WTI $46.57 -21c, Brent $49.97 -28c, Diff -$3.40 -7c, NG $2.59 +4c
Oil remains quietly firm, last week WTI rose by 31c and Brent by 72c and both are up c.50 cents this morning taking the latter up over 50 bucks again, but drifts in early afternoon trading.
The situation remains the same, whilst virus numbers continue to rise, and inevitably will do so again after the Christmas hooley, the pictures of vaccines being trucked of Pfizer factories overrides the bears and most asset markets remain positive. Whilst Brexit has no specific impact, the news this morning that talks are continuing gives ground for very modest market optimism.
Finally various and unconnected events in Nigeria and the Middle East have tightened the oil market somewhat as has the announcement that Opec+ will meet on January 4th to assess oil market balance.
Jersey Oil & Gas
A GBA Exploration and Licensing update from JOG this morning where the company announce that the results of a comprehensive subsurface evaluation that has been completed across all of the Company’s licensed acreage. This evaluation has validated its existing prospectivity and has identified a significant new prospect named Wengen, located on Licence P2170, directly west of the producing Tweedsmuir field.
Four of the prospects have been matured to drill-ready status: ‘Verbier Deep, Cortina NE (J64), Wengen (P2170) and Zermatt (P2497) with aggregate P50 prospective resources of 222 MMboe (including upside potential to Cortina NE (J64) that, in the success case, could be tested by an initial exploration well and a side-track well). Individual probabilities of geological success (“Pg”) range from 16 to 30%’.
The company say that ‘subject to funding a drilling campaign is planned from 2022 and if successful any development would be made via the short distance, subsea tiebacks to the planned GBA facility. This makes these prospects ‘individually robust with, in each case, the estimated P90 economically recoverable volumes exceeding the required minimum economic field size’ which is very impressive.
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
“Our latest subsurface work has further detailed the significant value within the wider Greater Buchan Area. These highly attractive, drill-ready exploration prospects are in the immediate vicinity of our planned GBA production facility and, as a result, a discovery at any one of these prospects would have the potential to extend the GBA production plateau and further enhance shareholder value. We look forward to progressing a drilling campaign post a successful conclusion to our upcoming GBA sales process.”
JOG have been working hard on the GBA hub which has the potential to build into a substantial CNS production facility again and this news of exciting, drill-ready prospects adds to its value after recently announcing acquisitions in the area. With news to come on completion of the Concept Select and the launch of the GBA sales process shareholders have much to look forward to in the months to come.
Chariot Oil & Gas
Chariot has announced that it has negotiated key terms for a new licence in Morocco. Called the Rissana Offshore CHAR will have a 75% interest and operatorship with ONHYM having the remaining 25%. This is a very cheap way in as Chariot only have to spend around $1m on 2D seismic as a commitment.
‘Rissana (approximate area 8,476km2) will completely surround the offshore boundaries of Chariot’s existing Lixus Offshore Licence (approximate area 2,390km2), which contains the Anchois Gas Discovery, as well as covering the most prospective northern areas of the previously held Mohammedia Offshore Licence and Kenitra Offshore Licence. In addition, Mohammedia and Kenitra licences have been relinquished by Chariot and ONHYM to allow incorporation of prospective areas already covered by 3D seismic data into the Rissana licence.
Adonis Pouroulis, Acting CEO, commented:
“Whilst 2020 has been a challenging year for many, we believe that Chariot is exiting the year in a very strong position. With the anticipated formal award of the Rissana licence expected in 2021, we have shown Chariot’s strong commitment to both the Anchois gas project as well as to Morocco. I would like to personally thank ONHYM for their significant support over the year and we look forward to a highly active 2021 that will see us drive the Anchois development towards near term cashflows. We also anticipate completing Chariot’s full transformation to an energy transition group with the introduction of exciting new ventures in the New Year, which we look forward to updating our investors on in due course.”
Chariot has taken on a new lease of life lately and this shows that they are still working hard to add value for shareholders through in this case working with ONHYM to upgrade and provide more upside for the portfolio. I have been extremely impressed by swift progress being made by the upgraded board and investors look like they have an exciting 2021 ahead of them including the much heralded new ventures.
It has been announced that Gran Tierra Resources has sold a 26.7% stake in PTAL to Remus Horizons PCC at 0.99385 per share which raised £21.7m and leaves then with a 3.44% stake in the company. GTRL has said that it is disposing of the shares for ‘investment purposes’.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
“We are very appreciative of the guidance and support provided by Gran Tierra and certainly wish them success in their continued corporate growth. The Peruvian assets and start-up funding provided by Gran Tierra when PetroTal was created in late 2017, formed the nucleus for PetroTal’s growth.
