Another flash blog from Fort Lauderdale today, all these stories will be added to where necessary and when I have had a chance to speak to the companies. Nothing much to add on the oil price front, all the same old reasons are being wheeled out but worth noting that all the oil and gas contracts expired yesterday pretty much.
A Petroleum Agreement and Association Contract has now been signed with the Office National des Hydrocarbures et des Mines (‘ONHYM’) regarding the Lagzira block (75% working interest and operator).
The Agreement is for a full eight-year exploration term (in three exploration periods), with attractive fiscal terms.
The Lagzira block (formerly Sidi Moussa) is a large offshore licence, in water depths of 200-1,200 metres, with a proven petroleum system following Genel’s 2014 SM-1 well, which recovered oil from the Upper Jurassic reservoirs.
New multi-azimuth broadband 3D seismic acquired in 2018 by Genel resulted in a significant uplift and improvement in subsurface imaging, and prospects have been high-graded, with follow on potential in the wider area. The data has highlighted new plays and provided an enhanced understanding of the SM-1 well result.
In total, 18 prospects and leads have been identified, with over 2.5 Bboe mean recoverable prospective resource potential and individual prospects estimated at 100-700 MMbbls each.
Genel has launched a process to find a partner to take a material equity position and jointly pursue the exploration programme in the block, with the opportunity to drill and test one of the high-graded prospects.
Genel is hosting a webinar on the Lagzira opportunity on 2 March 2023 at 1400 GMT. To register, click here
An interesting move from Genel who have flagged that deals like this are likely as they work the portfolio and watch M&A opportunities in general and from this one to get interest in a farm-out of the substantial or ‘material’ position.
Scirocco, the AIM investing company targeting attractive assets within the European sustainable energy and circular economy markets, is pleased to announce the appointment of Niall Roberts as a Non-Executive Director.
Mr. Roberts joins Scirocco’s Board of Directors as a candidate recommended by GP Jersey, the Company’s largest shareholder with a holding of 8.82%. Mr. Roberts is presently CEO of Fluechem Ltd, a global leader in the environmental transformation of the shipping industry. Mr. Roberts has worked with a number of fertilizer manufacturers since 2012 and as a result brings relevant expertise within the European fertilizer market that will support the delivery of Scirocco’s strategic expansion into the Anaerobic Digestor and Bio-fertilizer markets.
Following the appointment of Mr. Roberts, Scirocco’s Board of Directors (the “Board”) now consists of four Non-Executive Directors, including the Chairman, and the CEO. It is the intention of the Board to reduce its size in the coming months to ensure it is appropriately sized from a cost discipline perspective while maintaining the appropriate level of expertise, public markets experience and independence to deliver the Company’s strategy on behalf of the shareholders.
In this regard, Muir Miller has served notice of his intention to step down from the Board on 31 May 2023. Mr. Miller joined the Board in February 2021 and has provided the Company with valuable insight around renewable energy assets based on his extensive prior experience. Mr. Miller was also responsible for setting up the Company’s ESG strategy in compliance with the UN sustainable development goals and will provide a managed handover of his renewable energy brief to Mr. Roberts.
Going forward, and as part of an ongoing process to ensure the Board provides the appropriate range of experience and expertise taking account of the Company’s forward strategy, the Board intends to review its composition as the Company makes further progress on its own transition from an investor in natural resources to renewable energy assets over the coming year.
Commenting on the appointment, Alastair Ferguson, Chairman of Scirocco, said:
“We welcome Niall to the Board and look forward to benefiting from his experience and insights. Niall brings directly applicable experience within Scirocco’s sector focus which will be beneficial as the Company seeks to deliver its stated strategy. We also believe it is important to demonstrate the Board’s alignment to the wider shareholders and the appointment of a director candidate recommended by our largest individual shareholder does just that. GP Jersey is very supportive of the Company’s growth strategy and this appointment will strengthen the Company’s execution of those objectives.
I’d like to thank Muir for his service in support of Scirocco during a period of transition for the Company and wish him well as he pursues other interests. His insights and experience within renewable energy sectors and developing the Company’s ESG strategy has been valuable and he now hands that baton over to our new NED to ensure continuity of access to that critical knowledge base and network.”
Whilst I wouldn’t always cover NED appointments this is probably more important than most as I see it showing that Scirocco is addressing upcoming changes and that it has the right skills in place for the transition. The NED announced today is recommended by the biggest shareholder, another encouraging sign from a highly supportive direction.
In that respect as the Ruvuma divestment continues to progress then the existing board is looking forward to other green transition opportunities and maybe more adding to existing ESG strategy and decarbonisation measures.
As such I would say that this announcement is a very good start and there will be more to come from this board as things they are a changin.
SDX has provided the following operational and corporate update:
Egypt – South Disouq
· Average gross production of 38.5 MMscfe/d (2,720 boe/d net to SDX) for full year 2022.
