Oilman Jim's Letter - September 15, 2024

Companies issuing interesting news last week

Pantheon Resources (PANR.L PTHRF P3K.F) announced that Megrez-1 is on track for drilling next quarter from a gravel pad adjacent to the Dalton highway, some three months earlier than an ice pad location and with the advantage of year-round operational activities. Per the company, it is a low cost, high impact exploration well with management estimating a high chance of success of 69% and targeting a P50 best estimate of 609 million barrels of recoverable liquids and 3.3 trillion cubic feet of gas. The well is targeting high quality conventional reservoirs analogous to the current discoveries and developments on the Alaska North slope and will be designed to maximise the data to be gathered. Depending on results, Pantheon will undertake an extended production testing operation. Success at Megrez-1 would represent a substantial increase to the independently certified gas resource of 6.7 trillion cubic feet within the Aphun project area which will improve the overall merits of Phase 1 of the proposed Alaska LNG project with the Alaska Gasline Development Corporation…more

Hartshead Resources (HHR.ASX PGNYF) announced an update on the results of their 33rd Licensing Round applications. The company has received from the North Sea Transition Authority letters of offer and license documentation covering six new oil and gas licenses which cover 10 offshore blocks. Three of these licenses have now been fully executed and formally awarded to Hartshead. All contain discovered hydrocarbons and present a range of re-development, development and appraisal opportunities. Per Chris Lewis, CEO, Hartshead is now a significant acreage holder in the Southern North Sea and additionally has a single license and acreage in a new area of interest, the East Irish Sea. Total additional contingent and prospective resources are 1,187 billion cubic feet (2C + 2U) net to Hartshead and, in aggregate, the new licence awards, combined with the existing P2607 Licence, see Hartshead with a net interest of 1.5 trillion cubic feet of reserves and resources, contingent and prospective…more

For public companies I have a number of opportunities available which may be of interest. A few are listed below. Just click reply to contact me

• To become involved, or expand involvement, in the energy transition, a partnership with / investment in a new, still private, company bringing to market large format rechargeable Zinc-Manganese Dioxide (Zn-MnO2) batteries – offering a low cost, safe and green alternative to existing lead-acid and lithium batteries. Based in North America, where significant funding and incentives are available, the team has an extensive background in the development and commercialisation of energy storage technologies, having brought to market a number of products including rechargeable battery and charging technologies, battery processing and manufacturing equipment. The team were responsible for the development and commercialisation of the first small format rechargeable Zn-MnO2 battery, under the guidance of the inventor of single-use alkaline batteries.

• To acquire a working interest in a low cost onshore production-development-exploration asset, a farm-in with a large drilling / servicing company to a 32 sq. km. producing lease. Current gross production is 80 barrels of oil per day, with the opportunity to add more than 1,000 barrels of oil per day from a shallow reservoir and 2,000 barrels of oil per day from a deeper exploration reservoir. Existing 2D seismic covers the whole lease and operating expenses are low with attractive drilling costs of +/- $200,000 for shallow wells and infrastructure in place with spare capacity for production growth.

• To sell or farm out an asset or interest therein to an entity with financing capabilities, there are several North American public companies currently looking for hydrocarbon projects, some with a geographical focus, others open as to location.

Whatever you’re looking for (acquisition, disposal or financing) I probably can help you

Back to the companies which issued interesting news last week, Petro Matad (MATD.L PRTDF HA3.F) announced that it has spudded the Heron-2 development well in the Tamsag basin of eastern Mongolia. This is the first development well to be drilled on the Petro Matad operated Heron field, which has total oil in place potential of around 190 million barrels and was discovered when the Heron-1 well was drilled and tested in 2019. Heron-2 is located around 800 metres south of the original Heron discovery well and is targeting the same reservoir units of the Cretaceous Lower Tsagaantsav formation that were proven productive in Heron-1, which flowed at a maximum rate of 821 barrels of oil per day on test from a 12 metre interval in an overall oil column of some 70 metres. Heron-2 has been located to investigate the extension of the productive reservoir zone seen in the discovery well and will be drilled to a total depth of around 2,900 metres. Drilling to total depth is expected to take about 30 days following which wireline logging will be conducted to evaluate the productive potential of the reservoir. A well test and stimulation programme are planned to be executed during the 2024 operational season and, if successful, Heron-2 will be put on stream in either late 2024, if time permits, or in Q2 2025 after the winter operational shut down. Meanwhile, mobilisation activities for the Gobi Bear-1 exploration well are underway with anticipated spud by mid-September…more

HyTerra (HYT.ASX HYTLF) announced that it has acquired a significant leasing position in the Nemaha project, Kansas. Approximately 26,200 acres have been acquired, bringing the total exploration lease position from 12,880 acres to approximately 39,000 acres. The leases are in Washington and Marshall counties, above the Mid-Continent Rift, which is considered to be the generation zone for hydrogen. Infill leasing, the leasing of new exploration areas, and securing additional well permits continues. Meanwhile, preparation for an EGM for shareholders to vote on the $21.9 million Fortescue investment and strategic interest in HyTerra is said to be on track…more

