WTI (Jan) $79.98 -$1.24, Brent (Feb) $85.57 -$1.71, Diff -$5.59 +13c.

USNG (Jan) $6.28 -45c, UKNG ( Jan) 355.0p +7.0p, TTF (Jan) €141.4 +€11.9. 

Oil price

Oil was up on the week after China eased on Covid and Opec+ kept output to previously agreed levels but remain ready to take ‘immediate action’ should things change. Today sees the start of the EU boycott on seaborne Russian crude and also the $60 price cap from the EU, G7 and Australia. This has led to Russia buying up every tanker it possibly could…

Wentworth Resources

Wentworth and Etablissements Maurel & Prom have announced that they have reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of Wentworth by M&P.
• Under the terms of the Acquisition, which will be subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the Scheme Document, Wentworth Shareholders will be entitled to receive:
for each Wentworth Share: 32.5 pence in cash
• The Acquisition values the entire issued and to be issued ordinary share capital of Wentworth at approximately £61.7 million. This represents a premium of approximately 30.0 per cent. to the closing price of 25.0 pence per Wentworth Share on 2 December 2022
• Adjusting for Wentworth’s existing cash of approximately US$30.2 million as at 1 November 2022, which was equal to approximately 12.9 pence per Wentworth share, the Acquisition values the business and non-cash net assets of Wentworth1 at approximately £37.1 million. This represents a premium of approximately 62.2 per cent. to the closing price of 25.0 pence per Wentworth Share on 2 December 2022 when this closing price is similarly adjusted for cash.
• The Acquisition represents a material increase to the initial indicative offer price proposed by M&P on 23 September 2022.
Background to and reasons for the Acquisition
• Wentworth’s sole non-cash asset is its non-operated 31.94% (direct and indirect) interest in the Mnazi Bay gas asset in Tanzania. As the majority owner and operator of the Mnazi Bay gas asset, M&P is familiar with and has a good understanding of the value of the Mnazi Bay asset and accordingly of Wentworth. As partners in the asset, M&P and Wentworth have an existing relationship which extends over a number of years.
11/77955809_4 2
• The Acquisition will provide Wentworth Shareholders with an immediate upfront realisation of value in cash for their Wentworth Shares at a substantial premium to the market price, and an opportunity to realise this value despite the limited liquidity in Wentworth Shares. As M&P is a partner and the operator of the Mnazi Bay asset with existing in-country relationships this is expected to facilitate a timely implementation of the Acquisition and a smooth continuation of operations.
Recommendation and irrevocable undertakings
• The Wentworth Directors, who have been so advised by Stifel as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its financial advice to the Wentworth Directors, Stifel has taken into account the commercial assessments of the Wentworth Directors.
• Accordingly, the Wentworth Directors intend to recommend unanimously that Wentworth Shareholders vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, as the Wentworth Directors have irrevocably undertaken to do in respect of their own holdings of Wentworth Shares, representing approximately 0.26 per cent. of Wentworth’s issued share capital as at 2 December 2022.
• In addition, M&P has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting from Wentworth Shareholders holding 39,546,272 Wentworth Shares representing approximately 22.32 per cent. of Wentworth’s issued share capital as at 2 December 2022.
Information on M&P
• M&P is an independent oil and gas company, publicly listed on the Euronext Exchange in Paris and focused on exploration and production in Africa and Latin America, with its principal assets in Gabon, Tanzania, Nigeria, Angola and Venezuela. M&P has significant technical and operational experience with over 700 staff globally overseeing M&P’s 171 mmboe of 2P reserves and working interest production of 25,359 boe/d.
• If any dividend, distribution or other return of value in respect of the Wentworth Shares is declared, paid, made or becomes payable on or after the date of this Announcement and prior to the Effective Date, M&P reserves the right to reduce the consideration payable for each Wentworth Share under the terms of the Acquisition by the amount per Wentworth Share of such dividend, distribution or other return of value. In such circumstances, Wentworth Shareholders would be entitled to receive and retain any such dividend, distribution or other return of value, which has been declared, made or paid.
• It is intended that the Acquisition be effected by way of a Court-sanctioned scheme of arrangement of Wentworth under Article 125 of the Jersey Companies Law, further details of which are contained in the full text of this Announcement and full details of which will be set out in the Scheme Document. However, M&P reserves the right, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer.
• The consideration payable under the Acquisition will be funded out of M&P’s existing cash resources.
• The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement, including, amongst other things: (i) approval by the requisite majority of Wentworth Shareholders of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, and sanction of the Scheme by the Court; (ii) consent from the Minister responsible for petroleum affairs in Tanzania under the Petroleum Act 2015 and any other applicable laws; (iii) the waiver of any right of first refusal or pre-emption right to which the Tanzania Petroleum Development Corporation (“TPDC”) is entitled in respect of the Mnazi Bay asset; and (iv) approval from the Tanzanian Fair Competition Commission (in the case of (ii), (iii) and (iv) on terms satisfactory to M&P, acting reasonably).
• The Scheme Document will include further details of the Scheme and the Acquisition, together with notices of the Court Meeting and the General Meeting and the expected timetable of the Scheme, and will specify the action to be taken by Wentworth Shareholders. It is expected that the Scheme Document will be sent to Wentworth Shareholders in January 2023. It is expected that the Scheme will become Effective in Q2 2023, subject to the satisfaction or, where applicable, waiver of the Conditions and certain further terms set out in Appendix 1 to this Announcement.
• The Scheme will be governed by Jersey law and will be subject to the jurisdiction of the Court. The Scheme will also be subject to the applicable requirements of the Code and the Panel.

