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Overview 

Today I publish the 2025 Bucket List, the format remains rather rough and ready but after all the promises from a certain investment house last year it’s better this way a bit quick and dirty but as they say DYOR…It means that my great ideas about including dividends etc will have to remain a mystery but I note in places where a dividend would have bettered performance.

I have placed the stocks in alphabetical order again, but have included y/y share price performance except for the two additions. Three stocks left during the year, Jersey Oil & Gas whom I dearly hope can return soon, the way that the Government with its shortsighted net zero policies have left the Greater Buchan Area hanging, one of the lowest carbon and environmental friendly of all international developments has been hung out to dry. JOG will be waiting on the bench ready to reappear in case of any political change of heart.

Quite when the Government will realise that its energy policy is totally disastrous in which wind farms are paid to turn off its turbines, gas power stations are brought onstream late at night at enormous cost as dunkelflaute creates a windless, sunless environment in which  renewables fear to tread and mark my words, blackouts are just around the corner. Such flagrant abandonment of the UK energy industry is a disgrace of monumental proportions, as major international investors leave the North Sea in a mad dash for the door we will be buying our energy in the future from dictators and ne’er-do-wells without a thought about their carbon footprint…

The other stocks that have dropped out of the list are Chariot, where against all expectations the Anchois-3 well disappointed and Jadestone where the man behind the company and its UK listing Paul Blakely was dispensed with rather peculiarly somewhat, after the Montara fiasco which had been sorted and Akatara had been successfully brought onstream.

The new entrants all have differing skills to offer the list, one came in during the year and two are on debut here. Back in June as soon as Seascape Energy Asia (+357.9% since insertion) arrived, courtesy of Longboat, I was on the phone to James Menzies to find out about his plans. As one of the most successful oil entrepreneurs in SE Asia in the last few years he has been able to position Seascape more than well, getting awarded the 2A PSC block which includes the Kertang prospect and of course the gassy DEWA structure means that the company is well in with the locals. My Target price was immediately set as a ten bagging 75p, already halfway there that looks conservative already.

Pharos had a good year in 2024 with much going on, repayment of a great deal of Egyptian debt started the process, the arrival of top quality CEO Katherine Roe was a smart move and the year end saw extension of key Vietnamese licences. With decent production, a strong balance sheet and longer term massive potential Pharos merits its place in the new Bucket List.

Finally I’ve put in a stock from left field, something which may seem overly risky and only for the serious high beta investors particularly as it is not currently quoted and can be found on Asset Match. I’m talking about Gulfsands Petroleum which is a play on Syria and any reconstruction there. The company has kept its team together and maintained discipline with annual reports and indeed CPR’s. Any success and reconstruction in Syria would pressage a resurrection of the listing so at 5.5p on Asset Match it’s worth a look, but only for those prepared to take a risk.

So that just leaves the stocks that have lasted since last January to stay in the remaining 14 places, as I have said I have not had the technology to add dividends but if you add back the significant dividends in such stocks as DEC, PetroTal, Serica and Union Jack makes the total return a great deal better.

The List

Afentra (+48.3%)

Afentra went into the Bucket List almost immediately after coming to the market and has stayed there ever since reflecting the fact that they have amongst the best management in the sector. That management did the offshore deal in Angola which while taking a while to get rolling has proved too be of significant value and will deliver for many years.

Ongoing, I rate the stock amongst the best in the sector so remains in the updated Bucket List loud and proud. With the strong cash production and the robust balance sheet comes the opportunity to do more deals either in Angola or elsewhere as will be shown in the upcoming CPR. 

Arrow Exploration (+47.83%) 

Arrow has totally justified being in the list, up nearly 50% and it should have been more. It stays in with total confidence ahead of another year of exciting horizontal drilling in what is a fantastic basin full of opportunities. My 75p TP looks modest and should be revisited after a few decent well results. Plus I’m hoping that Marshall will come over and into the studio for another interview soon, Arrow remains a favourite in the sector with plenty of upside and watch out for M&A in Colombia, be it being dinner or diner as he told me in the last chat.

