Oilman Jim's Letter - November 3, 2024

88 Energy (88E.ASX 88E.L EEENF POQ.F) announced the completion of 2D seismic processing over Petroleum Exploration Licence 93 in the Owambo Basin, Namibia. Significant structures are said to have been identified in the processed data, which is yet to be interpreted in-house. The programme has been designed to enable an independent estimation of a maiden independent prospective resource for PEL 93 and identify potential future drilling locations. Volumetrics are anticipated to estimate a significant prospective resource from the Mulden (Upper and Lower) and Otavi reservoirs, validating PEL 93 as a project with material scale and opportunity…more

Deltic Energy (DELT.L 7RC0.F) confirmed the Selene gas discovery. Based on preliminary information available from the wellsite, Deltic has updated its volumetric model and now estimates Selene to contain gross P50 estimated ultimate recoverable resources of 131 BCF (P90-P10 range of 95 to 176 BCF) which is at the lower end of pre-drill estimates. However, the bulk of the recoverable resources are concentrated in the higher quality B-Sand up-dip from the 48/8b-3Z well location which should support a simpler and cheaper development option with greater gas production per well than was envisaged pre-discovery. Based on the results of the well and the data collected, Deltic believes that the JV should be well placed to progress towards field development planning and a final investment decision on a future development without requiring a further appraisal well. In addition to Selene, Deltic will re-evaluate the Endymion prospect, located on the north-eastern corner of the block, which is another low-risk Leman Sandstone opportunity that could be tied into any future Selene development…more

First Helium (HELI.V FHELF 2MC.F) announced the closing of its upsized non-brokered private placement financing. First Helium issued 60,666,671 units at a price of C$0.06 per unit for gross proceeds of C$3,640,000.26. Each unit consists of one share and one share purchase warrant exercisable at a price of C$0.09 per share for a period of 36 months, subject to an acceleration clause. The company intends to use the net proceeds to fund additional asset development and operating expenses on its Worsley project, as well as for general working capital. Per Ed Bereznicki, President & Chief Executive Officer, the company is extremely excited about the potential at its Worsley property which encompasses more than 53,000 acres of wholly-owned land on the historically productive Peace River Arch. This includes its helium discovery well, with an independently evaluated resource of 323 million cubic feet of helium, along with numerous multi-zone targets for oil, and helium-enriched natural gas, substantiated by its two successful oil wells and cased horizontal well. This winter, the company will test the large Leduc anomaly identified on 3D seismic. All securities issued under the offering will be subject to a statutory hold period of four months…more

Challenger Energy (CEG.L BSHPF) announced that the farmout of a 60% interest in the AREA OFF-1 block, offshore Uruguay, to Chevron (CVX) has been completed. The company has received a cash payment of $12.5 million while retaining a 40% non-operating interest in AREA OFF-1. Chevron has assumed operatorship of the block and going forward will carry 100% of the company's share of the costs associated with a 3D seismic campaign on AREA OFF-1 (up to a maximum of $15 million net to Challenger). Should Chevron decide to drill an initial exploration well on the AREA-OFF 1 block, Chevron will also carry 50% of the Company's share of costs associated with that well (up to a maximum of $20 million net to Challenger). The cash received and farmout terms will ensure that the company is fully funded for the foreseeable future…more

New Zealand Energy (NZ.V NZERF) announced that its wholly-owned subsidiary has entered into a farmout agreement with a wholly-owned subsidiary of Monumental Energy (MNRG.V MNMRF ZA6.F). Pursuant to the agreement, Monumental is entitled to participate in the repair and workover of two wells, Copper Moki 1 & 2, in order to restart production. The wells are located in a permitted block in the Taranaki Basin, New Zealand in which NZ holds a 100% interest. In exchange for paying for the workovers, which are estimated to cost approximately NZ$800,000, Monumental will be entitled to 75% of the oil and gas revenue, net of production costs, until its investment is recovered after which it will have a 25% net revenue interest, or royalty, in the permit. The companies expect the workovers will begin within Q4 2024. The companies are evaluating other opportunities in the New Zealand oil and gas industry for collaboration. Monumental holds approximately 8.0% of the issued and outstanding capital of New Zealand, which separately announced that it intends to complete a non-brokered private placement of common shares at a price of C$0.50 per share for aggregate gross proceeds of up to C$1,500,000. The net proceeds will be used to fund the sidetrack of the Tariki-5 well and to advance the company's plans regarding the Tariki gas production/storage field and for general working capital. Several of the company's largest shareholders have indicated they will participate in the offering.

