Oilman Jim's Letter - December 8, 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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PetroTal (TAL.TSX PTAL.L PTALF SER1.F) announced that it has closed the acquisition of a 100% working interest in Peru's Block 131. This is said to be a pivotal step in the company's growth strategy, diversifying its production base within Peru and establishing a new platform for future production and reserves growth. Similar to the strategy employed at Bretaña, the company plans to apply modern drilling techniques at the Los Angeles field, which produced an average of 817 barrels of light oil per day from January 1 to September 30, 2024, yet has on-site facility infrastructure built to accommodate throughput of up to 5,500 barrels per day, providing a clear runway for production growth and improved unit operating cost structure. The produced oil is 45° API, which offers potential for marketing synergies with PetroTal's heavy Bretaña crude. PetroTal estimates remaining proved recoverable reserves are 2.0 million barrels of light oil, and 4.2 million barrels of proved plus probable reserves. PetroTal sees upside to reserve bookings given multi-horizon reservoir potential and improved geophysical interpretations…more

Sintana Energy (SEI.V SEUSF) announced an update regarding the second campaign on blocks 2813A and 2814B located in Namibia’s Orange Basin. The blocks are governed by Petroleum Exploration License 83 which is operated by a subsidiary of Galp Energia of Portugal. Sintana maintains an indirect 49% interest in Custos Energy, which holds a 10% working interest in PEL 83. NAMCOR, the National Petroleum Company of Namibia, also maintains a 10% working interest. Mopane well 1A 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 and Mopane-2X findings, this appraisal well confirms the extension and quality of AVO-1. Galp and its partners will continue to analyse and integrate all newly acquired data, while progressing with the upcoming activities, which include additional exploration and appraisal wells, and a high-resolution proprietary 3D seismic campaign set to start in December 2024. This appraisal well is the first of an up to four well program consisting of two exploration wells and two appraisal wells. This second campaign builds off an initial two well program completed in Q2 of 2024, the results of which included the discovery and appraisal of AVO-1, as well as other discoveries. This second campaign is intended to provide additional insights into the scope and quality of the Mopane complex…more

Seascape Energy Asia (SEA.L 8YG.F) announced a £2 million fundraising at 35p following on from the conditional farm-out of a 42.5% participating interest in the Block 2A production sharing contract to INPEX. Block 2A contains the giant Kertang prospect, which is believed to be one of the largest undrilled structures in Malaysia. The CPR undertaken in June 2024 assigned total gross unrisked mean prospective resources of 1.7 billion barrels of oil equivalent across four target horizons. Seascape will receive an uncapped carry for its 10% retained interest through the remaining exploration phase including one firm wildcat well and one contingent appraisal well (subject to a commercial discovery), plus $10 million cash payable in full at completion of the Block 2A farmout, a $10 million contingent cash consideration to be paid following confirmation of a commercial discovery, and reimbursement of certain historic costs totalling approximately $0.5 million…more

Royal Helium (RHC.V RHCCF RD31.F) announced that it intends to complete a non-brokered private placement offering of up to 13,520 convertible debenture units at a price of C$1,000 per unit. Up to 4,500 of the units will be issued to new investors for aggregate gross proceeds to Royal of up to C$4,500,000 and up to 9,020 units will be issued to existing debenture holders in exchange for the forfeiture of their debentures. Each unit will consist of 1,000 20% senior unsecured convertible debentures having a face value of C$1 convertible into shares at a conversion price of C$0.05 per share with a maturity date three years from the closing date and 20,000 share purchase warrants, each entitling the holder to purchase one share at C$0.05 per share for a period of three years following the closing date. Net proceeds of the offering are expected to be used to fund capital expenditures related to the re-commissioning of the Steveville production facilities and for general corporate and working capital purposes…more

New Zealand Energy (NZ.V NZERF) announced preliminary results of the Tariki-5A gas development well. The Tariki-5A intersected the target Tariki sands, which are interpreted to be gas bearing from shows, cutting samples and preliminary evaluation of wireline logging. The well is being completed. Perforating and production testing are expected to be carried out in the week commencing December 16, 2024, with commissioning of facilities for gas processing also planned for later that week, following which gas sales can start. Management expects the reservoir to be able to deliver at least 9 million cubic feet of gas per day…more

