A flash blog today, as always I will update in the next day or two.

Chariot

Chariot Limited announce that it has signed a Petroleum Agreement for a new exploration licence, Loukos Onshore, located onshore Morocco.

·      75% interest in, and operatorship of the Loukos licence signed by a wholly owned subsidiary of Chariot Limited in partnership with the Office National des Hydrocarbures et des Mines (“ONHYM”) which will hold a 25% interest.

·      Loukos covers an approximate area of 1,371 km2 and is adjacent to Chariot’s Lixus and Rissana offshore licences, with the former containing the significant Anchois gas discovery and development project (“Anchois”).

·      Detailed evaluation has already commenced, based on existing modern 3D seismic data of 150 km2 and on-block wells, identifying:

 overlooked, shallow, conventional gas play, which has already produced gas in other areas onshore Morocco, and which is geologically similar to Chariot’s offshore projects including the adjacent Anchois gas discovery.

 multiple low risk gas prospects, supported by characteristic seismic attributes, with gas and reservoir proven by previously drilled wells which targeted deeper different prospects.

·      Intention to drill priority targets identified, with drill rigs available in country.

·      Loukos has the potential to deliver early gas sales due to the proximity to a significant and undersupplied industrial gas market, with further potential development synergies through the location of the planned Anchois processing facility and pipelines being situated on-block.

·      Minimal licence commitments comprise re-processing of existing 2D and 3D seismic data and desktop studies, which will help to fully evaluate the potential of the Loukos licence, including other plays and areas outside of that covered by existing 3D seismic data.

Mrs Amina Benkhadra, General Director Office National des Hydrocarbures et des Mines, commented:

“We are pleased to have signed this Petroleum Agreement with Chariot. They have a substantial understanding and knowledge of this basin from their extensive exploration in the area and we look forward to their ongoing work and progress with a view to accelerating the supply of gas to the Moroccan markets.”

Duncan Wallace, Technical Director, commented:

“This onshore licence is a natural fit with our existing acreage in Morocco. Loukos has significant read through from the prospectivity we see offshore, with a common geological setting extending from our Lixus licence and the onshore operating environment offering a significantly lower cost development and an attractively priced domestic industrial market ready to serve. The Company has already high-graded a range of targets on the 3D seismic data set, and further to our recent fundraise we plan to drill near-term to look to accelerate the supply of gas directly to domestic industries through various routes, including leveraging our new partnership with Vivo Energy.  

In securing the Loukos licence, we have continued to build on our unique position within a basin-scale opportunity and we are committed to developing this asset as quickly as possible.”

This is confirmation of the news we received last month along with the raise to drill it out so will come as no surprise to the market. Adjacent to Lixus and being onshore brings clear economic advantages along with a higher exposure to the very attractive Moroccan domestic market. As always more if I chat to the company. 

San Leon Energy

San Leon has announced a further extension to the longstop dates for the proposed transactions with Midwestern Oil & Gas Company Limited and the Company’s further conditional investments in Energy Link Infrastructure (Malta) Limited (“ELI”).  Details of the Proposed Transactions were announced by the Company on 8 July 2022 and set out in an admission document published by the Company on the same day. 

All longstop dates in relation to the Proposed Transactions have, in agreement with Midwestern and the other relevant parties, now been extended to 31 August 2023. The longstop dates are in relation to the New Eroton Debt Facilities, the Sahara OML 18 Acquisition Agreement, the MLPL Reorganisation Agreement and the ELI Reorganisation Agreement (details of all of which are set out in the Admission Document).

Documentation in relation to the Proposed Transactions is developed given the foundation of work undertaken by the Company in this respect over 2021 and 2022, and San Leon therefore expects to be in a position to move to proceed once the Proposed Transactions’ conditions allow.  This will be based, inter alia, on the conclusion of its refinancing, as well as updated due diligence in relation to the Proposed Transactions.

Further to the update on refinancing discussions and outstanding creditors announced on 3 July 2023, the Board remains optimistic on progress being made and expects to provide an update to shareholders in the near term.

This comes as no surprise as the company telegraphed recently that it would be needed. Comment above seems to be ‘optimistic’ which would come as welcome news to shareholders. 

