Oilman Jim's Letter - 11 February 2024

Pulsar Helium (PLSR.V PSRHF Y3K.F) announced that it has spudded the Jetstream #1 appraisal well at the Topaz Helium Project. The well is located approximately 15m (50ft) from the original discovery well LOD-6 that hit free gas with a concentration of 10.5% helium. Jetstream #1 will be drilled to a depth of 686m (2,250ft) with contingency in place to extend to 762m (2,500ft). A mass spectrometer will be onsite providing gas composition every 100 seconds with gas samples to be collected when zones of helium gas response are encountered. Upon reaching total depth, a comprehensive suite of open hole wireline logs will be acquired by Baker Hughes. Following the wireline data acquisition, the well will be completed, and the rig will be released and demobilised. A well testing package will then mobilise and rig up on the Jetstream #1 well and execute a flow testing and pressure build-up program, also collecting pressurised gas sample data.

Grand Gulf Energy (GGE.AX GRGUF) announced that, following the recent Jesse-1A flow-test (which flowed gas at one million cubic feet per day), Walsh Engineering has finalized the operational design to facilitate the drilling of a sidetrack early 2024, which will be completed for production in a success case. The sidetrack will be cased to the bottom of hole which, given the kick-off trajectory from the original wellbore, will be located several hundred feet laterally and approximately 700 feet below the original wellbore total depth. Once petrophysical logs are run, gas bearing zones will be perforated for stimulation and production, maximising gas production flow-rates. The case and perforate well design also facilitates testing multiple prospective secondary independent reservoir targets below the primary reservoir target, which can be immediately completed for production in a success case.

Noble Helium (NHE.AX NBHEF) announced that laboratory results confirm helium concentrations of 2.46% in highly permeable reservoirs at the North Rukwa Project’s Mbelele prospect. The full section net reservoir increased by over three times to 148m in Mbelele-1 and almost two times to 271m in Mbelele-2 after whole wellbore petrophysics analysis. The company is now planning additional appraisal of the Mbelele structure to sample and flow-test the gas gap as well as conducting a pilot program to flow test the helium-enriched fluids in the deeper reservoirs. Hydrogen (up to 1,500 times atmospheric) was said to be an unexpected surprise which could provide significant additional upside and Noble plans to sample and test it as part of the appraisal program, for which funding is stated to be in place.

Helium One Global (HE1.L HLOGF 9KE.F) announced that its Itumbula West-1 well flowed helium to surface from Basement at a measured concentration up to 4.7%. Hydrogen also flowed to surface at a concentration of 2.2%. Samples will be sent to a laboratory for analysis. The well is now being cased and suspended and the company says it will fully evaluate the well results and focus on advancing this project in the most effective way possible. There is no mention of any flow test. The announcement was followed two days later with a £4.7 million placing at 1.5p, a near 60% discount to the high of 3.7p reached following the “4.7% helium” announcement. Questions why HE1’s costs (even with its own drilling rig) are many times those elsewhere remain unanswered by the company.

Union Jack Oil (UJO.L 1UJ0.F) announced a farm-in agreement to acquire a 45% working interest both in a well planned to be drilled during Q2 2024 and in an area of associated interest, located in Seminole County, Oklahoma, USA. The Andrews-1 well has a geological chance of success estimated by the operator to be 75%. Estimated drilling time to a depth of 5,200ft (1,585m) is 10 days. Completion time will be approximately eight days including perforating and flow-back if successful. UJO is to pay 60% of the costs of the Andrews-1 well to earn a 45% economic interest. Going forward, the cost of further planned wells will be based on the company's 45% economic interest and further drill ready prospects covered by 3D seismic have been identified within the interest area earned by Union Jack. Seismic acquisition and planning costs of US$347,000 are payable by UJO and the cost for drilling and completion of the Andrews-1 well is estimated to be approximately US$516,000 net to Union Jack. Costs are to be paid from existing cash resources.

Scirocco Energy (SCIR.L JTJ2.F) announced that it has received a letter from Forest Nominees, the legal holder of 78,978,978 shares in the company which are held as nominee on behalf of G.P. (Jersey), requesting Scirocco to convene a general meeting of shareholders. The single proposed resolution relates to a request for the directors to put in place a strategy to distribute cash proceeds from the sale of assets to shareholders. This results from shareholder concerns that the directors will simply waste the money on salaries for themselves and investments in what they think are “attractive assets within the European sustainable energy and circular economy markets.” A circular convening the general meeting will be posted to shareholders no later than 23 February 2024.

The Parkmead Group (PMG.L LYK1.F) announced that it has been provisionally awarded three new offshore blocks in Tranche 2 of the UK's 33rd Licensing Round awards. The award consists of a licence covering Blocks 14/15a, 14/20d and 15/11a situated in the Central North Sea. Parkmead will be operator and hold a 50% working interest, alongside its partner Orcadian Energy (ORCA.L 9J1.F). The new licence contains seven undeveloped oil discoveries, the most substantial of which is Fynn Beauly, one of the largest undeveloped oil accumulations in the UK, with estimated gross P50 contingent resources of 292 million barrels. This large heavy oil discovery is situated between the prolific Claymore and Piper fields and extends across all three awarded blocks. It is said to be an important award because the acreage which encapsulates the oil field has not previously been licensed to a single partner group. The current licence commitment requires no major capital outlay and the work programme is focused on assessing the feasibility of reducing Fynn Beauly oil viscosity using enhanced oil recovery techniques. This work will include assessing the potential to utilise geothermal energy as part of the recovery mechanism to avoid the need for injected hot water, which would allow for the delivery of a successful development in line with the NSTA's net zero strategy.

88 Energy (88E.AX EEENF 88E.L POQ.F) announced that Hickory-1 pre-flow test operations are on track. Ice pad construction has commenced and mobilisation of the All American Rig-111 to the Hickory-1 well location is scheduled to commence mid-month. Testing operations will focus on the two primary targets, the SFS and the SMD zones. These two zones are said to possess, in aggregate, a multi-hundred million barrel oil prospective resource. The Upper SFS reservoir is set to be flow tested first. This zone has not previously been flow tested at Project Phoenix or on the adjacent Pantheon Resources (PANR.L PTHRF P3K.F) acreage. This will then be followed by targeted testing of the SMD-B reservoir. Each of the two planned flow tests is scheduled to take approximately ten days to complete, with perforation, completion-running and stimulation expected to take four days, followed by a clean-up and flow period of up to four days and a pressure build up and downhole fluid sampling program of up to 2 days. 88E says it will provide a further update upon commencement of the flow test operations.

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