WTI (Jan) $77.86  +$1.45, Brent (Jan) $83.10 +$1.42, Diff -$5.24 -3c.

USNG (Jan) $2.80 +1c, UKNG (Jan)* 103.5p -3.5p, TTF (Jan) €40.945 -€2.58.

*UKNG December contract expiry.

Oil price

Oil rallied yesterday, somewhat odd when the guesses ahead of today’s Opec meeting are mixed and the EIA inventory stats were not good, crude built 1.61m barrels and gasoline added 1.764m, even distillates built by some 5.217m b’s.

With Opec starting as I write and with no recommendations from the JMMC I understand that the group will cut another 1m b/d in addition to the KSA/Russia cuts.

PetroTal Corp

PetroTal has announced the release of its 2022 ESG Sustainability Report, which has been posted on the Company’s website (www.petrotal-corp.com).

2022 marked another significant step forward in terms of ESG reporting and standards achieved, aligning key projects with the UN Sustainable Development Goals (“SDG”) and improving the quality of life for many Peruvians.

PetroTal is committed to providing a sustainable business plan that delivers meaningful opportunities for all stakeholders, which includes dedicating significant attention, consideration and resources to environmental stewardship and social responsibility, with a constant and uncompromising commitment to safety, ethics and transparency.

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:

“PetroTal is very pleased to present its third annual ESG report covering operations for 2022.  We have trended portions of our ESG data from previous reports, and feel these trends show a significant advancement in our ESG practices and reporting from three years ago.  We are particularly pleased with our ability to scale scope 1 carbon emissions down to 6.96 kg CO2eq/bbl from 11.4 kg CO2eq/bbl in 2021.  The Company has many exciting ESG related projects in development and is looking forward to communicating them in 2024 and beyond.”

PetroTal has announced that the 16H well, the first well to be drilled from the new L2 West platform has commenced. The well is expected to cost approximately $15 million with completion and initial production expected in January 2024.

The company has been at the forefront of ESG reporting and this third report is as detailed and show that the significant progress as one would expect. The figures with respect to carbon emissions are indeed exceptional and bodes well for the future.

The key highlights from the Company’s third annual 2022 ESG report are noted below.

·    Distributed economic value in Peru of US$92.7 million in 2022 encompassing operating costs, salaries and benefits, payments to government and community investments including amounts related to the 2.5% development fund created by PetroTal in late 2021;

·    Significant climate change related projects which include but are not limited to:

 An evaluation of the Bretana oilfield’s geothermal energy generation potential, driven from the near boiling water produced from the Company’s fluid production;

 A diesel to solar panel transition at the Bretana oilfield and nearby communities;

 A field wide reduction of flare gas from gas to power investments in infrastructure; and,

 A carbon sequestration project partnership with Servicio Nacional de Areas Naturales Protegidas (“SERNANP”) that utilizes peat bogs in the Pacaya Samiria National Reserve adjacent to the field.

·    A commitment to achieving net-zero biodiversity loss by 2030, by implementing a robust flora and fauna hydrobiological monitoring program around 400 meters surrounding the area of operating influence near the Bretana oilfield;

·    Completion of the Taricaya Genetic Study which allowed for the discovery of a new species of bird called a Batara de Cocha, which, the Company was awarded for by the Sociedad Nacional de Mineria Petroleo Y Energia (“SNMPE”);

·    Initiation of a reforestation project in 7 de Junio community;

·    Improvement of the Company’s climate change goals by reiterating a 40% reduction of greenhouse gases of scope 1 and 2 by 2030, which aligns with Peru’s environmental targets;

·    A reduction in scope 1 emissions intensity to a peer leading 6.96 kg CO2eq/bbl from 11.40 kg CO2eq/bbl in 2021;

·    A commitment to local value creation with a strong Peruvian workforce irrespective of race, disability, sexual orientation, or age; and,

·    No fatalities or work related near misses during 2022 despite total number of hours worked increasing to nearly 2.8 million in 2022 from 2.1 million in 2021 by employees and contractors.

Drilling Commenced on well 16H

PetroTal is also pleased to announce the drilling commencement of well 16H, the first well to be drilled from the new L2 West platform.  The well is expected to cost approximately $15 million with completion and initial production expected in January 2024.

Eco (Atlantic) Oil & Gas

Eco Atlantic has announced its results for the three and six month periods ended 30 September 2023.

Highlights:

Financials (as at 30 September 2023)

·    The Company had cash and cash equivalents of US$3.85 million and no debt.

·    The Company had total assets of US$51.0 million, total liabilities of US$1.71 million and total equity of US$49.30 million.

