WTI (May) $69.26 -70c, Brent (May) $74.99 -92c, Diff -$5.73 -22c.

USNG (Apr) $2.21 +6c, UKNG (Apr) 103.0p -2.01p, TTF (Apr) €42.250 -€0.85.

Oil price

Last week actually saw a rebound, both blends rallied by north of two bucks, after the trauma of rate rises many scribblers are now saying that rates are at or at least nearly at the peak. And oil is up again today by around a dollar after the Iraq-Turkey pipeline was closed.


Genel Energy plc (‘Genel’ or ‘the Company’) has been informed by the Kurdistan Pipeline Company that the Iraq-Turkiye pipeline has been shut-in. The Company understands this shut-in has been requested by the Republic of Turkiye. Public statements made by both the Federal Iraq Ministry of Oil (‘MoO’) and the Kurdistan Regional Government (‘KRG’) lead Genel to believe the shut-in will be temporary, and Genel continues to produce oil into storage facilities.

This follows the International Chamber of Commerce in Paris ruling in favour of Iraq in the long running arbitration case against Turkiye concerning the Iraqi-Turkish pipeline agreement signed in 1973.

  • The MoO has stated that, “it will discuss the mechanisms of exporting Iraqi oil through the Turkish Port of Ceyhan with the concerned authorities in the [Kurdistan] region and with the Turkish authorities”, and that “it is in the interest of the Ministry to export the full quantities allocated from all oil fields, including the [Kurdistan] region, with the aim of maximising financial revenues, to supplement the federal budget.”
  • The KRG’s Ministry of Natural Resources (‘MNR’) issued a statement noting that in relation to the budget, and regarding oil exports, there was “an initial agreement and a good understanding under the umbrella of the constitution and the constitutional rights and entitlements of the Kurdistan Region.”
  • The Prime Minister of Kurdistan, Masrour Barzani, stated that the KRG’s “recent understandings with Baghdad have laid the groundwork for us to overcome the arbitration ruling”. He also noted that a delegation from the KRG was in Baghdad yesterday “to build on the goodwill of our discussions.”

Genel welcomes the statements from both the MoO and MNR, and the comments from both regarding ongoing facilitation of exports from the Kurdistan Region of Iraq.

Genel also notes the references to the draft three-year federal budget approved by the Iraqi Cabinet earlier this month, to be submitted to the Iraqi Parliament for final approval, which includes a mechanism to ensure ongoing exports of 400,000 bopd of Kurdistan production in return for federal budget transfers. The budget was agreed at the same time that Iraq completed a budget transfer of 400 billion dinar (c.$275 million) to the KRG.

The Company will update the market when required.

Whilst this is a short term hassle for the companies, the nature of Iraqi politics indicates it was always possible and it will even have a mildly positive effect on global oil prices. The parties are confident that the outage will be temporary as talks have been underway between the KRG and Baghdad, I suspect that it is not in the interests of any of the parties for this to continue.

As to the effect on the companies involved, again I feel that for shareholders it shouldnt be something they will notice. I know that in terms of its own policy, Genel are, whilst not being complacent, happy that their policy is watertight in these sort of circumstances. Their model is to ‘build bumps into the road’ to ensure that they get no shocks or surprises, on things such as production or payment gaps, the company have said that as such the dividend payment due in May is sacrosanct and will be paid in these circumstances. As such investors should use today’s weakness to top up holdings.

As for GKP I can’t be so specific as the company have yet to get back to me, if they do I will make a comment in tomorrow’s blog.

Union Jack Oil

Union Jack has announced that material landmark net revenues, well in excess of US$14,000,000 have been achieved from the Wressle hydrocarbon development, located within licences PEDL180 and PEDL182 in North Lincolnshire on the western margin of the Humber Basin.

Union Jack holds a 40% economic interest in this development.


·    Landmark US$14,000,000 revenues generated to Union Jack since re-commencement of production at Wressle during August 2021

·    Well producing under natural flow with zero water cut

·    Union Jack continues to be cash flow positive covering all G&A, OPEX and contracted or planned CAPEX costs, including any drilling activities for at least the next 12 months

·    As of 24 March 2023, cash balances, short-term receivables and investments stood at over £10,500,000

·    Debt free

Executive Chairman of Union Jack, David Bramhill, commented:

Revenues from Wressle continue to bolster the Company’s Balance Sheet.