United Oil & Gas

United Oil & Gas has provided an update on the conditional sale of the UK Central North Sea Licence P2519 containing the Maria discovery in Block 15/18 to Quattro Energy Limited.

On 18 January 2023 United announced that it had entered into a binding asset purchase agreement (APA) with Quattro for the conditional sale of its UK Central North Sea Licence P2519. Further to the announcement of 18 May 2023 United confirms that all conditions under the APA have not been met by the expiry of the long stop date on the 31 July. The Company are in advanced discussions with Quattro regarding a possible further extension and expects to be in a position to update the market shortly.

This is clearly disappointing news as it looks like Quattro has failed to raise the money for the deal. Should this change then all will be well but only the next few days will tell us this. I hope to speak to Brian Larkin later this week but I imagine that at present there is little he will be able to add. 

Predator Oil & Gas

Further to its announcement of 4.35 p.m. of 31 July 2023 Predator Oil & Gas Holdings plc (LSE: PRD), a Jersey based Oil and Gas Company with near-term gas operations focussed on Morocco, is pleased to announce that the Bookbuild was oversubscribed and it has successfully raised gross proceeds of £10 million, with good new institutional support,  pursuant to the Placing. 

A total of 90,909,090 new ordinary shares of nil par value (“Ordinary Shares”) were placed with investors (“Placing Shares”), at an issue price of 11 pence (the “Placing Price”).

Admission of new Ordinary Shares

Application will be made for the Placing Shares to be admitted to trading on the standard segment of the main market of London Stock Exchange plc (“Admission”). It is anticipated  that Admission will take place at or around 8.00 a.m. (London time) on 15 August 2023 (or such later date as many be agreed between the Company, Novum and Fox-Davies) but in any event not later than 8.00 a.m. on 31 August 2023. 

The Company does not currently have the ability under the Prospectus Regulation Rules to enable  admission of the Placing Shares. The Company is working with its advisers to obtain approval of a prospectus (the “Prospectus”) which is in the late stages of the vetting process with the FCA.  In the event that the Prospectus is not approved by the FCA in time to enable Admission on 15 August 2023, Admission will be delayed to ensure that the Company will have sufficient headroom under the Prospectus Regulation Rules to enable Admission.   Admission will take place no later than the back stop date of 8.00 am on 31 August 2023.

With Predator continuing to operate in Morocco the raise came as no surprise and this was a good number to receive with new institutions on the list. 

Eco (Atlantic) Oil & Gas

Eco has announced its audited results for the year ended 31 March 2023.

Highlights:

Financials (as at 31 March 2023

·    The Company had cash and cash equivalents of US$3,770,614 and no debt.

·    Eco has cash and cash equivalents of US$6.4 million on the balance sheet as at 31 July 2023.

·    The Company had total assets of US$53,777,531, total liabilities of US$5.9 million and total equity of US$48 million.

Operations:

South Africa

Block 3B/4B

·    Post period end, the Company signed a legally binding Letter of Intent with Africa Oil to farm out a 6.25% Participating Interest in Block 3B/4B, offshore South Africa for up to US$10.5 million in cash.

·    In March 2023, Africa Oil released a New Competent Person’s Resource Report confirming that the Block contains an estimated P50 Prospective Resources of approximately four billion barrels of oil equivalent (“BOE”), one Billion BOE net to Eco Atlantic prior to the sale of the aforementioned Participating Interest which is expected to complete shortly.

·    Eco, alongside its JV Partners, applied for Environmental Authorisation to undertake exploration activities in Block 3B/4B in the Orange Basin. An application was made to drill one well and one contingent well with an area of interest in the north of the Block. A comprehensive Environmental and Social Impact Assessment (“ESIA”) process commenced in March 2023, in preparation for drilling activity on the Block.

·    The JV partners continue to progress plans to conduct a two-well campaign on the Block in conjunction with progressing the collaborative farm out process, up to 55% gross working interest, with various potential parties.

Block 2B

·    On November 15, 2022, a Production Right Application to the Petroleum Agency of South Africa, for Block 2B, based on the existing oil discovery of AJ-1 and potential future operations was submitted by the JV Partners. 

·    Eco continues to believe that Block 2B contains considerable hydrocarbon resources and looks forward to providing further updates as the Company looks to deliver value from the licence for all stakeholders.