Operations:

Guyana

·    On 10 August 2023, the Company signed a Sale Purchase Agreement for its wholly owned subsidiary, Eco Guyana Oil and Gas (Barbados) Limited to acquire a 60% Operated Interest in Orinduik Block, offshore Guyana, through the acquisition of Tullow Guyana B.V., a wholly owned subsidiary of Tullow Oil Plc. in exchange for a combination of upfront cash and contingent consideration (the “Transaction”).

Post-period end:

·    On 15 November 2023, Eco announced that the Company had received Government approval for the transfer of 60% Working Interest and Operatorship in the offshore Orinduik Block in Guyana from the Minister of Natural Resources, Cooperative Republic of Guyana.  

·    On 21 November 2023, the Company announced completion of the Transaction, upon which Eco became the designated Operator of the Orinduik Block and increase its aggregate Participating Interest to 75%, held via Eco Orinduik B.V. (60%) and Eco (Atlantic) Guyana Inc (15%). TOQAP Guyana B.V continues to hold a Participating Interest of 25%.

·    A formal farm-out process for the Orinduik Block has commenced and the Company expects to provide further updates in due course.

South Africa

Block 3B/4B

·    On 17 July 2023, the Company issued 1,200,000 shares to the Lunn Family Trust in place of the US$500,000 cash consideration due in respect of the acquisition of the 6.25% interest in Block3B/4B from the Lunn Family Trust as previously announced on 27 June 2022.

·    On 11 July 2023, 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. On 14 August 2023, the parties signed the final Assignment and Transfer agreement. Additional US$2.5m cash consideration is expected to be received upon Government of SA approval of the transfer, with the initial consideration of US$2.5m already having been received.

·    Government of SA approval and therefore the $2.5m cash payment from Africa Oil are expected to be received by year end 2023.

·    The JV partners continue to progress a farm-out, in conjunction with preparations for a two well drilling campaign on the Block. Further updates will be made as appropriate.

Block 2B

·    Eco has applied for a Production Right Application to the Petroleum Agency of South Africa, for Block 2B, and continues to assess opportunities available to deliver value from this licence for the benefit of stakeholders.

Namibia

·    Following media reports that significant multi-well drilling campaigns are about to be undertaken offshore Namibia, 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.

Board Changes:

·    Post period end, on October 9, 2023, the Company announced the appointment of Miss Alice Carroll and Miss Selma Usiku as executive and non-executive directors respectively of the Company with immediate effect, with Helmut Angula retiring from the Board.

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

“We have made progress on all fronts across our exploration portfolio in 2023. The most notable development was the acquisition of a 60% Working Interest in the Orinduik Block, offshore Guyana, from a subsidiary of Tullow Oil Plc. This transaction made Eco the Operator of the licence and brings our total stake in the Block to 75%. We have already commenced with a farm-out process and opened a data room, receiving early interest from a number of multi-national oil and gas companies.

“Also, offshore South Africa, we continue to progress plans for a two-well campaign on Block 3B/4B in parallel to continuing farm-out discussions with various large industry partners. In Namibia, we continue to receive incoming interest with regard to our highly strategic acreage position, which has increased following recent media reports of multi-well drilling campaigns being lined up.

“In closing, the last two quarters of 2023 have been a highly active period for us, and we look forward to sharing further updates on the ongoing farm out workstreams and drilling plans with our stakeholders as and when we are in a position to do so.”

These are historic figures and show nothing that we haven’t already heard of before, specifically the numbers are of no significance for Eco Atlantic.

I am much more excited by the recent news from the company and there is clearly much going on. Obviously the fact that they have managed to get Tullow’s stake in Guyana off them is exciting and I expect a farm-down here before long.

Also I am excited about activity offshore South Africa and block 3B/4B which to me looks to have potentially huge upside. Finally in Namibia which is increasingly becoming one of the world’s highly sought after post codes eco appear to have an enviable hand in this card game.

All in all Eco are extremely well placed with their excellent portfolio and I expect the next few months to show that the share price is extremely undervalued.

Predator Oil & Gas

Predator has provided an update on the background to, rationale for and current progress of the Company’s rigless testing programme within the northwest area of interest of the Guercif Petroleum Agreement and corresponding Exploration Permits onshore Morocco.

Petroleum Amendment No.3

Following the signing and approval of Petroleum Agreement Amendment No.2 dated 14 October 2022, the Initial Period of the Guercif Petroleum Agreement and corresponding Exploration Permits, which had been extended from 30 months to 42 months as a result of Petroleum Agreement Amendment No.1 dated 27 November, 2020, which allowed for force majeure due to COVID, was extended by a further 9 months to 5 August,2023. This allowed for the acceleration of additional drilling that would have otherwise been scheduled for the First Extension Period.

