Oilman Jim's Letter - August 18, 2024

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Companies issuing interesting news last week

Pulsar Helium (PLSR.V PSRHF Y3K.F) announced an operational update for both the Topaz project in Minnesota, and the Tunu project in Greenland. At Topaz, acquisition of a 20.4 kilometre (12.7 mile) long 2D seismic line has commenced, and at Tunu the passive seismic survey is underway. Topaz data acquisition began on August 8 and is expected to complete this month, after which it will undergo processing and interpretation. The 2D seismic line is expected to provide high-resolution structural data and will be used to complement and update the current subsurface 3D model, assisting the placement of step out appraisal wells from Jetstream #1. Tunu Field activities also are underway with a total of three passive seismic (ambient noise tomography) arrays planned and anticipated to be completed in September before being sent for processing and interpretation. This will provide the first sub-surface dataset for the project. Migratory primary helium, not associated with hydrocarbons, was identied by the company at Kap Tobin, in addition to a potential geothermal heat source. There are said to be multiple un-tested hot springs within the project area that provide a favourable sample medium for gases from depth, emanating at surface…more

Pantheon Resources (PANR.L PTHRF P3K.F) announced that it has executed a contract to secure the use of the Nabors 105AC rig to drill the Megrez-1 well in Q4 2024. The company is familiar with the rig, having used it in previous drilling campaigns. Site works for construction of a gravel pad along the west side of the Dalton Highway are expected to commence in September and upon completion of these works the drill rig will be mobilised. The Megrez-1 well is estimated to have a 69% geological chance of success and will target the topset sands in the Ahpun East project area which Pantheon estimates to contain a 2U prospective resource of 609 million barrels of marketable liquids and 3.3 trillion cubic feet of natural gas. The Ahpun East topsets are significantly shallower than the Ahpun western topsets drilled previously and per Jay Cheatham, CEO, the company believes this to be one of the most impactful onshore exploration well being drilled anywhere in the world during 2024…more

Trillion Energy (TCF.CSE TRLEF Z62.F) announced that its SASB revitalization program has started well, realizing the complete payback of recent perforation costs in just 35 days of production. In the first phase of the workover all remaining gas pay on the Akcakoca platform was perforated, including three long reach deviated gas wells (Guluc-2, South Akcakoca-2, West Akcakoca-1 wells) and the recompleted legacy well Akcakoca-3, all of which were drilled in the 2022/2023 program. The wells started production over a staggered period from July 9 to July 28 and have already produced 140 million cubic feet of gas, averaging 4.6 million cubic feet of gas per day since the perforation program concluded…more

Georgina Energy (GEX.L), formerly Mining Minerals & Metals, announced a Mt Winter EPA155 update. The company has received a formal invitation from the Central Land Council to attend an on-ground meeting with the traditional Aboriginal landowners on 11 September 2024 in Alice Springs for the purposes of approving negotiations leading to the granting of the EPA155 application. The company will outline its plans and ultimate goals of delivering a positive outcome to the indigenous community and delivering low-risk projects in Australia for the development of natural gas, hydrogen and helium projects through its well re-development programme. Should the traditional landowners consent, the company will expedite its commitments under the farm-in agreement to earn its initial 75% interest. The EPA155 Mt Winter prospect is said to host unrisked 2U prospective recoverable resources of around 148 billion cubic feet of  helium, around 135 billion cubic feet of  hydrogen and around 1.22 trillion cubic feet equivalent of hydrocarbons. Georgina also holds 100% of the working interest in the Hussar prospect, which is said to host unrisked 2U prospective recoverable resources of around 155 billion cubic feet of helium, around 173 billion cubic feet of hydrogen and around 1.75 trillion cubic feet equivalent of hydrocarbons. Per the company, Hussar is considered by independent consultants to be one of the most potentially lucrative resource basins in the Asia Pacific region due to its significant helium, hydrogen, oil & natural gas potential…more