Namibia

·    Following the significant drilling success in the area, Eco continues to receive third party interest in its strategic acreage position offshore Namibia.

·    The Company continues to assess farm out opportunities with its four licences in the region as it considers options for progressing exploration and commercial activity on its acreage.

Guyana

·    Eco Atlantic and its JV partners remain committed to further drilling on the Orinduik Block and continue assessing opportunities to drill at least two exploration wells into the light oil cretaceous targets as soon as practical. Further updates will be made on the matter in due course.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented: 

“As a business we continue to make significant strides across our strategic portfolio of hydrocarbon assets, in some of the world’s most prolific exploration areas. Following the stabilising of commodity prices during the first half of this year, alongside a number of discoveries being made in and around the regions we operate in, we continue to see strong industry interest in our unique acreage positions in Orange Basin SA, Walvis Basin Namibia, and the Guyana Suriname Basin.

“The agreed transfer of a portion of our WI on Block 3B/4B to our strategic alliance partner Africa Oil will strengthen the JV position amid our continued negotiations with third parties to farm into the Block and execute a drilling campaign targeted for 2024. The proceeds from this agreement give us the opportunity to fund other growth opportunities elsewhere in the portfolio with no shareholder dilution. Also, at 3B/4B, we applied for Environmental Authorisation to undertake further drilling exploration activities as we believe that the licence holds significant potential to be explored by the Joint Venture partnership in South Africa.

“Namibia continues to produce globally significant hydrocarbon discoveries, and as a sizeable licence holder in the region, Eco continues to benefit from heightened levels of industry interest in the area.

“As a Board and Management team, we continue to assess and progress value accretive opportunities across our portfolio, with the goal of delivering substantial shareholder returns over the medium to long term.

“We remain excited about our prospects, and I look forward to providing further updates to the markets during the remainder of the year.”

A great deal of historic information here in the figures, no need to comment on that but since the period end much has gone on and Eco looks set very fair for an exciting year from now on. 

Issue of Azinam Shares, Admission and Total Voting Rights

In addition, further to the Company’s announcement of 29 November 2022 regarding the closing of the acquisition of Azinam Group Limited (“Azinam”) and in accordance with the previously announced Share Purchase Agreement, the Company has received TSX Venture Exchange approval to issue the balance of 1,625,000 Common Shares (“Azinam Shares”) to the previous shareholders of Azinam representing the full and final number of Common Shares to be issued in respect of this transaction.

Application has been made for admission of the 1,625,000 Azinam Shares, which will rank pari passu with existing Common Shares, to trading on AIM (“Admission”). It is expected that Admission will become effective, and trading in the Azinam Shares will commence, on or around 8:00 a.m. on 2 August 2023.

On Admission, the enlarged issued share capital of the Company will be 370,173,680 Common Shares. The above figure may be used by shareholders 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.

The Company’s audited financial statement for the year ended 31 March 2023 is available for download on the Company’s website at www.ecooilandgas.com and on Sedar at www.sedar.com.

The following are the Company’s Balance Sheet, Income Statements, Cash Flow Statement and selected notes from the annual Financial Statements. All amounts are in US Dollars, unless otherwise stated.

Balance Sheet

          

March 31,

 

March 31,

2023

2022

Assets

 

Current Assets

 

       Cash and cash equivalents

           4,110,734

 

       3,438,834

       Short-term investments

                13,107

 

            52,618

       Government receivable

                22,494

 

            27,487

       Amounts owing by license partners, net

              477,578

 

                    –  

       Accounts receivable and prepaid expenses

           1,529,451

 

          257,911

       Assets held for sale

                        –  

 

       2,061,734

Total Current Assets

           6,153,364

 

       5,838,584

 

Non- Current Assets

 

    Investment in associate

           8,612,267

 

       9,277,162

    Petroleum and natural gas licenses

         40,852,020

 

     30,753,034

Total Non-Current Assets

         49,464,287

 

     40,030,196

Total Assets

         55,617,651

 

     45,868,780

 

Liabilities

 

Current Liabilities

       Accounts payable and accrued liabilities

           4,416,789

 

       1,931,823

       Advances from and amounts owing to license partners, net

              286,553

 

