Oilman Jim's Letter - June 6, 2024

Eco (Atlantic) Oil & Gas (EOG.V ECO.L ECAOF EOI.F) announced the farm-in to Block 1 offshore South Africa Orange Basin. The company is acquiring a 75% working interest and will become operator. Block 1 is 19,929 km2 in area and is located on the Namibian Border in South Africa. The Eastern side of the block is approximately 174 km off the South African shoreline and the block reaches out some 263 km West into deep water in the Orange Basin. Terms are as follows: $150,000 payable upon signing, $225,000 payable upon issuance of Government title transfer and $375,000 payable upon a TSX-V/AIM compliant resource report to be commissioned by Eco. The company will carry the remaining 25% interest through the budget and work program for the first three years up to an agreed sum of $2.3 million of a total work program. The block has significant 2D and 3D seismic data already completed and no additional seismic acquisition or drilling of wells is planned in the three-year carried period.

Pantheon Resources (PANR.L PTHRF P3K.F) announced that the company's wholly owned subsidiary, Great Bear Pantheon, has entered into a gas sales precedent agreement with Alaska Gasline Development Corp subsidiary 8 Star Alaska. The project under development is to deliver natural gas within Alaska and export up to 20 million tonnes per annum of liquified natural gas. Phase 1 is a pipeline from the North Slope to Southcentral Alaska to provide natural gas to avert what is described as the looming energy crisis facing the region. This phase does not involve construction of a LNG plant and has a lower capex requirement and construction timeframe, allowing gas transportation as early as 2029. Alaska Gasline Development Corp is aiming to undertake front end engineering and design ahead of a final investment decision planned for the middle of 2025. Pantheon says it expects to be able to lay out the full strategy for achieving funding to first investment decision and beyond by the end of this month. In addition, the company is working with Cawley Gillespie & Associates to finalise their independent resource report on the Ahpun Topsets, which should be completed and published in the coming weeks.

Jersey Oil & Gas (JOG.L TPC1.F) announced an update on the Buchan redevelopment project. Following the announcement of an earlier than expected UK General Election in July 2024, the Buchan joint venture partners have assessed the implications and their plan for progressing the project. While activities continue in order for the Buchan project to be ready for field development plan approval by the end of this year, the exact timing for achieving this key milestone and enabling project sanction is now linked to securing fiscal clarity from the next government and ensuring that the project remains financially attractive. Following the receipt of fiscal clarity and subject to field development plan approval, the major contract awards and capital commitments for the project are now expected in 2025, which leads to Buchan first production being targeted for late 2027. JOG remains fully funded with a current cash position of over £13 million and a forecast annual base cash spend of £3 million. The Buchan project remains fully carried to field development plan with a further $20 million payment due following approval by the NSTA and receipt of the associated regulatory and legal consents. The company also has a full carry to first oil for its 20% equity interest in the Buchan field development costs.

Predator Oil & Gas (PRD.L 1EM.F) announced a corporate update. In Morocco, the early stages of the Sandjet rigless testing programme have commenced with the arrival of some well services equipment at the MOU-3 well site and the preparation of the well for re-entry and perforating. Extensive operations at MOU-3 are anticipated to last for at least five weeks before moving to the next well in the Sandjet testing programme. Following completion of the MOU-3 rigless well testing a decision will be made to move to either MOU-1 or MOU-4 next to perforate the TGB-2 Sand and the Moulouya Fan sequence respectively. The MOU-5 well will now commence drilling as soon as practical after entry into the First Extension Period following the delay to the scheduling of the Star Valley rig 101 programme due to other commitments. The company says it is fully financed for all its near-term operations. In Trinidad, a sale and purchase agreement has been executed for assignment of a further 16.2% interest in the Cory Moruga, and in Ireland the company has agreed in principle farm-in terms on successor authorisation to Licencing Option 16/26, Corrib South.

Zephyr Energy (ZPHR.L ZPHRF VD5N.F) announced a State 36-2R well update. Drilling operations have been completed, with the well drilled to a total depth of 10,290 feet (measured depth). A production liner will be set across the Cane Creek reservoir section and, over the coming weeks, Zephyr will mobilise equipment for completion and production testing of the naturally fractured reservoir zone that was intersected during drilling operations. The well is said to have encountered drilling mud gas shows of a similar magnitude to the original well and pore pressure analysis suggest formation pressures estimated at approximately 9,300 pounds per square inch, which is broadly consistent with previously drilled offset wells. The well further confirms the presence of hydrocarbons within a large structural compartment, within Zephyr's acreage and 3D seismic coverage.

Jadestone Energy (JSE.L JDSEF 8KW.F) announced an update on the Akatara gas development project onshore Indonesia. The Akatara gas processing facility is nearing the key milestone of mechanical completion, where all components and systems of the facility will have been constructed, installed and tested, and the project focus is now on the final commissioning of the plant ahead of introducing wellhead gas. The project remains on schedule for gas into the facility in approximately two weeks time and for commercial gas, LPG and condensate sales following shortly thereafter. The workover campaign on the five existing Akatara wells which will provide gas to the facility has been successfully completed, flowing at an aggregate rate of 54 million cubic feet per day, significantly in excess of the c.25 million cubic feet per day of raw feed gas required under the gas sales agreement. In addition, the 17km pipeline which will deliver gas into the regional gas trunkline has been successfully tested and is now ready to receive Akatara gas.

These are opinions only of the individual author.  The contents of this piece do not contain investment advice and the information provided is for educational purposes only and no discussions constitute an offer to sell or the solicitation of an offer to buy any securities of any company.  All content is purely subjective and you should do your own due diligence.  No representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness or reasonableness of the information contained in the piece is made.  Any assumptions, opinions and estimates expressed in the piece constitute judgments of the author as of the date thereof and are subject to change without notice.  Any projections contained in the information are based on a number of assumptions and there can be no guarantee that any projected outcomes will be achieved.  No liability is accepted for any direct, consequential or other loss arising from reliance on the contents of this piece.  The author is not acting as your financial, legal, accounting, tax or other adviser or in any fiduciary capacity.