Oilman Jim's Letter - 7 January 2024

Catching up on some of the more interesting recent company news, Pantheon Resources (PTHRF PANR.L P3K.F) announced final results for the year ended 30 June 2023. It is now clearly stated that the board believes a successful demonstration of the commerciality of its Ahpun field has been achieved. The company thus is targeting first oil in early 2026 and key now is financing. To reach first production requires an estimated US$120 million funding and Pantheon says it aims to achieve this while minimising shareholder dilution.

Helium One Global (HLOGF HE1.L 9KE.F) announced the result of its placing and subscription offer. £6.1 million was raised at a price of 0.25p per share, a tiny fraction of the share price when the need for funding first became known. It appears the only way funds could be raised was by the “forward selling” of shares into the market, with the short position being covered by new shares issued in the placing, resulting in huge profits for those involved in the financing and massive losses for the existing shareholders. Returns are now down to the outcome of the Itumbula drill. Per the company, it should be due to spud imminently.

Deltic Energy (DELT.L 7RC0.F) announced an operational and commercial update. The Selene exploration well is on track to be drilled in Q3 2024 and appraisal well planning is underway on the Pensacola discovery with the well scheduled for late 2024. Meanwhile, the company awaits the results of the UK's 33rd licensing round. Deltic says it continues to work on a number of potential options to both realise value and reduce future capital expenditure and has received a considerable level of interest in both Pensacola and Selene from industry.

Finder Energy (FDR.AX) announced that its UK resource portfolio continues to grow with the addition of the Boaz prospect, which is estimated to contain gross mean prospective resources of 748 billion cubic feet of gas and 81 million barrels of condensate. Finder’s joint venture partner here is Equinor, the operator of the nearby Sleipner infrastructure. Per the company, the prospect is well-positioned to access gas markets in Western Europe that attract premium pricing.

Star Energy (STAR.L K1P3.F) announced that a drill rig has been mobilised to its Ernestinovo licence in Eastern Croatia, where it will re-enter the Ernestinovo-3 well to test the geothermal potential. Results are expected later this month. Data from three deep exploration wells drilled in the 1980s suggests high temperatures and flow rates are achievable from this well. The subsequent trading update regarding its UK operations confirmed that the company remains on track to deliver its full year production target, expected to be around 2,090 barrels of oil equivalent per day.

Blue Star Helium (BSNLF BNL.AX) announced that Hydro Resources has commenced arriving on location for the planned drilling of BBB #33 at its Voyager helium project in Las Animas County, Colorado The company previously announced that it had successfully spudded the BBB #33 well and cased and cemented the surface hole section. This is an offset well to the BBB #1 discovery well which tested the Voyager prospect in November 2021 and encountered a calculated air-free gas concentration of 8.8% helium in a 134 feet gas column. Voyager is located only 6 miles from the historic Model Dome analogue production, which produces a similar high helium gas composition averaging 8% concentration. An independent 2C resource estimate of 857 million cubic feet of helium net to Blue Star also has been announced.

Europa Oil & Gas (EOG.L EGN.F) announced the acquisition of a 42.9% equity interest in Antler Global via a US$3 million cash subscription for new ordinary shares in Antler, which holds an 80% working interest in the recently acquired EG-08 production sharing contract, offshore Equatorial Guinea. The subscription monies received by Antler will fund the first-year work programme costs and the company believes it already has drill-ready prospects, which consist of three independent targets, with estimated total prospective resources of 1.4 trillion cubic feet of gas equivalent. Antler will commence a farm-down process with a view to bringing in a partner for drilling.

Longboat Energy (LBE.L 8YG.F) announced completion of the acquisition of Topaz Number One, increasing its working interest in the production sharing contract over Block 2A offshore Sarawak, Malaysia to 52.5%, simplifying the process towards a positive well decision and the potential introduction of an additional funding partner prior to drilling. The main prospect on Block 2A is a large anticlinal structure called Kertang, with a closure of over 100 square kilometres at multiple levels and significant volume potential representing multiple trillions of cubic feet of gas.

Grand Gulf Energy (GRGUF GGE.AX) announced that during comprehensive flow-testing of the Jesse-1A well, the upper Leadville reservoir flowed helium gas to surface at a raw gas rate of 1 million cubic feet per day. Measured helium concentrations trending up from 0.78% are consistent with the previously measured 1% helium from a downhole sample. Jesse-1A now is to be sidetracked for casing, completion and focused stimulation ahead of production. The company’s Red Helium project has an independently estimated, gross unrisked P50 prospective resource of 12.7 billion cubic feet of recoverable helium, with over 29,000 acres leased.

Molecular Energies (PPCGF MEN.L NNH.F) announced that Tapir-1 will spud after the holiday period. The well, if successful, will potentially unlock a complex of prospects, estimated by Molecular to contain in aggregate over 260 million barrels of oil. MEN stresses the exploration risks with the estimated chance of success of 17%, but says that even using a conservative recovery factor of 5% and a conservative oil price of $70 per barrel, the potential of the prize makes this exploration well compelling. Separately, the IPO of Molecular's 75% owned alternative energy development division, Green House Capital Group, is expected this quarter.

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