                    –  

       Current liabilities related to assets held for sale

                        –  

 

          473,254

    Warrant liability

              261,720

 

       3,241,762

Total Current Liabilities

           4,965,062

 

       5,646,839

 

 

Total Liabilities

           4,965,062

 

       5,646,839

 

Equity

 

       Share capital

       121,570,983

 

     63,141,609

       Shares to be issued

                        –  

 

     20,766,996

       Restricted Share Units reserve

              920,653

 

          267,669

       Warrants

         14,778,272

 

       7,806,000

       Stock options

           2,804,806

 

          958,056

       Foreign currency translation reserve

         (1,458,709)

 

     (1,309,727)

       Accumulated deficit

       (87,963,416)

 

   (51,408,662)

 

Total Equity

         50,652,589

 

     40,221,941

 

Total Liabilities and Equity

         55,617,651

 

     45,868,780

 

Income Statement

 

Year ended

March 31,

 

2023

 

2022

Revenue

 

Interest income

                  66,571

 

                   3,556

                  66,571

 

                   3,556

Operating expenses:

 

  

Compensation costs

                905,974

 

               852,383

Professional fees

                694,304

 

               551,751

Operating costs, net

           33,039,264

 

            1,932,826

General and administrative costs

                848,893

 

               603,145

Share-based compensation

             2,968,294

 

                 14,495

Foreign exchange loss (gain)

                559,947

 

              (116,631)

Total operating expenses

           39,016,676

 

            3,837,969

Operating loss

          (38,950,105)

 

           (3,834,413)

Fair value change in warrant liability

             2,980,042

 

              (263,136)

Share of losses of company accounted for at equity

               (664,895)

 

           (1,154,838)

Net loss for the year from continuing operations

          (36,634,958)

 

           (5,252,387)

 Gain (loss) from discontinued operations, after-tax

                  80,204

 

           (1,304,937)

Net loss for the year

          (36,554,754)

           (6,557,324)

Foreign currency translation adjustment

               (148,982)

 

              (111,630)

Comprehensive loss for the year

          (36,703,736)

 

           (6,668,954)

Basic and diluted net loss per share:

     from continuing operations

                   (0.105)

                  (0.027)

     from discontinued operations

                    0.000

                  (0.007)

Weighted average number of ordinary shares used in computing basic and diluted net loss per share

         349,622,239

 

        195,869,114

 

Cash Flow Statement

 

Year ended

 

March 31,

2023

 

2022

Cash flow from operating activities – continued operations

 

Net loss from continuing operations

   (36,634,958)

 

        (5,252,387)

Items not affecting cash:

   Share-based compensation

      2,968,295

 

               14,495

   Revaluation of warrant liability

     (2,980,042)

 

             263,136

   Share of losses of companies accounted for at equity

         664,895

 

          1,154,838

Changes in non‑cash working capital:

   Government receivable

             4,993

 

               (4,790)

   Accounts payable and accrued liabilities

      2,484,966

 

               (7,279)

   Accounts receivable and prepaid expenses

     (1,271,540)

 

             530,121

   Reallocation to discontinued operations cashflows

      –

 

           (317,340)

   Advance from and amounts owing to license partners

        (191,025)

                       –  

   (34,954,416)

        (3,619,206)

Cash flow from operating activities – discontinued operations

     (839,029)

 

        (1,008,182)

Cash flow from investing activities

 

 Investment in associate

                   –  

 

      (10,000,000)

 Short-term investments

           39,511

 

          1,500,022

Acquisition of interest in property

     (1,598,986)

 

                       –  

     (1,559,475)

        (8,499,978)

Cash flow from investing activities – discontinued operations

      2,507,713

 

                       –  

Cash flow from financing activities

 

Proceeds from private placements, net

    35,666,089

 

          4,793,814

Acquisition of Azinam

                   –  

 

                 2,590

Exercise of stock options

                   –  

 

               74,212

    35,666,089

          4,870,616

Increase (decrease) in cash and cash equivalents

         820,882

 

        (8,256,750)

Foreign exchange differences

        (148,982)

 

           (111,725)

Cash and cash equivalents, beginning of year

      3,438,834

        11,807,309

Cash and cash equivalents, end of year

      4,110,734

          3,438,834