WTI (June) $78.99 +61c, Brent (July) $83.58 +42c, Diff -$4.59 -19c.

USNG (June) $2.19 -2c, UKNG (June) 75.0p +0.25p, TTF (June) €30.70 +€0.03.

Oil price

A small bounce for the oil price and with nothing doing in the Middle East the inventory stats showed a welcome improvement from the API the day before. With crude drawing 1.362m barrels the market liked it but with a 1% rise in refinery runs the gasoline stock built, ahead of the imminent driving season.

Genel Energy

Genel has issued the following trading and operations update relating to Q1 2024, ahead of the Company’s Annual General Meeting, which is being held today.

Paul Weir, Chief Executive of Genel, said:

“We have achieved balanced income and expenditure in the first quarter of the year, which is ahead of schedule. Local sales from the Tawke licence have been robust to date, with the sales price increasing marginally and demand staying strong, and we continue to expect income to cover our spend over the course of the full year. Local sales volumes going forward will continue to be dependent on demand, the view of the field partners on reservoir management, and whether investment would be cost effective and deliver value to shareholders.

The business is in a robust financial position, with multiple potential catalysts for the delivery of significant shareholder value ahead.”

As always at the moment there is little to add to the situation at Genel, after all until anything changes on the pipeline front there is nothing much to add. Even on the analysts call there were virtually no major discussion points, and crude is being sold at ‘high $30’s’ per barrel to local buyers and refineries.

Genel remains financially very strong and with a continued interest in M&A, and with ‘multiple potential catalysts for significant shareholder value ahead’, it makes the company of genuine interest. 



  • Cash of $372 million at 31 March 2023 ($363 million at 31 December 2023)
    • The positive improvement in cash is principally caused by temporary deferral of payables and other positive working capital movements
    • Following the first of the $11 million bi-annual bond interest payments in April, cash at the end of April is $361 million
    • We expect our costs to be covered by income for the remainder of the year
  • Net cash under IFRS of $128 million at 31 March 2024 ($120 million at 31 December 2023)
    • Total debt of $248 million at 31 March 2024 ($248 million at 31 December 2023)


  • Zero lost time incidents in 2024 to date, with four and a half million hours worked since the last incident
  • Gross production of 76,310 bopd in Q1 2024 (65,770 bopd in Q4 2023), all from the Tawke licence, where local sales demand remains robust
    • Net production of 19,080 bopd in Q1 2024 (16,440 bopd in Q4 2023)
  • Following negotiation with local buyers, the sales price from the Tawke licence has been raised to the upper-USD 30s per barrel level


  • The London-seated international arbitration process, which includes Genel’s claim for substantial compensation from the KRG following the termination of the Miran and Bina Bawi PSCs, is ongoing. Written closing submissions will now be made next week, subsequent to which written reply submissions will be made in the first half of June. The timing of the result is uncertain, but is expected by the end of 2024


  • Genel continues to expect net cash to remain well above $100 million throughout 2024
  • Talks between stakeholders regarding the Iraq-Türkiye Pipeline are ongoing, although the timing of the resumption of exports remains uncertain

Diversified Energy Company

Diversified has announced it is trading in line with expectations and provides the following operations and trading update for the quarter ended March 31, 2024. In addition, the Company is providing an update on its Black Bear processing facility.

Delivering Reliable Results

•     Recorded average 1Q24 production of 723 MMcfepd (121 Mboepd)

◦     Exit rate of 742 MMcfepd (124 Mboepd)

◦     Production essentially flat from 4Q23 adj. production of 725 MMcfepd (121 Mboepd)(a)

•     Operating Cash Flow of $107 million, and Net loss of $15 million inclusive of non-cash unsettled derivative fair value adjustments, and non-cash depreciation, depletion and amortization

•     Achieved 1Q24 Adjusted EBITDA of $102 million and Free Cash Flow of $74 million

◦     Realized 48% Adjusted EBITDA Margin(b) and TTM  Free Cash Flow Yield of 31%(c)

•     Adjusted Operating Cost per Unit(d) of $1.68/Mcfe ($10.10/Boe); ~7% improvement vs 4Q23

•     Realized $22 million in gains on settled derivatives as a result of a prudent hedging program, providing a 28% uplift to Adjusted EBITDA

◦     Recently added additional natural gas hedges in 2026 at $3.95 and 2027 at $4.01