“Since the last production update, another consistent and impressive production performance from the Wressle-1 well has been recorded and the trend as seen throughout 2022 and the start of 2023 remains positive.

“Encouragingly, our significant cash balance continues to expand on a monthly basis, and we are funded for G&A, OPEX and contracted or planned CAPEX costs, including any drilling activities for at least the next 12 months.”

There is little more to add to what I have already commented on the fantastic rewards that Wressle is providing for UJO and others. Shareholders are getting dividends and buy-backs and the company remains confident that they are fully funded for G&A, Opex and capex costs for the next 12 months, what more could you ask for?

Coro Energy

Coro has announced that the Company has now signed the Sale and Purchase Agreement for the disposal of its Italian natural gas assets to Zodiac Energy plc by way of the sale of the entire issued share capital of Coro Europe Limited. Zodiac Energy plc is a UK based holding company for an Italian subsidiary company Pengas Italiana Srl, which extracts crude petroleum and natural gas in Italy.

The disposal is fully in line with the Company’s strategic objectives, enabling Coro to focus exclusively on Southeast Asia where demand for energy and the opportunity for material expansion remain very strong.


–     SPA signed for a total consideration of up to EUR 7.5M, including contingent payments of up to an aggregate of EUR 1.5M through a 10% net profit interest (“NPI”) in the Italian Portfolio over the three years from the date of completion of any disposal of the Italian Portfolio.

–     An initial cash payment of EUR 1.5M will be made by Zodiac within 7 business days of signing the SPA.

–     The proposed disposal of the Italian Portfolio under the SPA will be subject to Coro shareholder approval pursuant to Rule 15 of the AIM Rules for Companies and regulatory approval in Italy.

A circular containing detailed information about the disposal of the Italian Portfolio will shortly be published and available from the Company’s website at www.coroenergyplc.com.

Background to and reasons for the disposal

Following structural increases in global gas prices in 2022, the Company relaunched its Italian gas asset portfolio  earlier in that year. The Italian Portfolio has since delivered significant free cash flows for the Coro Group. The previously reported 2022 unaudited revenues of the Italian Portfolio were EUR 6.0 m and is expected to be profitable once Coro’s audited accounts are published. The reported loss in 2021 was US$1.5 m. Current production is around 24,000 scm/day (2022: 13,979 scm/day) with an average realised gas prices of around EUR 0.65/scm to the end of February 2023 compared to an average realised price in 2022 of EUR 1.17/scm.    

However, the Company remains primarily focused on Southeast Asia and the significant growth and investment opportunities the region provides. In expectation of near term and long awaited developments on the Duyung PSC and the Company’s renewable portfolio in Southeast Asia and with a view to capturing the value inherent in the Italian Portfolio following gas price rises, the SPA was concluded with Zodiac, with the consideration then being available to deploy in line with the stated strategy.

The funds received will therefore be used to meet Duyung PSC expenditure; potential further solar projects in Vietnam (of which a likely acquisition was announced on 25th November 2022); to continue to progress Philippines solar and wind projects to achieve ready to build status; and for working capital whilst being mindful that the Eurobond due date is in April 2024.

The Board believes that incremental capital expenditure in Southeast Asia is a more value accretive use of Coro’s resources and ultimately has a greater possibility of generating greater returns for Shareholders than allocating additional capital to the development of the Italian Portfolio.      

Details of the Disposal

Further to the Heads of Terms announced on 24 August 2022, the Company has now signed the SPA with Zodiac to sell 100% of the issued share capital of Coro Europe Limited, the Company’s wholly owned subsidiary which in turn holds 100% of the issued share capital of Apennine Energy S.p.A, the Group entity holding the Company’s interests in the Italian Portfolio for up to EUR 7.5m.  

Of the total maximum consideration of EUR 7.5m, EUR 0.3m was paid as a non-refundable deposit upon signature of the Heads of Terms, an additional EUR 1.5m is payable within 7 business days of SPA signature and a further EUR 2.2m will be paid upon completion of the disposal.  As soon as practicable following completion of the SPA, Zodiac shall make a further payment of EUR 2m less a sum equal to any amount owed to Apennine by the Company on the intercompany loan account as of the date of completion.

