Oilman Jim's Letter - October 31, 2024

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.

Union Jack Oil (UJO.L UJOGF 1UJO.F) announced that that the spudding of the Taylor-1 well, located in Seminole County, Oklahoma, is expected on or around 31 October 2024 (today).  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 an extremely 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.

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.