Oilman Jim's Letter - 22 April 2024

Falcon Oil & Gas (FO.V FOG.L FAC.F) announced results of the fundraising. The company has confirmed that the bookbuild has been completed and Falcon has, conditionally, raised gross proceeds of c.$4.9 million (c. £3.9 million) through the subscription and placing, for a total number of 64,794,087 shares at an issue price of 6p. The company’s subsidiary also has agreed to grant Daly Waters Energy and a major US-based energy industry service provider overriding royalty interests over Falcon Australia’s working interests in the Beetaloo Sub-Basin exploration permits in return for cash payments of US$3 million and US$1 million, respectively. The net proceeds of the fundraising, together with the company’s existing cash resources of c.US$4.3 million, the balance of Falcon’s net carry of A$3.75m due from Tamboran and the consideration from the grant of the ORRIs, if finalised, will primarily be used to fund Falcon’s share of estimated capital expenditure in respect of the work to be carried out on the proposed Shenandoah South Pilot Project in 2024, including the drilling of two 3,000m horizontal wells and the stimulation and flow test of two wells in the Beetaloo Sub-basin. These proceeds will also enable Falcon to fund its share of the cost of the planned 330km2 of 3D seismic survey around the Pilot area, which it is expected will be acquired during Q4 24 with processed results being available by Q1 25.

Galp Energia (GALP.LS GLPEF GZ5.F) announced that the company has concluded the first phase of exploration in the Mopane field off the coast of Namibia and estimated it could hold at least 10 billion barrels of oil. Galp said it conducted testing operations at the Mopane-1X well in January and the Mopane-2X well in March. In both wells, which are 8 kilometres apart, it said “significant light oil columns were discovered in high-quality reservoir sands.” Also, Galp, together with its partners NAMCOR and Custos (in which Sintana Energy (SEI.V SEUSF) maintains an indirect 49% interest), has successfully completed the first phase of the Mopane exploration campaign with the conclusion of the Mopane-1X well testing operations. Per Galp: “the flows achieved during the well test have reached the maximum allowed limits of 14 thousand barrels of oil equivalent per day, potentially positioning Mopane as an important commercial discovery. In the Mopane complex alone, and before drilling additional exploration and appraisal wells, hydrocarbon in-place estimates are 10 billion barrels of oil equivalent, or higher.” 

Europa Oil & Gas (EOG.L EGN.F) announced a third-party report that details the results of an updated study which calculated the expected emissions associated with the development of a future 1 trillion cubic feet indigenous gas discovery on Europa's Irish offshore licence FEL 4/19. Per Will Holland, Chief Executive Officer of Europa: "This updated emissions report reinforces the importance of the gas resource at Inishkea West, which has the potential to not only eradicate the need for higher emissions intensity gas imports from the UK for up to 3 years, but also a discovery would help Ireland meet its carbon emission reduction targets. A discovery at Inishkea West could provide security of gas supply for Ireland during the transition to renewable energy, which is in line with the EU's stated goals for diversity of gas supply. FEL 4/19 contains the large 1.5 TCF low risk Inishkea West gas prospect where, given the proximity to existing infrastructure, a discovery could be brought online quickly providing domestic gas with, as this report demonstrates, significantly lower emissions intensity than imported gas from the UK, Norway or further afield. We are now in the process of progressing FEL 4/19 to drilling, which requires us to attract additional partners to this highly prospective licence."

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