· The SD-5X well, drilled in Q2 2022, is on production and is exceeding the immediate post-drill volume expectations. It is expected in place volumes will be increased for this well.
· Evaluation of the MA-1X well, drilled in Q2-Q3 2022, has been completed and SDX is moving forward on applying for a development lease for the Mohsen discovery. Updates on the progress of the application will be communicated to the market in due course.
· In 2023, it is anticipated that workover operations will be performed on SD-3X and SD-4X wells, recompleting the wells to shallower reservoirs to maximise recovery, and on IY-2 to restart production from the existing reservoir.
Egypt – West Gharib
· Average gross production of 2,033 boe/d (389 boe/d net to SDX) for full year 2022.
· Since October 2022, the development infill drilling campaign has continued with the FDLN-2 and Rabul-9 having been drilled, completed and brought on-line. This brings the total number of wells drilled in the current campaign to eleven.
· Operations at the Rabul SE-1 exploration well are currently ongoing and the results of this well will be communicated to the market in due course.
· Workover operations on the existing well-stock to maximise recovery from the fields continues.
· The operator is evaluating options to increase recovery and plans to bring water injection on the Rabul field.
· Morocco gross production averaged 4.9 MMscf/d for 2022.
· The SAK-1 discovery well, drilled in Q3 2022, was connected to the network and a long term well test via production is being carried out.
· The KSR-20 discovery well, also drilled in Q3 2022, was tied-in to the infrastructure and is currently on production.
· Development activities are ongoing with the testing and tying-in of the 2019 BMK-1 discovery and the connection of our infrastructure to the DOB region.
· Crowe LLP (“Crowe”) has been engaged as auditor to the Company. The appointment of Crowe will be subject to approval by shareholders at the next Annual General Meeting of the Company.
· 2022 Year-end results are expected to be published near the end of April 2023.
· SDX focussed on delivering new vision focused on operational and technical excellence, disciplined growth, profitability, and cash flow generation through organic and inorganic opportunities.
· Daan Hanssen, the Interim CFO, has tendered his resignation in order to pursue other interests and will be leaving the Company at the end of May 2023.
Jay Bhattacherjee, Executive Chairman of SDX, commented:
“Since my appointment to SDX, we have made solid operational progress, particularly in Egypt despite the current volatile currency situation in country. We are pushing forward to create a sustainable and repeatable strategy to be a leading player in the energy sector and I am confident that through a disciplined approach, we will have the opportunities to deliver future growth as we implement changes to the business for the benefit of our shareholders.
“The Board would like to thank Daan for his support and dedication and we wish him all the best in his future endeavours.”
I’m looking forward to chatting to Jay about his plans for SDX which I’m sure will be exciting. After that I will write more.
Canadian Overseas Petroleum Limited
Canadian Overseas Petroleum Limited has announced that its operating affiliate, COPL America, has received a covenant waiver from its senior lender and, is also pleased to provide an operations and oil production update.
Further to the news release of 1 February 2023, COPL America has executed a Waiver, with the support of its Lender, pursuant to which the measurement date of its 28 February 2023 liquidity covenant has been extended to 14 March 2023. The Liquidity Covenant will be measured based on average cash of $2.5 million from the period, 15 January 2023 to 14 March 2023.
The Company has experienced several severe winter storms at its Wyoming operations from late December to late February. High snow accumulations from these winter storms coupled with ongoing high winds and lower than normal temperatures have impacted the production operations at the Company’s Barron Flats Shannon Unit and it’s Cole Creek field. The Company has augmented its normal snow clearing equipment with contracted D6 sized bulldozers to keep the field roads open daily to its production tanks. This extra equipment was needed due to ongoing snow drifting to heights of 8-10 feet due to recurrent high winds. Access to field production tanks has also been restricted by the lack of snow clearing on local rural public roads due to local government imposed low clearing priority during these winter storm events. Oil storage capacity in the field is limited, thus production is limited when removal of produced oil is restricted.
2023 Production Summary
· January: 1,080 bbl./d average
· February: 1,200 bbl./d average
· Current: 1,400 bbl./d
o Barron Flats Shannon Unit: 150 bbl./d
o Cole Creek: 90 bbl./d
Arthur Millholland, President and CEO commented:
“This has been a difficult winter in Wyoming and western North America in general. The weather we have experienced has been well above historical averages. The interruption in our production operations has been difficult for all of us. We conduct our field operations with safety of our field personnel and contracted services first. Ongoing conditions with very low temperatures, high winds and significant drifting snow have caused the Company to suspend operations during these storms. Those familiar with these conditions east of the Rocky Mountains in the north-western United States and Western Canada understand the issues to production operations and accompanying safety concerns related to field personnel. Most importantly our principal stakeholders understand this too, and are working with the Company to exit this period stronger than it entered.”
Another one where I hope to update after I get back and check out Arthur, as you know I’m quite new to this one so a few items to ask about.