WTI (Oct) $78.39 -$1.46, Brent (Oct) $83.21 -82c, Diff -$4.82 +43c.

USNG (Sep) $2.49 -7c, UKNG (Sep) 76.5p -27.5p, TTF (Sep) €31.605 -€10.63.

Oil price

After yesterday’s blog debacle I can reprise that PMI data was very mixed, bad in Europe and Australia and good in Japan whilst discussions are continuing about the Ceyhan pipeline in Ankara.

The inventory stats were actually very positive, the EIA crude draw was 6.134m barrels and with refinery runs slightly down but at a high level of 94.5% gasoline stocks added 1.468m and distillates increased by 945/- b’s.

Finally gas prices fell sharply as rumours swirled around that gas workers in Australia had settled their claim, this was made worse by very high European gas storage data.

Touchstone Exploration

Touchstone has provided an update on Royston-1X well production testing, commissioning of the Cascadura natural gas and liquids facility, and operations at Coho. Touchstone has an 80 percent operating working interest in the Royston-1X sidetrack well and the Cascadura and Coho fields, all of which are located on the Ortoire block onshore in the Republic of Trinidad and Tobago. Heritage Petroleum Company Limited holds the remaining 20 percent working interest.


The Company has completed its program of five production test intervals at Royston-1X. Touchstone is currently evaluating the uppermost prospective intervals in the Herrera and Karamat formations. The well is shut-in while awaiting the arrival of a service rig which will be used to put the well on pump to facilitate further testing.

As previously reported, the lowermost section of the Royston-1X well in the subthrust sheet of the Herrera Formation was initially completed at depths between 11,102 and 11,168 feet. Swabbed oil volumes were analysed by a third party confirming between 34.1 to 40.0 degrees API gravity formation crude oil, representing the deepest oil encountered on the Ortoire block to date. The maximum shut-in pressure observed at surface was 2,534 psi, however, this section of the formation was interpreted to have a low permeability reservoir.

The second production test evaluated the subthurst sheet of the Herrera Formation at depths between 10,604 and 11,020 feet. Light, sweet oil was recovered measuring 35.4 degree API gravity. The maximum shut-in pressure observed at surface was 2,450 psi. Similar to the first testing interval, the formation exhibited a low permeability reservoir with minimal natural oil flow to surface. Touchstone suspended the first two intervals with a retrievable plug, allowing us the opportunity to reevaluate the subthrust sheet at a further date for potential fracture stimulation.

The third production test evaluated the intermediate sheet in the Herrera Formation at depths between 10,220 and 10,314 feet. 38.3 degree API gravity crude oil was encountered, with a maximum shut-in pressure observed at surface of 2,331 psi.

The fourth production test evaluated the overthrust sheet in the upper Herrera X Formation at depths between 9,591 and 9,662 feet. 38.1 degree API gravity oil was encountered, with a maximum shut-in pressure of 2,438 psi.

The final production test targeted the Karamat Formation at depths between 9,318 and 9,346 feet. Once again, light, sweet oil was recovered with a maximum shut-in pressure observed at surface of 2,230 psi.

Royston commerciality

Although high reservoir pressures were observed during each of the production tests, minimal natural flow to surface was observed, indicating low permeability. As a result, Touchstone has now commingled the three uppermost prospective intervals and is waiting for a service rig to place the well on pump. We expect that once the well is pumping, the hydrostatic pressure on the reservoir will be reduced, allowing the formation fluid to produce at increased rates. A further update will be provided following completion of the final evaluation of the three uppermost prospective intervals.


The Cascadura facility has been designed for a maximum gross production capacity of approximately 200 MMcf/d and 5,000 bbls/d of associated liquids, with a current gross production capacity of 90 MMcf/d and 2,250 bbls/d of associated liquids (17,250 boe/d).

The facility is currently undergoing final commissioning with natural gas from the Cascadura-1ST1 well being used for the initial systems start-up and equipment testing. Upon completion of the commissioning of the Cascadura facility, the Company will begin to introduce natural gas and associated liquids from both the Cascadura-1ST1 and Cascadura Deep-1 wells.

The current commissioning status of the Cascadura facility is as follows:

·      testing of the flare system has been successfully completed;

·      introduction of fuel gas to the recycle compressors has occurred;

·      introduction of fuel gas for the generators to provide power to the site has been established;

·      all safety devices and equipment have been tested and are functioning; and

·   testing of all electronics, alarms, and systems at the facility to ensure full functionality is 99 percent complete.