Expansion of Processing Capabilities- Black Bear Facility

•     Located in DeSoto Parish, Louisiana, includes two processing plants, and FERC regulated NGL pipeline

•     Strategic purchase in April 2022 for ~$10 million as part of overall vertical integration strategy

•     Recently completed upgrade and reroute that provides processing capacity for ~120 Mmcfpd

◦     Anticipated to process ~66 Mmcfpd of DEC production while also allowing for potential third-party processing revenue and additional volume from potential bolt-on acquisitions

•     Improvement of ~20% on transportation and fractionation fees and anticipated margin improvement of ~$9 million per year

◦     Eliminates third-party processing and compression fees on the transferred Diversified production volumes

Executing Strategic Objectives

•     Declared 1Q24 interim dividend of $0.29 cents per share

•     Repurchased ~400,000 shares in 2024 for £3.9 million ($5 million) at an average of £9.74/share

◦     ~$18 million of share repurchases (inclusive of EBT(e) purchases) since the 2023 Annual General Meeting, representing ~3% of Issued Share Capital

◦     More than $830 million in aggregate return of capital(f) since the Company’s 2017 initial public offering

•     Reduced debt outstanding by ~20% (~$309 million) compared to Q1 2023

•     $115 million of undrawn credit facility capacity and unrestricted cash; leverage ratio(g) of 2.5x

•     Previously announced acquisition of Oaktree Capital Management working interest proceeding on schedule and anticipated to close in due course

Creating Value Through Stewardship

•     Published 2023 Sustainability Report highlighting significant emissions reduction achievements, record levels of well retirement, and implementation of innovative sustainability strategies

•     Next LVL Energy completed 76 well retirements through March 2024, in line with prior year retirements of 74 wells over the same period

Rusty Hutson, Jr., CEO of Diversified, commented:

“Building a portfolio of high-performing, mature producing assets and optimizing the cost structure has been the foundation of our strategic vision since inception. The Company’s ability to continue to deliver solid results, both operationally and financially, reinforces the success of this strategy. I am pleased that our ongoing focus on cost reduction opportunities has translated directly into a 7% sequential quarterly operating cost improvement, allowing us to effectively navigate the current natural gas market headwinds.

Additionally, I am excited to announce that our Black Bear processing facility has begun service.  Completing this strategic project demonstrates our success in leveraging in-house expertise to unlock value and facilitate meaningful cash flow generation. This facility will integrate our own natural gas production in the area and is expected to deliver approximately $9 million of additional margin creation annually while providing additional potential upside from any non-utilized capacity to process third-party gas from other operators and accretive bolt-on acquisitions in the Cotton Valley and Haynesville region.

We will continue to observe our commitment to our “Focus Five” priorities while looking to capture synergies, operate efficiently, and ensure Diversified remains the Right Company at the Right Time.  We look forward to completing the acquisition of additional working interest production from Oaktree. This acquisition provides Diversified with increased volumes in our Central region, which has exposure to the LNG pricing markets on the US Gulf Coast. I am confident that the reliability and consistency of our assets will continue to provide meaningful cash flow, financial flexibility and support our ability to return value to shareholders.”

Yet again in my view DEC has delivered the goods and the model has performed well in producing a highly investible set of econometrics. In this case production, which is in line with my and the market expectations has coped well and delivered, despite a lower than expected natural gas prices which were offset by even better hedging policies and a warmer winter.

Also as expected, the company’s exceptional attack on the cost base continued, this was during this quarter particularly noticeable at Black Bear where a huge increase in the processing of gas is taking place and where DEC’s own as well as third party gas reduces the costs and drops through to the margin.

The company kindly gives a good target of the amount that that margin improves by, approximately $9m of annual  additional creation and importantly ‘while providing additional potential upside from any non-utilized capacity to process third-party gas from other operators and accretive bolt-on acquisitions in the Cotton Valley and Haynesville region’.

So, with continued attacks on the cost base and in particular Black Bear delivering well, I am happy with the way that this update pans out. I have also noted in recent days how the natural gas price has picked up and what is more looks better on the longer strip. It should also be noted that a higher gas price is not a necessity for DEC, indeed some of the best performing periods have been the reverse.

The company have also declared another very positive 29c of dividend and will distribute also via buy-backs which is another sign of confidence and that operationally from its high quality portfolio of assets ‘provide meaningful cash flow, financial flexibility and support our ability to return value to shareholders’. 

