Oilman Jim's Letter - June 24, 2024

Africa Oil (AOI.TSX AOIFF AFZ.F)announced it has reached an agreement with BTG Pactual Oil & Gas to consolidate their respective shareholdings in Prime Oil & Gas. This will provide Africa Oil shareholders with significant free cash flows and enable the company to commit to an enhanced total shareholder returns model within a robust and clearly defined financial framework, supported by producing assets in Nigeria, and shareholders will continue to benefit from funded, high value growth opportunities, including the Venus oil project in the Orange Basin, offshore Namibia. The enlarged Africa Oil, with greater scale and financial resources, will be better positioned to deliver further growth beyond its existing portfolio, supported by a new cornerstone shareholder with a proven track record of creating value in the global oil and gas industry. A 100% increase in working interest proved plus probable reserves and production is expected in return for  BTG receiving approximately 35% of the shares in the enlarged Africa Oil. Accretion in free cash flow per share for Africa Oil shareholders in the 2025 – 2029 period is expected to be more than 100%…more

Royal Helium (RHC.V RHCCF RD31.F) reported that helium trailer sales took place last week from Royal’s Steveville helium purification facility, located near Brooks, Alberta. The company continues to ramp up production at the facility towards nameplate capacity of 15 million cubic feet of raw gas per day. The plant is designed to be fully automated and self-powered such that once at steady state, the operation can quickly turn toward positive cash flow with very low operating expense. The company also announced the granting of 5,000,000 incentive stock options to a consultant. The options are exercisable at a price of $0.085 per share, vest evenly over a term of six months and, subject to earlier expiration provisions, expire in three years…more

Bluejay Mining (JAY.L BLLYF S5WA.F) announced it has reached agreement with the major shareholder of White Flame Energy to purchase the company in two tranches. Subject to acceptances from the balance of the White Flame vendors, Bluejay will initially acquire up to 51% of the issued share capital of White Flame and will be granted a 3 year option to acquire the remaining 49% on the same terms. The consideration for the acquisition of 51% of the issued share capital of White Flame is £1,402,500, payable in Bluejay shares, valuing the total issued share capital of White Flame at £2,750,000. Bluejay acquires three granted exploration and exploitation licences adjacent to the Pulsar Helium (PLSR.V PSRHF Y3K.F)Tunu project covering 8,429 km2, which are said to be highly prospective for helium and white hydrogen as well as all industrial gases, natural gas and liquid hydrocarbons. The basin has anomalous helium and white hydrogen occurrences, as well as working liquid-rich hydrocarbon reservoirs with potential resources estimated by management to have in excess of 2.4 to 8.1 billion barrels of oil equivalent in place…more

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