WTI (Dec) $71.69 -30c, Brent (Jan) $74.92 -61c, Diff -$3.23 -31c.

USNG (Dec) $2.75 +8c, UKNG (Dec) 102.13 +1.54p, TTF (Dec) €41.045 +€1.17.

Oil price

The aftermath of President elect Trump’s victory has kept oil around the same price, the downward pressure of drill baby drill, bearing in mind how much can actually be produced quickly, is offset by the potential rise in the price after sanctions on Iran, Venezuela are taken into account. 

Sleepy Joe turned a blind eye to Iranian nuclear build up in order to get gasoline prices down to gain favour with the electorate, he also sold off the SPR, I suspect Trump will rebuild it. Oil stocks rose in sympathy, correctly but investors should look carefully at the oilfield service companies, modern day picks and shovels will probably do better as onshore USA including fraccing builds up. Obviously Schlumberger and Halliburton will do but take a look at Hunting where the price has recently fallen on reduction in guidance due to, yup you’ve got it, onshore US activity. Buy now while stocks last…

Hurricane Rafael is on the move and as I write some installations in the GoM have already been de-manned. Finally on top of everything today is interest day, the Bank of England and the Fed are both expected to trim 25 bp’s off their rates.  

Afentra

Afentra has provided an operational and financial update for the period 1 January to 31 October 2024.

Operational Highlights

Production and Field Operation

Redevelopment works at Block 3/05 facilities, along with well interventions, continue to result in improved production and water injection performance. Gross average production to end October 2024, including the impact of the recent shutdown, for Block 3/05 and 3/05A was 20,575 bopd (Net: B3/05 5,815 bopd; B3/05A 255 bopd). Post shutdown, gross oil production rates have averaged 23,000 bopd and water injection resumed, with gross daily water injection rates averaging around 40,000 bwpd which we expect to increase as further injection facilities are commissioned.

The next phase of light well interventions (LWIs) has commenced, with more than 10 LWIs planned before the end of 2024 across several fields, which will include various stimulation techniques and reperforation activities.

Whilst the ongoing asset integrity/reliability works, along with LWIs, continue to deliver successful outcomes the planning process for the next stage of the Block 3/05 & 3/05A redevelopment is underway. This phase will focus on near term well workovers, future infill drilling and satellite field developments.

Shutdown and Maintenance Activities

The planned 21-day maintenance shutdown was successfully completed on schedule in early October 2024. Significant maintenance and upgrade work was carried out, focusing on power supply improvements, inspection and integrity of the subsea infrastructure, improved monitoring of water injection allocation and installation of gas meters to assist in monitoring emissions. Routine maintenance at the Palanca FSO was also progressed as planned. The shutdown and associated activities are all part of the ongoing upgrade project aimed at ensuring integrity and longevity of the Block 3/05 facilities, following the license extension through to 2040.

Kwanza Onshore Licenses

Afentra continues to focus on strategically complementary opportunities in the Kwanza Onshore Basin. As previously announced, the PSC for KON19 has been awarded and we await the license award for KON15 which is still expected before the end of 2024. Whilst the full work programme is still to be defined, the basin-wide enhanced Full Tensor Gravity Gradiometry (eFTG) survey, initiated in August 2024, has completed its first phase with coverage recorded over KON19. A further phase covering KON15 will commence early in 2025. The utilization of advanced, high-resolution eFTG technology will enable a more efficient and detailed assessment of the subsurface potential across this 25,000km² onshore basin, a region that has seen minimal exploration activity over the past few decades.

Financial Highlights

Afentra maintains a solid financial position, with cash resources of $37.4 million and net debt of $4.6 million as of 31 October 2024. The Company’s prudent approach to managing its balance sheet is demonstrated by maintaining a low debt profile, while upcoming crude sales will further bolster liquidity. Afentra executed three liftings in the first three quarters of the year, selling 1.68 million bbls of crude at an average price of $84/bbl. A structured hedging strategy was implemented to provide protection against price volatility. With the final lifting scheduled for Q4 2024, which is 70% hedged with a floor of $70/bbl, the company is well positioned to continue its disciplined financial management and operational growth.

Key Financials

–       Cash resources as of 31 October 2024 of $37.4 million

–       Debt drawdowns at 31 October 2024:

o  Reserve Based Lending Facility: $42 million

o  Working Capital Facility: zero

–       Net debt ~ $4.6 million at 31 October 2024

Crude Oil Sales

–       Final crude cargo (~550,000 bbls) planned for Q4 2024, completing liftings for this year totaling 2.23 million bbls.

–       Q4 cargo 70% hedged with a mixture of floors and costless collars providing a floor of $70/bbl.

Paul McDade, Chief Executive Officer, Afentra plc commented:

“We are pleased with the operational progress made during the period, particularly the successful completion of the Block 3/05 maintenance shutdown which is part of our redevelopment plan to futureproof the infrastructure and deliver production growth for the duration of the license period. I would like to acknowledge the quality performance that Sonangol, as the operator of Block 3/05, demonstrated in ensuring the safe and efficient execution of the shutdown.

Our well intervention program continues to yield positive results, setting us up for further production improvements in the months ahead. We are also excited about the ongoing developments in the Kwanza Onshore Basin, where we see promising potential.

