Oil price, PetroTal, Serica, Jersey Oil & Gas.

WTI (Sep) $75.22 -55c, Brent (Oct) $79.45 +9c, Diff -$4.23 +64c.

USNG (Sep) $2.69 +1c, UKNG (Sep) 130.45p -3.87p, TTF (Sep) €53.325.

Oil price

Oil is up a couple of dollars today as whilst talks apparently continue it is uncertain quite who is talking to whom…

Iran and Oman have apparently agreed a deal with regard to the control of the Strait of Hormuz but will be worthless if it is perceived to be a way of taking fees from tankers passing through. Unless Trump really does cave in, and further TACO is perfectly possible, it may be that there is more short term upside than downside.

The EIA stats reflected the API data, analysts were again outfoxed on crude but we all know that products are drawing. 

PetroTal Corp

PetroTal has reported its operating and financial results for the three months ended June 30, 2026. All amounts herein are in United States dollars unless stated otherwise.

Selected financial and operational information outlined above 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 June 30, 2026, which are available on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.PetroTal‐Corp.com.

Key Highlights

•      Average Q2 2026 sales and production of 11,969 and 12,557 barrels of oil per day (“bopd”), respectively;

•      H1 2026 production averaged 13,726 bopd, tracking 3% ahead of budget expectations;

•      Adjusted EBITDA⁽¹⁾ of $43.5 million ($39.98/bbl) in Q2 2026 and $78.7 million ($33.05/bbl) in H1 2026;

•      Free Funds Flow⁽¹⁾ of $32.4 million ($29.72/bbl) in Q2 2026 and $58.1 million ($24.41/bbl) in H1 2026;

•      Net Income of $4.8 million ($4.40/bbl), net of a $10.2 million impairment charge relating to the sale of the Amazonia-1 drilling rig;

•      Capital expenditures of $8.0 million, bringing 2026 YTD capital investment to $15.6 million, and;

•      Unrestricted cash of $105.4 million, an increase of $6.1 million YoY.

(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:

“PetroTal delivered strong second quarter results, with Adjusted EBITDA of $43.5 million and Free Funds Flow of $32.4 million reflecting stronger realized pricing and continued cost discipline. Production of 12,557 bopd tracked slightly ahead of our internal plan, putting us in good position to meet our annual production and EBITDA guidance. As part of our ongoing work program at Bretana, we recently commenced a pulling campaign to replace tubing and pumps on up to five wells, which will help mitigate forecast production declines in the second half of the year.

I am happy to report that preparations for our development drilling campaign are progressing on schedule. The Estrella drilling rig is now in Peru and we have increasing confidence that drilling will resume in accordance with our October target date. Delivery on these key project milestones reflects strong execution by our operations and drilling teams and lays the groundwork for a return to production growth in 2027. Looking ahead, we remain focused on disciplined capital allocation and advancing our drilling campaign as we work toward that objective.”

PetroTal is rebuilding its operational capability and with production of 12,557 bopd slightly ahead of plans, will meet existing guidance for that and for EBITDA expectations. Interim EBITDA was a highly creditable $43.5m and even better was the Free Funds Flow of $32.4m giving net cash of $136.9m. If this improvement continues the board will surely be happy to reconsider the dividend in the coming months. 

This all means that there is more positive news to come next year, the Estrella rig is now in country and the company are confident that ‘drilling will resume in accordance with our October target date’ and with a fully funded drilling programme to come production growth planned for 2027 should ensue. 

I have heard that the new-ish COO is really beefing up the operational and drilling teams and also costs are being rigorously kept under control, in addition the company recently commenced a pulling campaign to replace tubing and pumps on up to five wells, which will help mitigate forecast production declines in the second half of the year.

PetroTal shares at 26p are up 4% today and the last 6 months have seen a rise of c.25% and with the planned upcoming investments I am confident that success will see positive results and a good increase in production. Accordingly I am happy with my 75p target price and PetroTal deserves to retain its place in the Bucket List.

Serica Energy

Serica has announced its unaudited financial results for the six months ended 30 June 2026. The results are included below and copies are available at www.serica-energy.com and www.sedar.com.

Chris Cox, Serica’s CEO, stated:

“Serica delivered a strong first half, with robust production, material free cash flow and a significantly strengthened balance sheet. The operational work completed last year is now translating into much improved asset performance, most notably at Triton, and the addition of production from new assets has provided a further boost. Together with a supportive commodity price environment, this performance generated $184 million of free cash flow and enabled Serica to move from net debt at year-end 2025 to a net cash position at 30 June 2026. 

We have taken advantage of attractive market conditions and successfully completed both the issue of a new five-year Nordic Bond and refinanced our RBL facilities with a new six-year maturity $750 million facility. This gives Serica substantial liquidity and flexibility as we enter the next phase of organic investment and portfolio growth. We expect to shortly confirm contracting of a rig to deliver our high-impact and rapid return organic growth projects in the UK North Sea, and continue to seek further opportunities to deliver shareholder value via M&A both in the UK and internationally.

