WTI (Nov) $89.68 -35c, Brent (Nov) $93.29 +2c, Diff -$3.61 +37c
USNG (Oct) $2.63 u/c, UKNG (Oct) 109.0p +7.85p,  TTF (Oct) €42.695 +€0.33

Oil price

Oil is down a little this morning as various factors exert themselves in the market. The Fed, as well as the ECB, have said that rates may not come back as much next year as the market expects and unsurprisingly Jamie Dimon, rarely short of a quote, has said that rates may go up on the back of ‘political insecurities’.

With the important National Day Golden Week holidays in China starting at the weekend, demand for jet fuel should show a significant rise and manufacturing data is also due and markets will watch that before the holiday shutdown. 

The US Appeals Court has given Sleepy Joe until 8th of November to hold an expanded sale of oil & gas leases in the GoM, apparently the Federal Government is protecting an endangered whale species…

Wentworth Resources

Wentworth has announced its interim financial results for the six months ended 30 June 2023. AII dollar values are expressed in US dollars unless stated otherwise.

Katherine Roe, CEO, commented:
“The first half of 2023 saw continued strong production, further highlighting the quality of the Mnazi Bay asset, alongside an ongoing exemplary safety record which remains a key priority for Wentworth. Furthermore, our strengthened financial position underscores the robust nature of the business. 

“We continue to work collaboratively with all stakeholders towards successful completion of the acquisition by Maurel & Prom in Q4 2023, which we see as representing considerable value realisation for shareholders.”

Wentworth are continuing to provide excellent figures as the Mnazi Bay asset delivers yet again and the management are to be applauded in a seamless operational process whilst they must have their eye on the M&P transaction in the background.

I have no reason to believe that the transaction will not complete despite the delay, as I understand it the deal remains very much alive and a year-end completion seems to be a very realistic likelihood. Given this I remain a committed fan of the company.  

HIGHLIGHTS

Financial

• Revenues grew 29% to $19.9 million (H1 2022: $15.5 million)
• Adjusted earnings before interest, taxes, depreciation, amortization, and exploration (EBITDAX) increased by 53% to $14.7 million (H1 2022: $9.6 million)
• Strong financial position with $40.7 million cash (H1 2022: $27.4 million) and zero debt

Operational

• Health and safety of employees, partners and local communities continues to be a top priority for Wentworth.  On 2 August 2023, the Company celebrated seven years without a Lost Time lncident (LTI)
• Average daily production of 98.2 MMscf/d (gross) during the first six months of 2023 (2022: 92.3 MMscf/d)         
• Wentworth’s share of Gross 2P Reserves estimated to be 137 Bcf as at 31 December 2022

Outlook

• 2023 production guidance maintained at 90 – 100 MMscf/d for Mnazi Bay as issued in June 2023, up from previous guidance of 85 – 95 MMscf/d issued in March 2023
• The Company anticipates, given the absence of recent investment in the Mnazi Bay field and continued cost recovery in H1 2023, that H2 2023 production will include significant periods where costs have been fully recovered, leading to substantially lower revenues
• The Government’s re-examination of the historic cost pool audit for the years 2013 – 2015 is ongoing; any reduction in the current expected cost pool balance as a result is likely to further impact revenue going forward

Update on offer by Etablissements Maurel & Prom S.A.  (“M&P”)

• On 5 December 2022, the boards of Wentworth and M&P announced that they had reached agreement on the terms of a recommended all cash offer by M&P for the entire issued, and to be issued, share capital of Wentworth (the “Acquisition”). The Acquisition is to be implemented by means of a scheme of arrangement pursuant to Article 125 of the Jersey Companies Law. The circular in relation to the Scheme was published or made available to Wentworth Shareholders on 25 January 2023 (the “Scheme Document”)
• The Acquisition was approved by Wentworth Shareholders at the Court Meeting and the General Meeting which were held on 23 February 2023, but remains subject to the satisfaction or (where capable of being waived) waiver of the other Conditions to the Acquisition as set out in Part III (Conditions to and certain further terms of the Acquisition and the Scheme) of the Scheme Document
• These Conditions include, inter alia, (i) consent from the Minister responsible for petroleum affairs in Tanzania under the Petroleum Act 2015 (the “Act”) and any other applicable laws; (ii) the waiver of any right of first refusal or pre-emption right to which the Tanzania Petroleum Development Corporation is entitled in respect of the Mnazi Bay asset; and (iii) approval from the Tanzanian Fair Competition Commission (“FCC”), in each case on terms satisfactory to M&P, acting reasonably
• On 11 July 2023, Wentworth was notified that the FCC has issued a decision notice that application for FCC approval shall not be determined at this time and that this application will be marked closed by the FCC
• Following this, there have been a number of discussions between the parties to the offer including recent meetings in country between the CEO of Wentworth and relevant Tanzanian government stakeholders, as well as the CEO of M&P and relevant Tanzanian stakeholders, to seek to bring the Acquisition to a successful conclusion before the agreed 31 December 2023 Long Stop Date, including at the highest levels of government in Tanzania
• There has been positive progress in these discussions, although there can be no certainty that the Conditions will be satisfied or (where capable of being waived), waived by M&P.  The Company and M&P are working towards the satisfaction or (where capable of being waived) waiving of the Conditions in Q4 2023

Touchstone Exploration

Touchstone is hosting a Capital Markets Day event for analysts and investors today at 9 a.m. BST at the offices of FTI Consulting.

At the CMD, Touchstone’s senior management team will present further details regarding the Company’s recently transformed production profile, the exciting geological profile in Touchstone’s land package, as well as covering the work it is undertaking to set leading environmental, social and governance standards in Trinidad. The presentation will outline Touchstone’s key drivers and areas of focus over the next five years to take advantage of its unique growth opportunities. No new material information will be disclosed about current trading.

A copy of the presentation slides will be made available on the Company’s website later today. 

Retail Investor Presentation
President and Chief Executive Officer Paul Baay will also hold a presentation and Q&A for retail investors today via the Investor Meet Company platform, beginning at 3:30 p.m. BST.

The presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free and add to meet Touchstone via:

https://www.investormeetcompany.com/touchstone-exploration-inc/register-investor

Investors should make every effort to listen to the 3.30 presentation today as the situation at Touchstone has been totally transformed by the bringing on of Cascadura field that changes the company completely. I was on the earlier call and it was excellent. I interview CEO Paul Baay tomorrow.

Diversified Energy Company

Diversified has announced its  completion of the semi-annual borrowing base redetermination for the Company’s revolving credit facility, structured as a Sustainability-Linked Loan. The borrowing base under the facility was increased to $425 million from $375 million with 100% approval from Diversified’s 14-bank lending syndicate, resulting in current liquidity of approximately $120 million. 

Rusty Hutson, Jr., CEO of Diversified, commented:
“We thank all the members of our lending syndicate for their continued support and confidence in Diversified’s strong reserves base and sustainability practices, resulting in the unanimous borrowing base increase to $425 million for Diversified’s Sustainably-Linked Loan. The expanded borrowing base reflects the quality and value of our asset base and the economics associated with our investments in the business.”

This is an important note for DEC for whom the important revolving credit facility, and structured as a Sustainability-Linked Loan has been increased to $425m from $375m. The impact has resulted in a strengthening of the company’s liquidity of $120m, notably important in the econometrics of DEC. 

KeyFacts Energy Industry Directory: Malcy's Blog