Challenger Energy Group (+110.53%)

Challenger is not only the top of the List this year, excepting a mid-year joiner, and has fully justified its position but done say with plenty to spare. My 25p TP looks quite modest now, that was not the case when CEG went into the list but if it was a risk on a super-major farming-in to AREA OFF-1 then it didn’t seem like it. I can value that on its own as much as my TP and with seismic already in the price for AREA OFF-3 what price another deal like it? The future looks very exciting, it could take some dislodging…

Deltic Energy (-81.75%) 

Deltic is clearly the stock at the biggest discount to my TP of 200p by a mile but given the bad deal it was given with the exit from Pensacola it should be given huge credit for sticking to the knitting and carrying on at the successful Selene well. The Government in its obscene way has given the company a kicking but Andrew Nunn is a fighter and this company is worth way more than this. I stick with it in the Bucket List and am convinced that Selene carries huge potential upside.

Diversified Energy Company (+40.52%)

Readers who go back a long way with me will know why I absolutely love this company, I have stuck with the doubters through thick and thin in defence of Rusty and his team and the DEC model. Last week’s acquisition was brilliant, accretive and increased margins in addition it adds production to the portfolio plus a fantastic midstream package and you know how much I like Coal Mine Methane. Valuation leaves plenty of room for both capital and income gains and the first class management team continue to deliver the goods. That gain above reads better when you include the divvi…

Eco (Atlantic) Oil & Gas (+8.91%)

After its recent swap with Africa Oil it remains with a meaningful 5.25% in the exciting Block 3B/4B offshore South Africa in which my spies tell me Total have at the top of their list for drilling soon. With the process looking exciting here what with Eco being in possibly the best post code in the world right now and don’t forget its acreage in Block 1 in South Africa, Namibia and at Orinduik,  indeed much excitement to come for Eco shareholders. 

Genel Energy (-24.77%)

Genel is in a remarkably strong position given that the pipeline is still shut and to produce 19,650 b/d for the year was very good, with DNO having done ‘a great job’ especially by bringing on the DUC’s during the year. Guidance for this year will be published when DNO have all the data to hand but for me this is a genuinely good achievement under the circumstances. Recent news from Iraq makes things look a little more attractive. With a strong balance sheet and cash of $131m Genel have been on the lookout for a meaningful acquisition for some time but I detect the pace is being stepped up, a ‘value accretive acquisition’ which will ‘geographically diversify into a reliable and predictable jurisdiction’. It won’t be in Kurdistan but likely in MENA and probably not far from Turkey. What Genel has done is more than impressive, with some guidance from DNO later in the quarter we should have an idea about revenues and should they manage to find another world class asset then the outlook is decidedly bright, it should stay in the Bucket List going forward.

Kistos (-12.64%)

Kistos is looking in good shape right now given the deck it has been given by the UK Government and its fiscal policy that is driving away investors and killing off the domestic oil & gas industry. But Kistos is bearing up and with ongoing production sitting at around 8/- b/d and looking likely to be on a decent long term rising trend, particularly with Balder coming on stream later this year. With the Balder hybrid debt leaving the picture we know that production from the development will commence later this year and it leaves the company well placed, Balder Future leads to Phase V and there is more exploration behind that for significant potential upside. Elsewhere the substantial amount of growth opportunities are not limited to Norway, the GLA is a good gas development and with the arrival of Prax, Glendronach should move up the pecking order. I remain very optimistic about the potential for the UK gas storage business and of course Kistos is always assessing acquisition opportunities for ‘value accretive expansion’ and so I remain as confident as ever in the high quality management team to deliver for shareholders who we must remember the Chairman and the Board are  significant stakeholders…

PetroTal Corp (-18.81%)

Last year, once again PetroTal delivered the goods and then some, 2025 guidance is set at 21-23/- b/d which is up c.24% on what was a fantastic year by any standards. That gives revenue at $75 pb Brent crude of $438m and EBITDA of $240-250m which is up 6% but notably net of erosion funding costs of $30 taken as opex. All this EBITDA and revenue means that the dividend is safe,  guidance here is for a ‘fully funded quarterly dividend of $0.015/share, consistent with 2024′ which cost $55m which right now sits the shares on a 13% yield. Depending on quarterly results, the oil price and the summer low levels of the river I would expect this number to rise and the ‘Company also intends to maintain its ongoing share buyback program’. Once again it would be crazy not to include PetroTal, it is after all ‘one of very few companies in the oil and gas sector that can support a stable dividend while growing output by more than 20% year after year’. I would expect capital growth and with such income support these shares should be highly sought after, in M&A if not elsewhere. 

