A flash blog today, Kistos Capital Markets Day so will add to that, and the other company news after reflecting with the companies.

Kistos

Kistos has announced an investment in Spiralis Energy Ltd, a tidal energy business.

As part of Kistos’ commitment to the energy transition and meeting its own sustainability objectives, the Company has identified and invested in Spiralis Energy’s tidal technology, which is at an advanced stage of testing and has the potential to revolutionise the tidal energy industry.

Spiralis Energy has developed the Axial Skelter tidal power solution, a unique proposition in the tidal energy industry made from fully recyclable, 3D-printed segments. The entire tidal energy generator can be produced in less than a week with the individual segments of the Axial Skelter easily transported, maintained and, if required, replaced.  A demonstration of Spiralis Energy’s Axial Skelter can be viewed here

Supported by Kistos’ investment, Spiralis Energy will undertake a long term survivability test of the Axial Skelter. This will demonstrate the operational resilience of the Axial Skelter and could lead to widescale deployment to provide a sustainable energy generation capability.

As a cost effective way to mitigate our carbon impact, Kistos has agreed to take an equity interest of up to 20% in Spiralis Energy Ltd through 10% equity and 10% warrants for an investment of £800,000. Kistos has the right to have board representation.  

Andrew Austin, Executive Chairman of Kistos, commented:
“Kistos is committed to supporting the energy transition and believes this can be done whilst exposing shareholders to asymmetric value accretive opportunities. Our investment in Spiralis follows extensive due diligence on the business, its technology and commercial strategy and the tidal power sector and current market participants. Providing financial backing at this stage, with imminent final testing and the potential for commercial deployment shortly thereafter, meets our risk profile for this investment.

Whilst as a management team our priority remains to seek value accretive opportunities in hydrocarbons, this investment offers a path to meet our stated sustainability commitments in conjunction with providing direct upside exposure and influence not available with traditional offsetting initiatives.”

So, Kistos has moved further into energy transition by investing in Spiralis Energy which harnesses the energy created by the tide, in itself renewable but without the intermittent nature of other sources. Indeed the vendors have a unique proposition based on its Axial Skelter tidal power solution which is formed of a singular moving part made from fully recyclable, 3D printed segments. 

This is most interesting as tidal is an exciting potentially substantial energy source but one with, at present, high barriers to entry which are addressed by this technology. With Kistos having invested £800,000 for a 10% equity interest in Spiralis Energy ltd with warrants entitling kistos to acquire a further 10% at the same price.

Chairman Andrew Austin believes this to ‘expose shareholders to asymmetric value accretive opportunities’ and that following extensive due diligence on the business the investment in the tidal power sector and its participants rewards can be substantial. With testing in the south coast before a funded survivability test in Q1 2025, ahead of full-scale deployment in the waters of Alderney where a plan to talk to the state officials to secure a PPA would displace its dependence on diesel energy.

I would say a very exciting investment, lots of potential upside and in line with Kistos’ risk profile in such an area. It continues to make the company a very attractive investment at these prices.

Touchstone Exploration

Touchstone has announced the completion of Cascadura-2ST1 and Cascadura-3ST1 well testing.

Highlights

• Cascadura-2ST1 Well: during an extended 48-hour test, Cascadura-2ST1 produced an average rate of approximately 4,950 boe/d, consisting of 26.4 MMcf/d of natural gas and 547 bbls/d of NGLs.
• Fluid Analysis for Cascadura-2ST1: initial field analysis shows the presence of liquids-rich natural gas with no produced water, similar to the characteristics of the Cascadura-1ST1 well.
• Cascadura-3ST1 Well: over a 68-hour testing period, Cascadura-3ST1 achieved an average production rate of approximately 1,100 boe/d, including 786 bbls/d of crude oil and 1.9 MMcf/d of natural gas.
• Fluid Analysis for Cascadura-3ST1: field assessments indicate medium API gravity crude oil with a 2 percent water cut, along with liquids-rich natural gas.
• Production Status: the Cascadura-2ST1 well is currently on continuous production to the Cascadura natural gas processing facility, and the Cascadura-3ST1 well is scheduled to commence permanent production within the next two days.

Paul R. Baay, President and Chief Executive Officer, commented:
“These encouraging well test results not only validate our geological models but also underscore the potential of the Cascadura field. With critical infrastructure in place between the wells, we are well-positioned to drill additional wells to further develop the field.