A long-standing objective is to establish a significant international business to complement our position on the UKCS. The recommended acquisition of Pharos Energy represents the first step in delivering that strategy, and the deal, should it complete, is set to deliver value accretive, materially cash-generative diversification and act as an ideal platform for further international growth.”

Indeed a cracking set of interims from Serica who have delivered above expectations in all key metrics, a solid mix of operational and financial outperformance and taking important steps to set the company up very well for the future.  

Production increased to 44,700 boepd (net to Serica) in the period which was a sign of the transformation of Triton, where the operational work done so painfully last year is ‘now translating into much improved asset performance’ with an asset uptime of over 95% and of course the addition of production from new assets also contributed significantly. Notably production in Q2 averaged 50,200 boepd and guidance has been tweaked upwards to ‘above 40,000 boepd’. 

The substantial increase in both revenue and EBITDAX which was a reported $301m ($118m), contributed to a welcome net profit but as important was the free cash flow of $184m which led to a net cash position of $26m at the interim from net debt at the end of last year. 

Serica maintain the 6p dividend, in line with previously announced policy, and the company has a rock solid balance sheet which has been strengthened by the recent Nordic Bond issue and the RBL refinancing at an excellent rate and with substantial international demand. 

This means that the company is very strongly placed in all areas, it is expecting to sign a rig contract ‘in the coming weeks for the high-impact and rapid return drilling programme’ which I expect to make a major contribution but will also give huge scope for inorganic growth to add to the portfolio. 

In this respect one should mention that the company has recently started the process of establishing ‘a significant international business to compliment our position on the UKCS’ and so the Pharos move, which brings a move into Vietnam and Egypt would be another cash-generative diversification for future growth. 

This is ongoing so no further comment but with such firepower, and a will to grow, Serica is well placed to benefit from potential opportunities in M&A across the energy space both at home and abroad and of course where the company’s tax advantage can play out. So expect organic growth and value accretive inorganic and cash generative organic opportunities for management to take advantage of. 

Serica is a core member of the updated Bucket List with a target price of 400p which is easily achievable. The shares at 232p are up 3.5% today, having risen 12% over 6 months and 39% up year on year, the stock is seriously undervalued ahead of the -very- long awaited move to the main market hopefully later this year…

Results summary ($ million unless stated)

¹ Pre-hedging, with hedging in the period resulting in actual average portfolio sales oil and gas prices of $73/bbl and 97p/therm respectively

² See non-IFRS measures 

Highlights

Significant production growth driven by improved uptime and new West of Shetland contribution

·      Production increased to 44,700 boepd net to Serica in H1 2026 (H1 2025: 24,700 boepd), in line with guidance, a material increase from the prior year due to higher portfolio uptime and the addition of production from newly acquired assets West of Shetland

–     Production in Q2 averaged 50,200 boepd, underpinned by a step-change in Triton performance, where production contributed 20,300 boepd with asset uptime of over 95%

Material free cash flow drives move to net cash position 

·      Serica is robustly positioned to take advantage of opportunities to create material shareholder value, with cash of $326 million as of 30 June 2026 (31 December 2025: $31 million), a material increase since year end 2025 due to robust production, higher commodity prices, and the receipt of $56 million upon completion of the acquisition of assets West of Shetland from TotalEnergies

·      Net cash of $26 million as of 30 June 2026, following completion of $300 million five-year Nordic bond in May

·      Completion in July of six-year Reserves Based Lending (‘RBL’) facilities totalling $750 million supporting a robust liquidity position of $784 million as of 30 June 2026 pro forma for the new RBL borrowing base, providing substantial capacity to support the Company’s UK investment programme, future decommissioning security requirements and disciplined M&A

·      Capital expenditure on a cash basis of $81 million in H1, of which $50 million was spent on the Bruce Hub

·      Interim dividend of 6p declared today (2025 interim dividend: 6p), reflecting the Board’s confidence in Serica’s cash generation and financial position

–     The interim dividend is payable on 19 November 2026 to shareholders registered on 23 October 2026, with an ex-dividend date of 22 October 2026 

Rig set to be leased ahead of high-impact organic growth programme

·      As detailed at the Capital Markets Day on 2 June, Serica has a portfolio of short-cycle projects with the potential to add 30,000 boepd of incremental production, supporting annual average production of over 50,000 boepd into the next decade. The programme is expected to deliver average rates of return above 40%, reinforcing the capital efficiency of Serica’s organic growth portfolio

·      Serica expects to sign a rig contract in the coming weeks for a drilling programme estimated at around 400 days duration, with an option to extend, giving the potential to drill up to six wells across the Company’s expanded portfolio

·      Drilling is expected to begin with the Bruce SCE and SCW wells in Q3 2027, with the potential for first production 12 months from the start of drilling