Olivier de Langavant, Chief Executive Officer of M&P said:

“As the operator of the Mnazi Bay gas field, increasing our stake through the acquisition of Wentworth is a logical step and reflects our stated strategy of maximising value from existing assets. Mnazi Bay is an important project to M&P and we look forward to ensuring it continues to make a positive impact, helping Tanzania meet its increasing energy demands and enabling local development. We are pleased to have agreed a fair value with Wentworth and will provide further updates on the acquisition process in due course.”

Tim Bushell, Chairman of Wentworth, said:

“The Board of Wentworth is pleased to recommend the acquisition by M&P which represents a substantial premium to Wentworth’s prevailing share price and offers an opportunity for our shareholders to realise this value in the near term for cash.
Wentworth has created significant value for shareholders over recent years through share price appreciation alongside substantial capital return from both dividends and share buybacks. Having pursued the Company’s stated strategy of further growth in Tanzania in recent years, the Board believes the offer from M&P delivers immediate value to our shareholders at an opportune time.
M&P is the operator and majority owner of our sole asset, Mnazi Bay, and this is a logical combination that we believe is in the best interests of our shareholders, wider stakeholders and of Tanzania. Wentworth will now work with its in-country stakeholders to assist M&P to achieve the required regulatory approvals in a timely manner and deliver this compelling outcome for our shareholders.”

Shareholders will be pleased to see that the Wentworth board has agreed to a bid that fully values the company as M&P seeks to achieve the full value from a majority holding in its portfolio. They have done well because it is extremely difficult for a single asset company to sustain a cost base of a PLC and which has complicated pre-emption rights which discourages other potential buyers.

Combine this with the difficulty of finding acquisitions of its own, the previous CEO found that out to his cost, and the support from major shareholders for this company policy to pursue the single asset route and the sale option stands out. 

Wentworth can be very proud of what they have done at Mnazi Bay, the asset is in good shape, producing flat out and a generator of free cash flow on a predictable gas price. With further investment upcoming and Wentworth having nailed its colours to the mast of distribution to shareholders via dividends and buy-backs a sale at this generous price seems very much the right thing to do. 

Angus Energy

Angus has announced that, despite relatively slow progress in casing and cementing, it expects to resume drilling into the open hole section of the reservoir in the early part of next week with well clean up operations set to commence on or around 16th December shortly followed by well testing.

Drilling itself is expected to end on or around 14 December with the setting of the completion string (i.e. the production tubing).  On this timetable, if there are no issues, the well can be declared a technical success by the middle of the month, although testing will be required before flow rates can be announced and a commercial success declared.

We have created an infographic video of the drilling process to assist in comprehension which is available under the video tab in our website and on our Twitter feed.

Angus is keeping the market fully updated every step of the way at Saltfleetby and whilst this is a modest delay, progress is good and should be finished soon. After that testing should be completed and success announced. At that stage the shares should rise substantially with a great deal of upside as the company grows. 

Serica Energy

Serica Energy has provided the following operations update.

North Eigg

The North Eigg exploration well 3/24c-6B has been drilled to a total depth of 16,728 feet in the Jurassic Heather formation and initial analysis indicates that, whilst the well has encountered hydrocarbons, commercial quantities have not yet been established. At the well location, the objective sands were thinner than had been prognosed but a total of 16 feet of hydrocarbon-bearing sands were encountered, and these have confirmed the presence of hydrocarbons at a deeper depth than in the adjacent producing Rhum field.

A full suite of wireline logging data has been acquired and our analysis is ongoing. We aim to determine if a future sidetrack location can be designed to better evaluate the volumes of hydrocarbon in this new discovery. It is our intention that the well will be suspended pending the results of this further work prior to future potential re-entry and sidetrack.

Final well costs will not be known until after the rig is off hire, but it is likely that the net after tax cost of the well to Serica will be around £13 million.