Touchstone anticipates initial sales volumes during the week of August 28, 2023.


Since the Coho facility commenced commercial production in October 2022, the Coho-1 well has produced a total of approximately 2 Bcf of gross natural gas and generated over US$4 million in gross natural gas sales. The Coho facility has achieved 99.9% uptime performance with the majority of the downtime associated with third-party processing issues. The Coho-1 well is currently being restricted on a 34/64-inch choke to manage flowing pressures. In May 2023, the Company performed a downhole production test that indicated the well could be optimized by reconfiguring the producing reservoir intervals. The Company will commence this operation once the Cascadura facility comes onstream. Additionally, Touchstone has been approved to drill two additional wells from the existing Coho location with the intent to fill the facility to its maximum gross operating capacity of approximately 24 MMcf/d of natural gas (4,000 boe/d).

Paul Baay, President and Chief Executive Officer, commented:

“Testing of the Royston-1X well was undertaken in a methodical manner to provide a comprehensive evaluation of the prospect. The flow and buildup tests for each interval has provided us with information that could be used for future stimulation of the well to optimize recovery and production rates. The fact that we have recovered light oil and significant pressures on each test is encouraging. We now need to evaluate the mechanics of how to produce the well at economically sustainable rates. By putting the well to pump for an extended period, we will be able to determine both the economics and viability of future operations, which could include artificial stimulation of the reservoir.

Looking forward to the commencement of commercial production from the Cascadura facility, we now have in place the infrastructure to process and monetize all future potential drilling successes on the Ortoire block. This has been a long process, but we have now put in place the building blocks for a fully funded, full-cycle exploration and production strategy.”

Every chance is being given to Royston to be able to give a successful production tests having completed its programme of five intervals and a service rig is on the way for a pump aided extended test, stimulation may also be needed in the end.

Perhaps more importantly investors will be keen to hear news of Cascadura which is undergoing final commissioning and soon gas and associated liquids from both Cascadura wells will be introduced. It looks to me as if the company are within days of starting commercial production which will be no more than the company deserve after all the time, money and operational expertise that they have put into the Ortoire Block.

Finally, over at Coho which has had 99% uptime since coming into production and is now having flowing pressure management restrictions ahead of reconfiguring the producing reservoir intervals and in addition the company has been approved to drill two additional wells in order to maximise operating capacity.

I’ve said it before but this is a major turning point for Touchstone and with all these pointers are going to be a fully funded, full cycle E&P company with fantastic prospects.


Hunting has today announced its unaudited half year results for the six months ended 30 June 2023.

Financial Highlights


Order book increased by 63% to $529.7m (H1 2022 – $325.9m)


Revenue increased by 42% to $477.8m (H1 2022 – $336.1m)


Gross profit $114.2m up 51% (H1 2022 – $75.8m)


Gross margin improved to 24% from 23%


EBITDA of $48.7m (H1 2022 – $23.6m)


Adjusted operating profit $26.2m (H1 2022 – $4.7m)


Interim dividend declared 5.0 cents per share (H1 2022 – 4.5 cents)

Commenting on the results Jim Johnson, Chief Executive, said:

“Today’s results confirm the positive trend of increased investment in the oil and gas industry following years of under investment, driven by global energy demand and increased focus on energy security. We believe that the sector is in the early days of a long term growth cycle which, coupled with our non-energy businesses, positions the Company for increased revenue and earnings going forward. All our businesses have performed well during the period, and we are particularly pleased to have continued to secure major OCTG orders, which has increased our sales order book strongly since year-end. Management believes this performance indicator provides good visibility of the Group’s trading outlook in the short to medium term.  

“Alongside our core oil and gas businesses, Hunting has made good progress in positioning itself as a critical provider of technology, as well as a key supplier of important raw materials for the energy transition. Management anticipates this market will provide strong growth in the long term as the world solves the challenge of energy security and low carbon. Hunting will play a major role in this complex solution and we look forward to delivering on our objectives over the coming years.”

I listened in to the Hunting meeting this morning, with the Capital Markets Day upcoming there will be much more data to analyse at that time but these results rubber stamp the previous announcements that I have written up in the last few months. 

