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There’s also a special edition of Oilman Jim’s Letter out today, covering helium and hydrogen companies. You might find it interesting.
On to last week’s oil and gas news, Baron Oil (BOIL) announced a Chuditch PSC update. A six month extension has been granted to contract year two of the PSC which will now end on 18 June 2024, with a subsequent commitment on entry into contract year three for the drilling of the Chuditch-2 appraisal well. The practical effect of this is that a formal decision on whether to enter the drilling phase is now required to be taken at or before that date. This allows some extra time to advance the funding plans for Chuditch-2, in respect of which the company says it continues to make good progress in its discussions with a number of potential funding partners.
88 Energy (88E) announced a Project Phoenix joint venture partner update. Burgundy Xploration now has secured US$2 million in initial funding that has been agreed to be paid to 88 Energy immediately in part settlement of outstanding cash calls. 88E has agreed to a standstill of the default until 31 January 2024 for Burgundy to pay the remaining amount. If Burgundy is unable to pay the remaining outstanding amount in full by 31 January 2024, 88 Energy will receive 50% of Burgundy's working interest in Project Phoenix. Burgundy says it remains committed to funding its share of the Hickory-1 flow test program.
Orcadian Energy (ORCA) announced a Pilot farm-out deal and partnership with Ping Petroleum. The company has executed a conditional sale and purchase agreement for the farm-out of an 81.25% interest in the Pilot development project. The total consideration due under the SPA is US$3.1 million, plus the payment of certain historic costs incurred by Orcadian to date. It is anticipated completion will occur before the end of March 2024. Under the terms of the proposed joint operating agreement, which is a condition of the SPA, ORCA will retain an 18.75% carried interest in the Pilot development with Ping paying 100% of the pre-first oil scope of work.
Reabold Resources (RBD) announced that £5.2 million has been received from Shell for the sale of Corallian. This follows the £3.2 million received by the company last year. The final consideration payment of £4.4 million will be received upon the North Sea Transition Authority granting development approval for the Victory gas field, which is anticipated to occur within the coming months. Reabold says it intends to use the proceeds received to advance the development of assets across its portfolio, including the drilling of the new horizontal well at West Newton and the acceleration of the work programme at the Colle Santo gas project in Italy, as well as distributing excess cash to shareholders.
Chariot (CHAR) announced that it has signed partnership agreements with Energean (ENOG) on the Lixus offshore licence, where the Anchois gas development project is located, and on the Rissana offshore licence, both in Morocco. This provides funding for Chariot and the project through upfront consideration, deferred consideration and potentially a full carry to first gas, with Chariot retaining a stake in the project. Energean is to acquire 45% and 37.5% interests in the Lixus and Rissana licences respectively and take operatorship of both licences, Chariot will retain a 30% and 37.5% interest in Lixus and Rissana respectively, with Office National des Hydrocarbures et des Mines maintaining a 25% stake in each licence. Chariot will receive US$10 million payable on completion of the transaction, US$15 million payable on Final Investment Decision and a US$85 million gross carry. Following completion of the Anchois well, Energean will have the right to acquire a further 10% of Chariot's equity in the Lixus licence for a US$850 million gross development carry to first gas, a US$50 million 5-year zero coupon convertible loan note and a 7% royalty payment. Energean's carry of Chariot's costs is non-recourse and has a coupon of 7% over the one year Secured Overnight Financing Rate, with the carry including interest repayable from 50% of Chariot's future net sales revenues from the Lixus licence.
Now, two companies of interest.