Top End Energy (TEE.ASX) announced it has entered into a binding conditional share purchase agreement to acquire 100% of Serpentine Energy and its 100% owned and operated natural hydrogen project in Kansas. The project is located in the heart of what the company describes as an active land rush, fuelled by historical observations of natural hydrogen and a surge in recent exploration activity, including seismic surveys, drill site permitting, drilling and testing operations. In parallel with the acquisition, the company has raised A$6 million at A$0.10 through a placement. Funds will be deployed to expand the project's lease holdings, ahead of drilling programs being planned by multiple explorers, as well as geological evaluation for the company’s own drilling program in H2 2025. Serpentine has executed more than 100 leases with private landowners totalling approximately 20,000 acres across Marshall, Washington and Riley counties. For those interested, Northeastern Kansas is a focal point of evaluation due to the combination of geological factors required for the generation, migration and preservation of natural hydrogen. The Nemaha Uplift is the culmination point for the migration of hydrogen gas.

HyTerra (HYT.ASX HYTLF) announced the completion by Fortescue Future Industries Technologies of a strategic investment in the company. HyTerra has received the subscription proceeds of A$21.9 million and has issued 644,117,647 shares plus 322,058,824 unquoted options to Fortescue. The investment will fully fund the initial exploration phase of the Nemaha project including continued leasing, geophysical activities and an expanded drilling campaign targeting additional prospects in several identified geological play areas. Contemporaneously with completion of the investment, the company and Fortescue have executed a strategic alliance agreement. Previous material news on 11 October 2024 was that HyTerra has acquired approximately 13,000 additional acres bringing the total lease position from 39,000 acres to approximately 52,000 acres…more 

Coincidentally, I have been engaged by a Kansas operator with a 3 townships (69,120 acres) Nemaha hydrogen/helium project. Companies interested in joining this play are invited to contact me for details. Entry cost is modest. Other interesting projects currently available are an oilfield onshore Egypt with significant development / exploration potential and low drilling costs, plus a shallow water farm in opportunity offshore Ghana with 3 existing oil and gas discoveries (66 mmbbls 2C) offering a quick development opportunity and significant resource upside (900 mmbbls) through further exploration. Terms are good.

Pharos Energy (PHAR.L SOCLF) announced a trading and operational update. The company now is debt free having repaid all outstanding facilities in September 2024; cash balance at 30 November 2024 was c.$18 million. Discussions continue with potential farm-in partners and rig contractors required to progress Block 125 and 126 in Vietnam. Drilling Block 125 is potentially transformational: the competent person's report for the block confirms gross unrisked prospective oil resources of between 1.178 billion barrels (1U) and 29.785 billion barrels (3U) with a mean value of 13.328 billion barrels. Detailed drilling engineering studies for the well on Prospect A commenced in Q3 2024 and purchase orders were placed for long lead items in August 2024…more

Pantheon Resources (PANR.L PTHRF P3K.F) noted the announcement made by Alaska Gasline Development Corporation stating that the Alaska Industrial Development and Export Authority has approved a resolution to negotiate a letter of credit with the Alaska Gasline Development Corporation to backstop the costs of front end engineering and design on Alaska LNG Phase 1, the in-state pipeline portion of Alaska LNG. The importance for Pantheon is that the resolution is a key step to securing private investment in the project and moving to a final investment decision. Pantheon and Alaska Gasline Development Corporation signed a gas sales precedent agreement in June 2024 which includes, among other conditions, a requirement for the Alaska LNG project to reach final investment decision. The value of a take or pay contract under a gas sales agreement based on the terms of the gas sales precedent agreement, if finalised, could potentially allow Pantheon to secure funds required to cover capital costs from the point of Ahpun first investment decision to cash-flow self-sufficiency…more

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These are opinions only of the individual author. The contents of this piece do not contain investment advice and the information provided is for educational purposes only and no discussions constitute an offer to sell or the solicitation of an offer to buy any securities of any company. All content is purely subjective and you should do your own due diligence. No representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness or reasonableness of the information contained in the piece is made. Any assumptions, opinions and estimates expressed in the piece constitute judgments of the author as of the date thereof and are subject to change without notice. Any projections contained in the information are based on a number of assumptions and there can be no guarantee that any projected outcomes will be achieved. No liability is accepted for any direct, consequential or other loss arising from reliance on the contents of this piece. The author is not acting as your financial, legal, accounting, tax or other adviser or in any fiduciary capacity.

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