I remain confident that the management of DEC is amongst the best in the industry, it identifies, pursues and acquires and then delivers its targets. With a best in class cost reduction process, the 48% margin remains better than most enabling payouts to shareholders again, the shares have risen by some 35% since the lows and indicates that the market have finally ‘got’ the process.

Black Bear Processing Facility

In April 2022, the Company closed on the strategic purchase of the Black Bear processing facility for approximately $10 million in cash. This NGL processing facility located within the Company’s Central Region (DeSoto Parish, LA) maintains two 60,000 mcf per day cryogenic processing plants (total capacity of approximately 120,000 mcf per day) with direct connection to downstream natural gas and NGL markets. At full utilization, the facility can produce approximately 3,000 barrels per day of NGL’s.  The Company has completed a reroute and maintenance optimization program relative to the facility that will increase processed volumes to approximately 66,000 mcf per day of Diversified’s natural gas production, which is approximately a 400% increase from when Diversified acquired the facility. The addition of this strategic midstream infrastructure is anticipated to drive further cost improvements, provide the potential for ethane recovery, and present the ability to receive third-party revenue from the current non-utilized capacity. 

Operations and Finance Update


The Company recorded exit rate production in March 2024 of 742 MMcfepd (124 Mboepd) and delivered 1Q24 average net daily production of 723 MMcfepd (121 Mboepd). Diversified’s average production for the quarter reflects the exceptionally shallow decline profile of its assets, with average production for the period representing an effectively 0% change in volumes(a) compared to the 4Q23 average of 725 MMcfepd (121 Mboepd), adjusted for the recent divestiture of assets associated with the previously announced ABSVII Asset Sale transaction.

Margin and Total Cash Expenses per Unit

Diversified’s consistent application of the Company’s hedging strategy again provided material insulation from commodity price volatility, positively impacting 1Q24 per unit Total Revenues, inclusive of Settled Hedges of $3.25/Mcfe ($19.50/Boe) despite headwinds to natural gas prices during the quarter.

Adjusted EBITDA Margins(b) of 48% (42% unhedged) reflect the benefit of the Company’s per unit revenues and ongoing decreases in commodity-price linked expenses that more than offset production-related changes to per-unit Lease Operating Expense and Midstream Expense. General and Administrative expenses remained consistent with prior period levels.








Average Realized Price1

$      3.25

$    19.50

$     3.49

$ 20.92

    (7)    %

Adjusted Operating Cost per Unit(d)








Lease Operating Expense2

$      0.65

$      3.91

$     0.62

$   3.69


Midstream Expense






Gathering and Transportation






Production Taxes






Total Operating Expense2


Employees, Administrative Costs and Professional Fees(h)






Adjusted Operating Cost per Unit2


Adjusted EBITDA Margin(b)



1 1Q24 excludes  $0.05/Mcfe ($0.30/Boe) and 4Q23 excludes $0.08/Mcfe ($0.49/Boe) of other revenues generated by Next LVL Energy

Values may not sum due to rounding

2 1Q24 excludes $(0.07)/Mcfe ($(0.39)/Boe) and 4Q23 excludes $(0.08)/Mcfe ($(0.47)/Boe) of expenses attributable to Next LVL Energy

Values may not sum due to rounding

Results of Hedging and Current Financial Derivatives Portfolio

Diversified’s consistent application of hedges to strategically secure cash flows and margins resulted in a 1Q24 hedge floor price of $3.36/Mcf, 40% higher than the average settled price for NYMEX Henry Hub during the quarter(j).

For the balance of the year, the Company’s strategy continues to be well-placed for cash generation with a remaining 2024 average natural gas hedge floor of $3.41/Mcf, currently situated at a ~40% premium to the NYMEX strip(i) and a ~65% premium to the 2.04/MMBtu active contract price(i). The table below represents the Company’s full-year hedge positions through calendar year 2026 at April 30, 2024:

GAS (Mcf)

NGL (Bbl)

OIL (Bbl)

Wtd. Avg. Hedge  Price(j)(k)

~ % of Production Hedged(l)

Wtd. Avg. Hedge  Price(j)

~ % of Production Hedged(l)

Wtd. Avg. Hedge  Price(j)

~ % of Production Hedged(l)






















Natural gas pricing has shown a meaningful recent improvement during 2024, driven by several overriding supply and demand factors, including continued production management through curtailments, deferrals of well completions, and the emerging data center thematic, which would require material volumes of additional natural gas power demand. The table below illustrates the natural gas price curve movements:

Strip at February 2024

Strip at May 2024

Pricing Improvement





























Source: Bloomberg, all values priced in $/MMBtu

Environmental Update

Emissions Reductions Activity

During the quarter, Diversified continued to execute its emissions detection activities throughout its operating footprint through a combination of aerial LiDAR and handheld LDAR deployments. Upstream emissions surveys in Appalachia and the Central Region have maintained no-leak rates of 99% through the quarter, reflecting the ongoing impact of Diversified’s stewardship focus.