Trillion Energy (TCF.CSE TRLEF Z62.F) announced that the Akcakoca-3 well at the SASB gas field has now been put into production. On July 17, 2024, 11 meters of gas pay was perforated in the well, however, due to delayed pressure build up, was not initially produced. By September 6, 2024, the well head pressure for Akcakoca-3 had increased to 616 pounds per square inch and the well was put into production. Initial production flow rates were 4.28 million cubic feet per day which increased to 4.66 million cubic feet per day with well head pressure increasing to 645 pounds per square inch. At the same time, Alapli-2 was opened to test pressure resulting in gas flow to surface and production is pending installation of velocity strings…more

80 Mile (80M.L BLLYF S5WA.F) announced that it has successfully identified high concentrations of helium at surface in select historical drill holes, with values of up to 10.7% helium in the Perttilahti area. This marks the first published occurrence of helium detected flowing to the surface in Finland. Previously, helium was identified in solution within groundwater at depth and these new results position the company to fast-track further exploration efforts providing a foundation for the continued evaluation of the Outokumpu Belt's potential as a major source of industrial gases. Gas samples from a 2,480 metre deep drill hole have additionally revealed up to 46% geological hydrogen, highlighting the belt's potential for industrial gas reserves. 80M will undertake further detailed sampling and analysis, focusing on areas with the highest helium concentrations, including additional surface sampling, re-entering select drill holes for deeper testing, and integrating the findings with historical seismic data to pinpoint the most prospective zones. The company has additionally begun planning a proof of concept study aimed at assessing the commercial recovery of helium and hydrogen from existing deep drill holes. This study will focus on evaluating the technical and economic feasibility of extracting these gases using modern recovery techniques. Per the company, the success of this study could represent a significant step towards generating cash flow from the project…more

Empire Energy (EEG.ASX EEGUF) announced that it has executed a drilling contract with Ensign Australia for the drilling of the EP187 Carpentaria-5H well, which is expected to commence in late October 2024. Additionally, the company has executed a services agreement with Halliburton Australia. Empire has also executed a contract with Halliburton Australia to fracture stimulate ~60 stages across the planned horizontal production section of Carpentaria-5H. Halliburton will provide an integrated services package for the delivery of the program including stimulation, wireline and coiled tubing, mobilising over 44,000 hydraulic horse power to execute a North American style high efficiency 60 stage fracture stimulation program, which is expected to commence shortly after rig release. Carpentaria-5H will be Empire’s longest drilled and stimulated horizontal shale well and will target a ~3,000 metre horizontal section and ~60 fracture stimulation stages, incorporating learnings from Carpentaria-2H and Carpentaria-3H. The goals of the well are to execute a development scale well for the Carpentaria Pilot Project, optimise fracture stimulation design to achieve higher productivity, conduct a long-term production test to develop a Carpentaria type curve for long laterals for development planning, and commence gas sales from the Beetaloo Basin.

Corcel (CRCL.L RM4B.F) announced that its contractor, Metatek Group, has completed the acquisition of the data phase of the eFTG survey on block KON-16, which is 35% owned and operated by the company. Focus now moves to processing and interpretation, which is expected to extend through Q4 2024, enabling Corcel to high grade prospective areas in the 1,000 square kilometre block and design a focused 2D seismic acquisition program in 2025 which the company intends will ultimately lead to the drilling of the first new well on the block since the 1960s. Prospectivity is said to range from shallow oil-prone targets analogous to the nearby Tobias and Galinda fields, to the deeper pre-salt play which is analogous to the deep water Kwanza Basin discoveries in TotalEnergies Kaminho project…more

Vermilion Energy (VET.TSX VET CVZ.F) announced an operational update on key projects. In Germany, the company successfully completed testing operations for its first deep gas exploration well drilled earlier this year. The well flow tested at a restricted rate of 17 million cubic feet per day with a wellhead pressure of 4,625 pounds per square inch. The company believes deliverability would have been higher without testing equipment limitations. The company began drilling its second deep German exploration well in August 2024, a process that will continue through the fourth quarter. Recently, it signed an agreement with a third-party to farm down half of its working interest in this well to 30% (previously 60%) to reduce risked capital requirements and further enhance project returns. Consequently, along with deferring the 2024 drilling program in France to 2025, Vermilion has accelerated the drilling of a third deep gas exploration well (100% working interest) in Germany, which it expects to spud in the fourth quarter of 2024. In Croatia, the company successfully increased production on the SA-10 block after commissioning the gas plant in late June 2024. Current production levels now exceed 2,000 barrels of oil equivalent per day (100% gas). On the SA-7 block, Vermilion completed testing on the third well of its four-well program, which flow tested at 5.6 million cubic feet of natural gas. The company plans to test the fourth and final well in Q4 2024. In Canada, on the Mica Montney asset, Vermilion recently brought five wells on production from the 9-21 pad that were drilled and completed earlier this year. The wells produced at an average IP30 rate of over 1,000 barrels of oil equivalent per day per well (52% liquids).  The Q3 2024 capital program is progressing as planned and the company says it remains on track to achieve its Q3 2024 production forecast of 83,000 to 85,000 barrels of oil per day and its full year guidance range of 83,000 to 86,000 barrels of oil equivalent per day.

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.