Oilman Jim's Letter - October 6, 2024

Companies issuing interesting news last week

Pulsar Helium (PLSR.V PSRHF Y3K.F) announced that it has increased its net land position by around 100% at the Topaz helium project in Minnesota. This expansion follows the successful drilling of the Jetstream #1 well and the release of an independent resource report that underscores the Topaz project's existing resource with high helium concentration and upside potential. The company is also pursuing additional acreage to secure district-wide control of what it believes to be a newly emerging helium reservoir that is regional in scale. Next steps include deepening the Jetstream #1 well, which the company believes will positively influence its resource update, assessing drilling step-out wells, and the completion of additional seismic studies…more

Predator Oil & Gas (PRD.L 1EM.F) announced the helium potential for its MOU-5 prospect at Guercif, Morocco. The potential conventional prospective gross recoverable gas resources for the primary reservoir target in MOU-5 was previously reported as being 5.916 trillion cubic feet (P50 upside case), thus potential gross estimates of in-place helium for the P50 upside case are, per the company, 104.31 billion cubic feet based on a global averaged scenario of 1.298% helium and 598.88 billion cubic feet for the P10 upside case based on a global averaged scenario of 4.066% helium…more

Pantera Minerals (PFE.ASX) announced completion of the 3D static geological model, delivered by SLB, that details the subsurface geology and reservoir characteristics of the Smackover lithium brine project. The development of a 3D static geological model is seen by the company as a critical step in de-risking and optimising exploration planning, workflow and project development. The project now covers a land position of over 26,000 net leased acres of lithium brine prospective ground in the Smackover formation, Arkansas, a known high grade lithium brine formation. A total of 243 oil and gas wells were found to be drilled within the model extent of which 38 wells penetrated the Upper Smackover formation and contained raster log information. These wells were selected for digitisation and well log harmonisation and for use in the 3D static modelling, which also used data from 13.34-line miles of 2D seismic and 481 gravity stations. The subsurface model confirms that the company’s project has the potential to host a large and world-class lithium brine resource, analogous to neighbouring Arkansas super majors Exxon Mobil and Equinor/Standard Lithium, both with advanced lithium brine projects. Leasing to the north and west of the Pantera acreage position is said to be seeing a new and aggressive push from multiple parties.

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Returning to the companies, Touchstone Exploration (TXP.TSX TXP.L PBEGF PNW1.F) announced that the Cascadura-2ST1 and Cascadura-3ST1 wells have been completed with initial shut-in wellhead pressures building to 3,600 pounds per square inch and 2,665 pounds per square inch, respectively. The fluid column gradient observed in the tubing at Cascadura-2ST1 suggests a significant presence of natural gas, comparable to findings in the Cascadura-1ST1 well, reinforcing the companies geological models. Cascadura-3ST1 successfully flowed crude oil from the lower sheet 5 Herrera interval on September 17, 2024, followed by a test from the sheet 4 Herrera interval on September 26, 2024 confirming natural gas. Touchstone has successfully installed the flowline connecting the Cascadura C surface location to its natural gas facility and hydrotesting of the line will commence shortly. Infrastructure also has been enhanced with the test separator at the Cascadura natural gas facility having been installed and the riser at the Cascadura B site has been completed, optimizing operational capabilities. Also reported was a significant production increase at Balata East: since acquiring the field in June 2024, production has surged by nearly 300 percent from a targeted workover and optimization program…more

Petro Matad (MATD.L PRTDF HA3.F) announced that Heron-2, the first development well to be drilled on the Petro Matad operated Heron oil field in Block XX in the Tamsag Basin of eastern Mongolia, has reached total depth and wireline logging has been completed. The well reached a total depth of 2,908 metres seven days ahead of schedule and an oil zone of 18 metres gross thickness was encountered which wireline logging indicates is very likely the same stratigraphic unit as that successfully tested in the Heron-1 discovery well. Production casing has been run in preparation for a well testing programme…more

Buru Energy (BRU.ASX BRNGF) announced an update in relation to the transactions recently executed by the company with Sabre Energy. Following lengthy discussions, Sabre failed to meet their financial obligations under the Rafael Shallow farm-in agreement announced in August and both the Rafael Shallow and Ungani farm in agreements have been terminated. Alternative funding of A$3 million for the Rafael Shallow 1 well has been arranged with two entities associated with long-term Buru shareholders. They have entered into separate farm-in transactions with Buru to earn a total 25% interest in the Rafael Shallow 1 well which has been negotiated largely based on the same pro-rata farm-in terms as the previous farm-in agreement with Sabre. Additionally, Buru announced that it has completed a successful share placement at A$0.62 per share, which has raised a total of A$6.7 million before costs. The placement provides funding towards the commercialisation of the Rafael gas project, drilling of the Rafael Shallow 1 exploration well, and restarting of the Ungani Oilfield. Buru has now executed a contract with Silver City Drilling for the Rafael Shallow 1 well, their Rig 24 has mobilised and the company is preparing to commence drilling this month…more

Prospex Energy (PXEN.L) announced that initial drilling of the Viura-1B development well in northern Spain has delivered better than expected preliminary results, successfully reaching the reservoir and prompting the decision to appraise a deeper section of the well. This deeper appraisal has the potential to significantly increase revenues and create further value at a fraction of the cost compared to drilling a standalone well. The well is being drilled by HEYCO Energy Iberia and is one of three wells targeted for drilling at the producing Viura gas field, which has estimated gross remaining reserves of 90 billion cubic feet, of which 6.5 billion cubic feet is net to Prospex, which owns 7.2365% of the Viura field through its 7.5% ownership of HEYCO. Per Mark Routh, CEO, deepening the well to appraise the hitherto undrilled Utrillas-B formation unit is a unique opportunity to add significant value at a fraction of the cost of a standalone well.  By drilling ahead now the operator delivers for €1 million, or €2.5 million in the success case, an exploration well which would otherwise have cost over €25 million as a standalone well. The company also announced that it has qualified to apply for onshore open acreage hydrocarbon exploration licences in Poland and says details of the new licence areas will be made public when the official applications are publicly gazetted after the submission to the Ministry of Climate and Environment which is expected before the end of this month.

Reconnaissance Energy Africa (RECO.V RECAF 0XD.F) announced an operations update with respect to activities on PEL 73, onshore Namibia. The company continues to make progress on the drilling of the Naingopo exploration well and has set its last casing point prior to drilling into the Otavi reservoir section. Drilling will commence in the coming days and RECO expects soon thereafter to penetrate the primary objective of the Damara Fold Belt play, the Otavi carbonate reservoir. The company plans to be drilling through October before reaching total depth and says it will disclose well results after analysis of the logs and any obtained fluids. Meanwhile, construction operations are proceeding on schedule to spud the Kambundu exploration well (Prospect P), which is expected to spud following completion of the Naingopo exploration well. Naingopo is targeting 181 million barrels of unrisked prospective light/medium oil resources or 937 billion cubic feet of prospective natural gas resources. Kambundu is targeting 309 million barrels of unrisked prospective light/medium oil resources or 1.6 trillion cubic feet of prospective natural gas resources…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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