Oilman Jim's Letter - July 24, 2024

PMG.L LYK1.F ORCA.L 9J1.F 88E.ASX 88E.L EEENF POQ.F RECO.V RECAF 0XD.F BWE.OL 6BW.F EOG.L EGN.F ADX.ASX ADXRF GHU.F DELT.L 7RC0.F

Parkmead Group (PMG.L LYK1.F) announced the formal award of the P2634 licence by the UK Government’s North Sea Transition Authority. The licence is situated in the Outer Moray Firth and comprises Blocks 14/15a, 14/20d and 15/11a. Parkmead (50% interest and operator) and joint venture partner Orcadian Energy (ORCA.L 9J1.F) (50% interest) say they will leverage their expertise gained in developing challenging crudes to work towards commercialisation of Fynn Beauly, one of the UK’s largest undeveloped discoveries. This heavy oil accumulation has been proven by three wells and is estimated to contain oil-in-place of between 740 million and 1.33 billion barrels. The company’s board believes that this licence offers Parkmead and its investors access to huge potential upside, via one of the largest remaining oil resources left on the UK continental shelf…moremore

88 Energy (88E.ASX 88E.L EEENF POQ.F) announced that the 2D seismic data acquisition program for PEL 93 over the Owambo Basin, Namibia, has been completed on time and within budget. The program acquired 203 line kilometres of 2D seismic data utilising Polaris vibroseis and is expected to deliver an excellent image for the accurate interpretation of the subsurface geological structures of the Damara play. Processing of the data is ongoing and interpretation of the new lines is currently expected in Q4 2024. Determination of the size and quality of a number of the Damara fold structures that are expected to be present in PEL 93 is the key purpose of the program and this work will form the basis for an independent certified prospective resource assessment. This will allow for more accurate drilling location identification and enable planning for potential future drilling events. 88E also noted that its near neighbour, Reconnaissance Energy Africa (RECO.V RECAF 0XD.F), has now spudded its first well, Naingopo-1, on PEL 73, which is modelled by 88 Energy to be a continuation of the interpreted opportunity at PEL 93. Subsequently, BW Energy (BWE.OL 6BW.F) farmed into Recon Africa's Namibian acreage, acquiring a 20% working interest in PEL 73 with a $16 million equity investment to participate in two Damara Fold Belt exploration wells and a 3D seismic program, with an option to participate in two Rift Basin exploration wells over a two year period…moremore

Europa Oil & Gas (EOG.L EGN.F) announced that an additional 716 billion cubic feet of unrisked prospective resources have been identified on the EG-08 block bringing total gross unrisked mean prospective resources on the block to 2.116 trillion cubic feet. EOG owns a 42.9% equity interest in Antler Global, which in turn holds a 80% interest in the EG-08 production sharing contract, located offshore Equatorial Guinea, with Guinea Ecuatorialde Petroleos, the national oil company, holding the remaining 20%. This stage of technical work on the block now is complete and the data is being loaded into a data room, which will be open in the coming weeks. A number of companies are said to have already expressed interest in farming into the block. Antler says it is seeking a farmin partner to accelerate drilling an exploration well which will target one horizon in the Barracuda prospect, with an estimated chance of success of 70%. Future wells will target the significant additional upside in Barracuda and throughout the license. Initial discussions have also been initiated with rig providers with a view to securing a jack-up rig to drill the farmin well in H2 2025…more

ADX Energy (ADX.ASX ADXRF GHU.F) announced an update in relation to the appraisal, exploration and testing programme on its ADX-AT-I and ADX-AT-II exploration licences in Upper Austria. The programme includes drilling of the Anshof-2A side track well within the Anshof field area in the ADX-AT-II licence, which is expected to commence in early September 2024. The Anshof-2A well is planned as a producer and is expected to take approximately 14 days to drill in preparation for testing and tie-in to the recently installed Anshof permanent production facility which is currently processing oil from the Anshof-3 well. Additionally, ADX will be drilling a gas exploration well in the MND Investment Area within the ADX-AT-I licence, which is expected to commence in early October 2024. Drilling and environmental permitting is completed for the LICHT-1 prospect and the IRR-1 prospect is expected to be permitted by mid August 2024. ADX and its partner MND Austria will finalise their preferred drilling prospect early next month. Both prospects are said to offer significant resource potential, are covered by high quality 3D seismic and are proximal to gas infrastructure. MND will fund the first EUR 4.5 million of well costs to earn a 50% economic interest in the MND Investment Area (an exploration investment area within the ADX-AT-I license). Preparations and permitting for Welchau-1 production testing meanwhile are ongoing with a view to undertaking an extended testing program during the fourth quarter of 2024…more

Deltic Energy (DELT.L 7RC0.F) announced that the Valaris 123 drilling unit has been mobilised and is on route to the Selene well location. Drilling operations are expected to commence shortly after its arrival, with planned operations lasting approximately 90 days. The well is designed to collect all key information in relation to reservoir quality and gas composition that is required to support a field development plan and final investment decision on the potential development of the Selene gas field without the requirement for a further appraisal well. The joint venture has therefore determined there is no requirement for a full well test as part of that process and, in line with normal oilfield practice, the well will accordingly be plugged and abandoned on completion. Deltic estimates the Selene structure to contain gross P50 prospective resources of 318 billion cubic feet with a 69% geological chance of success and the company is fully carried for its 25% working interest in the Selene well up to a gross success case well cost of $49 million, which is in excess of the operator's success case well authorisation for expenditure of $47 million…more

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