Oilman Jim's Letter - August 25, 2024

Companies issuing interesting news last week

Pulsar Helium (PLSR.V PSRHF Y3K.F) announced an operational update for the Topaz project in Minnesota and the Tunu project in Greenland, plus receipt of an independent report of the contingent and prospective resources for one prospect at Topaz, an intention to apply for admission to trading on AIM, with a target admission date before the end of October 2024, and a proposal to raise approximately £5 million in connection with the AIM IPO. 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 identifed 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 (Note: the Private Letter started covering Pulsar Helium at under C$0.20; it’s now C$0.50, having reached C$1.70 following first drill results)…more

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Petro Matad (MATD.L PRTDF HA3.F) announced an operational update. The Heron-1 well has now been re-entered, stimulated and completed for production. The perforated zone from 2834 metres to 2846 metres in the Lower Tsagaanstav formation from which the well flowed at 821 barrels of oil per day on test was successfully isolated and hydraulically stimulated. DQE Drilling has been approved as the winning tenderer for the 2024 drilling programme and the rig to drill Heron-2 is expected to start mobilisation by the end of August with spud anticipated in mid-September. The smaller rig for the Gobi Bear-1 well is expected to mobilise by mid-September and spud before month's end. Heron-2 will be drilled to a total depth of around 2,900 metres and the anticipated timing will allow for a full evaluation of the well results, flow testing and completion within the current operational window. The planned total depth for Gobi Bear-1 of 1,800 metres should be reached in time to allow for logging and, if merited, testing before the normal winter operational shutdown in late November. Per the company, further updates will be provided as the 2024 work programme progresses…more

Georgina Energy (GEX.L) announced the appointment of Aztech Well Construction to project manage the well re-entry at Hussar EP513. The Hussar prospect 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. Meanwhile, the detailed work program has been lodged with the Department of Energy, Mines, Industry Regulation & Safety, an independent environmental consultancy has been engaged to complete required environmental assessments and planning for site preparation and civils work is underway. New, recently available, seismic data is being analysed to enhance pre-drilling structural mapping of the prospect…more

D3 Energy (D3E.ASX) announced another result from its multi-well production testing program at ER315, located in the Free State, South Africa. Testing at RBD10 has yielded an average flow rate of 199 thousand cubic feet per day over a 6.9 day period, mirroring the results seen at RBD03. Total gas produced during this testing period was 1,367 thousand cubic feet. As previously announced, the helium and methane composition at RBD10 were measured at 5% helium and 85% methane. Gas samples will be collected and analysed towards the end of the extended production test to confirm these concentrations. Once testing at RBD10 is complete, and with the granting of the renewal of ER315 received this week, the company plans to commence drilling at RBD12, with rig mobilisation expected within the coming weeks. The current testing regime is said to be a critical part of D3 Energy’s broader program, which includes drilling and testing multiple boreholes within ER315. The results will inform key decisions regarding well interference, spacing, and planning for the submission of a production right application to the South African authorities…more

Gran Tierra Energy (GTE GTE.TSX GTE.L G1P0.F) and i3 Energy (I3E.L ITEEF ITE.TSX I32.F) announced they have reached agreement on the terms of a recommended and final cash and share offer by Gran Tierra for i3 Energy pursuant to which Gran Tierra will acquire the entire issued and to be issued share capital of i3 Energy. Under the terms of the acquisition, each i3 Energy shareholder will receive one new Gran Tierra share for every 207 i3 Energy shares, 10.43 pence cash per i3 Energy share and a cash dividend of 0.2565 pence per i3 Energy share in lieu of the ordinary dividend in respect of the three month period ending 30 September 2024. Following completion of the acquisition, i3 Energy shareholders will own up to 16.5% of Gran Tierra, which will then hold approximately 1.4 million net acres in Colombia, 138 thousand net acres in Ecuador and 584 thousand net acres in Canada including 298 thousand net acres in Central Alberta, 102 thousand net acres in Wapiti/Elmworth, 50 thousand net acres in Simonette, and 69 thousand net acres in North Alberta (Clearwater). Previous news from GTE was of 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 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