Additionally, we are excited to welcome Remus as PetroTal’s largest shareholder. The long term investment focus, along with sound business and social principles of the fund, will provide solid backing for PetroTal. All stakeholders in the Company will benefit from knowing our shareholder base is strong and committed to PetroTal’s ongoing growth.”
Sath Kanagarajah, Chief Executive Officer of Remus Corporation commented:
“We are delighted to achieve this significant strategic milestone for Remus and our investors. Our deeply experienced management team looks forward to working with PetroTal and the Peruvian national authorities to support further development of PetroTal, in full cooperation with all their stakeholders. We are especially keen to foster local employment opportunities and partnerships with the communities in which PetroTal operates.”
I quote the Remus CEO as whilst I don’t cover the company I feel that these comments show that they appear to be a supportive shareholder and in it for the long haul, but that’s all…I also like the PTAL management a lot and they have done a good deal with the Bretana asset since they bought it from Gran Tierra and despite the shares being up 75% in almost exactly a month offer exceptional value at a sub £100m market cap and that Remus have made a wise call here.
The company announces Funding Agreements with a ‘leading European alternative asset manager’ for up to $20m of which $10m will be drawn immediately at 2p per share. There is also an option to raise another $5m within ten days after the spud of the Perseverance#1 well, if BPC so elects, the Investor has the option to double that amount, thereby providing BPC discretionary access to the full £15 million.
This Funding Arrangement provides ‘a superior source of immediate funding especially as compared to the Company’s previously announced Zero-coupon Facility. Moreover, the Funding Agreement requires the issuance of direct equity (rather than convertible notes) at a fixed price (rather than at a future indeterminate price) and thus represents a known level of dilution (as compared to an unknown level of potential future dilution). BPC has stated on a number of occasions it would seek to optimise its funding strategy such that it would have no need to draw on the Zero-coupon Facility in the future, and with the proceeds from the Funding Agreement, the Company can now categorically commit to not drawing any further on the Zero-coupon Facility’.
Simon Potter, Chief Executive Officer, commented:
“2021 will be a busy year for BPC in pursuing operations that have the potential to create considerable value for the Company. We have a full slate of activity planned in Trinidad and Tobago and Suriname, where we are proposing an active drilling campaign of appraisal and production aimed at rapidly bringing wells directly into production and thus cashflow, building to 2,500 bopd production by the end of 2021. We will also be maturing prospects that will drive an active onshore exploration programme that is designed to deliver the next step-change in production beyond 2021. In The Bahamas, we have the transformational Perseverance #1 well, for which operations are expected to commence imminently. And in Uruguay, we expect to commence early-stage evaluation of already identified leads, with a view to maturing drillable prospects from our high potential offshore licence.
We are thus extremely pleased to have secured a further US$10 million of immediate equity funding, along with the option to expand that to US$15 million and potentially to receive a total US$20 million, from a leading European institutional investor. Not only will this additional liquidity, consistent with our overall funding strategy, give us the flexibility to continue to pursue an aggressive growth agenda at a pace determined by the Company, but we consider this funding at this time to be a strong vote of confidence in BPC and the value embedded in the totality of our portfolio. I look forward to providing updates of our continued progress to shareholders.”
BPC have concluded that this type of funding is ‘in line with their policy of optimising the Company’s funding mix so as to achieve a lower cost of capital, less aggregate dilution, greater certainty of funding availability, and maximum funding flexibility’. In this process they were advised by Gneiss Energy, rapidly making waves in innovative funding that is needed in a portfolio such as that at BPC. I’m sure that all concerned now wish to get the peripherals out of the way and get on with P#1 as well as activity in Trinidad and Suriname.
Max Verstappen won the Abu Dhabi GP with the two Mercs behind him, as the last of the season Lewis was confirmed as Champion and a long 2021 season await in March in Australia.
A big weekend of footy started with the Hammers winning at Elland Road on Friday night. Saturday saw the Toffees beating Chelski, a goalless draw in the Manchester derby, the Magpies beat the Baggies and Villa beat Wolves at Molineux. On Sunday the Saints beat the Blades 3-0 and the Eagles drew with Spurs 1-1. The Cottagers held Liverpool 1-1 and the Foxes beat the Seagulls 3-0 whilst that six pointer went the Mighty Burnley’s way who won 0-1 at the Gooners…
The early pool stages for the 2023 RWC in France have been made and Scotland have drawn Ireland and South Africa with two to come, England have Argentina and Japan whilst Wales have Australia and Fiji.
Anthony Joshua beat a strong Pulev at Wembley on Saturday with the obvious reward of a fight against Tyson Fury next year.
And Lee Westwood again won the Race to Dubai.