A flash blog today as I am in town talking to companies.

Scirocco Energy

Scirocco has announced an update regarding the Ruvuma transaction.

Significant progress has been made and in order to allow additional time to complete the transaction, Scirocco and ARA Petroleum Tanzania (“APT”) have executed amendments to extend the longstop date of the proposed transaction from 31 August 2023 to 30 September 2023.

As announced on 3 August 2023, Scirocco received the Tax Clearance Certificate and settled its assessed tax liability representing a major milestone towards final completion. Scirocco then wrote to the Tanzanian Minister for Energy to obtain the final approval which is expected in due course.

On receipt of this approval, all conditions precedent to the transaction will be satisfied and Scirocco and its counterparty APT will be able to proceed to complete the transaction during September. 

Commenting on the update, Tom Reynolds, CEO of Scirocco, said:

“The extension of the longstop date by a month allows additional time to complete the divestment of our interest in the Ruvuma asset. While the process has taken longer than originally envisaged, we continue to be encouraged by our dialogue with the relevant authorities in Tanzania and believe we are on track to complete this transformative transaction within this new timeframe.”

Arrow Energy

Arrow has announced the filing of its Interim Condensed Consolidated Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the three and six months ended June 30, 2023 which are available on SEDAR (www.sedar.com) and will also  be available shortly on Arrow’s website at www.arrowexploration.ca.

Q2 2023 Highlights:

·     Recorded $10.3 million of total oil and natural gas revenue, net of royalties, more than double compared to the same period in 2022 (Q2 2022: $5 million).

·      Adjusted EBITDA of $5.8 million, more than double compared to 2022 (Q2 2022: $2.8 million).

·      Average corporate production up 120% to 2,169 boe/d (Q2 2022: 980 boe/d).

·    Realized corporate oil operating netbacks of $44.21/bbl due to increased production allowing operating cost to be spread over more barrels.

·      Cash position of $10.8 million at the end of Q2 2023.

·      Generated positive operating cashflows of $4.9 million (Q2 2022: negative $0.1 million).

·    Successfully drilled the Carrizales Norte-1 (CN-1) exploratory well at the Tapir block resulting in material production and reserves additions.

Post Period End Highlights:

·   The Carrizales Norte-2 (CN-2) well has been successfully drilled encountering multiple hydrocarbon-bearing intervals and is currently on production. The Ubaque zone in CN-2 has produced at initial rates exceeding 600 BOPD (net) at low water cuts. Reservoir stewardship is in execution in voluntarily reducing high initial rates with the well currently producing at a managed rate of 500 BOPD net. Forecasted rates were 320 BOPD (net) per Ubaque well which is well below flow capability.

·    The Carrizales Norte-3 (CN-3) well has been drilled and is currently undergoing production testing in the Upper Ubaque. Stabilized flow rates are expected to be reported in first week of September.


·   The preliminary development plan at CN consists of 21 wells, the majority focusing on the Ubaque formation, to fully exploit the thick reservoir. The reservoir pay zone is consistently thick (100 feet) across the fault bounded structure. Gacheta targeted wells will also be part of the overall development plan at CN.

·     Arrow anticipates drilling two additional wells at Rio Cravo Este (RCE) by year-end to target the Gacheta formation which was successfully tested at commercial rates in RCE-2.

·     Arrow plans to drill two development wells at the Oso Pardo Block in the Middle Magdalena Basin. Existing wells at Osso Pardo demonstrated initial rates exceeding 400 BOPD of 23 API gravity crude. This is expected to be initiated prior to year-end utilizing a second rig.

Marshall Abbott, CEO of Arrow Exploration Corp., commented:

“Arrow continues to gain momentum with strong Q2 2023 results. Our exciting drilling program, including the drilling of three RCE wells and three CN wells, is adding significant production and reserves, as well as establishing a new core area. The 3D seismic West Tapir project is currently being processed and is expected to further evaluate the 2D recognized fault prospects. The Board remains confident in the Company’s opportunity rich portfolio and the capability of the Arrow team to increase shareholder value.”

More on Arrow tomorrow but this is a very sound set of figures that reinforce my optimism about their current drilling programme and the build up of production as promised at the time of arrival into the London market. My Target Price remains at 50p and I’m looking forward to interviewing Marshall Abbott when he comes to London shortly. 