The SPA contains a standard working capital adjustment mechanism which is expected to yield a positive and significant adjustment to Coro if the intercompany loan account is settled by completion. Any positive adjustment will be settled by Zodiac in cash within ten business days or, as is expected and agreed in the SPA, from the assignment to Coro of 70% of Apennine distributable annual profits until such time as the balance is paid in full. If the balance is not paid in full by 31 December 2027, the remaining balance will be immediately due to Coro by Zodiac irrespective of the distributable profits of Apennine.

The EUR 1.5 m payment to be received by Coro with 7 business days of signing the SPA will be repayable together with a 10% per annum coupon in the event that the transaction does not complete, and is secured over the Apennine bank account and gas sales. 

Any proceeds from the Bezzecca legal claim which was detailed in an announcement dated the 14th February 2023, and the cash flows from the business prior to completion, accrue to Coro and are in addition to the consideration of up to EUR 7.5m. 

In addition to the approval of Coro shareholders, completion of the disposal is also conditional on, amongst other things, regulatory approval by the Italian authorities.  Whilst the Company retains full ownership and cash flows from the Italian Portfolio prior to Completion, the Company has agreed not to withdraw further cash from Coro Europe and its subsidiary.   The accumulated cash in the business, alongside any inter-company loans and the 2022 Italian tax payments (including the extraordinary windfall tax introduced recently) will be adjustments to the final consideration using an industry standard net cash/debt adjustment at Completion.

Background to Zodiac

Zodiac Energy plc (company number 11052464)  is a UK based holding company for an Italian subsidiary company Pengas Italiana Srl, which extracts crude petroleum and natural gas in Italy.

General Meeting 

The disposal of the Italian Portfolio is subject to Coro shareholder approval pursuant to Rule 15 of the AIM Rules for Companies. A circular containing detailed information about the disposal of the Italian Portfolio will shortly be published and available from the Company’s website at www.coroenergyplc.com.  A notice convening the General Meeting, which is to be held at 2 p.m. at the offices of Link Group at 6th Floor, Gresham Street, London EC2V 7NQ  on 25 April 2023, is set out at the end of the Circular.

Recommendation and Voting Intentions

The Directors consider the transaction to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that the Shareholders vote in favour of the Resolution to be proposed at the General Meeting, as the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares, representing approximately 0.2 per cent. of the Company’s existing Ordinary Shares. 

Directorate Change

Further to the intended  non-executive Board appointment announced on 6th March 2023, Mark Hood has agreed to step down as a Non Executive Director of the Company to ensure the Company maintains a balanced and cost effective Board.

In the end the italy deal looks smart even on slightly lower gas prices and givens Coro’s strategic objectives, enabling Coro to focus exclusively on Southeast Asia where demand for energy and the opportunity for material expansion remain very strong.

Canadian Overseas Petroleum Limited

Canadian Overseas Petroleum Limited announce that it successfully completed its US$14.8 million convertible bond financing on March 24, 2023 with the full increase option being exercised.

The Convertible Financing has been led by the main bondholder, institutional stakeholders, and new institutional investors providing the full amount of US$14.8 million principal, showing their strong support for the Company. 70,257,026 new warrants have been issued in this Convertible Financing.  Closing of the Convertible Financing also triggered the 6th Amendment and Waiver of certain covenants pursuant to its Senior Credit Facility, as announced March 20, 2023.

Further to the announcement of March 20, 2023, the Company has also issued 26,842,036 common shares settling $2.2 million of payables to arm’s length creditors of the Company.  The price at which the Shares were issued was at a premium to the LSE share price.

Applications will be made to the FCA for these Shares to be admitted to the Official List and to the London Stock Exchange for the Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities within the next twelve months, in accordance with Listing Rule 14.3.4.

Following these issues of Shares the Company has a total of 343,126,335 Shares issued and outstanding. There are no Shares held in treasury and therefore the total number of voting rights in the Company is 343,126,335. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

With no comment from the Company I have nothing to add, I need to get an up to date meeting with the company.

And finally..

So, Antonio Conte finally got the Spanish Elbow from Spurs, thought he spoke a lot of sense myself but clearly 4th in the Prem isn’t what it used to be eh Daniel….!

International week has meant a barren weekend of sport, the home countries had mixed success with England winning along with Scotland.