Oilman Jim's Letter - 23 May 2024

Afentra (AET.L STGAF) announced completion of the acquisition of a 12% non-operating interest in Block 3/05 and a 16% non-operating interest in Block 3/05A, offshore Angola. The acquisition increases Afentra’s interest in Block 3/05 to 30% and in Block 3/05A to 21.33%. Payable cash consideration at completion is $28.4million, the initial cash consideration of $48.5 million being reduced by the impact of cash flow adjustments as of the transaction effective date of 1 October 2022. The company inherits a crude oil stock of around 480,000 barrels and net debt at completion is expected to be $46.2 million, with a crude oil stock of around 840,000 barrels. Combined gross production for the first four months of 2024 for Blocks 3/05 and 3/05A has averaged around 23,000 barrels of oil per day (net around 6,800 barrels of oil per day). The light well intervention programme, commenced by the joint venture during 2023, continues into 2024 with a further 45 interventions planned over two campaigns. The company and it’s auditor, BDO, continue to review and audit the appropriate accounting treatment relating to the INA and Sonangol acquisitions completed in 2023. This work is expected to be completed and the annual results issued in early June.

Energean (ENOG.L EERGF) announced an update on recent operations and the group's trading performance in the 3-months to 31 March 2024. Production for the period was 142,000 barrels of oil equivalent per day, a 49% increase versus Q1 2023. Group 2024 production guidance is reiterated at 155,000 – 175,000 barrels of oil equivalent per day, which is weighted towards the second half of the year. In Israel, FPSO uptime during Q1 2024 was 98% and in April 2024 the wells were successfully tested at 720 million cubic feet per day. Day-to-day production was and continues to be unimpacted as a result of what the company diplomatically describes as ongoing geopolitical developments. The new wells brought online in Egypt in the Abu Qir, NEA and NI concessions continue to perform above expectations. At the Abu Qir infill well drilling campaign in Egypt, around 270 feet of net pay across the BKES-1 formation and Abu Madi formations was encountered, around two times initial expectations. Preliminary analysis indicates gas-initially-in-place volumes of approximately 87- 129 billion cubic feet based on the P90 to P10 range. The well also encountered a possible liquids column of around 55 feet of net pay that requires further analysis. First production is expected in Q3 2024. Drilling operations continue on Cassiopea, Italy, with the second and third well (out of four) and first gas is on track for summer of 2024. The near-field Gemini exploration well is to be drilled after completion of the Cassiopea production wells. The Morocco farm-in is completed with Chariot (CHAR.L OIGLF) and a rig contract signed for the Anchois appraisal well, the spud of which is planned for August 2024. Long-lead items have been ordered for the Katlan development in Israel to maintain the project schedule ahead of final investment decision. Revenues for the period were $413 million, a 43% increase versus Q1 2023, and adjusted EBITDAX for the period was $259 million, a 60% increase versus Q1 2023. • Group cash as of 31 March 2024 was $220 million and total liquidity was $424 million. A Q1 2024 dividend of 30 US$ cents/share was declared.

Blue Star Helium (BNL.AX BSNLF) announced that it has successfully drilled, cased and cemented the intermediate hole section of the State 16 SWSE 3054 development well at its Galactica helium project in Las Animas County, Colorado. The intermediate hole section of the well was drilled to approximately 1,110 feet and the hole has been cased and cemented. A mandatory cement bond log is to be run. Following review of the cement bod log, the company will drill out into the target Lyons formation and TD the well as planned at the base of the upper Lyons sandstone. At total depth the well will be wireline logged after which it will be flow and pressure tested for at least an additional 5 days. It is anticipated that upon successful testing at State 16 SWSE 3054 the well will be completed, ready to be tied-in to production facilities.

Melbana Energy (MAY.AX MEOAF) announced an operational update. At the Alameda-3 appraisal well, wireline logging has been successfully completed in the Alameda structure and good quality data is said to have been obtained, preliminary analysis of which is encouraging. Technical difficulties resulting in a delay to drilling operations have now been resolved and drilling operations are expected to resume by week’s end. Total depth of the well is projected to be reached about two weeks after drilling operations resume and first flow tests are to be conducted immediately thereafter. Workshops and field trips in Cuba with the partner and regulator regarding preparations for commencement of field development have been successfully undertaken this month and the plan remains to initially develop Unit 1B of the Amistad structure with first oil sales by end 2024.

Criterium Energy (CEQ.V) announced that it has signed a binding sale and purchase agreement for the divestment of its wholly owned subsidiary which holds a 42.5% non-operated working interest in the Bulu production sharing contract. Total consideration for the transaction is $7,750,000 (C$10,500,000). Closing is expected on or before August 31, 2024 and is expected to result in: an increase in cash of $7,750,000, equivalent to C$0.08/share; a forecasted 2024 year-end net debt of approximately $15 million (down from approximately $23 million at closing of the Mont D’Or Petroleum acquisition in Q1 2024); and the ability to accelerate development activities in Criterium’s core operating areas, namely the Tungkal and West Salawati production sharing contracts, thereby prioritizing investment into short cycle return opportunities as a mechanism to fund further material production growth.

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.