Oilman Jim's Letter - 3 April 2024

SDX Energy (SDX.L SDXEF 3KX.F) announced that it has commenced drilling the Beni Malek-2 well in the Rharb Basin, Morocco, approximately 1.5km from the BMK-1 discovery well. The BMK-2 well will be drilled to a planned depth of approximately 1,470 metres and is targeting three stacked reservoirs in the Guebbas formation, which have been identified using 3D seismic. If BMK-2 is successful, the well will be completed and tied-in for production. The company is the sole independent gas producer in Morocco.

Deltic Energy (DELT.L 7RC0.F) announced that it has received the required consents in respect of the farm-out of a 25% interest in Licence P2437, containing the Selene Prospect, to Dana Petroleum and the farm-out has therefore completed. This transaction, in combination with the existing Shell UK carry, results in Deltic retaining a 25% non-operated interest in Licence P2437 and having no exposure to 2024 drilling and testing costs up to a cost cap of US$49 million gross, which is in excess of current success case well cost estimates provided by the operator. Timing of the Selene well remains on track, with operations expected to commence in July 2024. Attention is now focussed on drawing the Pensacola farm-out process to a successful conclusion.

Helium Evolution (HEVI.V HEEVF) announced a joint initiative with its partner and the operator, North American Helium, to embark on a drilling program in the Mankota area of Saskatchewan. HEVI and NAH are planning to drill up to nine joint development wells which are expected to spud between Q3 2024 and Q2 2025, subject to surface and environmental restrictions. The company intends to work with NAH over the coming months to determine specific well locations and timelines. Per HEVI, NAH’s decision to pursue drilling of an incremental six to nine wells demonstrates confidence in the ongoing partnership, builds on the existing three helium discoveries at Mankota, and highlights the opportunity to unlock value from HEVI’s 5.6 million acres of prospective land in Saskatchewan.

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