Oilman Jim's Letter - 29 September 2024

Petro Matad (MATD.L PRTDF HA3.F) announced that it has spudded the Gobi Bear-1 exploration well in the Tamsag Basin of eastern Mongolia. The well is being drilled by the DQE International rig #30609 and is located around 12 kilometres southwest of the Heron-1 oil discovery well in the Block XX exploitation area. Gobi Bear-1 is targeting reservoir quality sandstones in the Cretaceous Lower Tsagaantsav formation which is the main producing horizon in the Tamsag Basin and which was proven to be oil bearing in the company's nearby Heron-1 and Gazelle-1 wells. Based on seismic interpretation, the primary reservoir target in Gobi Bear-1 is anticipated to be reached at a depth of around 1,400 metres within a combination structural/stratigraphic trap at the southern end of the Toson Uul sub-basin in which approximately 2 billion barrels of oil in place have been discovered in the last 20 years. The Gobi Bear prospect is estimated to have mean oil in-place potential of 307 million barrels and the well is planned to drill to a total depth of around 1,800 metres. Gobi Bear-1 is expected to take approximately 20 days to drill to total depth following which wireline logging will be conducted to determine if it merits testing. In the event of encouragement, well testing will be performed using the same contractor engaged for the operations planned at the nearby Heron-2 well. The well cost is estimated to be $1.5 million, making it a high impact/low cost, near-field exploration well. It also has the potential to de-risk other prospects and leads identified within Block XX…more

Noble Helium (NHE.ASX NBHEF) announced that it has received firm commitments from institutional, sophisticated and accredited investors to raise A$3.0 million before costs through a placement of 66,666,667 million shares at an issue price of A$0.045. The funds will be used for deeper targets in the western margin shallow analytical program, the preliminary work program to prepare for 2025 dry season activity on the eastern margin of the North Rukwa basin, exploration license renewals, preliminary exploration activity at the other Tanzanian exploration license areas, estimated costs to proceed to dual listing on AIM and general working capital, corporate and offer costs. The company says it is continuing to acquire and analyse the shallow geophysics data to finalise all of the drilling locations, including some deeper targets at approximately 150 metres in the southern area. Noble also announced that following the grant of approval to award the drilling tender by the Mining Commission, the company has executed the contract and issued a notice to BoreXpert to mobilise to site. This contract is said to be low cost on a meterage basis including fixed price mobilisation and de-mobilisation, which significantly reduces the financial risk to the company. BoreXpert will be on site within 30 days ready to start the drilling component of the shallow appraisal program, which remains on track to be completed this dry season…more

Challenger Energy (CEG.L BSHPF) announced that in relation to its farmout agreement with Chevron for the AREA OFF-1 licence in Uruguay, the board of directors of ANCAP (the Uruguayan state-owned oil company with regulatory responsibility for offshore licences) has now approved the farmout and the process has progressed to its final stage, which consists of the farmout being notified to the Uruguayan Ministry of Industry, Energy and Mining, and at the same time the consortium agreement between the company and Chevron being submitted to the Uruguayan Ministry of Economy and Finance for registration. Once a 20-day notification period has elapsed and the consortium agreement is registered, the farmout can be completed. Per Eytan Uliel, CEO of Challenger, the farmout is transformational. Completion is now expected within the next four to eight weeks, which will enable Chevron, as incoming operator of the block, to move forward with 3D seismic acquisition on an accelerated basis, targeting commencement in early 2025…more

Arrow Exploration (AXL.V CSTPF AXL.L C1JT.F) announced an update on operational activity. The fourth horizontal well on the Carrizales Norte "B" pad (CNB HZ-5) is now on production and has a current flow rate exceeding 2,700 barrels of oil per day gross (1,350 net to Arrow) with production continuing to increase. Management's expectations are that CNB HZ-5 will achieve production rates similar to the company's first three horizontal wells, and similar payback schedules of less than 2 months. CNB HZ-5 was spud on August 22, 2024, and reached a target depth of 8,472 feet on September 7, 2024.  The well was drilled to a total measured depth of 13,350 feet with a horizontal section of approximately 4,070 feet. The Petroworks rig is now being moved to the sixth cellar on the Carrizales Norte B Pad where the company plans to spud the fifth horizontal well (CNB HZ-6). Thereafter, Arrow expects to drill one additional horizontal well on the B pad, followed by the Chorreron-1 (formerly known as Baquiano-1) exploration well, which is on trend with the Carrizales Norte field. Current net corporate production is approximately 5,835 barrels of oil equivalent per day, inclusive of CNB HZ-5, and the cash position was approximately $15 million on September 1, 2024, with the company maintaining a healthy balance sheet and no debt…more

Corcel (CRCL.L CRCL.V RM4B.F) announced that its 90% owned subsidiary, Atlas Petroleum Exploration Worldwide, has received authorisation for the assignment of an additional 20% interest in its operated block KON-16, onshore Angola. The assignment of this incremental equity will result in Atlas holding a 55% gross (49.5% net to Corcel) equity interest in KON-16. The company simultaneously announced a subscription of £1,220,000 with strategic investors to fund its ongoing operations and strategy. New seismic acquisition in 2025 will allow the company to drill the first new well on the block since the 1960s. Any new well drilled on KON-16, a large 1,022 km2 (252,500 acres) block, would be testing significant potential resources and success would be transformational for Corcel.…more 

ADX Energy (ADX.ASX ADXRF GHU.F) announced an update in relation to the resources potential and the planned well testing program for the Welchau-1 discovery in the ADX-ATII exploration licence in Upper Austria. The company is operator and holds a 75% economic interest in the exploration area. Welchau-1 well targeted the reservoirs encountered in the nearby, downdip Molln-1 discovery well that tested condensate rich gas at between 3 to 4 million cubic feet per day in 1989. Welchau-1 intersected three primary carbonate reservoirs that are considered promising for testing and ongoing appraisal and operations were suspended to comply with the conditions of environmental permits limiting drilling and testing operations to the Austrian winter months from 1 October 2023 to 31 March 2024. At the conclusion of drilling, hydrocarbon shows were still being encountered at the bottom of the well and further exploration potential may be accessible by deepening the Welchau-1 well after testing. In preparation, ADX has undertaken the necessary planning, permitting, procurement and contracting to execute an extended testing program on Welchau-1 and the target date to commence operations is 15 October 2024. The Welchau-1 well test program is designed to confirm the hydrocarbon characteristics, determine well productivity, the potential connected volumes and ultimately an estimate of recoverable resource volumes from future potential development wells. Additionally, ADX announced that the Lichtenberg-1 gas exploration well has commenced drilling. The LICHT-1 well will target an Upper Oligocene sandstone reservoir and two slightly shallower, geologically similar reservoirs. LICHT-1 is expected to take approximately 30 days to drill to a total measured depth of approximately 2,900 metres and the first Oligocene reservoirs are expected from around 2,000 metres, with the main target reservoir expected from approximately 2,500 metres. If successful, logging, casing and suspension of the well will take approximately another 10 days. Economics for successful gas exploration at this location are said to be potentially excellent due to high productivity reservoirs, close proximity to open access pipelines (approximately 4 kilometres distance) and strong central European gas pricing of approximately $15 per thousand cubic feet…more

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