Valeura Energy (VLE.TSX VLERF 83PN.F) announced first oil production from the Nong Yao C development in its 90% owned and operated licence G11/48, offshore Gulf of Thailand. The first three of the seven Nong Yao C development wells were opened up for oil production on August 15, with additional wells to be brought online successively thereafter. Ramp up of production volumes will continue in line with the company’s plan to achieve peak production rates of approximately 11,000 barrels of oil per day within the coming weeks, versus recent rates in the first half of August of approximately 7,200 barrels per day. Valeura intends to sustain Nong Yao production rates at approximately 11,000 barrels per day for the remainder of 2024. The drilling programme also successfully appraised several upside targets, which the company expects will both contribute to reserves and resources when evaluated at year end and may form the basis of future infill drilling to sustain volumes further into the future…more

Helix Exploration (HEX.L) announced that drilling of the Clink #1 well on the Ingomar Dome project area in Montana has commenced. The well will test the stacked reservoir targets in the Amsden, Charles and Flathead formations, plus the fractured pre-Cambrian basement. Historic drilling has identified nitrogen-rich gas in the Amsden, Charles and Flathead formations that has never been assayed for helium. Drilling will take 3-4 weeks to complete, followed by wireline logging and extended flow tests. This is the first well in a two-well Q3 drilling programme with the second well to be drilled to appraise contingent helium resources at the Rudyard project. If successful, the Clink #1 well will be used as a future production well, reducing time and cost to move towards first gas production anticipated before the end of 2025…more

D3 Energy (D3E.ASX) announced an update from its multi-well production testing program at ER315 located in the Free State, South Africa. RBD03 flowed gas at an average flow rate of 147 thousand cubic feet per day over a 16-day period. The flow rate is almost double the previous flow rate measured with previous testing equipment and what the company described as world class helium concentrations of 5.1% were measured after 7-days of sustained production. Following a reservoir pressure build up period, testing will commence at the recently drilled and tested RBD10 borehole utilising new equipment to see if comparable production rate increases are observed. RBD03 is a legacy gold exploration borehole drilled within the area of ER315 in 1983. With very low drilling and completion costs, combined with record worldwide helium prices and natural gas shortages in South Africa, the project is said to be shaping up as an extremely exciting and robust first up opportunity right out of the gate. The company will proceed with re-testing the RBD10 well with new equipment before commencing drilling at RBD12. Results of the program will inform key decisions regarding the design of further testing programs, well interference and spacing, and planning for the submission of a production right application to the South African authorities…more

Orcadian Energy (ORCA.L) announced that the company and the NSTA have now entered into binding licence agreements for all three of its licence awards in the 3rd Seaward Licensing Round. The Earlham licence P2680, where Orcadian is licence administrator and holds 100%, contains an existing discovery, an undrilled prospect and a redevelopment opportunity. The Mid North Sea High licence P2650, where Orcadian is licence administrator and holds 50%, contains shallow gas prospects and leads. The Fynn licence P2634, where Orcadian holds a 50% interest, contains a substantial viscous and heavy oil discovery. As a result, the company estimates that its contingent resource base has grown to 228 million barrels of oil equivalent with its un-risked prospective resource base now 100 million barrels of oil equivalent…more

Elixir Energy (EXR.ASX ELXPF) announced an update on the Daydream-2 program in its 100%-owned Grandis Project in Queensland’s Taroom Trough. The flow test of the Lorelle Sandstone post stimulation has completed and on-site operations have now moved to the stimulation of the 5 upper zones. The Lorelle Sandstone was flow tested from 4,200 meters to 4,217 metres directly through the 4 1/2” casing without a completion at multiple rates and multiple choke sizes. The well flowed gas at a maximum rate of 3.5 million standard cubic feet per day and on multiple occasions stabilized rates were observed between 2.1 and 2.5 million standard cubic feet per day throughout the flow period. Stimulation fluid in the wellbore was said to be accumulating, suppressing the stabilized rate and, per the company, running a completion string in the hole in any future production test would significantly improve production to a stable rate of 3.0 million standard cubic feet per day. Elixir’s plan now is to plug, perforate and stimulate 5 stages consecutively, and upon completion of this, in around 1 week’s time, commence further flow testing…more

Global Petroleum (GBP.L) announced a PEL94 license update. Following recent activity in the Walvis Basin, offshore Namibia, the company has seen increased interest in the data room for PEL94 from various parties. As a result, Global has entered into early commercial discussions with a potential operating partner for a farm-in agreement. The company believes a farm-in, if successfully concluded, could be transformational for the business, with a strategic partner potentially enabling the exploitation of the licence’s estimated 2,747 million barrels of oil unrisked net best estimate (P50) prospective resources. The company says it is hopeful in reaching a mutually beneficial agreement with the partner in due course following further due diligence and negotiations…more