Serica production performance in the second half of 2022 continues to benefit from the investment programmes that the company has continually undertaken since the acquisition of interests in Bruce, Keith and Rhum in 2018. Serica’s net production is as follows:

Jul 22

Aug 22

Sep 22

Oct 22

Nov 22

Bruce / Keith



































Serica’s net production YTD has averaged 25,955 boe/d and full year 2022 production is expected to be within the existing guidance range of 26,000 to 28,000 boe/d. Serica’s production continues to be more than 85% gas.

Commodity Prices and Hedging

Commodity prices, particularly gas, have remained strong during the second half of 2022 although somewhat lower in October and November. Monthly average market prices have been as follows:

Jul 22

Aug 22

Sep 22

Oct 22

Nov 22

Gas – NBP







Oil – Brent







1 Bruce and Rhum production figures were impacted by the planned 14-day preventative maintenance

shutdown in late July and early August

2 Columbus and Erskine field production was also impacted by planned maintenance shutdowns

Due to Serica’s increasing financial strength, the company has not entered into any new gas price hedging since July 2021 and has no immediate plans to do so. Serica continues to hold a modest remaining hedging programme with less than 20% of gas production covered in the second half of 2022, thereby allowing the company to benefit from full market prices on over 80% of its production. The existing gas hedges will reduce to zero during the next twelve months.

At the start of this year Serica held hedges covering a total of 146 million therms3. This number will have dropped to below 32 million therms by the end of 2022. Margin call requirements on these hedges had stood at over £300 million earlier in the year but have now reduced to significantly below £100 million.

Forward Programme

Serica continues to provide responsibly sourced gas to the UK domestic market, protecting security of supply, and reducing reliance on higher carbon intensity imports as part of the transition to a lower carbon future. We will continue to invest in our assets to maintain production levels and provide jobs.

The recent action by the UK Government to increase the marginal rate of tax on the UK Upstream Oil & Gas sector to 75% with no floor to prices, will make it challenging for the industry to invest in new longer-term UKCS projects. Nevertheless, we remain committed to expanding our portfolio through M&A.

Mitch Flegg, Chief Executive of Serica Energy, commented:

Although the North Eigg exploration well has not delivered the result we had hoped for, it has demonstrated the presence of hydrocarbons and provided a huge amount of high-quality data. In particular, the presence of hydrocarbons at deeper than expected depths will lead to a re-evaluation of both North Eigg and South Eigg.

Elsewhere, our production performance has been strong, and we will continue to invest in our existing portfolio in order to maintain this performance. In parallel, as a significant North Sea operator, Serica will continue to selectively review new potential projects to maintain our North Sea presence whilst also seeking greater clarity and stability on the taxation regime to enable these projects to proceed.

While we believe in the importance of the UK Oil & Gas sector, we are now considering opportunities in other countries alongside those in the UK as we continue to seek to expand our portfolio and create value for all of our stakeholders.”

The fact that the North Eigg well has come in almost dry is disappointing but it may lead to the greater area being commercial in due course. 

In the meantime all is well at Serica, production so far this year of 25,955 boe/d is excellent and current guidance is maintained at 26-28,000 boe/d. I like the lack of hedging going forward, punters don’t like it and it tarnishes the cash holding. 

The shares like others in the same boat have eased along with hydrocarbon prices in Europe but the model still looks good enough to me and with positive strip prices and high winter demand I would expect a return to the previous high of 450 and more. 

Petro Matad 

Petro Matad has provided the following operational update.

Key Company Updates

·    Progress being made to register the Block XX Exploitation Area as special purpose land

·    Mongolia announces 14 blocks available in a new Exploration Tender. Petro Matad plans to participate and exploit its competitive advantage as the country’s leading explorer

·    Negotiations with DQE Drilling in their final stages for a multi-well development drilling contract

·    More time secured on Block V Exploration PSC and plans for drilling Velociraptor 1 being progressed

Block XX Exploitation Licence

The Mongolian government’s process to certify Petro Matad’s Block XX Exploitation Licence area as special purpose land is progressing. Meetings held at the Matad district and Dornod provincial levels of citizens’ committees resulted in voting that did not to support the central government’s certification proposal. The Mineral Resources and Petroleum Authority of Mongolia (“MRPAM”) has however written to the Ministry of Mining and Heavy Industry (“MMHI”) recommending certification of the Block XX Exploitation Licence despite the local committees’ views. The Company’s focus is now to support MMHI in progressing the matter through to a cabinet resolution as quickly as possible. Given the delays, Petro Matad is unlikely to be in a position to operate on the Heron development until the spring of 2023, once its land access rights have been re-established.

Production Readiness

The Company continues to target having everything in place to get the Heron 1 well onstream as soon as the land issue is resolved by the government. Pumping, downhole completion and power generation equipment is now all in country. Production tanks and other related surface equipment have been sourced from Petro China, offering a cost effective solution to achieve rapid production start up. Discussions with Petro China on oil processing, export and sales have also begun with the facilitation and participation of MRPAM.