The absolutely key phrase in the CEO’s statement is this, ‘We believe that the sector is in the early days of a long term growth cycle which, coupled with our non-energy businesses, positions the Company for increased revenue and earnings going forward.

Along with the excellent revenue figure, good PBT numbers and an increased dividend it is pleasing to see a big increase in the international nature of the business. Indeed at $529.7m the order book is a record but worth looking down at the breakdown as there are some gems of contracts in there. 

It is a shame that the headline of closure of facilities and sale of the E&P business has claimed the headlines both of which are important tidying up operations and the shares have drifted a bit today but the massive run since the last upgrade earlier in the summer more than makes up for that. 

The margins are the best in the company’s history, more at the CMD and these are a great set of results but the prizes must go to the international sales, up by 35%. There is plenty to go for in the Hunting share price and at the moment the order book is only going one way. 

Financial Summary


Financial Performance Measures



H1 2023


H1 2022











EBITDA margin**



Adjusted operating profit*/***




Adjusted operating profit margin****



Adjusted diluted earnings (loss) per share*/***




Free cash flow*



Total cash and bank borrowings*





*      Non-GAAP measure (“NGM”). Please see the 2023 Half Year Report and Accounts pages 33 to 38.

**    EBITDA as a percentage of revenue.

***   Adjusted results exclude adjusting items.

**** Adjusted operating profit as a percentage of revenue.


Financial Performance Measures Derived from IFRS



H1 2023


H1 2022



Operating profit




Diluted earnings (loss) per share



Interim dividend declared per share




Sales order book





Outlook Statement

Global energy markets continue to display growth, stability and resilience, despite the macroeconomic narrative from some Western economies. Activity across the oil and gas industry continues to be strong, particularly within the offshore segment of the market and drilling continues to increase in momentum in South America, West Africa, the Middle East and Asia Pacific.

On this basis, the Board believes Hunting has good momentum going into the second half of the year, with an EBITDA performance similar to what has been delivered in H1 2023. Further improvements in working capital efficiencies are expected in H2 2023, with the Group’s total cash and bank borrowing position expected to unwind by the year-end as larger projects are completed in H2 2023 which will deliver strong cash generation from operating activities.

Opportunities within energy transition markets are accelerating fast, driven by legislation in North America, Europe and Asia Pacific, as well as the decarbonisation initiatives announced by many companies and governments. Hunting will continue to increase its position in this market in the months ahead, by offering new technology and critical supply channels to the many stakeholders in this increasingly important sector.

The Company’s Capital Markets Day is an exciting opportunity for Hunting to reinforce its investment case to investors as global energy markets return to robust growth and as traditional and new technologies and markets contribute to the ever-increasing complexity of the energy industry and future landscape. The Group has a strong position and reputation across multiple industries and end markets, and is well positioned to deliver strong long-term cash flows and returns for stakeholders into the medium and long term.

Corporate Highlights

Further Strengthening of Sales Order Book

The Company continued to build its sales order book during the period and at 30 June 2023 this stood at $529.7m (31 December 2022 – $473.0m; 30 June 2022 – $325.9m). The order book comprises 4% Perforating Systems; 47% OCTG; 28% Advanced Manufacturing; 19% Subsea; and 2% Other Manufacturing. Of this order book, approximately 70% is expected to be completed by the year-end; 20% during 2024; and 10% from 2025 onwards, underlying the changing profile of Hunting’s revenue visibility.

$91m Contract Award with Cairn Oil and Gas, Vedanta Limited

On 30 May 2023, the Company announced a record contract that management estimates to be worth up to $91m with Cairn Oil and Gas, Vedanta Limited, for the supply of Hunting’s SEAL-LOCK XDTM Premium Connection along with OCTG. The contract is for an estimated 100 wells and is to extend up to three years for Cairn’s operations in Rajasthan, India. This order supports management’s belief that international market sentiment remains extremely strong as governments and countries address the challenges of energy security, the development of domestic supply and post-COVID economic recovery. 