A further extension of six months to 5 February, 2024 was agreed with Office National des Hydrocarbures et des Mines (“ONHYM”)  to allow for the completion of the MOU-3 and MOU-4 drilling programme and associated reports and studies and for a potential rigless testing programme to be executed subject to a review of the drilling results.

Accordingly Petroleum Agreement Amendment No. 3 was executed by Predator Gas Ventures Ltd. (“PGVL”) and ONHYM dated 31 July 2023 and extended the Initial Period of the Guercif Petroleum Agreement and corresponding Exploration Permits to 57 months until 5 February, 2024 subject to obtaining the required statutory approvals under the form of (i) a Joint Ministerial Order to be executed by the Ministry of Energy and the Ministry of Finance approving the Guercif Petroleum Agreement Amendment No.3 and (ii) an order to be executed by the Ministry of Energy approving the six months extension to the Exploration Permits Initial Period.

Rigless Testing Programme

Changes to the rigless testing programme were forced to be made due to operational constraints regarding the preparedness of the Sandjet testing equipment and required availability of  chemicals in bulk to be imported from France.

Given the limited availability of the length of perforating gun strip for immediate use the following intervals were selected for perforating in sequence as follows:

MOU-3

1,406.0 to 1,412.0 metres RKB (within Moulouya Fan interval); and

845.0 to 849.0 metres RKB (Ma Sand)

MOU-1

1,236.5 to 1,241.1 metres RKB (TGB-2 Sand); and

844.0 to 848.0 metres RKB (Ma Sand)

Subject to establishing the potential quantum of gas flow rate for the Moulouya Fan interval in MOU-3, an option to replace the Ma Sand test in MOU-1 would be considered as follows:

MOU-4

873.85 to 879.85 metres RKB (within Moulouya Fan interval).

Accordingly the revised rigless testing programme for MOU-1 and MOU-3 was provided to ONHYM on the basis of which ONHYM sent letters to the Ministère de la Transition Energétique et du Développement Durable dated 12 October 2023 for authorisation for the use of the new quantity of explosives required for the rigless resting programme.

Following the receipt of all necessary approvals for rigless testing PGVL began the panning for the mobilisation on 6 November 2023 of those international crews required to perform certain elements of the testing programme.

The key objective of the testing programme was to ensure that all required rigless test data were available within the extension of the Initial Period of the Guercif Petroleum Agreement and corresponding Exploration Permits enabled by Petroleum Agreement Amendment No.3.

In preparation for entering the First Extension Period, PGVL has produced a partial 37.5% relinquishment map for the end of the Initial Period as required under the Moroccan Hydrocarbon Code but which retains all the prospective area within the original Guercif Licence.

Update on Guercif Petroleum Agreement Amendment No.3

On 8 November 2023 PGVL was informed by ONHYM of an unforeseen administrative regulatory issue as a consequence of which the Joint Ministerial Order approving the Guercif Petroleum Agreement Amendment No.3 had yet to be issued.

As a result PGVL had to stand down at short notice mobilisation of its rigless testing well services and international personnel to await resolution of the issue by third parties.

The matter was resolved and the Joint Ministerial Order is expected to be issued shortly.

We very much appreciate ONHYM’s assistance in resolving this matter.

PGVL has begun the process of re-scheduling and re-mobilising its rigless well testing team as a matter of urgency. It is currently forecast that rigless testing operations will begin as early as possible in January 2024.

The current rigless testing programme will remain as defined herein in order to minimise the lead time to commencement of operations.to enable the information to be acquired to support an application for an Exploitation Concession at the earliest opportunity in Q1 2024.

A follow-up rigless testing programme using Sandjet may also be scheduled for later to evaluate additional potential reservoirs in MOU-1, MOU-3 and MOU-4.

Memorandum of Understanding in relation to Gas Sales and Collaboration Agreements

In anticipation of a successful upcoming rigless testing programme and in preparation for a potential submission of a future application for an Exploitation Concession, PGVL successfully negotiated a Memorandum of Understanding in relation to Gas Sales and Collaboration Agreements (the “Agreement”) with Afriquia Gaz, a downstream potential purchaser of gas (together the “Parties”). The Parties have subsequently executed the Agreement on 27 November 2023, the main terms of which are also announced today in a separate RNS.

