears, he can negotiate behind the scenes a blanket immunity from prosecution deal which includes the individual States.  A Presidential pardon, which is dubious anyway if he’s pardoning himself, covers only Federal offences, not the charges which may result from the active criminal investigation into his and his family’s business dealings currently underway in the State of New York.  Despite the noise, at the end of the day, the GOP isn’t really going to bin American democracy to save Trump and relative normality will resume with the inauguration of President Biden in January.  Printing by the Fed will continue as usual.

The UK has still not agreed a trade deal with the EU and businesses have no idea what the arrangements, if any, will be come 1 January 2021, a date now just 27 working days away.  I reckon an extension to the “implementation” period may be on the cards, albeit suitably and euphemistically renamed (“ratification” phase perhaps).  Behind the rhetoric, I’ve often wondered what the benefits of Brexit actually are.  Businesses in meetings with Government have been told to seise the opportunities of Brexit, to which they have responded that there aren’t any, hence the “fuck business” line from Ministers.

The benefits for some though are now starting to come into sight.  Post Brexit, the UK no longer needs to comply with the general restriction imposed by the EU on the size of government deficits, plus it is no longer unlawful for the Bank of England to directly fund government spending.  This is prohibited for EU members, but it is now possible for the UK to fund the deficit by creating money.  Previously, the Bank of England created money to buy assets (quantitative easing).  Now it can create money to fund government spending – and there’s going to be a lot of that (think “Green Industrial Revolution” for example).  We get a hint of what’s to come from the PPE procurement exposures.  Those close to the current Government are going to be enormously enriched I suspect.

On to the companies, I said last Sunday that next up at 88 Energy (88E) would be a placing, and that was announced on Tuesday, A$10 million at 0.33p.  However, the set up here is different to before.  The farm-out agreement is not yet signed and the drill is not yet fully funded.  1.67 billion placing shares will be admitted to trading on Friday.

Another one where I expect a placing is Block Energy (BLOE), who are starting to ramp up the hype.  It’s one that I warned about several times before and investors who ignored me incurred horrendous losses.  The last pre-placing promotion was based on lies, so I’d suggest exercising extreme caution here.

Pantheon Resources (PANR) also announced a placing, raising $30.2 million at 31p.  This does fully fund their upcoming Alaska well, which the company aims to drill in the first quarter next year.  It has big numbers, but so does PANR’s existing market capitalisation, which was standing at nearly £200 million at close of business on Friday – and that’s before the new placing shares are admitted.  

PetroTal (PTAL) is another that I’ve warned about frequently, all the way down from over 30p.  It’s now 7.6p, at which level it’s capitalised at £62 million.  However, if they can start delivering through the Northern Oil Pipeline as discussed in last week’s third quarter 2020 financial and operating results, it’s possibly not too expensive now at this level.

Parkmead Group (PMG) announced preliminary results for the year ended 30 June 2020.  What always smells with this one is the director self-dealing.  Nevertheless, cash balances are £25.7 million compared to a market cap of £32.7 million and there are 2P reserves of 45.7 million barrels of oil equivalent.  There’s also a move into renewables on the land in Scotland purchased from the Chairman’s wife.

Bahamas Petroleum Company (BPC) announced an operational update.  They’re now “one month out” to Perseverance #1.  Funding, however, is dependent on the conditional convertible notes and I wonder if this line of finance actually can only come by selling shares into the market.  It’s one to keep a careful eye on.

Lekoil (LEK) announced the sudden resignation of its Nominated Advisor, Strand Hanson.  If no replacement is announced by 7 a.m. tomorrow, their shares will be suspended half an hour later.  Absent the appointment of a replacement Nominated Adviser within one month, the admission of its AIM securities will be cancelled.

My reporting last Sunday of the Union Jack Oil (UJO) @UnionJackOil account being suspended for violating Twitter rules provoked quite a reaction.  Indeed, one self-styled “independent” oil analyst/blogger came on later in the day, apparently rather the worse for wear, forgetting to mention that he in fact takes payment from the companies to say positive things about them.  Watch out for this one: the last time I looked, his “bucket list” (of the shares of the companies paying him most?) was down by around 80%.  Back channel communications from the company indicated the management was concerned about what their PR might have posted and therein lies the problem with UJO: the crowd of characters swarming around it.

Today, I’m finishing off the edit of the second edition of “UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM” which includes some interesting new material.  Its intention is to be educational, as with my blogs, public and private.  Hopefully, what I write can help protect you from being scammed and get you thinking about how you actually can make money in these unconventional markets.