(in United States dollars, except as otherwise noted)

Three months ended June 30, 2023

Six months

ended June 30, 2023

Three months ended June 30, 2022

Total natural gas and crude oil revenues, net of royalties







Funds flow from operations (1)




Funds flow from operations (1) per share –





    Diluted ($)




Net income (loss)




Net income (loss) per share –

   Basic ($)




   Diluted ($)




Adjusted EBITDA (1)




Weighted average shares outstanding –



   Basic ($)




   Diluted ($)




Common shares end of period




Capital expenditures




Cash and cash equivalents




Current Assets




Current liabilities




Adjusted working capital(1)




Long-term portion of restricted cash(2)




Total assets





Natural gas and crude oil production, before royalties

Natural gas (Mcf/d)




Natural gas liquids (bbl/d)




Crude oil (bbl/d)




Total (boe/d)




Operating netbacks ($/boe) (1)

Natural gas ($/Mcf)




Crude oil ($/bbl)




Total ($/boe)




(1)Non-IFRS measures

(2)Long term restricted cash not included in working capital


The Company increased its production from new wells at RCE-3, RCE-4 and RCE-5 and CN-1. These have allowed the Company to continue to improve its operating results and EBITDA.  There has been a decrease in the Company’s natural gas production in Canada due to natural declines.

Average Production by Property

Average Production Boe/d

Q2 2023

Q1 2023

Q4 2022

Q3 2022

Q2 2022

Q1 2022

Oso Pardo







Ombu (Capella)






Rio Cravo Este (Tapir)







Carrizales Norte (Tapir)


Total Colombia







Fir, Alberta







Pepper, Alberta







TOTAL (Boe/d)








For the three months ended June 30, 2023, the Company’s average production was 2,169 boe/d, which consisted of crude oil production in Colombia of 1,779 bbl/d, natural gas production of 2,318 Mcf/d and minor amounts of natural gas liquids from the Company’s Canadian properties. The Company’s Q2 2023 total production was 121% higher than in the same period in 2022.


During Q2 2023 the Company continued to realize strong oil prices, offset by decreased gas prices, as summarized below:

Three months ended June 30




Benchmark Prices


AECO (C$/Mcf)




Brent ($/bbl)




West Texas Intermediate ($/bbl)




Realized Prices


Natural gas, net of transportation ($/Mcf)




Natural gas liquids ($/bbl)




Crude oil, net of transportation ($/bbl)




Corporate average, net of transport ($/boe)(1)




   (1)Non-IFRS measure



The Company also continued to realize positive operating netbacks, as summarized below:


Three months ended June 30

Six months ended June 30






Natural Gas ($/Mcf)

Revenue, net of transportation expense










Operating expenses





Natural Gas operating netback(1)





Crude oil ($/bbl)

Revenue, net of transportation expense










Operating expenses





Crude Oil operating netback(1)





Corporate ($/boe)

Revenue, net of transportation expense










Operating expenses





Corporate Operating netback(1)





 (1)Non-IFRS measure

The operating netbacks of the Company continued to improve in 2023 due to several factors, principally the increased production from its Colombian assets, even with decreased crude oil prices.

During 2023, the Company has incurred in $11 million of capital expenditures, primarily in connection with the drilling of the three RCE and CN wells, civil works completed in Rio Cravo and shooting 125 km2 of 3D seismic in the Tapir block to highlight existing leads and prospects for drilling. This acceleration in operational tempo is expected to continue during the remainder of 2023, funded by cash on hand and cashflow.

Longboat Energy

Longboat has noted the following announcement made by Equinor confirming the production start for the Statfjord Øst project (Company 4.80%).

On 3 July 2023 the Company announced the acquisition of a 4.80% unitised interest in the Statfjord Øst Unit and a 4.32% unitised interest in the Sygna Unit and where completion is expected before the year end. 

With this project, Equinor and its partners expect to increase production by 26 million barrels of oil equivalents from Statfjord Øst.

The project is completed with sound safety results and is expected to deliver within estimated cost, despite the inflation and weakened Norwegian krone. Production starts six months ahead of schedule.

Two new wells have been drilled from existing subsea templates, and three additional wells are to be drilled. Statfjord Øst is tied to the Statfjord C platform, and the project includes a modification on Statfjord C and laying of a new pipeline for gas lift to the subsea wells.

