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On with the latest, Molecular Energies (MEN) announced a corporate update. The sale of its Argentinian oil and gas business has now been approved by general meeting. Total potential consideration is up to US$40 million, comprising a US$2m cash payment in 12 months time, repayment of US$13 million debt and interest owed by the Argentinian subsidiary to Molecular and contingent consideration of up to 20% of the net free cashflow of the Argentinian company over the next 5 years. With MEN capitalised at only £12 million, the directors believed that the market was not appreciative of the investment in Argentina and the sale they say allows Molecular to build a substantial business, retaining its interest in the Paraguay exploration licence, as well as its 20.5% interest in Atome Energy (ATOM) (worth £7 million at current market price) and ownership of Green House Capital, which is to be spun out via an IPO this year. Regarding Paraguay, rig mobilisation to the Tapir-1 site has been completed and commencement of drilling is scheduled to take place around the end of this month or the first week of October. The well, in which MEN holds a 50% interest, will take 40 days from the date of spud to reach total depth, targeting the Delray complex of prospects which are estimated by the company to contain in aggregate over 260 million barrels of oil. The company also is looking at new energy projects, specifically the synthetic kerosene (sustainable aviation fuel) business.
Predator Oil & Gas (PRD) issued its report and interim financial statements for the 6 months to 30 June 2023. Main points of interest were that “the outlook for” the remainder of 2023 will see the rigless testing programme in Morocco initiated and completed and, subject to results, the CNG development plan being progressed targeting first gas in 2024, with additional high impact drilling opportunities in Morocco to be evaluated and potentially progressed in 2023 and 2024. The share price is still stuck around the placing level, but a flow of actual news should get it moving. Current market capitalisation of PRD is £66 million
88 Energy (88E) announced a Hickory-1 well flow test planning update. The company says that the Upper Slope Fan System mapping is complete, with the reservoir zone more laterally extensive than previously considered. Resources in this zone are said to have not yet been estimated and are additional to the pre-drill estimates of 647 million barrels of oil resources. Stimulation and flow test modelling for each of the target intervals in Hickory-1 is now complete, Rig-111 has been secured for the flow test and ordering of long lead flow test items is underway. Operations are set to commence as early as possible in Q1 2024. Meanwhile, 88E could benefit from its neighbour Pantheon Resources (PANR)’s upcoming flow test of their Alkaid-2 well, where operations will commence soon. Current market capitalisations are £77 million for 88E and £288 million for PANR.
Orcadian Energy (ORCA) announced a potential farm-out of the Pilot development project. Orcadian will retain an 18.75% carried interest with the operator paying 100% of pre-first oil work, after which ORCA will pay its working interest share of expenditure. On completion of the transaction (the operator has a commercial exclusivity period until 30 November), Orcadian will receive a cash consideration of up to US$200,000, with a further US$3,000,000 being received on Pilot FDP approval. Cash is very much needed, since as of last week, ORCA only had around £90,000 left in its account. The shares, which could be picked up for around 3p a week ago, hit 19p on the news. Current market capitalisation of ORCA is £10 million.
Now, on to four companies in which I’m investing.