WTI (Oct) $87.29 -22c, Brent (Nov) $90.64 -1c, Diff -$3.35 +21c.

USNG (Oct) $2.60 u/c, UKNG (Oct) 91.78p +0.78p, TTF (Oct) €35.6 -€1.0.

Oil price

Oil is rising again today ahead of what will probably be good inventory stats today and tomorrow. The US is waiting for the CPI figures tomorrow but I’m not expect the Fed to change this month.


Afentra has announced its half year results for the six months ended 30 June 2023.

Financial Summary

·      Cash resources as at 30 June 2023 of $15.7 million, which includes restricted funds of $8.0 million1 (30 June 2022; $35.1 million included restricted funds of $8.0 million1)

·      Crude oil stock as at 30 June 2023 of approx. 245,000 bbls (30 June 2022: nil), including crude oil stock inherited from the INA Acquisition and subsequent net entitlement production from Blocks 3/05 and 3/05A

·      Adjusted EBITDAX loss of $0.8 million (H1 2022: loss $1.2 million)

·      Loss after tax of $3.9 million (H1 2022: loss $2.9 million)

·      Debt drawdowns: Reserve Based Lending Facility (The “RBL Facility”) $12.8 million and Working Capital Facility $9.1 million. 

Angolan Acquisitions

The Company completed the INA Acquisition in May 2023 and is progressing its two strategically consistent and complementary transactions in Angola.

·      INA Acquisition: completed the acquisition of interests in Block 3/05 (4%) and Block 3/05A (5.33%)2 offshore Angola for a net $17.0 million payment on 10 May 2023 with a subsequent $10.0 million contingent payment made to INA on 17 May 2023 upon the extension of the Block 3/05 licence from 31 December 2025 to 31 December 2040. The $27.0 million net upfront consideration was funded through $18.9 million in agreed debt facilities and $8.1 million cash. The Company also inherited crude oil stock of 207,868 bbls, which has subsequently been sold Post-Period in August (details below).

·      Block 3/05 License Extension: satisfaction of a key condition precedent of the Sonangol Acquisition following the Block 3/05 Licence Extension to December 2040. Improved fiscal terms have also been agreed between the JV partners and ANPG and are now proceeding through the formal government approval process.

·      Block 23 License Extension: the exploration licence has been extended until 2 December 2026.

·      Financing Agreements: Mauritius Commercial Bank entered both the RBL and working capital facilities becoming lender to the Company. Trafigura retains an interest in the RBL facility and will continue as an offtake provider.

Post Period end, announcement of intended acquisitions:

·      Azule Acquisition: acquisition of interests in Block 3/05 (12%) and Block 3/05A (16%)2 offshore Angola for a firm consideration of $48.5 million and contingent payments of up to $36 million3. Transaction will be funded through the agreed capacity within debt facilities with Mauritius Commercial Bank and Trafigura and existing cash on balance sheet. A 10% transaction deposit of $4.85 million has been placed in escrow as per the Sale and Purchase Agreement (‘SPA’).

·      Amended Sonangol Acquisition: acquiring a reduced working interest from Sonangol in Block 3/05, from 20% to 14% in order to ensure an appropriate balance of equity interests in Block 3/05. Firm and contingent considerations reduce to $56 million and up to $35 million, respectively4 (terms including the effective date of 20 April 2022 remaining unchanged). Combined with existing ownership and the Azule Acquisition, Afentra’s working interests will be 30% in Block 3/05 and 21.33%2 in Block 3/05A. The consideration for the 40% interest in Block 23 remains unchanged at $0.5 million.

Operations Summary

Existing operations and impact of ongoing acquisitions5

·      Block 3/05 (4% interest)a programme of successful light well interventions (‘LWI’) has been ongoing in 2023, delivering incremental production; combined with further interventions (post-period) gross daily production rates have exceeded 20,000 bbl/d since end July. An additional LWI campaign commenced in August and will continue through to year end. Water injection upgrades are also ongoing with injection rates more than doubling YoY (averaging approx. 38,000 bw/d during H1 2023), injection volumes are expected to continue to increase through H2 2023. This improved water injection is expected to impact oil production in the medium term as reservoir pressure increases.