10-Year Strategic Alliance Signed with Zhejiang Jiuli Hi-Tech Metals Co. Ltd (“Jiuli”)

On 5 June 2023, the Company announced a 10-year strategic alliance with Zhejiang Jiuli Hi-Tech Metals Co. Ltd (“Jiuli”), for the supply of corrosion resistant alloys (“CRA”) for OCTG, Carbon Capture and Storage (“CCUS”) and geothermal applications. The partnership brings together Hunting’s SEAL-LOCKTM Premium Connection technology with Jiuli’s CRA, such as duplex/super duplex and high nickel-based alloys, for downhole casing and production tubing applications, which meet some of the harshest well conditions in the traditional oil and gas industry as well as the emerging CCUS and geothermal markets. The partnership also adds to Hunting’s existing OCTG product portfolio and enables the supply of the widest range of premium OCTG for its client base, within the international oil and gas and energy transition markets, as projects accelerate in the key areas of North America, Middle East and Africa and Asia Pacific. CCUS and geothermal are two end-markets that Hunting is pursuing as part of its strategy to become a key supplier to these sectors by providing project developers with critical supply channels and the premium connections required for these increasingly challenging technical projects, which operate in demanding sub-surface environments. All these end-markets are believed to show robust demand and growth in the medium and long term.

Collaboration Agreement with CRA-Tubulars B.V.

On 13 July 2023, Hunting announced a collaboration agreement with CRA-Tubulars B.V., to further develop the Company’s presence in energy transition markets. The collaboration provides the Company with access to novel titanium composite tubing technology, which is showing strong potential in CCUS project applications. The technology has won awards within the Shell ‘Game Changer’ technology programme, and Hunting is exploring the use of the technology alongside its SEAL-LOCKTM Premium Connection technology. The collaboration agreement includes exclusive marketing, distribution and manufacturing rights for oil and gas and carbon capture and storage markets in North America for a period of five years.

Restructuring and Operational Efficiency

As separately announced today, Hunting is continuing to drive stronger internal operational efficiencies throughout its global footprint. Hunting Titan has commenced the closure of its Oklahoma City operating site and will transfer the manufacture of perforating systems to the Group’s Pampa, Texas and Monterrey, Mexico facilities. A distribution centre will be retained to continue to service clients in the Mid-Continent Region of the USA.

Within the EMEA operating segment, the manufacturing and assembly operations of the Group’s main well testing site are to be transferred from the Netherlands to Dubai, which will lead to the closure of a facility at Velsen-Noord, with activities in the Netherlands to be merged into a single location. Sales, engineering and service support functions will be maintained in the Netherlands to support European clients. Hunting’s Dubai operations are to be relocated to a larger, higher efficiency facility in the UAE to accommodate the manufacturing operations of the well testing business, which also positions Hunting to capitalise on the strong market outlook for the Middle East in the long term. Hunting will retain a single facility in Velsen-Noord to support oil and gas energy transition clients across Europe.

Disposal of Exploration and Production Assets

During H1 2023, the Group has completed a disposal process of all but one of its US onshore and offshore oil and gas producing assets, which are held by Hunting’s wholly-owned subsidiary, Tenkay Resources, Inc. The assets have been sold on an asset-by-asset basis to a variety of third parties. In addition, the Group has negotiated the transfer of the majority of the non-producing assets and respective future plug and abandonment liabilities, which have reduced Hunting’s possible exposure to future decommissioning costs. The transfer of these non-producing assets was completed in July 2023 and, therefore, the assets were shown as held for sale at 30 June 2023. As at 24 August 2023, Tenkay retains a working interest in the South Timbalier 34 asset, for which management is continuing to pursue a disposal in the short term.

Completion of Threading Facility in India, with Joint Venture Partner Jindal SAW

In Q2 2023, the Company completed the construction and commissioning of its new threading facility at Nashik Province, India, with its joint venture partner, Jindal SAW. The official opening of the facility is planned for 19 September 2023.

Coro Energy

Coro has announced that it has agreed to sell its 18.76% shareholding in ion Ventures Holdings Ltd to SLT1 LLC a privately owned entity based in the USA for a cash consideration of £1.25 million ($1.59 million), of which £1 million will be paid immediately, and the remaining £250,000 will be paid by the 31 March 2024. The shareholding was acquired by Coro for £500,000 ($662,000) in 2020.

ion made a loss in 2022 of $404k, Coro’s share being $82k. The net book value of the assets being disposed in the 2022 accounts was $259k, being the original consideration less share of losses since acquiring the shareholding.

