WTI (Aug) $72.99 -87c, Brent (Sep) $77.69 -78c, Diff -$4.70 +9c
USNG (Aug) $2.67 +10c, UKNG (Aug) 71.85p -9.51p, TTF (Aug) €29.75 -€2.85

Oil price

A modest fall yesterday as markets worried about US inflation data due tomorrow but in China the Government extended the loans to the property sector in a bid to perk up the economy. US retail gasoline was inconsequential, up a tick last week, down 4 cents m/m but still over a dollar off this time last year.

Chariot

Chariot has announced that further to the Company’s announcement released at 4.32 p.m. on 10 July 2023, the accelerated bookbuild has closed and the Company has conditionally raised net proceeds of US$15.0 million (£11.7 million), comprising gross proceeds of US$16.1 million (£12.5 million) less expenses, through the successful Placing of, and Subscription for 89,631,143 New Ordinary Shares, in each case at the Issue Price of 14 pence per Ordinary Share.

In addition to the Placing and Subscription, and as set out in the Launch Announcement, the Company proposes to raise up to a further US$3 million (£2.3 million) by the issue of New Ordinary Shares pursuant to an Open Offer to Qualifying Shareholders at the Issue Price on the basis of 1 Open Offer Share for every 58 Existing Ordinary Shares held on the Record Date. Qualifying Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility. Details of the Open Offer and the action to be taken by Qualifying Shareholders to subscribe for Ordinary Shares under the Open Offer will be set out in the Circular, which will be sent to Shareholders on 13 July 2023.

The Placing Shares and Subscription Shares represent in aggregate 9.3 per cent. of the Company’s Existing Ordinary Shares. The Issue Price of 14 pence per New Ordinary Share represents a discount of approximately 10% to the closing mid-market price of 15.6 pence per Ordinary Share on 7 July 2023, being the last trading day immediately preceding the date of the Launch Announcement.

The net proceeds of the Fundraise will be used as follows:

• For near term onshore drilling and development planning on a new onshore Moroccan Licence, expected to be awarded imminently; and
• New ventures and working capital.

The Company continues to make good progress on its partnership process for Anchois, with the fundraise providing an improved financial position ahead of finalising negotiations.

Commenting on the Fundraising, Adonis Pouroulis, CEO of Chariot, said:
“We are pleased to announce the successful completion of our oversubscribed Placing and Subscription, subject to shareholder approval at the upcoming General Meeting. I would like to thank all our existing and new shareholders for supporting this raise and we welcome the participation of our retail investors through the Open Offer. We look forward to reporting on our drilling programme on the new onshore Moroccan licence, to be awarded, as well as our partnering process, other offshore activities and further value generative corporate developments over the rest of 2023 and beyond.”

Given that Chariot has secured a new onshore licence with all the commitments that brings this is a very canny raise indeed. The proceeds are earmarked for the new licence which has been awarded by ONHYM, with the agreement expected to be signed imminently, at no cost to Chariot,  a true testimony to the strong relationship the company has there. 

This licence is thought to be on the Lixus reservoir fairways and with the Anchois gas development infrastructure such as processing facilities and pipeline access immediately to hand couldn’t be better placed. Also the licence offers the Company exposure to near term, low cost drilling opportunities. Chariot plans to start a four well drilling programme as fast as possible, in order to deliver near term cash flows and value for shareholders.

At around $3m each the company will still have change from the raise and has intimated that it will use the rest for working capital in order to be able to negotiate the best possible farm-out terms for Anchois. With local lifting prices at some $16/mcf a gas sales contract will be eye watering and being onshore and near to near insatiable markets the prospects are hard to oppose economically.

Finally it is easy to get carried away after all these exciting prospects but it should be remembered that Anchois still hasn’t got its FID yet, I can only imagine that with so much hard work having been done this too is imminent. 