Serica Energy (-33.99%)

In the list of course, as 2025 is indeed looking good, or in their words, ‘robust and resilient’ and with guidance of 40/- boepd, up some 16% year-on-year, looks like it could have decent uplift potential. With Opex of $330m and Capex of $220-250m there is plenty of work to do and initial drilling has already ticked boxes in my assessment. Financially things are looking better, material free cash flow is expected in 2025, and despite challenges last year it did not stop the company investing, especially at Triton, where upside is clear and rewards should be seen this year. And shareholders need not worry the company will stint on the distributions, last year a very decent divvi and a small buy-back which might be repeated, not for certain but the shares yield around 15% and make the equity an outstanding investment, add that to the price performance. 

Southern Energy Corp (-29.73%)

There is no doubt that it was a challenging gas market in 2024 and the company has ‘proactively focused on optimizing our value chain’. However the company is strategically placed location wise with regard to its assets and sales points which achieved a c. 11% premium to Henry Hub pricing in this quarter. Along with hedging at $3.40, which has provided those stable cash flows which enable the company to ‘navigate ongoing volatility’. Going forward signs are encouraging, better news as winter markets help as does initial signs for the 2025 strip where increased demand is forecast from a number of emerging markets such as crypto and AI. I consider that gas remains the only reliable and efficient fuel for the transition world for many years to come. Southern is an outstanding company with excellent management who have judiciously controlled the fine portfolio of assets. These will, in my view provide a pool of highly valuable assets for the future which makes for a great incentive to be a holder of Southern and offers good, long term quality upside and they remain in the Bucket List

Touchstone Exploration (-33.86%)

Touchstone ended the year in a busy fashion as I reported recently, here are the ticks.

✓ number 1 is the company’s excellent relationship with the Government, as the biggest independent in Trinidad the company don’t have to go back to administrators, they come to see Paul Baay for help and ideas about development of the hydrocarbon industry

✓ number 2 is the acreage position that TXP has now built up and recently added to with 3 new licences and of course the Central Block

✓ number 3 is all about infrastructure, a great deal of hard work and investment was done in 2023 and 2024 which leaves the company well placed to move, and of course the famous bridge opens up the country. With capacity of 48,483 boe and the drill to fill policy there are few limits in its scope.

✓ number 4 is drilling, with at least four wells scheduled for this year and maybe more on the Central Block production and thus revenue should increase rapidly.

✓ number 5 is all about production, last seen at 6,924 with a roughly 75/25% gas to oil ratio it is planned to triple by the end of the decade, and as I’ve mentioned, plenty of capacity. 

✓ number 6 is all about data, increasingly valuable and with Touchstone’s huge portfolio has already shown better evaluation of the assets and of course production curves in newly producing wells. 

✓ number 7 is all about guidance which was an issue in the past, there is now increased confidence as was shown in recent numbers offered for 2025.

✓ number 8 is as key as any of the others and it’s all about pricing. Current prices of some $2.30-2.50 are going to be historic for a number of reasons, firstly as BP and Shell have Point Fortin at which will have prices better than at Point Lisas due to LNG markets competing for TXP’s gas and that could make a big difference.

✓ number 9 concludes the list and it’s all about acquisitions, Touchstone’s strength has meant it can compete and the deal with Shell for the Central Block proves that. A brilliant strategic fit means that the company are bulking up and with higher priced natural gas and it brings fantastic infrastructure in the Herrera Fairway and infills their existing asset base.

As a result Touchstone remain in the Bucket list for sure, however late…

Union Jack Oil (-39.89%)

Given recent news from the USA investments and with an exciting portfolio of high class potential waiting to be developed I’m confident  that the shares at this level are scandalously cheap and with West Newton down the line the future is decidedly rosy, a must for value investors and payout potential too. 

Zephyr Energy (+44.08%)

Only Zephyr could end up drilling the State 36-2 LNW-CC-R well just as the Bucket List goes to bed, even as we eat and sleep the Cane Creek reservoir is revealing its contents for those of us who have watched it over all these years. The management deserve credit for getting thus far and my confidence is in them as much as the Paradox Basin to yield up what we have been waiting for, the long lateral well could and should be paradise…