88 Energy (88E) announced a not unexpected A$12 million placing at 0.45p. As a result, the company is fully funded for all planned activity through to the end of the calendar year. 88E now has funding to drill the Harrier prospect, in addition to Merlin, which provides a combined gross aggregate target of over 1 billion barrels of recoverable oil, on trend to large existing discoveries. The resignation of David Wall also was announced, but no reason was given. More on 88E in the private blog.
Bahamas Petroleum Company (BPC) announced its widely expected duster and the price collapsed by 70%. The well did encounter hydrocarbons, but it’s very rare that an oil drill does not. The issue of course is commerciality. It’s important to understand that the most likely end result with any of these AIM/London small cap oil projects is failure, particularly so if no farm-out to an actual oil company has been achieved. That’s why I believe they’re generally only worth buying for a short-term run up to a potentially transformational event and only when fully financed for that. Remember also that anything like a convertible loan in place is more or less certain to kill any upwards momentum dead. BPC was a particularly difficult one for investors, given its haphazard funding approach and the shareholder abusive nature of most of it. It’s curious that drilling stopped well short of target depth, but perhaps the company simply ran out of money, which would explain why Lombard Odier had to dump fast, since BPC wouldn’t have had the cash needed to reimburse their likely substantial losses in the event of a dry hole. Lombard Odier had a rather special agreement in relation to their investment in the company, guaranteeing them a minimum profit of 15% on their share purchase and indemnifying them against any loss. Company law is different in the Isle of Man, and not in a good way for shareholders.
Providence Resources (PVR) issued a response to media speculation that it could be merging with SpotOn Energy (a £1 UK company whose only asset appears to be it’s agreement with Providence, which in turn is conditional upon SpotOn somehow raising $166 million). PVR denies that it is currently involved in any merger discussions with any party, but that it will continue to work closely with SpotOn Energy to deliver the necessary funding to develop the Barryroe asset. Funding of course has always been the issue with Barryroe and to date there have been plenty of deals to pump the share price, but no actual hard news of any money arriving. PVR, along with Lansdowne Oil & Gas (LOGP) also announced Government consent for the Barryroe site survey. This must be completed to enable Providence to apply for any potential further works on the K site location of the Barryroe field and further regulatory approvals are required before any commencement of drilling can take place. Further on PVR and LOGP in the private blog.
I was contacted by David Sefton following my piece last week referencing Anglo African Oil & Gas (AAOG) and Iconic Labs (ICON). He takes exception to the statements of the European High Growth Opportunities Securitization Fund (EHGO), which were legitimised by their publication in a Business Wire article. EHGO apparently is a disgruntled CLN financier, who tried to bully ICON management, are annoyed that they did not get their way and are now throwing mud. Crucially, though, their litigation does not mention or concern David Sefton or his company, Greencastle, and they are not even included as parties. On that basis, the statement by EHGO regarding David Sefton is misleading and no inference should be drawn from it. I’m also expecting to receive from David Sefton his account of events at Anglo African Oil & Gas and I look forward to sharing that with readers.
Tower Resources (TRP) announced a South Africa update. 50% partner and license operator, New Age Energy, has reprocessed additional 2D seismic data covering the Algoa-Gamtoos license, offshore South Africa, plus further data acquired from the Petroleum Authority of South Africa, resulting in an increase in portfolio volumes to a mean figure of 1.983 billion boe recoverable. The Algoa-Gamtoos license is located adjacent to Total's Blocks 11B/12B, where Total has made discoveries in excess of 1 billion boe at Brulpadda and Luiperd. More on TRP in the private blog.
In other news, Block Energy (BLOE) announced a West Rustavi update. Production from the WR-38Z and WR-16aZ wells has recommenced. Trinity Exploration (TRIN) announced an operations update. Like virtually every other producing oil company these days, it sees opportunity in “the development of transitional energy projects such as micro LNG, wind and solar power.” Independent Oil &Gas (IOG) announced the appointment of a new chief operating officer. He’s David Gibson, ex-Foster Wheeler Wood Group, Amec, Marathon Oil UK, TAQA Bratani and Ithaca Energy. Canadian Overseas Petroleum (COPL) announced it has repaid the balance of its Riverfort loan in cash. £400,000 has discharged it.
UK Oil & Gas (UKOG) issued multiple announcements. It’s lodged an appeal with the Planning Inspectorate against Surrey County Council's 15 December 2020 decision to refuse planning consent for the Loxley gas appraisal project, the High Court has upheld its injunction against unlawful protest at the Horse Hill site and it’s completed the second instalment due under the sale and purchase agreement of the Horse Hill surface production equipment. IGas Energy (IGAS) announced a trading and reserves update. It has “continued to make good progress in a number of key strategic areas.”
Europa Oil & Gas (EOG) announced a placing, broker option & joint broker appointment. It’s raised £1,500,000 at 1.3p and granted Turner Pope a broker option to conditionally raise up to a further £500,000. Baron Oil (BOIL) announced the relinquishment of UK licenses PEDL330 & PEDL345. As in accordance with the operator's recommendation. Finally, Zephyr Energy (ZPHR) announced updated well & project economics. Its Paradox acreage is estimated to hold net 2C contingent recoverable resources of over 12 million boe in the Cane Creek reservoir from 30 wells.
More in the private blog, including my actual trading ideas. Further on that at https://www.oilnewslondon.com/oilman-jim
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The author may hold 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.