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On with the latest, Predator Oil & Gas (PRD) announced an operations update. Testing is on track and scheduled for this month. MOU-1 will be the first well. Of greater interest (and more likely to impact the share price once fully announced) are future drilling opportunities, in particular the up-dip appraisal of the Jurassic target encountered in MOU-4, which is a key objective of the company. Three preliminary drilling locations are being selected for inclusion in a new EIA, well design and sourcing of long lead well inventory has commenced and a field trip is being planned to evaluate the reservoir potential. Two other near-term drilling opportunities are also being assessed, one location covered by an existing EIA and the other to be added to the new EIA. The company also updated on Trinidad and Ireland, although none of that is going to be material anytime soon. The shares continue to churn around the 11p placing level and the price should move higher once it clears. PRD reached a high of around double the current level on the pre-placing ramp. Current market capitalisation is £62 million.
Molecular Energies (MEN) announced a Paraguay drilling update. Mobilisation to the Tapir-1 site has been completed and commencement of drilling is now scheduled to take place in the second half of this month. 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 has farmed-out a 50% interest in the prospect to CPC Corporation, the state owned energy company of Taiwan, which is paying 60% of the costs of the well, plus a cash payment of $4 million. Capitalised at £13 million, MEN also holds a 20.5% interest in Atome Energy (ATOM) worth £6.5 million at current market price and will be spinning out its Green House Capital Group subsidiary. In addition, there’s an oil and gas production business in Argentina, which reported turnover in excess of US$8.6 million and EBITDA of US$2 million for the first three months of 2023.
Eco (Atlantic) Oil & Gas (ECO) announced results for the three months ended 30 June 2023. The Company had cash and cash equivalents of US$2.4 million and no debt as of that date (cash and cash equivalents were US$4.7 million as at 30 August 2023). Since then, Eco has acquired from Tullow an additional 60% interest in the Orinduik block, Guyana, paying US$700,000 cash upon transfer plus contingent consideration of US$4 million in the event of a commercial discovery, US$10 million upon the issuance of a production licence from the Government of Guyana and royalty payments on future production of 1.75% on the 60% interest entitlement revenue. Eco now has a 75% interest in the block, becoming operator, and says it intends to drive the exploration process and focus on its strategy to attract new partners to join the licence and proactively engage in drilling. The other current project is Block 3B/4B, offshore South Africa in which ECO now has a 20% stake. A new CPR released by the operator earlier this year confirmed that the block contains estimated P50 prospective resources of approximately four billion barrels of oil equivalent and an application has been made to drill one well and one contingent well in the north of the block. Like Orinduik, funding for the drilling again relies on a farm-out. Current market capitalisation is £57 million.
88 Energy (88E) announced completion of a shortfall placement at 0.31p per share, which along with the prior rights issue has raised approximately £4.1 million. Together with the company's existing cash reserves, this will provide the capital to fund 88E's share of the Hickory-1 well flow test, which is planned to commence as early as possible in the Alaska 2023/24 winter operational season, plus the permitting and planning for a potential new Alaska well at its Leonis project, although that is a year and a half away and the drill still requires funding. Current capitalisation of 88E is £67 million and the amount of new stock issued is not too difficult for the market to absorb.
Pantheon Resources (PANR) announced an estimate of contingent resources prepared by Netherland Sewell in relation to the company's Kodiak project in Alaska. The numbers remain academic until the contingencies are addressed, which will require significant further sums to be expended. Even in the event of demonstrating commercial recoverability (which many regard as doubtful), development costs could more or less wipe out the existing equity. Nevertheless, it still has attractions for some since the big theoretical numbers are good for a stock promotion, particularly when the nature of them is misrepresented. It is a possible trade, but a risky one at a current market capitalisation of over £200 million for leases acquired in public sales at which there were no other bidders and for which the company has been unable to negotiate a farm-out.
Carnarvon Energy (CVN.AX) announced an update on its Bedout prospects. Evaluation of latest 3D seismic data has resulted in the joint venture now targeting five strategic prospects containing a combined resource of 623 million barrels of oil equivalent. Nearby upside of 7.78 trillion cubic feet of gas and 1.25 billion barrels of oil has already been identified. The announcement follows on from recent news of what Carnarvon described as a transformational divestment of a portion of its Bedout assets, leaving the company with around A$319 million in financial liquidity, comprising A$181 million in cash and a A$138 million future contribution to CVN’s Dorado development costs. Current market capitalisation is A$279 million.
Now, on to three companies in which I’m investing.