Oilman Jim's Letter - October 13, 2024

PetroTal (TAL.TSX PTAL.L PTALF SER1.F) announced an operational and financial update. Q3 production averaged 15,160 barrels of oil per day, a 39% increase on Q3 2023 and 2024 annual production is on track to meet the top end of guidance range. Total cash was $133 million as of September 30, 2024, an 18% increase on Q3 2023, and well 20H has achieved initial production rates of over 5,300 barrels of oil per day. This well was jointly completed in both the Upper and Main Vivian sand units. PetroTal commenced drilling well 21H at Bretaña on September 25, 2024 and it is expected to be completed by mid-November at a total cost of $14 million. Following 21H, PetroTal plans to drill and complete wells 22H and 23H, before releasing the rig in Q1 2025. Regarding the block 131 (CESPA) acquisition, the President of Peru signed a Supreme Decree allowing for the amendment of the hydrocarbon exploration and production license for this block and upon renewal of an investment certificate from the Peruvian tax authority, expected within the next 30 business days, the transaction is expected to close…more

Petro Matad (MATD.L PRTDF HA3.F) announced an update on activities in its Block XX production sharing contract area in eastern Mongolia. The Ministry of Industry and Mineral Resources and the Ministry of Construction and Urban Development have approved the company's proposal to reclassify oil production well pads such that they do not require construction permitting and the former has issued instructions to start production. Construction of long-term production facilities at Heron-1 has thus commenced and production startup during October is expected. Commercial details for the cooperation agreement between the company and the operator of Block XIX facilities have been provided and are in line with expectations. Preparations to test the Heron-2 well are underway with results expected in early November. Now that construction permitting is not required, the company is progressing plans to be ready to bring the well onstream in November in the event of a good test. The Gobi Bear-1 exploration well has been drilled and logged. Casing has now been run to bottom and the well will be suspended pending further evaluation prior to likely well testing…more

HyTerra (HYT.ASX HYTLF) announced that the company has acquired a significant leasing position in its Nemaha natural hydrogen project, Kansas. Approximately 13,000 acres have been acquired bringing the total lease position from 39,000 acres to approximately 52,000 acres. Infill leasing will continue. The targeted leasing is supported by geophysical data; the selection of the new leasing area is based on subsurface features identified in multiple reprocessed seismic lines. These features are related to both the Mid-Continent Rift and overlying sedimentary rocks which reveal drilling targets. This provides additional play diversity to support the expanded drilling program linked to the Fortescue subscription agreement to be voted on by shareholders at an upcoming general meeting. Regarding this, HyTerra expects the independent expert’s report in respect of Fortescue’s A$21.9 million strategic investment, which is required to be provided to shareholders as part of the notice of meeting, to be finalised by the end of October. As a result, the meeting is now expected to be held in December 2024 and the currently planned drilling campaign will commence as soon as practicable thereafter…more

Helix Exploration (HEX.L) announced an operational update on the Clink #1 well at the Ingomar Dome project in Montana. Precision Drilling’s rig 704 has commenced mobilisation to site where re-entry work is expected to begin shortly. Once mobilisation and rig-up is completed, it is expected to take approximately 7 - 10 days to case over the problematic Mowry shale and run a wiper trip to total depth. Following a successful re-entry, the company will evaluate the option to deepen the well and explore for helium and hydrogen in the lower-Cambrian and fractured pre-Cambrian basement, or to move directly on to wireline and flow-testing of helium and hydrogen gas-shows already identified in the Amsden, Charles, and Flathead formations. The company says it will keep the market informed as work progresses…more

ADX Energy (ADX.ASX ADXRF GHU.F) announced that the Lichtenberg-1 gas exploration well had reached a depth of 1,288 metres measured depth in 8 ½ inch hole. The well is expected to take approximately 30 days to drill to total depth of approximately 2,900 metres measured depth. If successful, detailed logging, casing and suspension of the well will take approximately a further 10 days. The first Oligocene gas reservoirs are expected from around 2,000 metres measured depth, with the main primary target reservoir expected from approximately 2,500 metres measured depth. The planned well total depth is approximately 2,900 metres measured depth. The next drilling operations report will be provided on 15 October 2024. ADX is operator and holds a 100% economic interest in the MND investment area, which will reduce to 50% upon the completion of MND’s farm in obligations. ADX has a 100% economic interest in the remainder of the ADX-AT-I licence including other gas exploration prospects (OHO and ZAM) as well as the GMU geothermal / oil and gas energy prospect…more

Zephyr Energy (ZPHR.L ZPHRF VD5N.F) announced an update on operations on the State 36-2R LNW-CC well, Paradox Basin, Utah. The board has approved the drilling of an extended lateral on the well since management estimated ultimate recoveries following completion of the extended lateral are as high as two million barrels of oil equivalent, substantially higher than recoveries that could be achieved from producing from the well in its current form. A non-binding letter of intent has been signed with a U.S.-based industry investor to fund 100% of the estimated cost of the extended lateral in return for a direct non-operated interest in the State 36-2R wellbore. Drilling operations are expected to commence before the end of 2024, or in early 2025, depending on rig availability and weather conditions. The proposed length of the extended lateral is expected to be 5,500 feet and the cost of the operation is expected to be around $7 million, including the workover preparations on the existing well, the drilling of the lateral extension, acidisation and the well production test. The company says it will continue other funding discussions with industry and asset-level financial partners in respect of the larger, long-term development of the Paradox project…more

Buru Energy (BRU.ASX BRNGF) announced that the Rafael Shallow joint venture comprising Buru, Twinsouth Holdings and Jingie Investments has spudded the Rafael Shallow 1 well in EP 428, onshore Canning Basin. This will be the first well drilled in the Canning Basin since 2021, the year in which Buru discovered Rafael Deep - the first proven significant conventional onshore gas and condensate resource in Western Australia north of Karratha. Per the company, an oil discovery at the Rafael Shallow 1 prospect could provide a rapid development path that would add substantial value for the Rafael Shallow joint venture parties. In addition, a discovery could provide an alternative funding path for Buru’s 100% owned Rafael Deep gas and condensate project, which is the company’s strategic development priority. Buru’s internal assessment of the Rafael Shallow 1 prospective gross unrisked resource volumes of recoverable oil indicates a range of between 3.2 million stock tank barrels (low estimate) and 79 million stock tank barrels (high estimate), with a best estimate of 19 million barrels…more

I cover only a few companies in the International Letter (mainly Canadian and Australian) and they do very well, e.g. HyTerra since its placement at A$0.018 per share. It’s now A$0.049, having been as high as A$0.059 a week or so ago (up 277%). Pulsar Helium since C$0.20. It’s now C$0.52, having been as high as C$1.70 (up 750%). Sintana Energy since C$0.34. It’s now C$1.12, having been as high as C$1.54 (up 352%). The characteristics of these markets are highly beneficial for investors, much better than the UK or even the US. The International Letter is available on Substack for £1,140/year (US$1,490/year). You can try it out on beehiiv for $95/month - cancel anytime. Everyone else has stayed. It’s the only newsletter that runs a 100% open rate…more

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.