WTI (Sep) $77.29 +$2.07, Brent (Oct) $82.99 +$2.04, Diff -$5.20 +97c.

USNG (Sep) $2.67 -2c, UKNG (Sep) 138.89p +8.44p, TTF (Sep) €56.60 +€3.275.

Oil price

Oil is up a little today but pretty flat having been up early doors, then down, this is no market to leave big positions open over the weekend what with a furious dictator on one side and……

The market should probably be higher, you don’t need me to tell you that should another 60 day ceasefire happen oil will fall but there are other impacting issues on the commodity. Yesterday the Houthi rebels attacked not only a Saudi tanker in the Red Sea but also Saudi operations inside the Yemen.

This led to a smaller level of ships traversing the Strait of Hormuz but that will change if Iran has its way. The talks with Oman have apparently agreed that Iran can, and will ban ships flagged by the USA or Israel, I can’t see that happening any time soon.

Whilst crude remains steady, but around 5 bucks down on the week, as before product prices are higher and natural gas, particularly in Europe, is higher again as Norwegian outages hit markets.

Arrow Exploration

Arrow has provided an update on operational activity at the Icaco field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50 percent beneficial interest.

Icaco-3 Well

The Icaco 3 well (IC-3) was spud on July 2, 2026, and reached target depth on July 9, 2026.  The IC-3 well was drilled, on time and under budget, to a total measured depth of 7,710 TMD feet (Total Measured Depth), or 7,622 TVD feet (True Vertical Depth) and encountered multiple hydrocarbon-bearing intervals.

Log analysis shows 18 feet of net pay in the Carbonera C7 formation (“C7”), 12 feet of net pay in the Gacheta formation and 20 feet of net pay in the Ubaque formation, for a total net pay of 50 feet TVD.

The well is currently producing from the Gacheta formation at a restricted rate, 19/128 choke and 38 Hz pump frequency, of approximately 250 BOPD gross (125 BOPD net). The oil quality is 25.3° API and there is a lower than 1% water cut.

Management considers the Gacheta production a very important feature in the Icaco discovery not only to prove reserves but also to determine the optimum way to develop the formation and maximize recovery from future wells.  The results of the IC-3 production test will be reflected in reserves additions for Arrow at the next reserve report update.

Icaco-4 Horizontal Well

The Icaco 4 horizontal well (IC-HZ4) was spud on June 13, 2026, and reached target depth on June 25, 2026.  The IC-HZ4 well was drilled, on time and under budget, to a total measured depth of 12,617 feet TMD or 7,297 feet TVD and encountered multiple hydrocarbon-bearing intervals.

Arrow put IC-HZ4, a short horizontal well, on production on July 2, 2026 in the Ubaque formation. The pay zone is a clean sandstone exhibiting an average porosity of 23% with high resistivities. An electric submersible pump (“ESP”) has been inserted in the well after perforating.  During the clean-up period the well reached a maximum rate of 799 BOPD gross (399 BOPD net) before settling into the current stable production rate of 150 BOPD gross (75 BOPD net).

Although logs are showing extended areas with high oil saturation along the horizontal section, management believes that during the completion operation ICD valves were placed too close to a water bearing zone, causing the water to overtake and reduce the oil production in the well.  Management is looking at alternatives to maximize oil production efficiency in this well.

The IC-HZ4 well also encountered approximately 23 feet of net oil pay TVD in the C7 and 10 feet of net oil pay TVD in the Gacheta formation.

Icaco-5 Horizontal Well

The Icaco 5 horizontal well (IC-HZ5) was spud on July 16, 2026, and reached target depth on July 27, 2026.  The IC-HZ5 well was drilled, on time and under budget, to a total measured depth of 11,914 feet TMD or 7,274 feet TVD and encountered multiple hydrocarbon-bearing intervals.

Arrow put IC-HZ5, short horizontal well, on production on August 3, 2026 in the Ubaque formation. The pay zone is a clean sandstone exhibiting an average porosity of 23% with high resistivities. An ESP has been inserted in the well after perforating.  The well is still cleaning up and is producing at a current rate of 1,270 BOPD gross (635 BOPD net).

The IC-HZ5 well also encountered approximately 20 feet of net oil pay (true vertical depth) in the C7 formation.

Flow Test Results

The ultimate flow rate will be determined in the first few weeks of production.

Initial production results are not necessarily indicative of long-term performance or ultimate recovery.

Forward Drilling Plans

Five additional cellars have been built at Icaco to continue the drilling program.  IC-6 will be a vertical well with Carbonera C7, Gacheta and Ubaque targets.

Production

Including production from the IC-3, IC-HZ4 and IC-HZ5 wells, total gross corporate production is over 5,000 boe/d. Currently the CN-HZ12 well is offline whilst the workover work  to restore production is underway. The well was producing approximately 330 BOPD gross (165 BOPD net) when it was shut in.   Arrow has continued to shut in the Pepper gas field due to low natural gas prices in Alberta, which was producing approximately 130 boe/d when it was shut in. The Company believes that AECO gas prices will improve in the third and fourth quarter of 2026 once the region moves into the winter months. At that time the Pepper field is expected to be brought back on production.