·      Block 3/05A (5.33%):2 production was restored at the Gazela field in March and at end-July was approx. 1,450 bbl/d. This extended test will help to establish the long-term resource potential and appropriate development strategy.

·      Production: consolidated net H1 2023 production from Blocks 3/05 and 3/05A 

Production (bopd)

Current Equity

Post Transactions5

Block 3/05



Block 3/05A






·      Reserves and resources: following an updated CPR, effective 1 July 2023, reserves replacement in the first half of 2023 has been in excess of 150%. 

2P Reserves (mmbbls)

2C Resources (mmbbls)6

Current Equity

Post Transactions5

Current Equity

Post Transactions5

Block 3/05




Block 3/05A








·      Odewayne block: offshore Somaliland (34% interest fully carried by operator, Genel Energy), the operator and Afentra completed updated petroleum systems and satellite seep studies with borehole planning in progress.

Post Period end

·      Suspension of shares and reverse takeover: in accordance with the AIM Rules for Companies, the Company’s ordinary shares were suspended from trading on AIM from 19 July 2023 as the Azule Acquisition and Amended Sonangol Acquisition each constitute a reverse takeover (‘RTO’) under Rule 14 of the AIM Rules. Trading in the Company’s ordinary shares will remain suspended until such time as either an admission document is published, or an announcement is released confirming that the Azule Acquisition and Amended Sonangol Acquisition are not proceeding.

·      AIM Readmission process and General Meeting: the Company has made encouraging progress with respect to the recommencement of trading on AIM and expects to publish an Admission Document shortly, with both the Azule Acquisition and the Amended Sonangol Acquisition being subject to shareholder approval thereafter. We expect both transactions to complete, subject to shareholder approval, in Q4 2023.

·      First crude cargo sale: the Company sold its first cargo of 300,000 bbls of crude oil in August comprising crude oil stock and subsequent production from the INA Acquisition. The sales price inclusive of the Brent premium was $88/bblgenerating pre-tax sales of $26.4 million net to Afentra.

·      Block 3/05 fiscal terms: the enhanced fiscal terms associated with the Block 3/05 PSA extension remain subject to requisite government approvals and we look forward to providing shareholders with further updates in due course.

Paul McDade, Chief Executive Officer, Afentra plc commented: 

“Having identified Blocks 3/05 and 3/05A as assets that align with the strategic purpose of Afentra, we targeted acquiring a material ownership in both licenses. This year we have made substantial progress towards that goal. In the first half of 2023, we achieved a significant milestone through the completion of our inaugural deal with INA to introduce these producing and development assets to the Company. This was followed with the announcement of the Azule SPA and Amended Sonangol transaction post-period, allowing us to maximise our ownership in both Block 3/05 and Block 3/05A while ensuring an appropriate balance of interests in the partnership. The positive news on the license extension and the favourable improvement of the fiscal terms that are proceeding through the approval process, underpins our belief that Angola is an attractive investment environment where we can maximise the value of these high-quality assets over the long-term.

In August we achieved another important milestone selling our first cargo of crude, at an attractive price, allowing us to monetise the barrels acquired at the completion of the INA transaction and generate Afentra’s first revenues.

On the operational side, the assets have performed well following the maintenance, light well intervention and water injection programmes undertaken and we take confidence in the positive influence the Afentra team have had working alongside Sonangol and our JV partners. The enhanced production and solid reserve replacement achieved through an active work programme demonstrates the considerable upside that we believe can be realised from Block 3/05 out to the current license period of 2040. 

The RTO process has progressed both efficiently and cost effectively thus far, ensuring that the suspension period for our shares is minimised. We look forward to demonstrating the highly value-accretive nature of the Azule transaction, and the amended Sonangol transaction, when they complete in the coming months, and meanwhile due to the effective dates we continue to benefit from the associated cash flow of those interests, which will be further enhanced by the improved fiscal terms.