Gran Tierra Energy (GTE GTE.TSX GTE.L G1P0.F) announced it has made another oil discovery with the Charapa-B6 well on the Charapa Block in Ecuador. What is described as a significant find is located just west of the recently discovered Arawana-J1 and Bocachico Norte-J1 wells, further underscoring the potential of this highly prospective region. The Charapa-B6 well marks the company’s third oil discovery in 2024 and its fifth in Ecuador since Gran Tierra resumed its exploration campaign after disruptions caused by the pandemic. The company has run production casing, cemented and perforated the Hollin oil zone and begun production testing at Charapa-B6. The rig has been moved to drill the Charapa-B7 exploration well which was spud on August 9, 2024…more

Sunda Energy (SNDA.L) announced it has entered into an exclusivity agreement with Pacific LNG Operations enabling a period of mutual due diligence relating to a potential strategic investment into the Chuditch PSC project that would fund the planned field appraisal well. It is anticipated that such investment, should it occur, would be through an equity issuance in a Sunda subsidiary company and not at the Sunda Energy plc level. The agreement contains carve-outs for several other potential funding partners, some of whose involvement may be complementary in supporting the project, not only through the appraisal well but also in future development of gas in the asset. Discussions with the other parties continue during the period of the exclusivity agreement. Meanwhile, operational planning has continued and negotiations to secure the use of an identified drilling rig are ongoing, as are procurement processes for other essential drilling equipment and services. As a result of the detailed planning, in particular the current scheduling of the targeted drilling rig, the company still expects, subject to financing being in place, to drill the Chuditch-2 appraisal well in early 2025…more

Buru Energy (BRU.ASX BRNGF) announced that it has commenced well pad construction at the Rafael Shallow 1 well location as part of its preparations to drill the high potential oil target in EP 428 in Western Australia’s onshore Canning Basin late Q3, early Q4 2024 using the Silver City Drilling Rig 24. The drill is financed by a farm-in agreement with Sabre Energy, which will carry Buru for A$6 million of the costs to earn a 50% interest in a commercial discovery and subsequent production licence, with Buru retaining a 50% interest and operatorship. The A$6 million cost contribution represents a full carry of the well by Sabre, based on Buru’s current estimate of drilling costs. Subject to a commercial discovery being declared, Sabre will pay Buru a further A$1.5 million in recognition of prior exploration expenditures incurred in relation to the Rafael shallow prospect. Buru’s internal assessment of the prospective resource volumes of recoverable oil indicates a range of between 3.2 million stock tank barrels (low estimate) and 79 million stock tank barrels (high estimate), with a best estimate of 19 million barrels. An oil discovery could provide a rapid development path that would add substantial value for both Buru and Sabre and an additional funding path for Buru’s 100% owned Rafael deep Phase 1 gas and condensate project, which remains the company’s development priority for this existing resource…more

CanAsia Energy (CEC.V CECAF) announced results of the June 30, 2024 contingent bitumen resources report, a National Instrument 51-101 compliant resources evaluation for its oil sands interests at Sawn Lake, Alberta, Canada, as evaluated by independent qualified reserves evaluator Sproule Associates. The unrisked best estimate contingent resources are 358 million barrels of bitumen recoverable with net present values discounted at 10% and 15% of $850 million and $356 million on an after-tax basis, respectively. The resources report assigned an 85% chance of development for Sawn Lake and the risked best estimate contingent resources are 304 million barrels of bitumen recoverable. The risked best estimate net present value, discounted at 10% and 15% is $725 million and $304 million on an after-tax basis, respectively. The resource report reflects the use of a 1,600 meter horizontal SAGD well pair design with control devices to reduce the number of required well pairs to develop the contingent resources. The number of new well pairs required to develop the contingent resources is 182. The resources report forecasts bitumen production from 2026 to 2097, with maximum unrisked best estimate net production of 26,658 barrels of oil per day in 2040. The unrisked best estimate evaluation indicates that the cumulative financing requirement (cumulative cash flow of operating income less capital expenditures) to the end of 2026 is $11.3 million, with further development to be funded by cash flow.

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