Cash Balance

As of August 1, 2026, the Company’s estimated cash balance is US$27.5 million.  The Company continues to have no debt.

Tapir Extension

Arrow and its partner in the Tapir block continue to be encouraged with the dialogue with the Colombian authorities regarding the extension of the Tapir block.    Arrow believes that all conditions required for the extension to be granted have been met and management remains very confident that the extension will be granted.  The Company will continue to update the market on developments as they occur.  Colombia elected a new President, Abelardo De La Espriella, in June.  The transition to the new President will take place in August.  President De La Espriella has discussed Colombia needing more oil and gas development, and Arrow is looking forward to being a part of the President’s vision.

Marshall Abbott, CEO of Arrow commented:

“The success of the Icaco-3 well indicates that the Gacheta formation is able to produce commercial rates.  The Icaco-4 and Icaco-5 horizontal wells had very short horizontal sections to prove the Ubaque’s ability to produce from a horizontal well.  Future projects at Icaco are expected to include both horizontal and vertical development wells targeting the Ubaque, Gacheta and C7.  These results underline the significant hydrocarbon density that exists in the Llanos basin and more exclusively in the Tapir Block.”

“Strong netbacks and successful horizontal wells support payout occurring in months. This adds significant value and materially improves our positive balance sheet. We look forward to updating our shareholders on the progress at Icaco over the coming months.”

This is a multi-well results analysis and these three wells have all reached TD between June and July and overall are a further validation of the company’s high expectations and are all successful in a number of ways.

The IC-3 well had 18′ of net pay in the C7 formation, 12′ in the Gacheta and 20′ in the Ubaque and is producing from the Gacheta at 25o bopd (125 net) with a minimal water cut. It is worth noting that ‘Management considers the Gacheta production a very important feature in the Icaco discovery not only to prove reserves but also to determine the optimum way to develop the formation and maximize recovery from future wells.  The results of the IC-3 production test will be reflected in reserves additions for Arrow at the next reserve report update’.

The IC-HZ4 well encountered multiple hydrocarbon bearing intervals and current production is 350 bopd gross (175 net) and again this comment from the statement is of interest. ‘Although logs are showing extended areas with high oil saturation along the horizontal section, management believes that during the completion operation ICD valves were placed too close to a water bearing zone, causing the water to overtake and reduce the oil production in the well.  Management is looking at alternatives to maximize oil production efficiency in this well’.

As for the IC-HZ5 well it went onto production on August 3rd from the Ubaque formation at a very healthy 1,270 bopd gross (635 net) and the well also encountered approximately 20′ of net oil pay in the C7 formation. 

Arrow has added five cellars at the Icaco and next activity there is IC-6 which will be a vertical well with Carbonera C7, Gacheta and Ubaque targets. Production is over 5,000 bopd and has cash of $27.5m with no debt, the balance sheet is strong, a big drilling programme is fully funded from internal resources and with strong netbacks the company is very well financed. 

Colombia is an exciting place at the moment, substantial corporate activity and a new President who is pro oil & gas development and discussions with regard to Tapir are continuing. Arrow shares have been excellent performers, at 26p they are up by 11% on 1 month, have risen by 58% on 6 and up 77% year on year. As such they are a valuable member of the Bucket List and my target price of 50p looks very achievable, as the CEO states ‘these results underline the significant hydrocarbon density that exists in the Llanos basin and more exclusively in the Tapir Block’. 

Pharos Energy/Ratio Petroleum Energy

Increased Ratio Offer for Pharos

Under the terms of the Increased Ratio Offer, Pharos Shareholders will be entitled to receive:

·     28.8183 pence in cash per Pharos Share (the “Cash Consideration“); plus

·   4.0 pence in cash per Pharos Share by way of special dividend to be paid from Pharos’ existing cash resources that the Pharos Board intends to declare prior to completion of the Acquisition with the record and payment dates aligned with the corresponding dates for determining entitlements to, and payment of, the Cash Consideration due to Pharos Shareholders under the terms of the Acquisition (the “Special Dividend”),

which would result in a total value of 32.8183 pence per Pharos Share. Pharos Shareholders, where they qualified, will continue to be entitled to retain the final dividend of 0.9317 pence in cash per Pharos Share for the financial year ended 31 December 2025 which was declared on 25 March 2026 and paid on 17 July 2026 to qualifying Pharos Shareholders on the register at close of business on 12 June 2026 (the “FY25 Final Dividend”).

Accordingly, taking together the total value offered of 32.8183 pence per Pharos Share with the FY25 Final Dividend, the aggregate amount Pharos Shareholders will receive is 33.75 pence per Pharos Share.

