WTI (Nov) $91.85 +36c, Brent (Dec) $104.72 +44c, Diff -$12.87 +8c.

USNG (Nov) $3.22 +5c, UKNG (Nov) 205.4p +13.07p, TTF (Nov) €82.60 +€4.725.

Oil price

Oil is up over two dollars today with Brent again better than WTI. Last week WTI only gained 74 cents whilst Brent was up 42.47 with the same old factors moving the price.

In particular the Houthis stepped up their attacks on Saudi with at least two attacks on Riyadh airport which killed 13 people and injured many more. It seems as if the USA are now considering joining the Yemeni/Saudi forces in the theatre. 

President Trump announced a deal with Russia which apparently means that the latter will supply around 40m barrels of diesel to the US and international markets. This shows some considerable level of ignorance of the market as there is little chance of anything like this amount getting out of Russia. 

There is also the small matter of the Russian/Ukrainian energy ceasefire to consider, the most interesting part of it is that neither side know anything about it. Zelensky says that he hasn’t heard any details and if Putin has he took no notice and bombed Ukraine overnight…

The Baker Hughes rig count showed another increase last week, overall units were up by 5 to 603 and oil were up by 6 to 462, year on year overall is up 56 rigs and oil increased by 44 units. 

Borders & Southern Petroleum

Borders & Southern has announced that it has raised £2 million, before expenses, to advance the continued development of its 100% held Darwin gas condensate discovery. The Fundraising comprises a direct placing of shares to a single investor.

The Fundraising will comprise the issue, in aggregate of 17,391,304 new ordinary shares in the Company at a price of 11.5p per new Ordinary Share. The Issue Price is an approximate 42 per cent. premium to the Company’s closing price of 8.1p on 9 October 2026. In addition to the issue of the Ordinary Shares, the Company will issue 8,695,652 warrants, convertible into further Ordinary Shares at a price of 20p per Ordinary Shares for a period of 18 months, after which time the warrants will lapse.

Highlights of the Fundraising:

  • £2 million raised through the direct placing of 17,391,304 ordinary shares at the Issue Price.
  • The issue of 8,695,652 shares warrants convertible into further Ordinary Shares at 20p for a period of 18 months.

Use of Proceeds

The proceeds of the Fundraising will be used to fund the Company’s Licence fees, Discovery Area fees, technical and commercial studies, general & administrative expenses and, more generally, to continue to advance the Company’s Darwin discovery for commercial appraisal.

Harry Baker, Chief Executive Officer of Borders & Southern, commented:

“I am delighted to welcome a new investor to the share register. The ultra-high-net-worth Middle Eastern investor is an exceptionally well-connected and experienced investor, with a long history of deploying strategic capital across a range of industries, including in this sector. His investment represents a strong addition to our shareholder base as we continue to progress the farm-out process.

As background, we have been talking to this investor for several months. In spite of the geopolitical backdrop, he has offered us £2 million at a 30% premium to the 10-day VWAP and an approximate 42% premium to Friday’s closing share price. The Fundraise means that we are now fully funded until mid 2028 and represents a very modest 1.9% dilution for existing shareholders.

 We remain completely focused on delivering the best deal possible for all shareholders, and today’s announcement further strengthens our position as we work towards concluding the farm-out process. Our confidence in delivering an excellent result for shareholders remains undiminished.”

This raise, at a very attractive 42% premium to the Friday close shows that a wealthy strategic investor, who apparently knows his way around the sector is very optimistic about B&S. Indeed he seems to take the view, as I do that the potential value of the company is way above the current market cap.

There are three tenets to the Borders story and they are, successful licence extension, eliminate funding risk and finally to identify and bring in a partner for Darwin. With the first tenet being covered off by the recent FI Government extension which only requires formal signature and this announcement securing full funding through ‘mid 2028’ only the final one is left to tick off. 

And on that point I would make an educated guess that discussions, which have been ongoing for a while, are progressing well and could lead to further significant news before too long. After all a recent comment by CEO Harry Baker stated that the company are ‘negotiating with rather than marketing to, potential partners’. 

This makes me fairly confident that the biggest players are still in the room, after all the company has always said that it is the best deal, not the first deal that matters the most in value creation. Right from the start management has always said that B&S shares are akin to a valuable call option, with the risk being either no oil or no farm-out on one side set against huge potential on the other. 

So, my target price of 50p per share leaves me very much in the added value corner and this investor clearly shares my faith. The shares are up only 12% today which is very parsimonious given the 42% premium payed by a highly respected strategic investor that secures funding for another 18 months. 

B&S came onto my radar screen in late 2024 when I visited the company and met with the subsea team who showed me a very detailed analysis of Darwin which I immediately took on board. The raise at 1.5p led to the rise in the shares up to as high as 14p in July and only the political interference, which I feel is overly risked at present has taken the top off the price. 

Accordingly I remain confident in Borders and its excellent team and that they will validate the £400m value that my TP compares to. That number may even be conservative, after all the industry still needs structures the size of Darwin for the future and I consider that development of this huge gas condensate discovery will enable that for the years to come. 

Afentra

Afentra has provided an operational update on its offshore Angola portfolio, including confirmation of the revised sequence for drilling the Impala-2 development well and completion of the Pacassa SW well.