The proceeds will be used to further progress Coro’s renewable portfolio in South East Asia, Duyung and for working capital.

Michael Carrington, Managing Director of Coro Renewables, commented:

“ion Ventures has successfully delivered its strategy and we have been delighted to have been a supportive investor. This investment was Coro’s first step into the clean energy space and was a useful bridge to establishing our own operated renewables portfolio. With operated positions in both the Philippines and Vietnam, this minority, non-operated investment is now no longer part of our strategy and we are pleased to exit at a multiple of our entry cost.”

A good deal for Coro and one in which it has made a meaningful profit and Coro can move into the new portfolio options. 

Ithaca Energy

Ithaca yesterday announced its unaudited financial results for the six months ended 30 June 2023.


Financial key performance indicators (KPIs)
H1 2023H1 2022
Group adjusted EBITDAX1 ($m)979.7907.4
Statutory net income ($m)159.61,557.7
Adjusted net income1 ($m)253.2233.4
Basic EPS (cents)15.9155.0
Net cash flow from operating activities ($m)691.0989.0
Available liquidity 1 ($m)791.3320.4
Unit operating expenditure1 ($/boe)19.819.5
Adjusted net debt 1 ($m)698.71,414.6
Adjusted net debt/Group adjusted EBITDAX 10.35x0.91x

Other KPIs

Total production (boe/d)75,75566,685
Tier 1 / 2 process safety events10
Serious injury and fatality frequency00


1 Non-GAAP measure as set out on pages 45 to 47.

H1 2023 Operational and strategic highlights

  • Strong H1 production of 75.8 thousand barrels of oil equivalent per day (kboe/d), supporting full year 2023 production guidance (H1 2022: 66.7 kboe/d)

–          Production growth driven by the contribution of producing asset additions from M&A transactions completed in the first half of 2022

–          Production split 66% liquids and 34% gas

  • Good progress made in H1 2023 against our BUY, BUILD and BOOST strategy preserving optionality across our portfolio with the aim of maximising value to shareholders


  • Acquired the remaining 40% stake in the Fotla Discovery, together with three exploration licences, providing Ithaca Energy with full control over pre-final investment decision (FID) work and timing (subject to completion)
  • Entered into marketing agreement with Shell U.K. Limited in relation to its interests in the Cambo field, representing a meaningful step towards securing an aligned joint venture partnership that would enable the future progression of the Cambo project towards FID, subject to regulatory and licensing approval processes and market conditions


  • Pre-FID work continues across the Group’s high-value greenfield and brownfield development portfolio. Focus remains on finalising development plans and financing for Rosebank
  • Positive exploration drilling results at K2 prospect, with the decision to proceed with an appraisal side-track (Ithaca Energy operated, working interest 50%) highlighting Ithaca Energy’s impressive exploration track record


  • Production performance in H1 2023 driven by high production efficiency across our operated assets in Q2 of 93%
  • Material project scopes completed at Captain Enhanced Oil Recovery (EOR) Phase II with four of the seven wells drilled. Critical EOR turnaround scopes scheduled for H2 2023
  • Front End Engineering Design (FEED) activity ongoing to explore the potential for electrification of the Captain field, demonstrating our continued focus on decarbonisation initiatives across our portfolio

H1 2023 Financial highlights

  • Announced second interim 2023 dividend of $133 million payable in September 2023, taking our total year to date interim 2023 dividend to $266 million, with targeted total dividend of $400 million reaffirmed for financial year 2023
  • Group adjusted EBITDAX up 8% to $979.7 million (H1 2022: $907.4 million), driven by higher production, despite lower average oil and gas prices
  • Realised oil and gas prices (respectively) of $85/boe and $82/boe before hedging results and

$83/boe and $125/boe after hedging results (H1 2022: $107/boe and $144/boe before hedging results and $93/boe and $105/boe after hedging results)