Chariot (CHAR.L OIGLF C62.F) announced that the Stena Forth drillship has arrived on location and drilling operations have commenced on the Anchois East well in the Lixus licence, offshore Morocco. Drilling and flow testing operations are expected to take approximately two months, with Chariot expected to be fully carried for the anticipated costs of the drilling campaign. This is a multi-objective well with distinct operational phases: an initial pilot hole will be drilled with the main objective to evaluate the potential of the Anchois Footwall prospect, located in an undrilled fault block to the east of the main field, which has a 2U prospective resource estimate of 170 billion cubic feet in the main O sand target; a side-track will then be drilled to intersect and further evaluate the discovered gas sands in the Anchois field with a current 2C contingent resource estimate of 637 billion cubic feet; the deeper Anchois North Flank prospect will then be drilled, which has an additional 2U prospective resource estimate of 213 billion cubic feet and which will also de-risk the nearby Anchois South Flank prospect with a 2U prospective resource estimate of 372 billion cubic feet. Well flow testing will then be performed on selected encountered gas sands to evaluate reservoir and productivity, following which the well will be suspended to enable it to be used as a potential future producer…more

Kistos (KIST.L KSTOF LU0.F) announced that it and TotalEnergies (TTE), as joint venture partners, have been offered seven new blocks or part blocks in the Greater Laggan area, West of Shetlands offshore UK. On completion of the licencing round, Kistos will hold a 33.3% working interest in all of the acreage, with TotalEnergies assuming operator status. The blocks lie within an area where the JV partners already produce oil and gas from the Laggan, Tormore, Glenlivet and Edradour fields and the award of these blocks, which include the previously identified Ballechin exploration prospect, supports the JV partners' aim to identify opportunities to extend the life of existing infrastructure and maximise economic output…more

Grand Gulf Energy (GGE.ASX GRGUF) announced it has received firm commitments to raise A$1.0 million before costs through a placement of 250 million fully paid ordinary shares to professional and sophisticated investors at an issue price of A$0.004. Each participant in the placement will be offered 1 free attaching option (exercisable at A$0.012 each on or before the date that is 3 years from the date of issue) for every 4 placement shares issued. The company will also undertake a 1 for 8 pro-rata non-renounceable rights issue to raise up to approximately another A$1.0 million before costs on the same terms as the placement. Funds raised will be utilised primarily to fund progression of Grand Gulf’s Red Helium project, business development and general working capital…more

Union Jack Oil (UJO.L UJOGF 1UJO.F) announced an update and confirmed that, following completion and testing, the Andrews 2-17 well has been declared a commercial discovery. The company’s first Oklahoma well, Andrews 1-17, was placed on restricted and periodic test production during late May 2024 and has produced 6,460 barrels with a gravity of approximately 46 degrees API and 382 thousand cubic feet of gas. It remains under test production using a pump jack while the optimum flow rate is being determined. Works to connect a gas pipeline to the Andrews 1-17 have recently been completed and gas has been sold to market. Andrews 2-17 is now on test production and free flowing 46 degrees API gravity oil with no water, producing naturally due to a gas expansion drive. Since being placed on restricted and periodic test production from 7 August 2024, the Andrews 2-17 well has produced 544 barrels of oil and 1.895 million cubic feet of gas. First oil and gas is already being sold to market. Under test conditions, production rates of 184 barrels of oil and 320 thousand cubic feet of gas per day have been recorded. Union Jack has also farmed-in to Reach’s Taylor well (45%), Moccasin well (45%), Wilzetta Diana-1 Footwall Fold drilling project (75%), Rogers secondary recovery project (45%) and East Shawnee 3D seismic acquisition programme (37.5%) so there should be a significant further flow of news…more

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