WTI (Oct) $90.23 -54c, Brent $ (Oct) $96.48 -24c, Diff -$6.25 -3c.
USNG (Sept) $9.68 +35c, UKNG (Oct) 580.0p +45p, TTF (Sept) €274.58 -€10.42
With no company news yesterday I didnt write just about the oil price as there wasnt much to add, Beijing slashing rates, rig count down 1 overall and u/c in oil and a warning about the Nordstream 1 three day service on 28th August. I will come back to the gas price shortly…
Today the price has firmed a touch after the Saudi Oil Minister, in an interview with Brian Sullivan of CNBC suggested that the next Opec+ meeting might start to ‘tighten production’ to keep actual prices in touch with paper futures.
In fact he nearly suggested that the oil price was being manipulated albeit how big that would be, my read is that as before he is warning speculators that it can be an expensive game shorting crude oil…
Retail gasoline continues to fall, the average you will pay for a gallon of Shell’s finest last week was $3.88 which is down 5.8c w/w, a fall of 45c m/m but still up y/y by 73.5c. Good elasticity which we don’t see in the UK, maybe due to taxation…?
Southern Energy Corp
Southern Energy today announces the release of its second quarter financial and operating results for the three and six months ended June 30, 2022. Selected financial and operational information is outlined below and should be read in conjunction with the Company’s unaudited consolidated financial statements and related management’s discussion and analysis for the three and six months ended June 30, 2022, which are available on the Company’s website at www.southernenergycorp.com and have been filed on SEDAR.
All figures referred to in this news release are denominated in U.S. dollars, unless otherwise noted.
SECOND QUARTER 2022 HIGHLIGHTS
· $3.6 million of adjusted funds flow from operations in Q2 2022, an increase of 490% from the same period in 2021
· Net earnings of $2.8 million in Q2 2022 ($0.03 earnings per share – basic and diluted) compared to net earnings of $3.1 million in the same period of 2021 (which included a one-time gain of $4.5 million on debt retirement)
· Petroleum and natural gas sales of $10.3 million in Q2 2022, an increase of 176% from the same period in 2021
· Q2 2022 average production of 14,169 Mcfe/d (2,362 boe/d) (95% natural gas), which included only a partial month of June from the three new Gwinville wells, an increase of 14% from the same period in 2021
· Completed and successfully brought online all three wells from the initial Gwinville appraisal program
· Exited Q2 2022 with Net Debt1 of $12.8 million, and Net Debt to annualized Adjusted Funds Flow from Operations1 of 0.9x
· Average realized oil and natural gas prices for Q2 2022 of $109.01/bbl and $7.53/Mcf, respectively, reflecting the benefit of strategic access to premium-priced US sales hubs
· On July 7, 2022, the Company completed a bought deal prospectus offering and placing raising aggregate gross proceeds of $31.0 million, and leaving Southern with approximately $33.2 million of cash as at July 31, 2022
· Initiated planning and procurement for a multi-well program to follow-up on the successful appraisal program at Gwinville
· On August 19, 2022, Southern entered into a non-binding term sheet with its current lender in respect of its senior secured term loan to increase the total Credit Facility to $35 million
· The combination of the recent equity financing and credit facility expansion, uniquely positions Southern to execute a meaningful growth strategy
Ian Atkinson, President and CEO of Southern, commented:
“We are pleased with the success of our recent equity financing, which allows us to accelerate the organic growth strategy portion of our goal to reach 25,000 boe/d. The success of these first three wells at Gwinville have already increased our corporate production by over 100%. We are truly excited by our ability to begin a long-term development drilling program to unlock shareholder value due to the significant reserves, production and cashflow growth in Gwinville and our other assets. Cash Flow generated from this development will support our fundamental strategy of both organic and inorganic growth of natural gas weighted assets in the Gulf Coast area of the United States.”
Wow, what a year, on 10th August last year SOUC arrived on the Aim market at 40p and without anyone knowing much about them drifted for a while down towards 20p. But since then, as they outlined their strategy a number of people including myself realised that this is no ordinary play.
Since then they have completed the initiated planning and procurement for a multi-well program to follow-up on the successful appraisal program at Gwinville and then completed a financing to accelerate the programme. Raising in Canada at C$0.87 and in the UK at 54.5p the raise was over $30m and the first well as can be seen above was a success and significantly increased production with concomitant increase in revenues.
The company have clearly got a world class asset at the Gwinville as well as the rest of the portfolio and will be in the market for other assets in the Gulf Coast area of the United States and I can see huge upside for the company.
The shares have performed pretty well, they are now above the price at the raise and at 62.5p I consider them to be excellent value, with such an exciting portfolio in the right post code, a top quality management team and now strongly financed leaves Southern very well placed.
Scirocco, notes that further to its announcement on 1 August 2022, the Company has now received written confirmation from the Tanzania Petroleum Development Corporation that it is not exercising its statutory right of first refusal with respect to the Company’s divestment of its 25% interest in the Ruvuma asset.
The Company maintains an active dialogue with ARA Petroleum Tanzania Limited (APT) on its intention to exercise its pre-emption right and will update the market shortly.
Tom Reynolds, Scirocco’s CEO commented:
“We thank TPDC for their constructive engagement throughout the process and we look forward to making further progress towards completing the transaction as discussions with APT continue in a similarly constructive manner. We will provide further updates in due course”
The process continues for Scirocco as they move away from Ruvuma and into the sustainable energy and circular economy markets space.
After a good solid protest against the Glasers, the Red Devils produced the game of the season, which wasnt difficult and beat Liverpool 2-1 at the Theatre of Dreams….