Disciplined M&A adds scale, diversification and cash-generative growth

·      The acquisition of the 40% interest in the Greater Laggan Area from TotalEnergies completed on 26 March, adding a new operated production and development hub in the high-potential West of Shetland basin

·      Post period end, Serica announced the recommended acquisition of Pharos Energy, completion of which would provide a first step in our long-standing strategic objective of adding international expansion, boosting our reserves, resources and adding cash-generative production, presenting a platform from which to grow

·      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

Outlook and guidance

·      Serica remains on track to deliver production rates of c.65,000 boepd following completion of the Spirit Energy transaction

·      The acquisition of assets from Spirit Energy is now set to complete on 1 October 2026, resulting in revised production guidance for 2026 of above 40,000 boepd (previously: significantly above 40,000 boepd)

·      Capital expenditure guidance of $175 to $195 million unchanged

·      Opex guidance of $380-400 million, excluding $65 million of Lancaster spend, unchanged

·      Post-tax CFFO guidance is impacted by the later completion of the Spirit Energy acquisition and is therefore revised to $450-475 million, consistent with current forward curve pricing

·      Work is progressing on the move from the AIM to the Main Market of the London Stock Exchange, remains on track to complete in 2026 

Jersey Oil & Gas

Jersey Oil & Gas has announced that the North Sea Transition Authority (“NSTA”) has approved an extension to the Second Term of the P2170 “Verbier” licence as part of aligning the duration with that of the P2498 “Buchan Horst” licence.

GBA Licences

The “Second Term” of a UK offshore oil and gas licence sets the period in which the licencees are required to obtain Field Development Plan (“FDP”) approval for the area in order to subsequently move into the “Third Term”, which covers the development and production phase of activities for the life of a field.

The Second Term of the P2170 licence has now been extended by approximately six months, to 28 February 2027, thereby aligning it with the corresponding duration of the P2498 Buchan licence.  Aligning the Second Terms of both Greater Buchan Area (“GBA”) licences logically reflects the NSTA’s objectives for an integrated “Area Plan”, which has always been regarded by the joint venture partners as requiring a phased development solution led by the initial exploitation of Buchan’s resources.

As planned, a request to extend the Second Term of the Buchan licence will be made to the NSTA towards the end of this year, with the request incorporating an overall development schedule that includes a further extension request for the P2170 licence.

GBA Activities

As previously announced, the slowdown in Buchan development activities that has resulted from the continuing industry uncertainties created by successive UK governments, has led to the optimal development solution being re-assessed within the context of a wider lens and a longer execution schedule than was initially envisaged.  While redeployment of the “Western Isles” floating production, storage and offloading vessel was set out as the solution in the draft FDP submitted to the NSTA, it is recognised that the passage of time means that other potential production solutions warrant further screening and consideration. 

As part of its central objectives for managing the future resources of the UK North Sea, the NSTA is seeking to ensure that the GBA joint venture continues to look at the wider opportunity to connect volumes in the vicinity of a Buchan based production hub as part of an integrated evaluation and plan with potential third-party resource owners.  

Work on these activities will continue into 2027 and the joint venture partners are in the process of establishing a work plan and budget for next year that will support progression of the GBA and the licence extensions.

Andrew Benitz, CEO of Jersey Oil & Gas, commented:

“We are pleased to receive a licence extension on our existing Verbier licence, which now aligns the timing of both of our GBA licences, as we continue to work on engineering the optimal development solution for the area.  As we have always highlighted, there is an exciting opportunity to unlock the resources across the area through the development of a Buchan-led production hub. 

“We continue to urge the government to work constructively with industry on critical oil and gas development approvals and bring an early end to the Energy Profits Levy, which has unquestionably led to a significant slowdown in investment activity.  The extended approval processes for developments that the UK’s regulatory landscape has created presents a complicated backdrop for progressing key projects.  With hydrocarbons continuing to account for around 75% of total energy usage in the UK, we believe that homegrown energy should always be prioritised over imports and we are encouraged that there are early indications following the recent cabinet changes of potential support for our domestic industry.  This support will only work through delivery of the fiscal and regulatory reforms required to unlock long term investment, protect jobs, strengthen energy security and support the energy transition.”  

The extension of the Verbier licence by the NSTA aligns with the rest of Buchan and now all being the same will help towards the FDP approval. 

As is normally the case I can rarely add much to the comments made by the CEO, whilst the early news from the King of the North is optimistic Andrew Benitz correctly notes that constructive work between the Government and the industry is crucial to supporting key projects in such an important domestic industry. 

It is worth also noting what the CEO of BP said in her recent remarks, to lose any more key projects by not altering the regulatory and fiscal rules and to make the necessary changes.

JOG has huge potential and in recent months the shares have rallied in line with more optimistic political expectations, with optimism the shares will be highly rewarding.