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Oilman Jim's Private Blog



Mainly positive news this week (excluding the lifestyle companies helps a lot with that).

88 Energy (88E) announced a new presentation. Permitting has commenced and farm-out discussions are underway for the drilling of two wells in the first half of 2021 on the newly acquired Peregrine acreage. Obviously, there will first be a financing.

Providence Resources (PVR) announced that binding term sheets are in place with the six consortium members participating in the Barryroe appraisal and development project. PVR is now working with SpotOn Energy and the members of the consortium to finalise a farm-out work programme. Providence also has been informed by R. O’Riordan and S. O’Driscoll that they hold 3.56% of the issued ordinary share capital. So things seem to be moving along here. Lansdowne Oil & Gas (LOGP) has a 20% interest in Barryroe, so anything positive for Providence in this regard is positive for them too.

Deltic Energy (DELT) announced a statement of support from IPGL, the largest shareholder in Deltic, who have stated their intention not to support the Reabold Resources (RBD) offer. As Deltic say, it does not reflect the commercial and technical risks associated with the RBD portfolio, which was rather confirmed by Reabold’s own update on Romania well flow test operations. To date, all they have are "indications" of methane gas.

Predator Oil & Gas (PRD) announced an offer to acquire FRAM Exploration (Trinidad) Ltd. from Columbus Energy Resources (CERP). This is pursuant to a prior agreement, but is complicated by the proposed merger between Columbus and Bahamas Petroleum (BPC). CERP says that the offer is not acceptable regardless, since it is not consistent with the terms of PRD’s option. On Morocco, Predator also announced that ConocoPhillips (COP) had been awarded the Mesorif Reconnaissance Contract adjoining to the west the PRD Guercif licence. Main news awaited here is of the drill rig mobilisation.

The CERP merger with BPC does appears to be happening though. Bahamas’ shareholders gave their approval on Friday; the Columbus shareholder meeting to obtain approval is tomorrow. Key for investors here now is how everything is going to be financed and I think the BPC board, who will end up in control, may be quite happy to do a deal for FRAM on PRD’s terms.

Another shareholder meeting coming up, on Wednesday in this case, is that of Aminex (AEX). They announced late on Friday after market close that John Bell, Chairman, and Linda Beal, senior non-executive director, have “stepped down” as directors of the company with immediate effect. No reasons were given and the speculation is that they were dismissed. Why may be revealed in a few days time.

Chariot Oil & Gas (CHAR) announced that Larry Bottomley, CEO, also has “stepped down” with immediate effect. In light of the current lack of market appetite for exploration activity, Chariot plans to evaluate other opportunities available to it. Their previously announced 2019 final results highlighted that exploration in frontier regions has fallen out of favour and there now is a need for nearby / adjacent discoveries to unlock basin potential.

Touchstone Exploration (TXP) announced a significant Cascadura reserves evaluation. 1P (proven) reserves have a NPV10 of $287.7 million. Development costs for those are estimated at $11.6m, so it looks commercial, but at a market capitalisation of £135 million, professional oil and gas investors, David and Monique Newlands, are selling.

Canadian Overseas Petroleum (COPL) announced that ShoreCan and Essar Mauritius have agreed to extend the backstop date to 4 August and the parties continue to work amicably towards completion. In the meantime they’ve got away a £1.3 million placing and a $1.6 million shares for debt conversion.

Global Petroleum (GBP) announced that 881 million barrels of un-risked gross prospective resources (best estimate) has been estimated in PEL0094 in two prospects, of which 687 million barrels is net to Global. Big question of course is can they raise the finance to drill it?

IGas (IGAS) commenced water injection at its Scampton North site. Mid-case economics for the project have an IRR of over 40%. IGas’s second water-flood opportunity in the southern section of the Welton Field remains on track to be online late summer 2020. Estimated base-case project economics for that one have an IRR of over 100%. So some potential solid progress here.

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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.

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