The Company continues to seek innovation in its application of emissions reductions and mitigation efforts, including pilot projects to convert upstream and midstream facilities from natural gas-powered pneumatic devices to air compression and electric actuation.

Asset Retirement Progress and Next LVL Energy Update

In 1Q24 the Company safely retired 76 wells (72 operated by Diversified), consistent with the 74 well retirements in 1Q23 and representing substantial progress towards the Company’s annual goal of retiring 200 operated wells per year. Next LVL Energy’s plans for the remainder of 2024 include revenue generation from its continued partnership with states and third-party operators. Diversified expects to achieve full-year retirements similar to 2023 while significantly offsetting the cash costs associated with retiring its own wells.

Oaktree Working Interest Acquisition

The Company’s previously announced acquisition of Oaktree’s proportionate interest in the acquired assets from Indigo, Tanos III, East Texas, and Tapstone (the “Assets”) continues to proceed as planned with an estimated transaction close date within 60 days post general shareholder meeting, pending shareholder and other customary approvals.



Sequential period decline rate of ~0% calculated as the change in average daily production from 4Q23 to 1Q24, excluding the net production impact of the ABSVII divestiture on the previously reported average daily production for 4Q23.


For purposes of comparability, Adjusted EBITDA Margin excludes Other Revenue of $3 million in 1Q24 and $6 million in 4Q23, and Lease Operating Expense of $4 million in 1Q24 and $6 million in 4Q23 associated with Diversified’s wholly owned plugging subsidiary, Next LVL Energy; For more information, please refer to the Non-IFRS reconciliations.


Calculated using the trailing twelve Free Cash Flow per share, dividend m the trailing twelve month average share price of £14.79 / $18.58; Trailing twelve month Free Cash Flow per Share calculated as Free Cash Flow of $279 million dividend by average shares outstanding of 48,269,478 during the twelve month period.


Adjusted Operating Cost represent total lease operating costs plus recurring administrative costs. Total lease operating costs include base lease operating expense, owned gathering and compression (midstream) expense, third-party gathering and transportation expense, and production taxes. Recurring administrative expenses (Adjusted G&A) is a Non-IFRS financial measure defined as total administrative expenses excluding non-recurring acquisition & integration costs and non-cash equity compensation; For purposes of comparability, excludes certain amounts related to  Diversified’s wholly owned plugging subsidiary, Next LVL Energy.


As used herein, “EBT” refers to Diversified’s Employee Benefit Trust, which was established in 2022 to purchase shares already in the market and is operated through a third-party trustee. The objective of the EBT is to benefit the employees of the Company and its wholly owned subsidiaries and in particular, to provide a mechanism to satisfy rights to shares arising on the exercise or vesting of awards under share based incentive plans and reduce dilution for shareholders.


Includes the total value of dividends paid and declared and share repurchases (including Employee Benefit Trust) since the Company’s initial public offering in 2017.


As used herein, Net Debt-to-Adjusted EBITDA, or “Leverage”, is measured as current Net Debt, divided by pro forma  Adjusted EBITDA for the twelve months ended March 31, 2024; For more information, please refer to the included Non-IFRS reconciliations.


As used herein, employees, administrative costs and professional services represents total administrative expenses excluding cost associated with acquisitions, other adjusting costs and non-cash expenses. We use employees, administrative costs and professional services because this measure excludes items that affect the comparability of results or that are not indicative of trends in the ongoing business.


Using NYMEX strip at May 1, 2024, inclusive settled contracts for January 2024 through May 2024.


Weighted average price reflects the weighted average of the swap price and floor price for collar contracts as applicable.


 MMBtu prices have been converted to Mcf using a richness factor of 1Mcf=1.07MMBtu.


Illustrative percent hedged, calculated using 1Q24 average production and assuming a consolidated annual corporate decline rate of 10%.

For Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in the Company’s  Annual Report and Form 20-F for the year ended December 31, 2023 filed with the United States Securities and Exchange Commission.