Union Jack Oil (UJO.L UJOGF 1UJO.F) announced that the spudding of the Taylor-1 well, located in Seminole County, Oklahoma, was expected on or around 31 October 2024.  Union Jack holds a 45% working interest in this well. The Taylor-1 well is an untested 3D seismic supported Hunton Remnant prospect with secondary targets in the Misener and Wilcox sands. The operator estimates the geological chance of success to be 40%. Taylor will be followed as soon as possible by the drilling of the Moccasin well in which Union Jack hold a 45% working interest. Moccasin is an untested 3D seismic supported Hunton and Wilcox structure with secondary targets in Pennsylvanian Channel Sands and Base Pennsylvanian Unconformity Sand. The operator assesses a high chance of finding movable hydrocarbons in the Base Pennsylvanian Sands and an approximate 50% chance of success in other target zones. Drilling and completion costs of both wells are being funded from the company’s existing cash resources…more

Noble Helium (NHE.ASX NBHEF) announced that it has measured significantly above background helium concentrations after sampling gas bubbles recently identified in the North Rukwa project’s southern region, Kinambo. The work was done by a team from the University of Dar es Salaam’s School of Mines and Geosciences, which analysed the composition of gas bubbles previously observed across six areas near Kinambo. Significantly above background helium concentrations were measured at all locations and these areas are on trend with identified potential shallow gas targets, including the two locations selected for the upcoming drill program in this area…more

Borders & Southern Petroleum (BOR.L BDRSF B5T.F) announced the extension of its Falkland Islands production licences PL018, PL019, PL020, including the Darwin discovery area. The revised expiry date of the three licences will now be 31 December 2026. The company's prime focus continues to be the monetisation of the Darwin gas condensate discovery that contains 462 million barrels of recoverable liquids (plus material upside in adjacent structures) by identifying a suitable partner to appraise it. The licence extensions will allow BOR to continue its search for a partner and move the Darwin discovery forward by either testing Darwin East or drilling another target. The company says it continues to be encouraged by progress on the relaunched farm-out process where it is working with a large global advisor. Per the CEO, with a partner secured, BOR offers significant upside potential.

Gold Hydrogen (GHY.ASX GHYLF) announced major findings following the successful completion and analysis of the inaugural drill program at its Ramsay project in South Australia. Oxford University’s specialist noble gas research laboratory within its Department of Earth Science, has measured and confirmed the presence of Helium-3 in gas samples taken from the Ramsay 2 well at depths from 280 meters to 1000 meters. Helium-3 is a rare and valuable gas, with only 7.2 parts per trillion within the atmosphere. Commercial supplies of Helium-3 could significantly impact the global energy market by providing a clean, efficient fuel for nuclear fusion, potentially revolutionizing energy production. Current prices for Helium-3 exceed $2,500 per litre ($70.8 million per thousand cubic feet), over 140,000 times the value of Helium-4…more

Thor Energy (THR.L THR.ASX THORF T5M.F) announced a capital raise of approximately £1 million before expenses to advance the company's existing portfolio, plus the signing of non-binding heads of terms to acquire an approximately 80% majority stake in Go Exploration, an Australian early mover company in the exploration of naturally occurring hydrogen and helium resources in South Australia. Go Exploration, as the operator and 100% equity holder, has developed a portfolio of prospective opportunities located near key energy markets and along significant hydrogen and helium trends. Consideration for the acquisition is intended to be satisfied through the issuance of up to approximately 466.5 million ordinary shares in the company. Go Exploration's PEL 120 asset is adjacent to and on trend with the recent Gold Hydrogen (see above) Ramsay-1 and Ramsay-2 discoveries.

Closing on a salutary note, Tlou Energy (TOU.ASX TLOU.L 55L.F) announced the proposed cancellation of the admission of its ordinary shares to trading on AIM. The company's shares will remain listed on the Botswana Stock Exchange and ASX. The directors believe that current conditions within the UK market are making it challenging to raise capital with large discounts required where funds could be raised. This is counterproductive for existing shareholders and the company does not believe this situation will change within a timeframe which will make remaining on AIM worthwhile. The considerable cost of maintaining admission to trading on AIM, including fees payable to its professional advisers, including the nominated adviser and broker, AIM fees payable to the London Stock Exchange as well as incremental legal, insurance, accounting and auditing fees, along with the considerable amount of management time and regulatory burden associated with maintaining the company's admission to trading on AIM are, in the directors' opinion, disproportionate to the benefits to the company.

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