  • Strong cost control, despite inflationary headwinds, delivering operating costs of $272.1 million ($19.8/boe (H1 2022: $19.5/boe)), allowing the Group to narrow its full year 2023 guidance range
  • Adjusted net income of $253.2 million (H1 2022: $233.4 million)
  • Statutory net income $159.6 million (H1 2022: $1,557.7 million) reflecting a $73.7 million post-tax impairment of the Greater Stella Area due to reduction in planned activity, as a direct result of the Energy Profits Levy (EPL) and falling gas prices; H1 2022 includes $1,324.3 million gain on bargain purchase which arose from the acquisitions of Marubeni UK and Siccar Point Energy
  • Net cash flow from operating activities of $691.0 million (H1 2022: $989.0 million)
  • Producing asset capex of $188 million, allowing the Group to reduce its full year 2023 guidance range
  • Strong cash flow generation supporting further deleveraging of the balance sheet in the period. Adjusted net debt of $698.7 million at 30 June 2023 (31 December 2022: $971.2 million; 30 June 2022: $1,414.6 million)
  • Group leverage position of 0.35x adjusted net debt to adjusted EBITDAX (30 June 2022: 0.91x)
  • Successful redetermination of Reserves Based Lending (RBL) facility in June 2023
  • Post period end, signed extension of bp off-take agreement and, in parallel, entered into new five- year $100 million loan facility agreement with bp (yet to be drawn)


FY 2023 Management Guidance and Outlook

  • Management provides the following updates to previously provided guidance ranges and activities for full year 2023 (FY 2023):

–          Production guidance reaffirmed for FY 2023 of 68-74 kboe/d;

–          Operating cost guidance narrowed at the lower end of the range for FY 2023 from $560-

$630 million to $560-$610 million; and

–          Producing asset capital cost guidance for FY 2023 reduced from $400-$460 million to $390-

$435 million

  • Turnaround activity across operated and non-operated base scheduled for Q3 2023
  • Captain EOR Phase II project H2 2023 activities include the continued drilling of Area E wells before moving to Area D to commence drilling operations and turnaround activity in Q3 that will support polymer injection into the subsea wells in 2024
  • Continued focus on maturing high-value development projects and preserving optionality across our portfolio while prioritising capital allocation to maximise sustainable shareholder returns
  • Management reaffirms its commitment to targeted total dividend of $400 million for financial year 2023

Energy Profits Levy impact beyond 2023

  • In June 2023, the UK government published terms of reference for the oil and gas fiscal regime review and committed to engaging with industry stakeholders. One of HM Treasury’s stated objectives is to achieve a “simpler, more predictable, and stabler regime” (HM Treasury)
  • In the meantime, until the fiscal regime is improved, as a direct result of the Energy Profits Levy, investment across our operated and non-operated portfolio has and will reduce, including the deferral and cancellation of certain 2023 and 2024 projects, impacting medium-term production outlook, with production in 2024 expected to be lower than 2023 levels. As part of the Group’s strategy, we continue to leverage our M&A capabilities evaluating potential inorganic opportunities with the clear intention to increase our production in the medium-term
  • We are in the process of working through our medium-term outlook, incorporating the full impact of EPL at an asset level and updating subsurface models for the latest production history along with the potential positive effect of new opportunities we are currently reviewing and we will share an updated view of our medium-term production outlook later in the year

Gilad Myerson, Executive Chairman, commented:

“Ithaca Energy’s robust H1 performance demonstrates continued strong delivery across our BUY, BUILD and BOOST strategy and our capital allocation policy in H1 2023. I am delighted to announce today the second tranche of our 2023 interim dividend, taking our total year to date dividend in 2023 to $266 million, in line with our commitment to shareholders at IPO.

The Energy Profits Levy continues to have a direct impact on investment in the UK North Sea and Ithaca Energy’s own investment programme across its diverse high-quality operated and non-operated asset base. We continue to constructively engage with the UK government to highlight the impact of the current fiscal regime to the industry’s outlook and to the UK government’s stated energy security and Net Zero ambitions.”

Alan Bruce, Chief Executive Officer, commented:

“We are pleased to share a strong set of results for the first half of 2023, with growing Adjusted EBITDAX as a result of production of over 75 kboe/d in the period. Production efficiency across our operated assets has been high demonstrating our strong operational capabilities.

We continue to take a disciplined approach to capital investment including at our Captain asset where we are progressing the EOR Phase II project construction activities as well as evaluating emissions reduction options. We reported successful exploration drilling at our K2 prospect in July which further strengthens our high-quality development portfolio.”

I recently wrote on Ithaca and said that I was considering taking up coverage of the company, I had seen the price that the company came to the market at which was way too high and the stock duly rerated in the market. Since then a combination of excellent operational and financial management has made looking at the company highly compelling.