From a financial perspective, we have made significant strides this year, achieving a strong balance sheet with cash resources of ~$37 million and net debt of $4.6 million following the completion of our transactions earlier this year. This is a key milestone for the company, reflecting our prudent financial management, and ensuring liquidity to consider complementary value accretive opportunities. With our final crude sale scheduled for Q4, we expect to move to a net cash position, allowing us to continue building long-term value for our shareholders.”

Afentra continues to be the poster boy for the sector after extremely smart deals offshore Angola pay off with substantial returns made bigger from now on after the recent redevelopment plan which will ‘futureproof  the infrastructure and deliver production growth for the duration of the license period’.

Production was good at 20,575 b/d and that was despite a 21 day maintenance  and is now over 23/- b/d and with 10 more LWI’s to come across several fields the outlook is very good indeed. This shows up in the cash position of $37.4m at the quarter end, to be increased yet more with one more crude sale to come in Q4 and with only $4.6m of debt. 

Meanwhile onshore looks highly promising in the Kwanza Basin where the PSC for KON19 has been awarded with KON15 expected this year. An eFTG survey has been completed over KON19 with the whole basin being targeted starting with KON15 early next year. This should enable a ‘more efficient and detailed’ assessment over the 25,000km2 

Afentra is in a very good place, share price wise it is up some 65% year on year but that figure was nearer 100% at the May peak and I confidently predict it will return there and some more. My target price of 100p is looking quite conservative given the current portfolio. 

Coro Energy

Coro has announced, further to the Company’s announcements of 15 August 2024 and 27 August 2024, an increase to the previously announced convertible loan and further positive developments at its C&I rooftop solar business in Vietnam.

Convertible Loan Increase

As previously announced on 15 August 2024 and 27 August 2024, the Company previously entered and drew down a six month US$500,000 secured convertible loan note (the “Original Loan”), which is repayable in cash at the discretion of the Company and matures on 14 February 2025.  

The Company today announces a US$250,000 increase to and draw down of the Original Loan, increasing the total Loan to US$750,000 (the “Increased Loan” or the “Loan”). The maturity date of the Increased Loan remains unchanged and, should the Company decide not to repay in cash or default on the Loan, then the lenders can decide to either exercise their security or convert, together with accrued interest, into such number of new ordinary shares of the Company as is the higher of: (a) an unchanged 946,063,400 ordinary shares in the Company per the original Loan terms; and (b) such number of new ordinary shares calculated by dividing the total amount drawn down under the Loan by the price per ordinary share at which the Company may raise equity funds prior to 14 February 2025.  The Loan attracts an annualised coupon of 40% (20% for the six month term), payable on the amount of the Increased Loan drawn down, and is secured on the shares of Coro Asia Renewables Limited and Coro Clean Energy Limited, the holding companies for the Company’s renewables businesses.

The Additional Loan has been provided by Fenikso Limited (“Fenikso”).  Tom Richardson, Chairman of the Company, is a director of Fenikso, and therefore the Additional Loan is considered to be a related party transaction pursuant to Rule 13 of the AIM Rules for Companies.

The independent director of the Company, Harry Beamish, considers, having consulted with the Company’s nominated adviser, that the terms of Additional the Loan are fair and reasonable insofar as the Company’s shareholders are concerned.

Vietnam C&I Rooftop Solar Update

Today the Company is delighted to announce that 27 further sites (circa 0.8MW) are now operational and revenue generating.

By way of background and as previously announced on 10 October 2023, the Company  signed a Memorandum of Understanding (“MoU”) in Vietnam with Mobile World Group (“MWG”) granting Coro exclusivity on an initial 900 company sites (estimated at 50MW of rooftop solar capacity) in the central and southern regions of Vietnam where solar irradiation is the highest in the country.  Coro will build, own, and operate each rooftop solar system and sell all generated electricity directly to each Mobile World Investment Corporation location under a 14-year Power Purchase Agreement, extendable in certain circumstances. 

The Power Purchase Agreement (“PPA”) was signed on 8 March 2024 with an addendum covering the first ten sites (c 0.4MW) as a pilot phase.  These ten sites were announced as operational on 30 July 2024.   The Company then signed an additional addendum covering the next 30 sites on 27 August 2024.  The Company is delighted to report today that 27 (circa 0.8MW) of these 30 sites are now operational and revenue generating (the remaining three sites having been temporarily deferred for operational reasons). This brings the current total operational sites with MWG in Vietnam to 37 sites (circa 1.2MW) as of today’s date.  

The Company signed a further addendum covering a further 50 sites (c 1.9MW) on 25 September 2024 which are currently under construction and are expected to become operational during November.  All addendums are consistent with those announced previously whereby the term is extendable in certain circumstances and includes a variable price with a floor of circa US$11.2 cents / kilowatt hour. 

Tom Richardson, Chairman, commented:

“This additional financing ensures the Company can maintain progress with the Mobile World Group project in Vietnam whilst we continue to work towards a longer term solution with our debt holders.”

Coro has upped its game in Vietnam and increased financing pays for that, meantime I suspect that there are more opportunities should funds from Duyung ever become available. 

And finally…

In the Champions League last night Villa lost at Club Brugge 1-0 after a schoolboy error gave the winners a penalty whilst the Gooners also lost by the same score away at Inter.

Tonight in the Boropa League spurs are at Galatasaray, Rangers at Olympiakos and PAOK visit the theatre of dreams.

In the Plate Chelsea host Noah and the Jam Tarts host Heidenheim.

In the ODI England got whipped by the WIndies and lost the series 2-1.