This is a good example of how we work with mature fields. Equinor aims to be a leading operator of late-life fields on the NCS. That means that we need to find new ways of working to reduce costs. Together with our partners we have developed simpler and faster solutions while maintaining high quality,” says Ketil Rongved, Equinor’s vice president for FLX projects.

The oil recovery rate from the field is expected to rise from 58 to 63 percent as a result from this project. Statfjord Øst started producing in 1994. The field is located five kilometres from Statfjord C.

The project was decided by the partnership in 2020 and approved by the Ministry of Petroleum and Energy in 2021.

“This proves the importance of extending the life of mature fields and maximizing value creation from existing infrastructure on the Norwegian continental shelf (NCS). The project contributes to extending the life of Statfjord C to 2040. The profitability is high, and the value of increased production equals around NOK 20 billion at the current oil price. This is good use of resources which provide ripple effects for Norwegian suppliers,” says Camilla Salthe, Equinor’s senior vice president for Field Life eXtension (FLX).

Star Energy

Star has announced that it has today acquired 51% of the issued share capital of A14 Energy Limited. A14 Energy owns, via its Croatian subsidiary, IGeoPen d.o.o, the Ernestinovo geothermal waters exploration licence in the highly prospective Pannonian Basin in Croatia. The IGeoPen team has deep knowledge and experience of the Croatian energy sector.

This transaction further develops the Company’s strategy to transition into a geothermal developer, owner and operator, diversifying regulatory risk and providing an entry into the electricity generation sector. 

The geothermal sector is a fundamental component of the energy transition, with the ability to provide long term baseload electricity and heat generation.  Star Energy, has decades of experience of sub-surface analysis, onshore drilling, well management and environmental control from its portfolio of oil and gas operations in the UK. These skills and experience, coupled with those of the IGeoPen team, mean that Star Energy is well positioned to deliver geothermal energy in Croatia, a member of the European Union (EU), with a liberalised, well established and attractive energy market.

Transaction Details

The interest in A14 Energy has been acquired by the Company’s subsidiary, GT Energy Croatia Limited (“GTEC”), from Peninsula International Pte Ltd (“Peninsula”) for a total cash consideration of €1.3 million. Additionally, Star Energy will pay €0.1 million, relating to the provision of cash backed guarantees to the Croatian Hydrocarbon Agency, plus €0.2 million in back costs relating to the ongoing appraisal of the Ernestinovo licence. 

In addition, GTEC has entered into a shareholders’ agreement with Peninsula in order to jointly develop and submit bids, and thereafter to own, construct and operate geothermal projects in Croatia.

GTEC and Peninsula, through IGeoPen, have jointly submitted three bids for geothermal licences to the Croatian Hydrocarbon Agency as part of the current licencing round and expect the results of the bids by December 2023. A further aggregate amount of up to €1.5 million is payable upon the successful award of these licences.

The re-entry of an existing well on the Ernestinovo exploration licence and the drilling of any new appraisal wells, on the successful award of licences bid for in the current licencing round, will be financed by GTEC and Peninsula through shareholder loans and externally sourced finance.  GTEC has agreed to carry Peninsula for up to €13.2 million over the five-year exploration licence period.  The GTEC carry is repayable from free cash flow generated from the licences.

Key highlights

·    The vast Croatian geothermal resource is well understood, with extensive data available from over 4,000 exploration and appraisal wells drilled during a period of hydrocarbon exploration in Croatia. In addition, 2D and 3D seismic surveys that cover c.20,000km2, including the Ernestinovo licence and the three licence areas that the parties have applied for in the current licensing round.  All data is available to the licence holder.

·    Characteristics are well suited for electricity generation with a geothermal gradient proven to be 60% higher than the European average and electricity can be sold bi-laterally throughout the EU.

·    Nearby electricity transmission infrastructure provides immediate access to pan-European power markets.

·    The Croatian Government is highly supportive and is actively promoting the sector internationally. The Croatian electricity market is liberalised and well established and it offers an attractive market premium (CfD) for a 12 year period.

·    The acquisition brings a small team of highly regarded geothermal and geological experts with a recognised track record in the Croatian energy sector, with key personnel having led the development of Croatia’s first geothermal power plant (Velika 1).