2024 Drilling Programme

A 2024 drilling programme and schedule will be proposed to ONHYM after completion of the rigless testing programme and upon entering the First Extension Period of the Guercif Petroleum Agreement.

In preparation for a drilling programme, PGVL has awarded a contract for an Environmental Impact Assessment covering five potential well locations.

These locations include a potential well to approximately 1,100 metres RKB to test the Jurassic prospect updip from the MOU-4 well. An independent geochemical desk-top study  has commenced to assess the potential for mature oil and/or condensate source rocks in the Jurassic in MOU-4.

Two well locations are planned to follow up the shallow sand intervals behind casing in MOU-3, that was not capable of being logged, and the Ma Sand interval in MOU-3 and MOU-1. Well depths are forecast to be approximately 800 and 1,000 metres RKB respectively.

Financing and Funding

PGVL is fully funded to execute a pilot CNG development project (the “CNG Project”) in Guercif.

The previously announced acquisition of TRex Holdings Trinidad Limited (“TRex”) and the Cory Moruga field was completed using discretionary cash on the Company’s balance sheet that was surplus to the CNG Project financial requirement.

Initial development of the Cory Moruga field will require only low cost workovers of up to four existing wells and is fully funded by the discretionary cash on the Company’s balance sheet.

The Cory Moruga workover programme will begin to be put together in January 2024 with the objective of re-entering the first well in Q1/Q2 2024. There is a significant and diversified well services industry in Trinidad. Cory Moruga is an existing Production Licence that does not require additional regulatory approvals before value-generating operations can be executed.

By the second half of 2024 TRex is expected to be generating significant positive cash flow from workover operations.

Cash flow from Cory Moruga production revenues and remaining discretionary cash on the balance sheet in H2 2024 would be potentially available to fund a high-impact Jurassic well in Morocco.

The Company will maintain an opportunistic strategy with respect to potential sale or farmout of some project equity where market conditions are conducive to such transactions and the commercial terms are attractive. Given that the Company is well-financed to deliver all of its current near-term firm strategic objectives for its substantially de-risked oil and gas portfolio, any dilution of project equity would need to be a compelling value proposition for shareholders.

Independent Technical Reports and Reserves Estimation

An independent technical report for the Cory Moruga asset with indicative production profiles and near-term revenue projections is expected to be released before the end of 2023.

An independent technical report for the Guercif gas assets and prospects including updated volumetric estimates will be available after completion of the rigless testing programme.

Paul Griffiths, Executive Chairman of Predator, commented:

“We have worked diligently to plan the necessary sequence of activities required to highlight the gas potential of the area and to be in a position after rigless testing to submit an application for an Exploitation Concession.

Unfortunately an unforeseen administrative regulatory issue totally out of the Company’s control caused a delay in the execution of the rigless testing programme. It is not possible to keep well services, equipment and personnel on standby indefinitely. Such services are in high demand at present elsewhere in North Africa. The costs that would have been incurred by the Company are simply not justifiable when prudent management of cash resources is essential during a time of uncertainty in the equity markets in the oil and gas sector.

However the additional time that is being accumulated before rigless testing can commence has enabled us to execute a Memorandum of Understanding in relation to Gas Sales with Afriquia Gaz.

Furthermore the Company was able to conclude the acquisition of TRex and oversee the transfer of a large quantity of technical and commercial data to enable us to  begin to plan the initial Cory Moruga workover programme for early in 2024.

The Cory Moruga Project is equally as exciting as Morocco, which will be demonstrated through the publication of an Independent Technical Report expected by the end of this year summarising potential resources.

We are extremely fortunate in these difficult times not only to be fully funded but also to have two projects competing for the generation of production revenues in the near-term.

Administratively it has been a difficult couple of months, but we are exiting 2023 stronger and even more resilient and secure in the knowledge that the Company has been transformed over the past 12 months. “

Predator has had its fair share of admin problems recently but now it expects its rigless testing to start at the Guercif early next year with the licence extensions. The plan is for Predator Gas Ventures to execute a pilot CNG development project in Guercif for which the company is ‘fully funded’. In this regard it is very good news that the recent delay has enabled them to sign up a MoU with Afriquia Gas S.A. 

And finally…

In the Champions League yesterday Lazio beat Celtic 2-0, PSG and the Bar Coders drew 2-2 and the Noisy Neighbours beat RB Leipzig 3-2.

Last night Galatasaray and the Red Devils drew 3-3 and the Gooners put 6 on Lens.

In the Boropa Cup tonight the Hammers are at Backa Topola, the Seagulls are at AEK Athens and Rangers host Aris Limassol.