Finally, we look forward to ending the year having completed all three transactions which will underpin the Company with material proven reserves, robust production and cash flow, and significant upside potential from a high-quality asset base.”

Afentra has been very busy putting together a portfolio of assets in Angola and whilst the road is inevitably slow the rewards will be highly significant.  With the latest suspension being unfortunate but necessary, the Sonangol and Azule acquisitions are hopefully not far from completion and therefore the listing will return. 

I continue to remain very positive about the prospects for Afentra with its highly experienced management team set to deliver a bunch of excellent acquisitions with not to be forgotten meaningful upside and remains in the Bucket List.

Reabold Resources

Reabold has announced that the Company has agreed to increase its interest in LNEnergy Limited by a further 1.6%, through the subscription of 18 new ordinary shares for a cash consideration of £250,000, at a price of £13,889 per share, funded from existing cash resources. This takes Reabold’s total shareholding to approximately 17.6% of LNEnergy’s enlarged share capital.

The Company still holds the Second Option, now expiring 29 December 2023, for the Company to acquire, at its sole discretion, a further 127 new ordinary shares in LNEnergy for cash consideration of £1,800,000, as announced on 9 May 2023. If the Second Option is exercised, it would result in Reabold holding an aggregate 26.1% interest in the enlarged share capital of LNEnergy for a total cash and equity consideration of £4.3 million. 

The Investment follows Reabold’s acquisition of a 16.2% equity interest in LNEnergy, as announced on 9 May 2023 and 12 June 2023. LNEnergy’s primary asset is an exclusive option over a 90% interest in the Colle Santo gas field. The Colle Santo gas field is a highly material gas resource with an estimated 65Bcf of 2P reserves[1], with two production wells already drilled and the field development ready. LNEnergy believes that the field has the potential to generate an estimated €11-12m of gross post-tax free cash flow per annum.

Reabold has published a competent person’s report in relation to Colle Santo, which can be found here: www.reabold.com/investors/reports-presentations

The Investment follows the announcement made by the Company on 5 September 2023, which noted that the Colle Santo project had entered the operational phase after receiving confirmation from the Abruzzo regional government of its agreement with, and intention to approve, by decree, the Early Production Programme for the Colle Santo gas field, which would allow early revenue generation from the Colle Santo project.  Reabold’s additional investment provides increased exposure to this material gas resource, as well as facilitating the first stages of the accelerated work programme associated with the Early Production Programme.

Additional Information

As part of the Investment, LNEnergy has agreed to appoint Sachin Oza, Co-CEO of Reabold, as a board observer. Reabold is entitled to appoint one person to act as a board observer provided that the Company is interested in 10% or more of LNEnergy’s issued share capital. 

As at 30 September 2022, LNEnergy reported unaudited net assets of US$746,034. LNEnergy’s financial statements for the year ended 30 September 2022 did not include income statement items; however, its management accounts reported a loss for the year ended 31 December 2022 of US$597,185.

Stephen Williams, Co-CEO of Reabold, commented:

“Following the positive permitting progress on the Colle Santo gas field announced last week and the subsequent acceleration of the work programme in Italy, we are delighted to be able to further increase our interest in LNEnergy. The 65Bcf field is development ready and is expected to generate significant cash flow once on stream, whilst providing crucial domestic energy resource for Italy.”

There is little to add following this inevitable increase in Reabold’s stake in LNEnergy and after my note last week. I am pretty much converted to the view that the political situation in Italy has changed as said by Mark Routh as a seminar this week the government has become a gas convert. I am only just onside with this view…

Once final approvals are given, the Colle Santo field should indeed generate substantial returns for Reabold, by the time that happens I would expect them to have invested substantially more in the project, at least as much as they have got that is not promised elsewhere… 

Ithaca Energy

Ithaca has announced that the Group has agreed, subject to regulatory approval, to acquire the remaining 30% stake in Cambo from Shell U.K. Limited taking Ithaca Energy’s stake in Cambo to 100%. 