·    The Ernestinovo licence already has existing wells in situ, one of which will require re-entry and a well test to validate the resource, after which a 20-year development licence will be awarded.

·    Bids have been submitted, through IGeoPen, for three further highly prospective licence areas.

Croatia Geothermal Development

Whilst still in its infancy, interest in geothermal exploration and the development of geothermal projects is growing fast, driven by government support and promotion of the sizable resource potential.

There is currently a single operating geothermal plant, Velika Ciglena, with an installed capacity of 17.5MWe. The Croatian Hydrocarbon Agency estimates that the geothermal potential in Croatia is in excess of 1GW.

There are good in-country grid connections. The Croatian Transmission System Operator (HOPS) owns and operates the entire Croatian transmission network (400kV, 220kV,110kV) and is independent and non-discriminatory towards all transmission system users. 

The operator of the Croatian electricity market (HROTE) runs tenders that award a CfD for electricity generation from renewable sources. The market premium contract is awarded for a 12-year period.    Alternatively, electricity can be sold bi-laterally throughout the EU.

Croatian Geology

There was intense oil and gas exploration and production in the northern part of Croatia (the Pannonian Basin) in the second half of the 20th century which yielded a substantial amount of deep geological, geophysical and hydrodynamic information, including 2D and 3D seismic acquisition covering an area of c.20,000km2. Some 4,000 deep wells have been drilled and a large number of geothermal reservoirs were discovered giving well test data that demonstrates excellent temperature and permeability which are considered to be critical elements to a successful geothermal project. Due to the very large data set, the geological risk is assessed as low.

Ernestinovo Licence

The exploration licence covers 76.7km2 with a commitment to re-enter an existing well, due 8 April 2024. GTEC’s carry is a maximum of €1.47 million for the well re-entry. A conceptual programme for the Ernestinovo-3 workover well has been submitted and the work programme is on schedule to be completed as planned, satisfying the licence commitment.  The licence has excellent data from three deep exploration wells drilled in the 1990s.

Based on preliminary heat reserves and well productivity estimates, the Company’s internal assessment forecasts the potential for a first phase development of a 10MW electricity generation plant utilising five to six wells producing and re-injecting geothermal brine.

The proposed plant would connect into the Ernestinovo HOPS substation – a major substation with 400kV transmission lines to Zagreb, Hungary, Serbia and Bosnia, and local distribution lines at 110 kV and 85kV – and sell electricity on either a market premium arrangement (CfD) or bilaterally. 

There is upside potential for plant extension (an additional 5 to 10 MW) upon permit area extension (subject to tender) and potential for heat for green-houses and milk processing plants as the area is predominantly agricultural.

Geothermal Licence Bids

Licencing is through the Croatian Hydrocarbon Agency. An initial five-year exploration licence is granted, followed by the development licence (subject to fulfilling licence obligations during the exploration phase).

A new licencing round, with six licences available, was announced on 28 December 2022. The parties have participated in the licencing round, submitting three bids in the Drava depression geological region (located in the southwestern area of the Pannonian basin), the same region in which the Ernestinovo licence is located.

The Croatian Hydrocarbon Agency has communicated that it has received 16 offers from a total of 11 companies (including our bids) and the results of the round are expected by the end of 2023.

Star Energy Chief Executive Officer, Chris Hopkinson commented:

“We are very pleased to announce our first overseas investment in geothermal as we look to build momentum in this part of our business.

Whilst the business has, and continues to build, a material pipeline of business opportunities in the UK, we identified a significant opportunity in Croatia which will allow faster development and diversification of Star Energy’s geothermal interests.

The Croatian government is actively promoting the sector with a focus on electricity production which should allow accelerated development. 

The acquisition brings with it a small, but highly respected team with years of experience in Croatia including developing the Velika 1 power plant and we look forward to working with them bringing complementary skills from our existing business.

This is an important next step in our strategy to transition over time into a significant player in the geothermal market and to deliver future value for our shareholders.”

Dragutin Domitrovic, Director of A14 Energy, added:

“We are excited to be working with the team at Star Energy. The combination of our understanding

of Croatia’s geology and Star Energy’s successful track record of operating projects onshore will be

mutually beneficial to both companies. This represents a significant opportunity to accelerate the

development of geothermal projects in Croatia.”