A complimentary copy in electronic format will be sent out in the next week or so to all private blog subscribers, existing and new, so if you’d like to read the book, try out a trial subscription to the private blog, details of which are at https://www.oilnewslondon.com/oilman-jim 

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 – 88E PANR UJO UKOG MSMN NTOG ZEN

Another week on and still no full acceptance of the Presidential election result in the US, nor any news about what the UK’s arrangements with the EU will be come 1 January 2021, a date now just 32 working days away.  Meanwhile, the Coronavirus rages worldwide, with record infection and death numbers being recorded.  It doesn’t seem to bother the markets that much, though, which now seem to realise that the only answer for Governments in the current situation is to continue printing money.  These artificially buoyant markets unfortunately have the side effect of helping enable the denial of reality.

The most interesting news this week from the smaller oil companies came from 88 Energy (88E).  The Peregrine farm-out is progressing well: multiple bids have been received, the preferred bidder has been selected and the transaction is expected to close within weeks.  Meanwhile there has been a resource upgrade at Icewine: total prospective resources are 1.77 billion barrels of oil equivalent with substantial oil volume in the Seabee formation of 1.4 billion barrels and a farm-out process for 2022 drilling at Icewine is to commence immediately.  Next up I think will be a placing.

Fellow Alaskan explorer, Pantheon Resources (PANR), announced formal approval of the Talitha unit.  Its ambitions to drill the Talitha #A appraisal well in Q1 2021 remain subject to funding and farmout discussions remain ongoing.  Compared to 88E’s market cap. of £42 million, PANR appears grossly overvalued at £242 million.  I also believe 88E has the more competent and effective management of the two.

Moving down to the more “lifestyle” orientated companies (I’ll cover these today since there was so little news from the more serious companies last week), Union Jack Oil (UJO) announced a Biscathorpe proposed side well planning update.  This is not particularly material in the context of a £31 million market cap; maintaining, or exceeding this all comes down to the results announced at West Newton.  Of greater interest was the @UnionJackOil account being suspended for violating Twitter rules.  What I wonder have the UJO directors and its PR people been posting?

UK Oil & Gas (UKOG) updated regarding the application for judicial review of Surrey County Council’s September 2019 consent for long-term oil production at Horse Hill.  A hearing will take place on 17-18 November and the company is well represented by David Elvin QC.  It’s unlikely the claimants will succeed and, in any event, focus is now moving on to Turkey.  The new prospect there has some decent sounding numbers, although I suspect many of the traditional shareholders who bought in on a rather different prospectus may regard this move as a betrayal.

Rounding off at the bottom end of the junkyard, Mosman Oil & Gas (MSMN) announced an operational update, Nostra Terra Oil & Gas (NTOG) announced a Pine Mills drilling update and Zenith Energy (ZEN) announced the terminations of both exploration in Azerbaijan and its nonsensical LOI for 2.5p per share funding (current share price is 0.35p).  As I’ve explained before, all these types of companies do is ramp and place, the “asset” being just a tiresome legal requirement.  At the bottom line of the accounts, there’s never actually anything for the shareholders, only losses.  Other than occasional ramps to clear placing stock and warrants, and provide the opportunity for insiders to sell short before covering at a profit in the next heavily discounted placing, there is nothing at all in it for investors.

I’ve now nearly finalised the second edition of “UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM” which includes some interesting new material.  Its intention is to be educational, as with my blogs, public and private.  Hopefully, what I write can help protect you from being scammed and get you thinking about how you actually can make money in these unconventional markets.

I’ll be sending a complimentary copy in electronic format to all private blog subscribers, existing and new, so if you’d like to read the book, try out a trial subscription to the private blog, details of which are at https://www.oilnewslondon.com/oilman-jim 

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 – UKOG BPC IOG DELT AAOG BLOE RBD PTAL IQAI PET

Following on from the US Presidential election result, it’s interesting times ahead in the UK both on the political and the economic front.  Britain exits the Single Market and Customs Union on 1 January, just 54 days away, and, as yet, no deal has been reached regarding access to GB’s major export market.  British businesses still have no idea what the arrangements, if any, will be.  It’s potentially a perfect storm when combined with the Coronavirus pandemic and there’s now no political back-up (or promise of a trade deal) from the US, with the probable next American ambassador to the UK describing Brexit as the “biggest own-goal” he’s ever seen.

Moving on to the company news, UK Oil & Gas (UKOG) announced a Horse Hill oil field update.  Following a surface-based intervention operation, the HH-1 well has been shut in for a long term pressure build up test.  Investors aren’t happy.  PR attention will now shift to its JV in Turkey with Aladdin, but how much appeal this will have for UKOG’s historic base is questionable.

Bahamas Petroleum Company (BPC) announced an operational update in relation to its assets in Trinidad & Tobago and Suriname.  This is all very much ancillary to their big drill hopefully coming up in the Bahamas soon and the question here is whether it actually is financed or are BPC going to have to first create the volume in the market for the convertible loan providers to sell into.  An interesting one.