Yesterday’s results and more importantly, the dividend announcement, firstly showed a good production number, better than I had expected but still waiting some summer maintenance which should bring it back to existing guidance. The Rosebank FID is imminent whilst Fotla is a useful filler until the Cambo deal is done.

BUT, the impact of the EPL sees investment falling and the medium term has been compromised by the Government’s Fiscal penalties, this proves that production and therefore tax take will fall in such circumstances. Surprisingly this doesn’t affect the longer term as the management here have very wisely kept them in the hunt for major assets on the market.

So the bottom line is that the announcement of the dividend has enabled us to give a firm number on the yield and not only for this year but with confidence expressed going forward for next year as well. Readers know that I don’t buy shares in companies I write up in the blog as I don’t want any accusations of trading on what I have written.

But, with Ithaca now yielding 22% for this year and c.15% for next year the shares have significant appeal and are monumentally cheap.

Dividend announcement

Ithaca Energy is pleased to announce its second interim dividend of $133 million, representing $0.1321 per ordinary share. The second interim dividend will be paid on 29 September 2023 to shareholders on the share register on 1 September 2023. The second interim dividend is expected to be followed by a further dividend payment relating to 2023, following the end of the financial year.

The dividend is payable in cash in Sterling to holders of the ordinary shares. Sterling dividends payable will be converted from US dollars at the mid-point of the market exchange rate on 4 September 2023. Accordingly, the Group will confirm the foreign exchange rate and the amount of the Sterling dividend payable in pence per share on Friday 8 September 2023.

Jadestone Energy

Jadestone yesterday provided the following update on operations at the Montara Venture FPSO offshore Australia, where production is temporarily shut in following the identification of a small defect between ballast water tank 4S and oil cargo tank 5C.

Since the most recent announcement on 10 August 2023, preparations to repair the 4S/5C defect have progressed in line with expectations, with the following activities taking place:

· Inspections in ballast water tank 4P have been completed, with two minor repairs to be carried out over the coming days, after which it is expected that tank 4P will be returned to service.

· The oil in tank 5C has been offloaded into a shuttle tanker and cleaning of the tank is well advanced, with a short inspection programme commencing later this week.

· The offload of the oil from tank 5C has permitted re-entry into tank 4S, with inspections now underway.

The defects encountered pose no safety or structural risk, nor any risk of a hydrocarbon leak to sea.

The Company continues to engage with the National Offshore Petroleum Safety and Environmental Management Authority on the results of ongoing inspections, analysis and near-term activities at the Montara Venture FPSO.

With regard to the disclosures in the 10 August 2023 announcement on the Company’s reserve-based loan, Jadestone currently does not expect production at Montara to be shut in for more than 60 days, subject to ongoing inspections, identifying the cause of the 4S/5C defect and implementing preventative measures.

A further update on the progress of Montara activities will be provided during the week commencing 28 August 2023.

The company recently announced another problem at Montara and at one stage the damage was of sufficient severity to have led to a breach of the covenant of the RBL. However the damage is apparently already under control and so there should be no breach nor punishment. More next week but it is time to let the JSE management to continue the recovery.

Deltic Energy

Deltic on Tuesday announced its interim results for the six months ended 30 June 2023.


·    Significantly increased estimate of oil and gas resources for the transformational Pensacola discovery on Licence P2252 (Deltic interest 30%) in the Southern North Sea (“SNS”).

 Discovery contains total gross P50 Estimated Ultimate Recovery (“EUR”) of c.99 mmboe, nearly double initial expectations

 Pensacola now estimated to contain material volumes of oil, representing c. 30% of the combined recoverable hydrocarbons

 Work is progressing with partners to develop the appraisal and development programme for Pensacola, with an appraisal well targeted for Q4 2024

·    The well planning process for drilling the Selene prospect (Deltic interest 50%) in the SNS is progressing well.

 The geophysical site survey currently underway with the geotechnical survey planned for later in the year

 Selene still expected to be drilled in Q3 2024

·    Deltic is withdrawing from three Licences (P2560, P2561 and P2562) it held with Capricorn Energy (“Capricorn”), and the partnership will move to relinquish these licences as soon as practicable.

·    Deltic intends to continue with Licences P2567 (Cadence) and P2428 (Cupertino), the two most prospective licences in this acreage, and apply for extensions to both licences as it seeks to attract another partner.