The aggregate value of the Cash Consideration and the Special Dividend, 32.8183 pence per Pharos Share, values the entire issued and to be issued ordinary share capital of Pharos at approximately £146.4 million and represents:

·    a premium of approximately 29.2% to the closing price of 25.4 pence per Pharos Share on 23 June 2026, being the last Business Day prior to the announcement of the Original Acquisition; and

·     a premium of approximately 0.5% to the equivalent 32.6683 pence per Pharos Share being the aggregate of the cash consideration and special dividend announced in the Serica Offer.

The Increased Ratio Offer provides Pharos Shareholders with superior value than under the Serica Offer. In addition, given the combination of the irrevocable undertakings which Ratio has received (as to which see section 6 below) and Ratio’s and the Wider Ratio Energies Group’s extensive experience of obtaining regulatory consents under 7 international regimes, Ratio believes that the Increased Ratio Offer provides Pharos Shareholders with greater certainty and deliverability than will be achieved under the Serica Offer.

There is no comment from Serica as I write as I imagine that they will be mulling over their options. I know that they have many irons in the M&A fire and commented recently that ‘Serica continues to rigorously evaluate a pipeline of M&A opportunities, both in the UK North Sea and other areas in which the Company can successfully deliver its strategy’. 

Sintana Energy

Sintana held an investor webcast yesterday which updated the recent Capital Markets presentation to analysts, and whilst it was largely of similar content there were a few interesting updates and the value proposition seems to grow as the portfolio quality emerges.

The company detailed all the key areas in which it operates, Namibia, Uruguay and Angola and detailed upcoming programmes of drilling, data collection and partner involvement. The presentation made 5 key points that for Sintana are the backbone for a much higher share price.

First, Sintana points to a value floor provided by the Mopane discovery, which differentiates Sintana and which, through the arrival of TotalEnergies, underpins value to the extent that Sintana’s interest in Mopane exceeds the current market cap of the company. 

Secondly is what Sintana call ‘asymmetric exposure’ by which the company’s model is to limit its capital per asset but still retain exposure to large potential value outcomes. 

In a third category called ‘multi-well catalysts they suggest that between 5-10 high impact wells in Namibia and Uruguay over the next two years and next will be transformative. They also state that they have positions in ‘world scale exploration assets’ which will play out in the development of the Sintana portfolio. 

In a fourth category – de-risking – the company point out that it is very important that its partners provide the funds for drilling which thereby limit its own balance sheet exposure and finally they outline a ‘path to value’ as exploration successes will drive a step-change in asset valuation. This is particularly the case with the Mopane valuation on its own exceeding the market cap as described above. 

The company provided a ‘value bridge’ analysis which shows that current valuation versus potential valuation gives huge scope for share price appreciation. If you take into account the large number of wells to be drilled, seismic activity and farm-out potential across the portfolio between now and 2028 then that value should be achievable. 

Sintana shares are looking exceptional value on pretty much any timescale, with drilling news from an array of wells across the portfolio and farm-out opportunities with major players a likelihood, then my target price of 75p is by no means a difficult bar to achieve in any of these scenarios and is a key part of the recently updated Bucket List.

 

Sintana Energy investor meeting company presentation, 6 August 2026

Sintana Energy post-AGM management update, 6 August 2026

Genel Energy

Genel notes the announcement made by DNO and confirms that it has received an unsolicited proposal from DNO regarding a possible offer to acquire the entire issued, and to be issued, ordinary share capital of Genel at a price of 69 pence in cash per Genel Share.

The Board of Genel, having evaluated the Possible Offer together with its advisers, has unanimously rejected the Proposal, strongly believing that the Possible Offer fundamentally undervalues Genel. Genel shareholders are advised to take no action in response to the Possible Offer.

There can be no certainty that any offer will be made.

In accordance with Rule 2.6(a) of the Code, DNO shall, by no later than 5.00 pm on 4 September, either announce a firm intention to make an offer for Genel under Rule 2.7 of the Code or announce that it does not intend to make an offer for Genel, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

On 2 July 2026, the boards of directors of Capricorn Energy plc (“Capricorn”), Genel and Genel Energy No.9 Limited (“Bidco”) announced that they had reached agreement regarding the terms and conditions of a recommended cash offer by Bidco for Capricorn pursuant to which Bidco will acquire the entire issued and to be issued ordinary share capital of Capricorn (the “Genel Offer”).  On 21 July 2026, Capricorn published a scheme document in relation to the Genel Offer, including notices of shareholder meetings to approve the Genel Offer, which have been convened for 18 August 2026.

This announcement is being made by Genel without the consent of DNO.

And finally…

It’s another dreary weekend of sport with no decent cricket or horse racing, F1 is on its holidays and in footy we can all watch Johnny Infant flying first class all the way around the globe trying to save his skin.

The ECB has announced the squad for the first two tests of the three test series against Pakistan which starts on August 19th at Headingly. With Jacob Bethell out for the season Jordan Cox comes in at No3 whilst Stokes is replaced by Dan Lawrence at 6. No place for an all rounder such as Sam Curran (?) or Rehan Ahmed while Bash for some unholy reason keeps his place. Also in the bowlers Sam Cook and Brydon Carse return but all cannot play and as Pope is also in the 16 he won’t either.