Independent Oil & Gas (IOG) announced the award of the Phase 1 rig contract to Noble, plus a corporate and operational update.  Spudding of the first well is expected in Q1 2021, with first gas in Q3 2021.  There’s an interesting presentation available at https://www.independentoilandgas.com/media/1306/iog_corp_pres_nov20_vf.pdf which, most importantly, shows it’s all fully funded.  There is a relatively small (£11.6 million) convertible loan note out, but it converts at 19p (52% above the current share price of 12.5p)  and it’s clear from previous statements that the LOG administrators are looking for quite a bit more than that for their stake.

Deltic Energy (DELT) received a takeover offer from IOG not too long ago, but the Board preferred to keep control.  DELT announced last week an update on activity relating to Licence P2252 (Pensacola), which remains scheduled to be drilled in Q4 2021.  Note, though, that DELT is only carried by Shell until the well investment decision is made.  After that, it will have to pay its own way.

I could talk about Anglo African Oil & Gas (AAOG), which was suspended last week and how all the other questionable ones I’ve called out over the last year or so (Block Energy (BLOE), Reabold Resources (RBD), PetroTal (PTAL), etc.) have fallen in price dramatically, but I’ll leave it at that for today.  People prefer good news and it was pleasing to see the only non-OAG company upon which I’ve commented positively over the last couple of years or so release quite exciting news last week.  That company was IQ-AI (IQAI) which I highlighted at around 1p saying “30% downside, 300% upside.”  It went over 23p on Thursday.  The only other share about which I’ve made the same “30% downside, 300% upside” comment is Petrel Resources (PET) which I also highlighted around 1p.  It went to 27p subsequently.  Mostly, though, I focus on companies with potentially transformational, upcoming drills with the potential for an easy 100% gain.  With the stock market, it’s not about being in every one, rather just being in those where you’re as certain as you can be.

I write about all this in my book, UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM, the second edition of which will be ready very soon.  I’ll be sending a complimentary copy in electronic format to all private blog subscribers, existing and new, so if you’d like to read the book, try out a trial subscription to the private blog, details of which are at https://www.oilnewslondon.com/oilman-jim 

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 – PVR LOGP CHAR IGAS BOR

It’s troubled times with oil price plus US election uncertainties on the international front and Brexit realities now coming into mainstream focus in the UK.  Personally, I would be cautious at present, particularly given the economic implications of COVID-19 countermeasures and the structural changes which may take place as a result, plus Britain is now uniquely disadvantaged, being the only country facing new trade barriers with its major export market on January 1.  If the economy contracts further, as it most likely will, remember that without constant access to new funds, most of these AIM companies are worthless.

Moving on to the company news, Providence Resources (PVR) and Lansdowne Oil & Gas (LOGP) revived memories of their previously failed deal with APEC by announcing an extension of the “exclusivity period” with SpotOn Energy to 30 November.  Although probably no surprise to those who follow me and read the blogs, after the hubristic investor presentation a fortnight ago and statements by the PVR CEO in the independent.ie last week, this came as quite a disappointment to the companies’ shareholders.  Some on social media tried to stop me saying it, but readers should know that SpotOn Energy is a £1 UK dormant company delinquent in its reporting requirements.  Links to its website and Companies House filings are here: https://spotonenergy.no https://find-and-update.company-information.service.gov.uk/company/SC542521  Form your own view.

Chariot Oil & Gas (CHAR) announced the receipt of “Expression of Interest Letters” from Africa Finance Corporation and an unnamed multinational investment bank.  The shares spiked on the announcement, leaving a number of investors with losses, but if genuine, possibly Anchois is a go.  The estimated capital expenditure required to bring the development online is anticipated to be in the region of $300-500 million.

IGas Energy (IGAS) announced a memorandum of understanding with BayoTech, a manufacturer of modular hydrogen generation systems, to produce hydrogen from certain of  the company’s existing gas resources.  Moves with the “energy transition” are gathering pace and the key shorter-term to actually transitioning away from oil is the re-profiling of nuclear energy as “green,” something which is now quietly underway.  Back to IGAS, hydrogen is another step forward in its re-profiling, following the announcement in September of its acquisition of a geothermal energy business.  It could be an interesting one.

Borders and Southern Petroleum (BOR) announced an extension to its Falkland Islands production licences, which were due to expire on 31 October this year.  The new expiry date for the licences will be 31 January 2022, which brings them in line with the expiry date for BOR’s Darwin discovery area licence.  For those who don’t know about this little company, BOR has a market capitalisation of £3 million, total assets per its 30 June 2020 accounts of $295 million, and is one whose share price can quickly double on any whiff of potential activity in the Falkland Islands’ area.