·    Deltic has submitted multiple applications for blocks and part blocks in the Southern and Central North Sea during the UK’s 33rd Offshore Licensing Round in FY 2022, with awards expected to be announced before the end of Q3 2023.

·    Cash position of £9.1 million at 30 June 2023 (31 December 2022: £20.4 million), with a net cash outflow for the period of £11.3 million (H1 2022:  £2.5 million).  The first half of 2023 saw significant planned investment and use of capital to complete the drilling of the Pensacola discovery.

Graham Swindells, CEO, commented:

“It is no exaggeration to say that the first half of 2023 has been transformational for Deltic, following the discovery of material quantities of hydrocarbons at Pensacola in the Southern North Sea. With an estimated 100 million barrels of oil equivalent, the majority of which is natural gas, this represents one of the biggest UK discoveries in over a decade, and is particularly significant considering the enormous energy security issues that the country currently faces. I am very proud of the entire Deltic team which has delivered this success, and I am confident that we will continue to build upon this going forward.”

I had a chance to catch up with Graham Swindells recently, primarily to talk about the Capricorn license situation but there are a number of exciting things to say at the moment. 

With regards to Capricorn, who after a year of turmoil are exiting outside Egypt and thus these parts of its portfolio and didn’t come as a big surprise to partners Deltic. The sensible thing to do was to relinquish three and keep two, those being P2567 and P2428 which have 17 leads and prospects and with an extension the company will open a data room in the near term to attract a partner. 

With regards to Selene, Shell has announced that site survey works associated with the exploration well location have commenced and that a geophysical site survey vessel has been mobilised to acquire high resolution 2D seismic lines over the proposed well location. The data will be in by the end of August and then used to determine the best location for the rig, which is still expected to be drilled next summer. 

Deltic are in a very strong position indeed, I have previously said that the 30% of a cautious 100m boe at Pensacola plus 50% of Selene makes a ten bagger a fairly easy target. Add to that the fact that the company are building a pipeline of assets taking them through 2025/26 and of course the multiple applications in the UK’s 33rd Offshore Licensing Round should be known this quarter.

With such a strong portfolio of high quality assets Deltic is well placed to grow strongly from here and at change from 29p to me that is a ten bagger…

United Oil & Gas

United Oil on Tuesday, announced that Jonathan Leather has notified the Board of his intention to step down as Chief Operating Officer  and Executive Director as of 31 August. Whist Jonathan will step back from day-to-day operational activity, given the status of the Jamaica farm-out process he will continue to provide support to the Company on a consultancy basis.

The Company has commenced a search process to identify a new COO and with effect from September, Jonathan’s non-Jamaican related responsibilities will be distributed amongst members of the management team in Dublin and Egypt. 

Brian Larkin, Chief Executive Officer commented 

“Jonathan has been a valued colleague at United since the formation of the company in 2015. I would like to take this opportunity to thank him, on behalf of the Board and colleagues across United, for his commitment and contribution during his time here and the central role he has played in United’s development to a full cycle oil and gas company. He remains central to our strategy on Jamaica and we are delighted that he will continue to support the Company on a consultancy basis through to the completion of this farmout process. He steps back from his Executive role with United with our best wishes for his future.”

Jonathan Leather, Chief Operations Officer commented:

“It has been an incredible eight years with United, and it is very much with mixed emotions that I have made the decision to step down from the Executive team. Having been part of the journey that saw the company grow from an idea and a sketched-out plan to the full-cycle company it is today, is without doubt one of the most fulfilling things I have been part of professionally. I am very pleased to continue to be involved with United in an advisory capacity, and will remain a significant shareholder, continuing to support this capable team as they grow the Company. Although I will continue to be involved in the company, I would like to take this opportunity to thank Brian and all of my colleagues at United for all the support they have given me over the last eight years.”

I spoke to Brian Larkin this morning and he updated me on the changes at UOG. After a long stint Jon is stepping down as COO but will remain as a consultant in particular looking after he process in Jamaica. With a strong country manager in Egypt he remains confident that while they are looking for a new COO the company is in good shape. 

That is clearly the case but I suspect that shareholders will want a deal on Maria, continued success in Egypt and even something in Jamaica before they feel confident about realistic upside at UOG.