I shan’t be changing my TP for Chariot, nor taking it from the bucket list, it still shows significant upwards potential and even only looking at the domestic gas business could make substantial growth dynamics, 100p is very much doable. 

Predator Oil & Gas

Predator has announced the successful completion of drilling and logging operations for the MOU-4 well.

MOU-4 preliminary drilling results

A preliminary summary of the results from the zones of interest is given below pending further NuTech petrophysical wireline analysis and reservoir characterisation. 

1. M1 Sand interval and deeper
Within the interval from 540 to 589 metres TVD MD, 26.5 metres of sands were encountered.

No structural closure was mapped pre-drill within this interval. Pending the results of the NuTech wireline log analysis this interval may be re-mapped and re-assessed. It had not previously been considered as a potential target and this is the first time that the Company has acquired wireline logs over this shallow interval.

2. Moulouya Fan
From 779.5 metres to 809.8 metres TVD MD the Moulouya Fan is present as prognosed pre-drill. The wireline logs over one interval of 16 metres of sand are impacted by poor borehole conditions with possible washouts. NuTech wireline log analysis will be run over this interval.

The presence of the Moulouya Fan in MOU-4 has extended the overall area of the feature to the southeast beyond the previously mapped limit.

3. Lower Fan
From 860.5 to 879.5 metres TVD MD 13 metres of gross sands are developed which justify further log analysis by NuTech.

4. Top Jurassic carbonates
The top Jurassic carbonate objective was reached at 1135 metres TVD MD, 253 metres deeper than the estimated depth pre-drill based on no well control.

A thick section of 175 metres of claystones capped the Jurassic carbonate section confirming the presence of an excellent seal separating the section from the overlying  Moulouya Fan sequence. This has eliminated a significant pre-drill seal risk.

The culmination of the Jurassic carbonate target now lies 2.6 kilometres to the southeast of the MOU-4 well location and significantly higher than at the MOU-4 well location.

Results of MOU-3 NuTech wireline log analysis

NuTech wireline log analysis and reservoir characterisation of the MOU-3 well has highlighted 43 metres to be likely gas sands that will form the primary objectives in a rigless testing programme.

Rigless well testing

Following the completion of the MOU-4 drilling and logging operations the next planned activities will be an extensive rigless testing programme details of which will be announced in the coming weeks.

Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings Plc commented:
"The MOU-4 well has confirmed the presence of the Moulouya Fan southeast of its previously mapped extent. The M1 Sand interval had not previously been considered as a reservoir target and therefore the results of the NuTech wireline log analysis over this interval will be of particular interest to determine whether it may or may not be a new candidate for rigless well testing.

The speculative pre-drill Jurassic carbonate horizon has now been validated in MOU-4. Seismic remapping and evaluation of the Jurassic using the new MOU-4 well control point and data yet to be analysed from the well will be required to further de-risk the Jurassic objective. The initial well results are however promising.

The MOU-3 drilling results also confirmed the potential to extend the presence of possible shallow gas to the west of MOU-3 and northwest of MOU-1.

We are pleased with our drilling results this year and look forward to an extensive rigless testing programme to help determine potential gas flow rates and gas volumes connected to the current inventory of wells."

These are very big numbers indeed and prove that those with confidence in PRD who have tripled the share price since the turn of the year may well have been vindicated. Whilst there is still plenty of evaluation to be done the rigless testing which is about to start could be highly rewarding for Predator. 

Predator is in the Bucket List as it screams out the constituents of a successful exploration campaign, not to mention the massive enthusiasm of founder Paul Griffiths. Nothing is a given with a huge amount of work to be done but just think what could happen if a wealthy partner arrived on board… 

Eco (Atlantic) Oil & Gas

Eco has announced that it has signed a legally binding Letter of Intent pursuant to which its wholly owned subsidiary, Azinam Limited, will farm out 6.25% Participating Interest in Block 3B/4B, offshore South to Africa Oil SA Corp, a wholly owned subsidiary of Africa Oil Corp. Pursuant to the terms of the LOI, the completion of the Acquisition is subject to the satisfaction of customary conditions precedent including, but not limited to, the receipt of requisite regulatory approvals from the government of South Africa and the TSX Venture Exchange. 

