Oilman Jim's Letter - January 1, 2025

The $100 Trillion Opportunity in AI?

The rise of AI is shaping up to be bigger than any financial trend we’ve seen before. According to seasoned investor James Altucher, this next-gen AI revolution could create a $100 TRILLION industry, and early investors could stand to benefit. He’s even laid out how a $10K investment might turn into $1 million over the coming years. Want to see the details?

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Happy New Year to all subscribers. The newsletter keeps growing with a 279% increase in subscription numbers during 2024.

Starting 2025 with a group of companies which may see interesting developments this year, Reconnaissance Energy Africa (RECO.V RECAF 0XD.F) announced that it has reached total depth of 13,727 feet on the Naingopo exploration well on Petroleum Exploration Licence 073, onshore Namibia. The company is now undertaking an extensive evaluation program, which includes wireline logging and coring, modular formation dynamics tester sampling and testing of any hydrocarbons present, and a vertical seismic profile. The technical team will assess all data to determine the results and RECO expects to have the preliminary results of the Naingopo well soon. During December 2024, the company was undertaking repair and maintenance activities on the Jarvie-1 drilling rig and expects to move to the Kambundu (Prospect P) well location after completing the review of the results from current operations. The Naingopo well is targeting 181 million barrels of unrisked and 15 million barrels of risked prospective light/medium oil resources or 937 billion cubic feet of unrisked and 65 billion cubic feet of risked prospective natural gas resources. Kambundu is targeting 309 million barrels of unrisked and 15 million barrels of risked prospective light/medium oil resources or 1.6 trillion cubic feet of unrisked and 64 billion cubic feet of risked prospective natural gas resources. My view with these companies is buy after a placement which finances the drill and sell/de-risk in the run up to the spud. We saw this with RECO on Naingopo exactly as expected…more

Latest news from Pantheon Resources (PANR.L PTHRF P3K.F) announced the Megrez-1 well as a discovery in the eastern topsets of 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. The main challenge for the share price has been and remains the convertible debt and until it is gone, the share price struggles to rise, increasing the dilutive effect of financings…more

Sintana Energy (SEI.V SEUSF) announced yesterday that the PEL 83 Joint Venture partners have successfully drilled and logged the Mopane-2A well (Well #4) on PEL 83 which was spud on December 2. Mopane-2A successfully encountered hydrocarbons in two reservoirs – a column of gas-condensate in AVO-3 with a thin net pay in the reservoir sweet spot, and also a column of light oil in a smaller reservoir at AVO-4. Both reservoirs showed good quality sands, with good porosities and permeabilities, high pressures and low fluid viscosity characteristics, with minimum CO2 and no H2S concentrations . Also, in line with all previous Mopane wells, no water contacts were found. As part of the ongoing campaign in the wider Mopane area, the drillship is now moving to the Mopane-3X exploration well location (Well #5), targeting two stacked prospects AVO-10 & AVO-13 with an expected spud date today. Also recently announced, QatarEnergy has entered into the PEL 90 joint venture through its acquisition of a 27.5% working interest in the license and petroleum agreement associated with Block 2813B operated by Harmattan Energy, an indirect subsidiary of Chevron. Upon completion of the acquisition the license owners will be 52.5% Chevron as operator, 27.5% QatarEnergy, 10% National Petroleum Corporation of Namibia and 10% Trago Energy, a wholly owned subsidiary of Custos Energy, in which Sintana maintains a 49% indirect interest. Located approximately 200 kilometres offshore in Namibia’s Orange Basin and approximately 70 kilometres north of TotalEnergies’ Venus discovery, in which QatarEnergy is also increasing its ownership, Block 2813B’s license covers an area of 5,433 square kilometres in a water depth of 2,400 to 3,300 metres. The joint venture has contracted Northern Ocean’s semi-submersible drilling rig Deepsea Bollsta for its inaugural exploration campaign in PEL 90 and the rig mobilized to drill the Kapana-1X well last month…more

The latest announcement from Eco (Atlantic) Oil & Gas (EOG.V ECO.L ECAOF EOI.F) was its unaudited results for the three and six month periods ended 30 September 2024. Of particular interest, Eco said it is witnessing considerable interest in its licenses in Namibia and is currently assessing options to progress its exploration work programmes including a potential farm-out. Eco already holds a fully carried 5.25% interest in Block 3B/4B, offshore South Africa and the carry is expected to be adequate to fund Eco's share of drilling up to two wells on the licence, which has a resource estimate of 4 billion barrels of oil equivalent and chances of success for the prospects of 15% to 39%…more

88 Energy (88E.ASX 88E.L EEENF POQ.F) is a neighbour of Pantheon Resources (see above) in Alaska; of more interest is its 20% working interest in PEL 93, Namibia, which has been transferred to the company as part of Stage 1 of a three-stage farm-in agreement. News last month announced that initial processing and interpretation of 2D seismic data has been completed by the operator for the exploration and development programme and interpretation has identified an initial suite of 10 significant independent structural closures within the licence area. The data 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. A prospective resource estimate for PEL 93 is targeted for completion in the second half of this year…more

Finally for today, First Helium (HELI.V FHELF 2MC.F) has announced plans to drill two complementary vertical Leduc oil targets at its Worsley property. The program will include drilling two strategic targets: the company's proven undeveloped location at 7-30, which has been assigned proved plus probable undeveloped reserves of 196,700 barrels by Sproule Associates; and the recently identified 7-15 Leduc anomaly. HELI has initiated licensing for both locations and intends to optimize drilling costs by executing a two-well program in succession. The 7-15 well will target a large structure in the Leduc Formation that is on trend with and approximately 5 times greater in areal extent than the company’s initial 1-30 Leduc oil pool discovery. Upon completion, the 1-30 well flowed 419 barrels per day of 35-degree API light oil from the Leduc Formation over a test period of 72 hours on a minimal drawdown. Given its premium light oil pricing, attractive vertical well drill costs and lower initial royalty rates, the 1-30 well paid out in less than 4 months. The 7-30 well directly offsets the 1-30 well. Its location was identified using the same seismic interpretation technique as used for the previously successfully drilled offset wells 1-30, and 4-29. Together, the 2 wells have produced 113,000 barrels of light oil and generated in excess of $13 million in revenue and $8 million in cash flow to date. In addition to the 7-30 and the 7-15 location on the Leduc Anomaly, the company has identified 10 further Leduc locations based on the same interpretation over existing proprietary 3D seismic. Through the 1-30 and 4-29 drilling successes, HELI has achieved a direct correlation of its Leduc seismic interpretation. Continued success through drilling the 7-30 well, and 7-15 will result in an immediate low risk 10 well scalable project…more

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Man Who Called Nvidia at $1.10 Says Buy This Now...

In 2004, one man called Nvidia before just about anyone knew it existed. Now, he says a new company could become the next to soar like Nvidia. The biggest tech firms are loading up on shares. Nvidia, Apple, Google, AMD, Intel, and Samsung are all invested in this company. It also signed a MAJOR deal with Apple to get its AI tech into the iPhone and iMac. And its tech is also found in products from Samsung and Google.

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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.