Negotiations with DQE Drilling (“DQE”), the main provider of drilling services in Mongolia, have continued and a contract for a multi-well development drilling programme is in the final stages of discussion. The contract envisages a reduction in drilling costs and deferral of some costs to allow a portion of the drilling expenditure to be settled from future production revenue. The contract still needs to be finalised and agreed with DQE and then with MRPAM, but the cost reductions and payment phasing could significantly improve project cash flows and overall asset value since the largest portion of the Heron development costs are drilling related.

Block V Exploration

On the Block V Exploration PSC area, local government approvals for land access have been secured. This area does not have the same history with the oil industry that Dornod Province has and as such, just as in previous years, thanks to its continued focus on positively engaging with local communities, Petro Matad has been able to secure all necessary permits to work on the land covering the highly prospective Raptor Trend and the Velociraptor prospect. The Company is now looking at its options and the availability of equipment to drill Velociraptor 1 on Block V in 2023.

A cost effective drilling solution for Velociraptor has been found, most equipment needed has been sourced and is already in country and MRPAM has given the necessary contractual approvals. The approval of the Company’s application to secure a moratorium for 2022 on Block V has also been received from MMHI. This extends the Block V exploration period until July 2024 and ensures that there will be sufficient time after Velociraptor 1 is drilled to gather enough data and submit the necessary documentation to secure a Block V Exploitation Licence in the event of success.

2022/23 Exploration Licencing Round

MRPAM has announced an Exploration Licencing round covering 14 blocks in the prospective fairways of the southern half of the country. These areas share the same stratigraphy and geological history as proven prolific oil basins of northern China. With its extensive data base, technical expertise and operational experience Petro Matad has a significant competitive advantage as the country’s leading explorer and intends to participate in the licencing round with a view to signing some new production sharing contracts.

Renewable Energy Opportunities in Mongolia

Petro Matad continues to explore opportunities in the renewables space following Board approval to do so in 2021. Work has continued this year to investigate the technical and commercial drivers of solar, wind and battery storage opportunities. A potential partner, highly experienced and well connected in the renewable energy sector in Mongolia, has been identified and negotiations for a collaborative association are at an advanced stage. The Company will update shareholders on the progress of this opportunity in due course.

Social impact 2022

In 2022, the Company undertook a significant exercise to re-evaluate its Environment, Social and Governance (“ESG”) commitments. In the process, Petro Matad established a newly formulated ESG Statement published on its website and in the annual report that better describes and demonstrates its commitment to environment, social well-being and governance.

At the local level, Petro Matad continued its close engagement with the communities in which it operates. To support local development, Petro Matad worked with local governor’s offices to identify projects in Block V and sponsored a local volleyball team to participate in a national tournament, funded the renovation of 4 local administrational buildings, participated in a programme of livestock restocking and the construction of a water well for irrigation of trees. The Company contributed to tree planting programmes in Block V. In Block XX, discussions have been held concerning the multi-year local development programme. Whilst this programme is yet to be initiated, pending resolution of the land issue, as a goodwill gesture, Petro Matad together with its subcontractor DQE, funded the restoration of the Matad Soum landfill project.

London South East Webinar, December 2022

The Company will participate in the London South East webinar on 6 December to provide shareholders with an update on Company activity and the progress made in 2022. For those interested in joining the event, the registration link is: https://us02web.zoom.us/webinar/register/9716691130893/WN_sIXgMNagT9-wPQnBAsGhOQ

Mike Buck, CEO of Petro Matad, said:

“It has been a frustrating year for Petro Matad and our shareholders given the lack of progress on the land access issue in Block XX. We are hopeful that we are now reaching a new phase in the process with central government recognising that it needs to bring this access issue to an end through direct action.

Meanwhile, we are pleased with our progress on negotiations with DQE drilling and with the cost reductions that can make a real difference to project cash flows and asset value. Similar positive progress has been made on the Block V Exploration PSC area and we are excited about the potential to drill a high impact exploration well on the Raptor Trend in 2023.

I would like to thank our shareholders for sticking with Petro Matad this year and look forward to sharing further updates.”

The disappointment over Block XX has been bitter all through this year but there is a very small glimmer of hope in the smoke signals from Government. Over at Block V it looks more optimistic where a well might be drilled next year. 

And finally…

In the World Cup at the weekend England rewarded the fans with another 3-0 win this time over Senegal. They will now play France in the Quarter Finals next Saturday after they beat Poland. On Saturday the Netherlands and Argentina both won and meet on Friday. Today Japan play Croatia and  Brazil play South Korea.

In the first test against Pakistan England won by 74 runs, the first for 17 years.