Oilman Jim's Letter - August 7, 2024

Reconnaissance Energy Africa (RECO.V RECAF 0XD.F) announced an operations update with respect to activity relating to Petroleum Exploration Licence 73, onshore northeast Namibia. The Naingopo well is currently drilling on schedule and on budget to a depth of 1,450 metres and will soon be drilling into key intervals. The well is targeted to complete drilling in early October with results thereafter. Elsewhere on PEL 73, the company has started construction on the access road leading to Prospect P, its second Damara Fold Belt exploration well, which is targeted to commence drilling in Q4 2024. Meanwhile, Reconnaissance is working with Polaris Natural Resources in testing the use of vibroseis as a source for the potential acquisition of 3D seismic covering a section of the Kavango Rift Basin. Current testing is being undertaken to compare results using the vibroseis as a source compared to previously acquired data using the acceleration weight drop system. The results of the testing will provide the data necessary to appropriately plan and execute a potential 3D seismic program in 2025…more

Gran Tierra Energy (GTE GTE.TSX GTE.L G1P0.F) announced positive test results from the Bocachico Norte-J1 well. The T-sand was perforated over 20 feet of reservoir with 29 feet of reservoir pay based on log evaluation. A jet pump was run and the well has produced at stabilized rates over 51 hours at 1,353 barrels oil per day, 35.5-degree API gravity oil, less than 1% water cut, and a gas-oil ratio of 336 standard cubic feet per stock tank barrel. This positive test in the T-sand is said to build confidence in the multizone potential for the Zabaleta well which is expected to be drilled in the second half of 2024 and is 200 feet up dip from the recent Arawana discovery well. Arawana continues to produce with strong results from the Basal Tena zone greater than 900 barrels of oil per day. The artificial lift system will be converted from a jet pump to electrical submersible pump in the third quarter of 2024. Cumulative production to date from Arawana is approximately 74,000 barrels and the company expects these fields to be key drivers of production growth, reserve additions and free cash flow for years to come…more

Grand Gulf Energy (GGE.ASX GRGUF) announced the receipt of all required governmental approvals for the Jesse-3 well. The updated well design involves casing and perforating the entire basinal stratigraphic section, adding significant helium upside to the already identified Mississippian Leadville dolomite (10.9 billion cubic feet) and Devonian McCracken sandstone (1.8 billion cubic feet) targets, with three sub-salt secondary targets identified. In a success case, deeper helium reservoirs will be perforated and tested for what is said to be modest additional cost. The company is also in the process of submitting a sundry application on the approved Earp-1 location to update the well design and engineering, including deepening of the well to test deeper pay below the Leadville primary target. Jesse-3 and Earp-1 are up-dip twins of historical wells with proven gas. Grand Gulf says it is engaged in discussions in relation to the potential farm-out of the Red Helium Project which would secure funding for drilling in exchange for an interest in the project…more

Helium One Global (HE1.L HLOGF HE1.F) announced it has successfully re-entered and deepened the ITW-1 well a further 168 metres into the basement and has reached a new total depth of 1,129 metres. Near-continuous helium and hydrogen shows are said to have been measured while drilling and were notably higher than those encountered while drilling the overburden section during Phase II. Contractors have now commenced preparations for running 7 inch slotted casing and cementing operations, following which extended well test operations will commence across two intervals, the fractured basement and the faulted Karoo group. Operations should complete in approximately 4 weeks…more

Buru Energy (BRU.ASX BRNGF) announced that it has entered into a farm-in agreement with Sabre Energy for the drilling of the high impact Rafael shallow oil target in EP 428, located in Western Australia’s onshore Canning Basin. Sabre will carry Buru for A$6 million of the costs associated with the drilling and testing of the Rafael shallow exploration well to earn a 50% interest in a commercial discovery and subsequent production licence, with Buru retaining 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. Negotiations for a drilling rig contract are well advanced, drilling equipment and materials have been secured, and on-ground preparations and approvals are underway. Commencement of Rafael shallow drilling operations is targeted for late Q3 2024 as part of a two well exploration drilling campaign that includes the Mars 1 well.

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