PetroTal Corp

PetroTal has reported its operating and financial results for the three months ended March 31, 2024.

Selected financial and operational information is outlined below and should be read in conjunction with the Company’s unaudited consolidated financial statements and management’s discussion and analysis (“MD&A”) for the three months ended March 31, 2024, which are available on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.PetroTal‐Corp.com. All amounts herein are in United States dollars unless otherwise stated.

Selected Q1 2024 Highlights

·    Average Q1 2024 sales and production of 18,347 and 18,518 barrels (“bbls”) of oil per day (“bopd”), respectively; PetroTal’s second best quarter to date and within the Company’s guidance;

·    Generated Q1 2024 EBITDA(1) and free funds flow(1) of $71.6 million ($42.85/bbl) and $52.6 million ($31.48/bbl), respectively, materially surpassing Q4 2024 levels due to higher sales volumes realized in the quarter;

·    Exited Q1 2024 in a strong cash position with $85.2 million in total cash ($62.5 million unrestricted), with over $93 million in short term receivables due subsequent to March 31;

·    Delivered strong operating cost metrics with lifting and variable transportation costs under $7.00/bbl in the quarter helping generate a near 80% net operating income margin;

·    Capital expenditures (“Capex”) totaled $30.4 million in Q1 2024 and were focused on drilling well 17H, and continued infrastructure projects including water handling upgrades;

·    Successfully drilled one and completed two new oil wells in the quarter, both of which met Company expectations and continue to perform at strong rates. Well 17H has averaged approximately 4,050 bopd for the month of April 2024;

·    Delivered strong Q1 2024 net income of $47.6 million ($0.05/share); and,

·    Paid total dividends of $0.02/share and repurchased 5.2 million common shares in Q1 2024, representing approximately $21.5 million of total capital returned to shareholders (approximately 4% of March 31, 2024, market capitalization).

(1)   Non-GAAP (defined below) measure that does not have any standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures presented by other entities. See “Selected Financial Measures” section.

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

“Q1 2024 was an exceptional and near record quarter for PetroTal.  Cash flow was stronger than projected in previously announced guidance, allowing the Company some additional flexibility to plan for upcoming heavier Capex quarters likely to be seen under dry season conditions.  As in previous years, the Company will reassess its guidance once the first half year results are finalized.

In addition to the strong quarterly results, we are extremely excited to execute the purchase and sale agreement for the first acquisition in the Company’s history.  This transaction is highly strategic from an operational, financial, and social perspective.  We look forward to incorporating it into our story when the transaction closes.”

This was a cracking quarter for PetroTal who have yet again delivered the goods across the board and even yesterday added a ‘strategic asset’ which shows that the company are ready willing and able to add to the portfolio at this stage.

Production was in line and revenue and EBITDA was a highly creditable $71.5m both significant increases on 4Q 23. The acquisition looks most interesting and as I wrote yesterday give plenty of upside potential in many ways. 

Whilst the shares have risen 25% from the years lows I am convinced that there is much more upside that the market has by no means taken account of. My long running Target Price of 150p should have been reached and crossed by now and I could easily upgrade it based on the upside at the company. Accordingly the shares are amongst the most attractive in the Bucket List and deserve a significant rerating.  

Echo Energy

As previously announced in its final results for the year ended 31 December 2022, following the partial divestment of its assets in Argentina and subsequent debt restructuring and cost reduction program, Echo Energy has been active in exploring potential opportunities to secure new assets. As a result of this process, and following a full review of the business, the Board is pleased to announce that it has decided to broaden the Company’s acquisition strategy towards a wider range of natural resources projects.

The Company is studying a number of potentially transformational projects which fit with this revised strategy. Amongst these opportunities is a gold project in Latin America, which the Directors believe has the potential to create significant future value for shareholders, without requiring a large initial capital investment.

Discussions are ongoing and there can be no guarantee at this stage that these negotiations will conclude successfully. The Company expects to make Further announcements relating to this revised acquisition strategy in due course.

Christian Yates, Echo Energy Chair, stated:

“Our focus is on finding opportunities to generate material value for our investors.  Echo’s network and relationships, within Latin America, have presented opportunities across the natural resources spectrum, which we are rigorously reviewing and we look forward to updating our shareholders on our plans as soon as we are able.”

 So, Echo is about to branch out, will it be gold, possibly something else? The company has clearly got some interesting prospects and knowing Stephen Birrell as I do it should be an interesting ride…