Oilman Jim's Letter - December 12, 2024

Sintana Energy (SEI.V SEUSF) announced a further update regarding the second campaign on blocks 2813A and 2814B located in Namibia’s Orange Basin. Galp (operator) and its partners decided to retain the Santorini drillship to continue the ongoing exploration and appraisal campaign during the southern hemisphere summer thus avoiding mobilisation and de-mobilisation costs. The Mopane-2A (well #4) now has been spud in nearby AVO-3, and the Mopane-3X (well #5) is expected to be spud in early 2025 in AVOs 10 and 13 (stacked) taking advantage of newly processed 3D seismic. The upcoming activities also include a high-density and high-resolution proprietary 3D development seismic campaign over the Mopane complex set to start in December 2024. Results of Mopane-1A (well #3) released on December 2 noted that the well encountered light oil and gas-condensate in high-quality reservoir-bearing sands, once again indicating good porosities, high permeabilities, and high pressures, as well as low oil viscosity characteristics with minimum CO2 and no H2S concentrations . Together with the Mopane-1X (well #1) and Mopane-2X (well #2) findings, this appraisal well confirmed the extension and quality of AVO-1 and supported the acceleration of the program…more

New Era Helium (NEHC NEHCW) announced it has closed on its business combination with Roth CH V Holdings and Roth CH Acquisition V. Co. (ROCL ROCLU ROCLW) in which New Era merged with Roth CH V Merger Sub Corp., a wholly-owned subsidiary of Holdings. With the transaction now complete, Holdings has changed its name to "New Era Helium" and the company's stock and warrants are trading on Nasdaq under the symbols NEHC and NEHCW, respectively. The combined company will operate under the new name, New Era Helium. The company intends to establish itself as a consolidator of helium and natural gas production and already holds over 137,000 acres in Southeast New Mexico and 1.5 billion cubic feet of proved and probable helium reserves. New Era already has announced a non-binding joint venture with Sharon AI to build a 90MW net-zero Tier 3 data center to be located within the Permian Basin. The joint venture combines Sharon AI's expertise in high-performance computing with New Era's extensive helium and natural gas reserves. The state-of-the-art facility will feature a liquid-cooled Tier 3 data center powered by sustainable energy, offsetting approximately 250,000 metric tons of CO2 annually through carbon capture technology and qualifying for 45Q tax credits.

Pulsar Helium (PLSR.V PSRHF PLSR.L Y3K.F) announced that it has signed an agreement with Earthly Labs, a subsidiary of Chart Industries (GTLS I3N.F) outlining a procurement roadmap facilitating access to advanced gas processing technologies, including helium and carbon dioxide capture, essential for servicing a potential production scenario at Pulsar's Topaz project in Minnesota. Pulsar would agree to purchase the Chart carbon capture solution to capture helium and CO2 from Topaz, allowing Pulsar to monetize these products, whilst also reducing emissions. Under the terms of the agreement, Chart will complete engineering studies and provide helium and CO2 plant and storage recommendations for Pulsar…more

Vulcan Energy (VUL.ASX VUL.F) announced a $164 million institutional placement and a $20m share purchase plan to fund aspects of its Lionheart project in Germany's Upper Rhine Valley brine field. The placement will raise $121 million from institutional investors and $43 million from strategic investors, with the share puchase plan offering existing shareholders an opportunity to participate at the same offer price of $5.85 per share. Vulcan is building an integrated lithium and renewable energy production system in Germany and the project aims to extract lithium from sub-surface brines while co-producing renewable geothermal energy. Offtake agreements with Stellantis, Renault, Volkswagen, Umicore, and LG are said to cover most of the project's first 10 years of production. The equity raise is part of a broader financing strategy; the total funding requirement for Phase One is estimated at $3.61 billion. Vulcan says it is targeting €1.5 billion to €1.6 billion in debt financing, including loans from the European Investment Bank, Export Finance Australia (from whom It has already received conditional approval for €120m in debt funding), Export Development Canada, and commercial lenders. On the equity side, Vulcan is targeting to raise €625 million to €725 million through strategic partnerships, public equity raises, and government funding. Recent grants from the German government and the European Recovery and Resilience Facility have already contributed €100 million to the project.

Parkmead Group (PMG.L) announced the signing of an agreement to effect the sale of its wholly owned subsidiary, Parkmead (E&P,) to Serica Energy (SQZ.L SQZZF A3P.F). The Netherlands asset portfolio is excluded from the transaction with Parkmead retaining 100% of its revenue producing assets, which comprise its Dutch natural gas fields and its UK wind farm, all onshore. The consideration being received by Parkmead consists of £14 million of firm cash and up to £120 million of contingent cash (which compares with a market capitalisation of £14 million at the time of announcement). The UK offshore sector faces continuing challenges in the form of the current political environment towards UK oil & gas, and the focus of the UK Government on its net zero strategy and Parkmead believes that the opportunity to progress these UK North Sea licences would be best served within the portfolio of a larger, North Sea focused company…more

Helix Exploration (HEX.L) announced a commercial helium discovery in the Darwin #1 well at the Rudyard project in Montana. 236 feet of the Darwin #1 was perforated simultaneously, testing the Souris and Red River reservoir horizons and Gas was assayed at 1.1% helium with the balance being primarily nitrogen. Commercial flow rates were sustained at 2,750 thousand cubic feet per day of raw gas on a 40/64" choke with the absolute open flow calculated to be over 4,500 thousand cubic feet per day. Per the company, the Rudyard field can support multiple production wells with each well having the potential to produce pre-tax cashflow of circa $4 million per year and drain a large area over a sustained period…more

88 Energy (88E.ASX 88E.L EEENF POQ.F) announced it has been declared the highest bidder on 4 lease blocks immediately adjacent to the existing Project Leonis leases. The new lease blocks cover approximately 10,203 acres, expanding Project Leonis' footprint to a total of 14 leases covering approximately 35,634 contiguous acres. The new leases are said to have been strategically targeted following the identification of additional prospectivity within Canning Formation turbidites. The newly identified Canning prospect indicates what the company describes as significant resource potential, with an approximate areal extent of 43km2 and a reservoir succession of up to 336 feet. Selection of potential drilling locations will occur in early 2025, leveraging results from the quantitative interpretation study, ahead of a planned well anticipated in H1 2026…more

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