Highlights

Impala-2 – Immediate rig move to drill and complete Impala-2; first oil expected in January 2027

Impala-2 Funding – Joint venture partners have agreed to fund the well directly up to a reduced cost cap of $60m gross

Pacassa SW – Sidetrack will follow Impala-2 completion; first oil expected in Q1 2027

The joint venture has agreed to move the Borr Grid drilling rig to Impala-2, upon completion of this well the rig will return to drill and complete the Pacassa SW sidetrack. The revised sequence is designed to optimise the drilling schedule and rig utilisation, allowing Impala-2 to progress while final preparations and equipment mobilisation for the Pacassa SW sidetrack are completed.

Impala-2

Impala-2 is expected to spud in mid-October, with drilling and completion operations anticipated to take approximately 80 days. Completion of the well is targeted for the end of December, with first oil expected in January 2027 at an initial gross production rate of approximately 4,000 bopd.

Reservoir pressure and productivity data obtained during the successful Impala-1 intervention, which restarted production from this well, have been incorporated into the final well planning, supporting the next phase in the re-development of the Impala field. A material incremental resource upgrade for the Impala field is anticipated following the completion of Impala-2.

Impala-2 Funding

The joint venture partners have elected to fund Impala-2 directly rather than utilise the previously agreed carry mechanism. Direct funding allows Afentra to participate in production revenues from first oil and benefit from the full capital expenditure uplift available under the Production Sharing Contract. The joint venture partners will retain the agreed well cost cap mechanism, at a reduced level of $60m gross, thereby providing Afentra with protection against any cost overruns.

Pacassa SW

As previously announced, the Pacassa SW well delivered a successful oil discovery, encountering 136 metres of net oil pay. The well will require to be sidetracked due to operational problems restricting access to the wellbore. Given the ongoing planning and procurement for the sidetrack, the rig schedule has been revised. Following completion of the Impala-2 well, the rig will return to Pacassa SW to sidetrack and complete the well. First oil from Pacassa SW is now expected in Q1 2027 following connection to the existing Pacassa production infrastructure.

Remapping of the Pacassa SW discovery is ongoing incorporating the discovery well results. This work is expected to confirm significant incremental oil resources of up to around 70mmbo as predicted prior to drilling the well. The updated oil in place and resource ranges will be released when this work is completed.

Near-Term Catalysts

–          Commencement of Impala-2 drilling expected mid-October 2026, with first oil expected January 2027

–          Trading update in November 2026

–          Completion of the Etu transaction

–          Completion of the Pacassa SW sidetrack, with first oil expected in Q1 2027

–          Operational update on the redevelopment of the KON4 Quenguela Norte field

–          Update on the assessment of the exploration potential across the Kwanza Onshore portfolio

–          Commencement of the Block 3/05 hydraulic workover programme planned for early 2027

Paul McDade, Chief Executive Officer, Afentra plc commented:

“The decision to move directly to Impala-2 provides operational flexibility, optimises the Block 3/05 drilling programme and enables us to maintain operational momentum. With preparations for the Impala-2 well complete, the revised sequencing allows drilling to progress immediately while final planning and equipment mobilisation for the Pacassa SW sidetrack are completed.

Pacassa SW remains a high-priority discovered resource and has already delivered an excellent subsurface result confirming the material potential we see in this area. Following Impala-2, the rig will return to Pacassa SW to sidetrack and complete the well, preserving a clear, efficient pathway to bringing both wells into production in Q1 2027.

The joint venture partners’ decision to fund Impala-2 directly enables Afentra to participate in production revenues from first oil, currently expected in January 2027, while benefiting from the full capital expenditure uplift available under the Block 3/05 PSC. Importantly, the retained well cost cap mechanism continues to provide Afentra with protection against cost overruns.

Together with our partners, we continue to take a disciplined, pragmatic approach to the redevelopment of Block 3/05. We now have two important production wells progressing through the programme, providing the potential for meaningful near-term production and cash flow growth as we continue to unlock the significant value within the asset.”

There is plenty going on at Afentra right now and this announcement confirms the news that the JV is ready to drill Impala-2 with the spud imminent and first oil of around 4/- b/d expected in January. After that the rig will move to drill the Pacassa SW sidetrack with first oil there expected in Q1 2027 and also provide extra resource they expect.

As I suggested a while ago JV will pay their own way and avoid the carry mechanism which will mean that they can benefit from gaining revenue from first oil. Thus the drilling programme should seamlessly be followed by first production in the spring.

And for the next few weeks the company expects to provide the market with plenty of information, expect trading and operational updates and of course news from the assessment of the exploration potential of the Kwanza onshore portfolio.

Financially very strong following the debt facility restructuring and of course with a very popular $40m raise at just below today’s price, Afentra has a robust balance sheet and the Gunvor prepayment facility giving substantial scope. 

At 71p Afentra shares are some 22% off the summer lows but I still maintain that there is significant upside, I upgraded my target price then to 125p which is by no means extravagant and with all the potential in the portfolio I think that the company will continue to justify its position as a stalwart of the Bucket List.  

And finally…

In the Prem there were wins for the Gooners, Chelsea, the Tractor Boys, Seagulls, Eagles and of course the Noisy Neighbours…

In the Gallagher Prem there were wins for the Tigers, the Saints, Sarries, the Chiefs and Sale.

Max won another over in Singapore and Chas was second and Kimi third. But on mediums lewis should have gone long not change early which cooked his goose and with the Kardashians watching too…