The acquisition, which has minimal near-term cost exposure, will provide Ithaca Energy with full control over the progression of the future development of Cambo, the second largest undeveloped oil and gas discovery in the UK North Sea.

The consideration, in accordance with the previously announced terms dated 5 May, is payable on the earlier of (i) first oil; and (ii) the receipt of proceeds of any subsequent sale of a working interest in Cambo by Ithaca Energy; and is subject to Ithaca Energy proceeding with FID and/or the NSTA providing development consent.

Alan Bruce, Chief Executive Officer, Ithaca Energy, commented:

“We are pleased to conclude the marketing process with Shell and to take full ownership of the Cambo development. Our primary focus continues to be the delivery of our BUY, BUILD and BOOST strategy, including the future development of Cambo, subject to fiscal conditions. We believe that Cambo has an important role to play in providing energy security and economic benefit to the UK, while reducing overall emissions intensity.”

Ithaca buying Shell’s 30% stake in Cambo came as no surprise, even the cheap nature of the deal was as expected as ITH pile into a piece of prime real estate in the North Sea. An attractive price with delayed payment which adds significant reserves to the portfolio and looks good with Rosebank. 

Ithaca is a must have stock in the sector with its attractive portfolio, full of long term value if you can ignore the slight medium term hole due to to UK Fiscal policy which I can and as if like an insurance company in run-off is paying out huge dividends. I think it yields some 21% which is absurd and will pop into the Bucket List very soon. (The Bucket List was scheduled for an update last month which didn’t happen for technical reasons, apologies). 

Coro Energy/Empyrean Energy

Coro and Empyrean have announced that the operator of the Duyung PSC has signed the non-binding Term Sheet with Sembcorp Gas Pte. Ltd. for a long-term gas sales agreement for the Mako gas field. Critically, the Term Sheet has been endorsed by the Indonesian petroleum upstream regulator (SKK Migas).

The Mako gas field was discovered in 2016, and since that time the resource has been delineated through successful appraisal drilling. It received formal approval from the Government of Indonesia for the revised Plan of Development in late 2022. Coro has a 15% participating interest in the Duyung PSC.

The Term Sheet relates to the sale of Mako gas from start of production until 2037 for a total sales gas volume (100%) of c 293 Bcf with the potential to increase to c 392 Bcf. Gas sales will be priced against Brent oil.

The parties will now focus on finalising a definitive gas sales agreement.

James Parsons, Coro Chairman, commented:

“I am delighted to have now secured the GSA Heads at the Duyung PSC, approved by the buyer and, critically, endorsed by the Indonesian authorities.

This is a critical step in the commercial de-risking of our project, positioning us perfectly for bids from the operator’s  farm-out process, which we expect to play out shortly.”

Empyrean CEO, Tom Kelly, stated:

“Empyrean is delighted that agreement has been reached between the operator of Mako and a major gas utility and that the agreement has been endorsed by the Government of Indonesia’s petroleum upstream regulator. Focus will now be on converting this significant milestone into a binding gas sales agreement. The existing terms will be welcomed by those parties currently participating in the sell down process to fund the development of the Mako gas field.

The Mako gas field is the largest undeveloped gas discovery in the West Natuna Sea and is considered significant for energy security in the region and the transition from coal to cleaner sources of energy.”

This is of key interest, in that the GSA was needed before either company can negotiate the debt deal that is also needed for taking the exciting asset to the next stage. 

Arrow Exploration

Yesterday in the blog I wrote about the updated reserves numbers and discussed Arrow’s exciting future. I also added this interview which says much more than I ever can and repeat it just in case anyone missed it yesterday.

Core Finance CEO Interview: Marshall Abbott, Arrow Exploration – September 2023

And finally…

A pause in the RWC after the first weekend means that footy takes the stage which is pretty unpalatable at this time of year. Last night in the Euro Qualifiers Wales beat Latvia 2-0 which is a great result for qualifying prospects. Tonight Scotland host England in a ‘friendly’ which is a travesty, that fixture should never be that…