Oilman Jim's Letter - December 15, 2024

Own a stake in Alaska’s oil reserves.

• Estimated 300 million barrels of recoverable reserves

• Royalty-based model reducing operational risks

• Projected 25+ years of reliable, high-margin royalty income

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Pantheon Resources (PANR.L PTHRF P3K.F) announced the Megrez-1 well as a discovery in the eastern topsets in the Ahpun field. The well has reached target depth and the company has run production casing in anticipation of long term testing commencing early 2025. The well has discovered a large light liquids hydrocarbon column based on logs and gas chromatography and analysis indicates three hydrocarbon bearing zones  over an approximate 1,260 foot vertical section, including the two primary objective formations. Separately, Pantheon announced results for the year ended 30 June 2024. The company reduced its convertible loan balance to $17.2 million as of 9 December 2024, further reducing to $14.7 million on 13 December. As of 9 December 2024, unaudited cash and cash equivalents totalled $23.7 million, which are currently funding the ongoing Megrez-1 well operations, with the majority of the costs remaining to be spent. Per David Hobbs, Executive Chairman, the past 18 months have seen extraordinary progress in three key areas. Pantheon received independent validation of the company's contingent resources base at 1.6 billion barrels of ANS crude, funded and is executing the Megrez-1 well programme, with its potential to add up to a further c. 40% to the overall resource base and secured a path to potential monetisation of the 6.6 trillion cubic feet of natural gas in a way that may support the development capital needs from Ahpun first investment decision…more

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. 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

HyTerra (HYT.ASX HYTLF) announced that it has continued leasing within several priority areas in the Nemaha project, Kansas. Approximately 8,000 acres have been acquired bringing the total lease position from 52,000 acres to over 60,000 acres, supporting the upcoming exploration campaign. The Kansas Corporation Commission has approved a further three well permits: Downey Ranch 13-31, Crome 1-28 and Larson 1-14. Each of these prospects are based on existing and recently purchased gravity, magnetic and seismic data. The drilling contractor has advised that preparation of the drill site earthworks and access road starts this week at the Blythe 13-10 prospect location…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 tax credits.

Sunda Energy (SNDA.L GHA.F) announced it has entered into a non-binding letter of intent with an international drilling contractor concerning commercial negotiations for a definitive drilling contract for the use of a jack-up drilling rig located in the region. Sunda intends to use the rig for the appraisal drilling campaign on the Chuditch Field, offshore Timor-Leste. Signature of the LOI enables the company to progress regulatory approvals for the use of the rig, which is expected to complete its ongoing work in the region before becoming available for Chuditch appraisal drilling in Q2 2025. The company states that further updates on preparations for the drilling of the Chuditch-2 appraisal well will be provided in due course…more

Pulsar Helium (PLSR.V PLSR.L PSRHF Y3K.F) announced the commencement of field activities at its Topaz project in Minnesota. Personnel and equipment have begun arriving on-site, with deepening of the Jetstream #1 appraisal well set to commence and scheduled to conclude before the Christmas holiday. The company plans to deepen Jetstream #1 by a minimum of 1,640 feet. The Jetstream #1 appraisal well previously reached total depth of 2,200 feet on 27 February 2024, identifying helium concentrations of up to 14.5% and CO2 concentrations exceeding 70%, with the latter expected to further contribute to the project economics. The deepening of Jetstream #1 will target the full height of the helium reservoir, guided by insights from recently acquired survey data, previous drilling phases, and onsite testing. Additionally, the company 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 Topaz. Pulsar would agree to purchase the Chart carbon capture solution to capture helium and CO2, allowing Pulsar to monetize these products, while 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

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 the 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 a year and drain a large area over a sustained period…more

88 Energy (88E.ASX 88E.L EEENF POQ.F) announced an update on activities related to Petroleum Exploration Licence 93 in the Owambo Basin, onshore Namibia. Initial processing and interpretation of the 2D seismic data has been completed by Monitor Exploration, the operator for the exploration and development programme. Interpretation has identified an initial suite of 10 significant independent structural closures within the licence area; the 2024 2D seismic data now confirms the presence of multiple significant leads in the southern area of PEL 93, each with large interpreted structural closures, with some individual leads covering up to approximately 100km2, exhibiting prominent vertical relief and clear hydrocarbon charge potential from source rocks beneath the prospects and in the kitchen to the north. 88 Energy has now received the 2D seismic products from Monitor and will aim to independently validate Monitor’s findings and work with the joint venture to integrate all available well log data, airborne geophysics and soil geochemistry together with the 2D seismic dataset. A prospective resource estimate for PEL 93 is targeted for completion in H1 2025, following the internal review of Monitor’s seismic interpretation. Additionally, the company announced it has been declared the highest bidder on 4 lease blocks in Alaska 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

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, thus 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

Vulcan Energy (VUL.ASX VUL.F) announced a A$164 million institutional placement and a A$20m share purchase plan to fund aspects of its Lionheart project in Germany's Upper Rhine Valley brine field. The placement has raised A$121 million from institutional investors and A$43 million from strategic investors, with the share purchase plan offering existing shareholders an opportunity to participate at the same offer price of A$5.85 per share. Vulcan is building an integrated lithium and renewable energy production system in Germany with the project aiming 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, 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.

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