The consideration for the Acquisition is up to US$10.5m in cash, payable conditional on certain milestones as set out below:

• US$2.5m within 30 days of signing of the LOI;
• US$2.5m upon government approval for the transfer of the 6.25% interest in Block 3B/4B to Africa Oil;
• US$4m upon the completion of targeted farm out to a third party; and
• US$1.5m upon spud of the first exploration well in Block 3B/4B

On closing of the Acquisition, which is subject, amongst other things, to Section 11 approval for the transfer from the government of South Africa, TSXV approval and customary pre-emption provisions, the Block 3B/4B interests of the JV partners in Block 3B/4B will be as follows:

• Africa Oil SA Corp, a wholly owned subsidiary of Africa Oil Corp. and the Operator of the Block, holding a 26.25% Participating Interest;
• Azinam Limited, a wholly owned subsidiary of Eco Atlantic, holding a Participating Interest of 20%; and
• Ricocure (Proprietary) Limited, holding the remaining 53.75% Participating Interest.   

The JV partners continue to progress the collaborative farm-out process, as previously announced, for up to a 55% gross working interest in the Block, with various potential parties.

As announced on 21 March 2023, the application process for a permit to drill one well and one contingent well (and potentially up to five wells) within an area of interest in the north of Block 3B/4B remains underway.

Completion of previously announced acquisition of additional interest in Block 3B/4B, South Africa
Further to the Company’s announcement of 27 June 2022, the Company can confirm that it will issue 1,200,000 new common shares of no par value in the Company to Lunn Family Trust in place of the US$500,000 cash consideration due in respect of the acquisition of the 6.25% interest in Block3B/4B from Lunn Family Trust. The Consideration Shares represent the full and final component of the completion consideration in respect of the acquisition announced on 27 June 2022 and there are no additional shares or cash due to the seller.

Gil Holzman, Co-Founder and Chief Executive Officer of Eco Atlantic, commented:
“We are very pleased to agree this transfer of a portion of our WI on the Block to our strategic alliance partner Africa Oil. The restructure of the WI will result in Africa Oil holding 26.25% and Eco 20% and will strengthen the JV position amid ongoing negotiations with third parties to farm into the Block and execute a drilling campaign. Since Africa Oil is already established as JV partner and Operator on the Block, receipt of the requisite regulatory approval for the transfer is expected to be straight forward. 

“We look forward to continuing our work with the South African government and regulatory bodies in terms of our Environmental Authorisation process and in the active exploration of Block 3B/4B. The initial cash to be received from Africa Oil will enable Eco Atlantic to fund its growth opportunities elsewhere and with no shareholders dilution, while maintaining a strategic and considerable 20% working interest in this highly prospective Block (pre farm out to a third party).”

You can’t keep a good man down and Gil Holzman is one of those who regularly surprises with another deal which is just around the corner. Today he unveils a plan to raise some $10m+ without any dilution by admittedly bringing in fellow investors in the extremely prospective Block 3B/4B. 

Myself and the international oil industry have been watching this acreage and of course I am also a huge fan of Africa Oil, a great company to be your partner here. Expect more deals as the time has now come for the partners to do more farm-outs and prepare to go to work on the Block. 

The shares have fallen in the last few, quiet months, I do not expect this to continue as the excitement grows about 3B/4B where there is much potential, as I said, expect more surprises from Mr Holzman, Lechaim!

Angus Energy

Further to the announcement of 30 June 2023, Angus Energy continues to negotiate detailed documentation for its proposed £6m bridge facility and will update the market in due course.

No surprises here for shareholders who had been warned but it shouldn’t take long to complete this.

KeyFacts Energy Industry Directory: Malcy's Blog