Oilman Jim's Letter - 14 January 2024

Catching up on last week’s more interesting company news, Sintana Energy (SEI.V SEUSF) announced an update regarding the ongoing exploration campaign on Namibia’s Petroleum Exploration License 83, in which the company indirectly owns a 4.9% carried interest. Galp, the operator, has successfully drilled and logged the Mopane-1X well, the first exploration well at PEL83 and confirmed the discovery of a significant column of light oil in reservoir-bearing sands of high quality. The drilling operations at Mopane-1X now proceed to explore deeper targets and upon completion, the rig will be relocated to the Mopane-2X location to further evaluate the extent of the Mopane discovery.

Aminex (AEX.L AEXFF) announced that an agreement for the sale of gas from the Ntorya location has been signed by the company's subsidiary, together with the operator, ARA Petroleum Tanzania and the Tanzania Petroleum Development Corporation. The initial contract quantity is 40 million cubic feet of gas per day. Aminex now anticipates early issue of the development licence which will allow the award of a rig contract and enable the drilling of Chikumbi-1 and the workover of Ntorya-1. The testing of Ntorya-2 is now scheduled for mid-year using an in-country mobile test unit. Construction of the pipeline unfortunately has been delayed and the Tanzanian authorities now expect it to be completed by the end of 2024. AEX owns a 25% non-operated carried interest.

Molecular Energies (MEN.L PPCGF NNH.F) announced a corporate and business update. Tapir x-1, the Paraguay exploration well, has been successfully spudded. Molecular has a 50% interest, with the state energy company of Taiwan being the other 50% holder. Target depth is approximately 3,800 metres with an estimated drilling time of 45 days. If successful, the well would unlock a complex of adjacent prospects estimated by the company to hold over 260 million barrels of oil of Pmean unrisked resources. Other news was that first monies have been received to the UK from the former Argentine business and the Green House Capital IPO continues to progress towards admission to trading on AIM.

Helium One Global (HE1.L HLOGF 9KE.F) announced the commencement of drilling at the Itumbula West-1 well in Tanzania, targeting two fault zones and the Karoo Group. Per the company, Geolog is undertaking mudlogging while drilling to monitor helium gas shows, a portable mass spectrometer and field pressure-volume-temperature specialist is on site to measure and validate helium gas shows as well as downhole samples, downhole reservoir testing equipment has been mobilised to perform open hole well testing and fully evaluate the fault zones, and Baker Hughes are providing third party services for wireline, fluids and cementing. The whole process from spud to completion of logs and well testing is expected to take approximately four to five weeks.

Blue Star Helium (BNL.AX BSNLF) announced that four new proposed helium development well locations have been approved at the Galactica/Pegasus project. These are offset development wells to the JXSN#1, JXSN#2 and JXSN#4 helium discoveries. The Galactica/Pegasus drilling inventory now comprises 11 permitted helium development well locations with 20 further well locations identified for permitting. Development planning is said to be advancing with a range of commercialisation pathways under consideration. Blue Star had a successful exploration campaign at the Galactica and Pegasus prospects during 2022 with four wells drilled across the two prospects resulting in four discoveries with gas bearing columns of up to 230 feet and helium content up to 6%. Flow rates were up to 412 thousand cubic feet per day.

88 Energy (88E.AX EEENF 88E.L) announced an update. The Hickory-1 discovery well flow test and well stimulation program is set to commence mid-February, following ice road construction, pad construction and rig mobilisation. The budget of US$11 million gross now is fully funded. The Slope Fan System and Shelf Margin Deltaic are the two primary test targets. Each zone will be tested separately and are planned to take approximately ten days each. The company says it is testing a mean, unrisked, multi-hundred-million-barrel oil resource.

Predator Oil & Gas (PRD.L 1EM.F) announced an operations update and its 2024 forward work programme. The much delayed Guercif rigless well testing is now said to be scheduled to commence before 25 January. The company also states that planning for a discretionary high impact Jurassic well has commenced for April/May drilling. Meanwhile, a site visit to Cory Moruga is scheduled for 22 - 26 January to begin planning for well work-overs, which are forecast to generate a gross net operating profit of US$3.1 million in the 12 months from H2 2024 to H1 2025. In Ireland, applications for successor authorisations to Licensing Options 16/26 (Corrib South) and 16/30 (Ram Head) remain under consideration by the Department of the Environment, Climate and Communications.

PetroTal (TAL.V PTALF PTAL.L SER1.F) announced operational, financial and corporate updates. Quarterly average production was 14,865 barrels of oil per day in Q4 2023, full year 2023 average production was 14,248 barrels of oil per day and December 2023 average production was 20,090 barrels of oil per day. Unrestricted cash liquidity was US$90 million as at December 31, 2023. Well 16H is currently being completed and is expected to start production imminently.  The well should allow the company to maintain production above 20,000 barrels of oil per day for the foreseeable future.

Trio Petroleum (TPET) announced that it has secured an option to acquire a 20% interest in a sweet (low sulfur content), heavy-oil development project at Asphalt Ridge in northeastern Utah. Development is planned to commence this quarter by a third party operator using advanced cyclic-steam production techniques. The project is estimated by an independent reserve engineering firm to be one of the largest heavy oil deposits in North America outside of Canada, making it a potential giant oilfield, that is unique given its low wax and negligible sulfur content, which is expected to make the oil desirable for many industries, including shipping. Phase 1 is commencing now, with upgrades to existing roads and well pads, and the drilling of the first of three initial wells is also planned to commence as early as this month. One of the initial goals is to produce the required amount of oil requested by interested parties to analyse and test the oil to confirm suitability for off-take agreements. With the completion of the three initial wells, the operator believes it will be able to execute reserve based lending agreements in order to fund future development.

Finally, Pulsar Helium (PLSR.V PSRHF Y3K.F) announced a private placement of up to 18,500,000 units at a price of C$0.23 per unit to raise proceeds of up to C$4,255,000. Each unit consists of one common share and one transferable common share purchase warrant entitling the holder to purchase one additional common share at an exercise price of C$0.36. The company intends to use the proceeds of the offering to fund the cost of the ongoing exploration programmes at Pulsar’s helium projects and for general working capital purposes. Drilling of the appraisal well at the Topaz helium project in Minnesota is expected to commence next month.

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