WTI (Oct) $91.30 +29c, Brent (Nov) $95.52 -11c, Diff -$4.22 -40c.
USNG (Oct) $2.91 -5c, UKNG (Oct) 176.03p -1.95p, TTF (Oct) €71.03 -€1.06.
Oil price
Crude is down a little today but will still be nicely up on the week after the return to military activity in the Gulf. There is little more to add to this weeks comments, products are still very short, in particular diesel prices have hardened again, apart from some dark ships it seems that there is little going through the Strait of Hormuz although the US Government are sure that there is plenty.
Opec+ meets on Sunday, the October quota completes the total unwind and now the decision for next year has to be made, with the war still ongoing the numbers will remain somewhat arbitrary but the comment might be useful, maybe no change….
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.
Production
Current total corporate production is over 6,000 boe/d, including production from the recently acquired Thorsby field in Alberta, Canada. This is a record high production rate for the Company and reflects recent drilling successes, outstanding results from workovers and the Thorsby acquisition. Arrow believes it can continue to grow production from its prospect-rich inventory.
Cash Balance
As of September 1, 2026, after the Thorsby acquisition payment of US$8.9m, the Company’s estimated cash balance is US$21.8 million. The Company continues to enjoy a strong balance sheet while growing production and associated cash balance.
Icaco-6 Well
The Icaco 6 well (IC-6) was spud on 19th August 2026 and reached a total depth on 24th August 2026. The IC-6 well encountered a fault and experienced lost circulation and associated drilling mud losses before reaching the target depth. Management, out of an abundance of caution, made the decision to case the well prematurely and complete it as a much-needed, water disposal well. The additional water disposal capacity will have a very positive impact on reducing operating costs.
Log analysis in the IC-6 well shows that the well encountered 6.5 feet MD (4 feet TVD) of net pay in the Carbonera C7 formation (“C7”) and 5 feet MD (3 feet TVD) of net pay in the Guadalupe Formation with Management encouraged with reservoir quality. The well was terminated before it reached the Gacheta and Ubaque formations.
Forward Drilling Plans
The IC-7 well was spud on 1st September and will be a vertical well with C7, Gacheta and Ubaque targets.
Tapir Extension
Arrow continues constructive discussions with regulatory bodies on the Tapir extension. The recent Presidential election resulted in a forward looking Government that is pro-business. In line with President De La Espriella’s vision to increase Colombia’s oil and gas development, Arrow is looking forward to being a part of the President’s vision.
Marshall Abbott, CEO of Arrow commented:
“Arrow is very proud to surpass the 6,000 boe/d threshold. The additional production from drilling and workovers highlights the continued operational success the Company has had on the Tapir block. The multi-zone quality of the Icaco discovery, and its commensurate production rates, have surpassed initial expectations
“Arrow is building another five cellars on the Icaco pad, bringing the total number to fifteen, to continue drilling C7, Gacheta and Ubaque wells.
“Although the IC-6 well was terminated sooner than expected due to encountering a fault, we were able to quickly pivot and complete the well as a water injector in a cost effective manner which will significantly help water handling and production efficiency at Icaco. Meanwhile, the best production wells in the Icaco block have paid out in less than 2 months and production continues to be strong from these wells.”
“The Company continues to experience strong netbacks. This adds significant value and materially strengthens our balance sheet. We look forward to updating our shareholders on further progress at Icaco over the coming months.”
Arrow remains in very good nick and despite some concerns about this well being terminated early for the above reasons, I have said a number of times since I visited the site that a number of wells are needed to be water injectors and as CEO Marshal states this ‘significantly helps water handling and production efficiency at Icaco’. The policy of taking any wells with sub surface fault issues means that they can be used for necessary and regular injectors across the field.
The 6/- b/d threshold number was better than I had expected and even including the c.550 boe/d from the Thorsby deal means that production in Colombia is c.5.45m b/d which must therefore mean that good results from the workovers and the return of CN-12 and of course the recompletion of the Icaco-4 well in the C7 reservoir have all been a great success.
The CEO also states that Arrow are already constructing five additional cellars on the Icaco pad which brings the total to 15, this is in order to continue drilling the C7, Gacheta and Ubaque wells, another surprise as I had only 10 in the book. The Icaco field truly is the gift that keeps on giving…
With current netbacks still ‘strong’ no surprise there then, value is being added every day and strengthens the balance sheet which now has $21.8m of cash and this is post the $8.9m payment for the Thorsby acquisition.
The success of Arrow’s recent drilling programme has meant that the shares have performed very well and of course justify their position in the Bucket List. It also means that I am increasing my target price again, today I raise it from 50p to 60p which looks easily achievable and makes Arrow still, incredibly cheap.
Genel Energy
The Board of Genel notes the announcement made earlier today by DNO ASA confirming that it does not intend to make an offer for Genel.
On 7 August 2026, Genel confirmed that it had 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 “Possible Offer”) and that the Board of Genel, having carefully evaluated the Possible Offer with its advisers, had unanimously rejected it.
The Board of Genel remains firmly of the view that the Possible Offer fundamentally undervalued Genel, its asset base, financial position and prospects, and that it provided no basis for engagement with DNO.
The Board of Genel believes that the Company continues to represent a compelling investment proposition, and remains confident in the Company’s strategy and prospects for long-term value creation for shareholders, underpinned by:
- a strong balance sheet (last reported cash of $240 million as at 31 July 2026);
- its 25% working interest in the Tawke licence, a large-scale, low-cost and highly cash-generative producing asset;
- the disciplined deployment of excess capital to diversify and strengthen the Company’s future cash generation, with a number of potential opportunities continuing to be under review;
- further de-risking the Company’s existing organic portfolio; and
- a return to exports in Kurdistan, which has the potential to more than double the revenue generation from Tawke, as detailed in Genel’s results announcement on 4 August 2026.