There were, of course, other announcements last week, but these are the ones that caught my eye as interesting.  Stating facts about some of the smaller companies, as happened last week with MSMN and NTOG, also brings on torrents of abuse from those ramping the shares to clear their placing stock and the newcomers who have drunk the Kool-Aid.  Dealing with these types of posts really is not the way I want to spend my Sunday.  I won’t stop commenting on scam companies, rather move the information over to the private blog.  I’ll revisit them here after their share prices have collapsed – as inevitably they always will.

To close, I’ve nearly finished finalising the second edition of “UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM” which includes interesting new material.  Its intention is to be educational, as with my blogs, public and private.  Hopefully, what I write can help protect you from being scammed and get you thinking about how you actually can make money in these markets.  I’ll be sending a complimentary copy in electronic format to all private blog subscribers, existing and new, so if you’d like to read the book, try out a trial subscription to the private blog, details of which are at https://www.oilnewslondon.com/oilman-jim 

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 – 88E BPC PVR LOGP AEX SCIR EOG RMP MSMN NTOG

88 Energy (88E) announced an operations update reporting good progress on the Project Peregrine farm-out with a deal on schedule for year-end close.  Permitting and planning for a two well program at Project Peregrine is on track for 1Q 2021 spud.  The quarterly report issued later in the week disclosed cash of A$4,681,000 (£2,535,000) as of 30 September 2020 and clearly 88E will need more.  A placing is a virtual certainty, but after that we may well see another 100% run as happened following the fundraising last year.

Bahamas Petroleum Company (BPC) announced a convertible note funding update.  As suspected, it remains far from certain.  The initial exploration well was of course “fully funded per the established criteria” the previous week when it came to paying out salaries and bonuses to directors, but now an element of doubt is creeping in.  Caution is the watchword here.

Providence Resources (PVR) and Lansdowne Oil & Gas (LOGP) announced the re-instatement of equity in the Barryroe Licence.  The interest has reverted to their subsidiary, EXOLA DAC, following the default of APEC in the previous farm-out process.  The current farm-out process is slated to close this coming week.  A brilliant deal for PVR and LOGP is being widely touted, so let’s hope no-one is too disappointed.

Aminex (AEX) announced completion of the Ruvuma farm-out.  Following assignment of a 50% interest to ARA Petroleum, AEX now holds a 25% interest in the Ruvuma PSA with a full carry for Aminex’s share of costs up to $35 million in respect of its interest, implying a potential expenditure during the carry period of up to $140 million.  ARA, as the new operator of the Ruvuma PSA, intends to call an operating committee meeting shortly, where they will formally present their programme and schedule for the drilling of the Chikumbi-1 well and the 3D seismic acquisition programme.  Scirocco Energy (SCIR) (the old SOLO) owns the other 25% interest, but is not carried, and the hard reality is that unless Scirocco agrees a sale very soon, they’ll either have to put up a large amount of cash or lose their interest.  No matter what some may say, there is no equivalence between the two companies.

Europa Oil & Gas (EOG) announced a one year extension to its offshore Morocco licence.  This perhaps is its most important asset and the additional time will enable it to further de-risk 30 prospects and leads which EOG estimates have the potential to hold in aggregate close to 10 billion barrels of un-risked oil resources.  Meanwhile, Red Emperor Resources (RMP) announced its quarterly activities and cashflow report.  It needs to get a deal done soon to avoid suspension and delisting, otherwise its fund raising days are over.

Those ramped in to Mosman Oil & Gas (MSMN) at up to 0.24p received a nasty surprise when it announced a 0.125p placing, as perhaps did its new TR-1 holder (if his filings are accurate), who was also the principal ramper.  But this is what, indeed all, these types of companies do, ramp and place, the “asset” (in this case, a minority non-operated working-interest requiring no management time whatsoever) being just a tiresome legal requirement.  At the bottom line of the accounts, there’s never actually anything for the shareholders, only losses.  The same applies to a very similar company, Nostra Terra Oil & Gas (NTOG), who released an operational update last week, which contained no production numbers.  Other than ramps to clear placing stock and warrants, and provide the opportunity for insiders to sell short before covering at a profit in the next highly discounted placing, there is nothing at all in it for investors.

I’m currently finalising the second edition of “UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM” which includes some interesting new material.  Its intention is to be educational, as with my blogs, public and private.  Hopefully, what I write can help protect you from being scammed and get you thinking about how you actually can make money in these unconventional markets.  I’ll be sending a complimentary copy in electronic format to all private blog subscribers, existing and new, so if you’d like to read the book, try out a trial subscription to the private blog, details of which are at https://www.oilnewslondon.com/oilman-jim 

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 – 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 

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 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.

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 – 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

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 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 

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 – 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.

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.