Mixed bag of announcements last week. Let's start with Rose Petroleum (ROSE), which announced an 85% reduction of their Paradox acreage from around 80,000 acres to 12,000 acres to save on annual lease rental costs. They still retain the key drill site, but ROSE is already in this deal on a promoted basis, paying 100% of the well cost for a 75% interest in the acreage, so although they talk about it, it's difficult to see a further farm-out. And since previous management couldn't raise the funds to drill this project, why should the new? The current management talk of new deals, but still have no details - and the big unanswered question of course is how are they going to raise the finance both for any new ventures and for Paradox?
Moving on to more positive matters, 88 Energy (88E) announced it had executed a rig contract for the upcoming drilling of the Charlie-1 appraisal well on the Central North Slope in Alaska. The spud of the well is planned for February 2020. Currently this is the only major financed drill coming up and it should attract a lot of attention, particularly with the huge numbers being touted. They're claiming an un-risked prospective oil resource totalling a gross mean of 1.6 billion barrels of oil in all the horizons they expect Charlie-1 to intersect, of which 480 million barrels of oil is the net mean to 88E. There was a placement last month of 540 million shares at an equivalent of 0.7p and, once those shares have churned, I would expect this to start moving higher.
Another company hoping to drill in Alaska either this winter or in spring next year is Pantheon Resources (PANR), who want to drill a minimum of two wells, subject to completion of a successful farm-out. Therefore, assuming they actually have valuable acreage attractive to a farm-in partner, it was rather surprising to see them announce that Halliburton will transfer their entire working interests in the leases to them in exchange for PANR accepting responsibility for future lease obligations. It appears that Halliburton view the PANR acreage as having no value at all, in fact being more of a liability than an asset. This isn't really a surprise to those who follow this company, but how on earth does it continue to maintain a £90 million market cap? The most interesting question is who supports the share price of this company - and why?
UK Oil & Gas (UKOG) announced the successful completion of HH-2 coring operations at Horse Hill. The 240 ft core has identified the Portland reservoir's most productive zone, which will now be the target of the planned 1,000 m HH-2z horizontal trajectory, expected to commence next week. The core is now at a laboratory, where a geological and petrophysical analysis is underway and results of analyses that directly impact the field's possible increased oil in place and recoverable oil volumes will be reported soon. So far, UKOG has been delivering strong announcements ahead of schedule and all is looking good for a strong move upwards in the share price before the end of the year. Alba Mineral Resources (ALBA) hold an interest in the Horse Hill oil field too.
Petro Matad (MATD) announced further disappointing drill results at Gazelle-1. They say they are casing it pending further evaluation, but in reality it appears to be non-commercial. They also say well testing at Heron-1 is costing more than expected, so they're postponing their plans to return to drill in Block V during 2019. I think a placing can be expected.
Tower Resources (TRP) announced another placing at the lowest price yet of 0.325p. Drilling of the NJOM-3 well is entirely dependent on a farm-out, but with the Chairman & CEO putting up nearly half of the £1.5 million being raised, he must be fairly confident. It's a gamble, but I'd say not a bad bet. TRP are also issuing 50 million shares in lieu of fees and, with admission of the first tranche of placing shares and the fee shares taking place on Monday, we could be seeing some of this stock hit the market next week. If the price comes back under 0.4p, that could offer a good buying opportunity.
Bahamas Petroleum Company (BPC) posted its open offer circular to shareholders. The offer is 1 new share in the company for each 5 shares held, at a price of 2p per share. 338 million new shares are being offered and they're hoping to raise £6.8 million. Key here and the actual purpose of the offer in my opinion having previously denied they were planning a placing to institutional shareholders, is that in the event not all of the shares offered in the open offer are subscribed for by shareholders, they will seek to place any unsubscribed shares. I think they're hoping that the shorts will take it up to cover. If not, the placing is underwritten for $1 million, so at least the management get to keep paying their salaries. My opinion on BPC remains unchanged. Wait and see if they actually can raise the funding for their drill and review the situation then.
In other news, IGas Energy (IGAS) announced a conventional project update, Zenith Energy (ZEN) announced drilling programme and well perforation activities plus a potential private placement in Norway, Empyrean Energy (EME) and Coro Energy (CORO) announced a Duyung PSC operations update (the Tambak-2 well has reached total depth), Parkmead Group (PMG) announced a FDP draft and environmental statement for Platypus, Oilex (OEX) announced a Cambay PSC update and an issue of securities, Exillon Energy (EXI) announced its September production report, Nostra Terra Oil & Gas (NTOG) announced a Mesquite and corporate update, Range Resources (RRL) announced a Georgia update, Tlou Energy (TLOU) announced an operational report, results of AGM, Chairman's address and field visit, Regal Petroleum (RPT) announced the spud of its SV-54 well, Trinity Exploration (TRIN) announced an operational update, Curzon Energy (CZN) announced a loan facility refinancing, San Leon Energy (SLE) announced a proposed share buyback and Savannah Petroleum (SAVP) announced the signature of a loan facility.
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The author holds one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research. This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.