The Genel statement above has been issued following the DNO announcement which I copy below. I would suggest that 69p was a very low pitch and particularly relative to the fundamental value of the Tawke asset. Two brief comments about the undisturbed price of 50p, firstly that price was taken when the asset was shut-in and secondly, only 12 months ago the shares were trading at 80p.
On that basis I am keeping my target price at 100p and see Genel emerging from this in a very strong position with a robust balance sheet and significant potential regardless of what happens regarding Capricorn. Genel remains a key member of the Bucket List this year.
No intention to make an offer for Genel Energy plc
Further to the announcement issued by DNO ASA (“DNO”) on 7 August 2026 regarding a possible offer by DNO Iraq AS, a wholly owned subsidiary of DNO, to acquire the entire issued and to be issued share capital of Genel, DNO confirms that it does not intend to make an offer to acquire Genel. This is a statement to which Rule 2.8 of the Code applies.
DNO continues to believe that its proposal of 69 pence in cash per Genel share, with a cash and share alternative, (the “Proposal”) would have represented a compelling proposition for Genel shareholders.
It would have:
· delivered a substantial premium to Genel’s undisturbed share price, reflecting, in DNO’s view, full value for Genel’s assets notwithstanding the continuing uncertainty over its sole revenue-generating asset;
· provided certainty of value irrespective of the outcome of Genel’s offer for Capricorn Energy plc (“Capricorn”), which, if unsuccessful, would leave Genel without the diversification it has long sought and with a significant G&A burden that is disproportionate to its current scale. In the announcement of the recommended offer for Capricorn by DNO Bidco AS, a wholly owned subsidiary of DNO, the Capricorn directors confirmed that they do not currently intend to ask the Court to sanction the scheme of arrangement in relation to Genel’s offer for Capricorn;
· represented a liquidity event for Genel shareholders providing an attractive opportunity to receive cash and realise their investments against a backdrop of poor trading liquidity in the Genel shares;
· given Genel shareholders electing for DNO shares immediate participation in a strong, diversified, growth-oriented business with an established track record of dividend payments; and
· created a stronger company in the Kurdistan Region of Iraq where continuing security and commercial risks make scale and financial robustness essential success criteria.
Following announcement of the Proposal, the Genel board of directors demonstrated no willingness to engage with DNO regarding the Proposal, despite DNO’s invitations to engage. As a result, Genel shareholders were denied the opportunity to consider a proposal that offered a substantial premium, certainty of value and an attractive liquidity event. DNO firmly believes that it would have been in the interests of Genel shareholders for the Genel Board to engage and to extend the 4 September 2026 deadline to determine whether a mutually acceptable proposal could have been reached. DNO is disappointed that the Genel Board was unwilling to do so.
Under Note 2 to Rule 2.8 of the Code, DNO, and any person acting in concert with it, reserves the right to set the restrictions in Rule 2.8 aside in the following circumstances:
· with the agreement of the board of Genel;
· if a third party announces a firm intention to make an offer for Genel;
· if Genel announces a Rule 9 waiver proposal (see Note 1 of the Notes on Dispensations from Rule 9 of the Code) or a reverse takeover (as defined in the Code); or
· if there has been a material change of circumstances (as determined by the Panel on Takeovers and Mergers).
Rockhopper Exploration
Rockhopper has noted media reporting regarding the Falkland Islands and also notes the announcement made today by its partner and Sea Lion project operator Navitas Petroleum which is extracted below:
‘Further to reports in the media, including in connection with the speech delivered overnight by the President of Argentina, Javier Milei, regarding Argentina’s position on the Falkland Islands and the Sea Lion Project, the Partnership hereby clarifies the following update:
The Partnership operates pursuant to valid petroleum licenses lawfully granted to it by the Government of the Falkland Islands, a self-governing UK Overseas Territory, and with the full and ongoing support of the UK Government. For further details, see also Sections 8.2, 8.13 and 8.15 of the Partnership’s 2025 Annual Report, published on March 18, 2026 (reference no. 2026-01-023779).
The Partnership believes that the recent developments are not expected to have a material effect on the development activities of the Sea Lion Project, including the timetable for completion of the Project’s development. For further details, see the Board of Directors’ Report included in the Partnership’s report for the second quarter of 2026, published on August 24, 2026 (reference no. 2026-01-079056).’
The full announcement by Navitas can be found here: NAVITAS PETRO- Response regarding publications regarding the Sea-Lion project | MAYA – TASE Site
And finally…
This weekend sees what some consider to be the finest Grand Prix on the circuit, the Italian GP at Monza is certainly up there with the best of them. Quali is at 1500 tomorrow and the race is at 1400 on Sunday.
In the Prem tonight the Tractor Boys host Liverpool whilst tomorrow sees the Magpies entertaining the Cherries, the Black Cats. go to the Bees, the Seagulls host Leeds, in a London derby the Eagles visit Craven Cottage whilst the Noisy Neighbours host the Sky Blues, Spurs are at Forest and the Tigers entertain the Villa. On Sunday the Red Devils are at the Toffees and in another London derby sees the Gooners hosting Chelsea.
There is good rugby again, after two very close games with the series level at 1-1 the Springboks host the All Blacks at 16:10 tomorrow and at 22:00 the Pumas host the Wallabies.
Racing is at Ascot and Haydock, nothing spectacular but the flat season is coming to an end and its very dry for jumping…
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