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On with the latest, Molecular Energies (MEN) announced the proposed sale of its Argentinian oil and gas business for a total potential consideration of up to US$40 million. Consideration comprises 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 believe that the market is not appreciative of the investment in Argentina and the sale will allow 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 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.
88 Energy (88E) announced execution of a rig contract for the Hickory-1 exploration well flow test at Project Phoenix. Multiple hydrocarbon-bearing pay zones are to be tested and operations are set to commence as early as possible in the upcoming Alaska winter operational season. The company says it is encouraged by its neighbour, Pantheon Resources (PANR), which recently announced an independently estimated, contingent resource for the Lower Basin Floor Fan reservoir, which was the deepest of the hydrocarbon-bearing pay zones intersected by Hickory-1. 88E is fully funded for the flow test via a recent £4.1 million rights issue and placement at 0.31p per share. Current market capitalisation is £67 million. Pantheon Resources itself announced a private placement last week at 18.78p, raising approximately US$2.8 million, which it will use to pay this month’s bond repayment in cash as opposed to making payment in shares as previously. The idea is to prevent further share price declines and attempt to stabilise the share price. The company says that re-entry of Alkaid-2 is scheduled to occur within the next two months. Current market capitalisation of PANR is £202 million.
Now, on to two companies in which I’m investing.