The Cascadura-2ST1 well test results are similar to those of Cascadura-1ST1, and the well is located at the boundary of our reserves booking. The Cascadura-3ST1 well test results are exceptionally promising, as they unlock a new oil and natural gas play on the eastern side of Fault C, extending into the recently acquired Rio Claro block. On a per barrel equivalent basis, oil currently generates nearly five times the revenue of natural gas, and with a 12.5 percent royalty on the block and anticipated operating expenses below our corporate average, the play offers strong cash flow generating capabilities.

Together, these wells represent a material increase to our base production, reinforce our development strategy and open the door to a new oil play.“

My initial thoughts here, to be added to after talking to the company are of significant pleasure as these results are potentially a good deal better than I or the market might have hoped for particularly at Cascadura-3ST1. The whole play is massively underwritten by this result as in the CEO comments above, as they not only extend into the Rio Clara block but also unlock a new play with both oil and natural gas on the eastern side of Fault C. 

As I have commented recently, the TXP oil portfolio is incredibly important as it generates much bigger revenues and again as above ‘strong cash flow generating capabilities. These flow rates in both hydrocarbons are exceptionally good and I look forward to writing more after speaking to the company.

Cascadura-2ST1 Testing

Cascadura-2ST1 production testing commenced on November 2, 2024, with flow tests spanning a total of 82 hours, comprised of an initial clean-up flow period, followed by an initial shut-in period and a four-step rate test, including a 48-hour extended flow test. All production accumulated during well testing was processed for sales at the Cascadura natural gas processing facility.

During the 48-hour extended portion of the flow test, the well produced at an average rate of approximately 4,950 boe/d (89 percent natural gas), including 26.4 MMcf/d of natural gas and an estimated 547 bbls/d of NGLs. The bottom hole flowing pressure of the well during this stage of testing averaged 3,497 psi through a 64 percent choke, representing a 15 percent reservoir pressure drawdown.

During testing, Cascadura-2ST1 yielded 44-degree API gravity NGLs at an average ratio of approximately 21 barrels of NGLs per MMcf of natural gas produced. Field analysis of the produced gas indicated liquids rich natural gas. Additional testing of fluid samples will be conducted to accurately assess the natural gas and associated liquids composition as well as the phase behaviour of the fluids within the reservoir.

The well was shut-in for a pressure build-up survey between November 6, 2024 and November 9, 2024 with further analysis to be conducted in identifying reservoir continuity.

On November 9, 2024 the Cascadura-2ST1 well was placed on continuous production at a choke restricted initial natural gas rate of approximately 20 MMcf/d and associated NGLs. This initial choke setting was selected based on well test analysis and is designed to maximize the ultimate recovery of both natural gas and NGLs from this section of the reservoir, ensuring optimal long-term performance.

Cascadura-3ST1 Testing

Cascadura-3ST1 flow testing commenced on November 6, 2024, with all production accumulated during testing processed for sales at the Cascadura natural gas processing facility.

During the 68-hour flow test, the well produced at an average rate of approximately 1,100 boe/d (71 percent oil), including an estimated 786 bbls/d of oil and 1.9 MMcf/d of natural gas. The wellhead flowing pressure during the flow test averaged 1,122 psi through choke settings of 25 percent to 35 percent, representing a 65 percent wellhead pressure drawdown.

During testing, Cascadura-3ST1 yielded 29-degree API gravity oil with a 2 percent water cut, as well as liquids rich natural gas. Additional testing of fluid samples will be conducted to accurately assess the liquids and natural gas compositions.

The well is currently shut-in for a pressure build-up survey with further analysis to be conducted in identifying reservoir parameters and bottom hole reservoir performance. Touchstone intends to place the Cascadura-3ST1 on continuous production over the next two days at a choke restricted initial rate of approximately 600 to 700 bbls/d of oil in order to optimize the well’s long-term production potential.

Cascadura-3ST1 openhole wireline logs also indicate an additional unperforated sand with over 24 feet of net hydrocarbon pay. This sand is located at depths between 5,816 to 5,840 feet in the well, uphole of the current production zone. Given the strong flow test results from the well, this interval offers a potential future development opportunity for the Company to pursue.

Arrow Exploration

Arrow has provided an update on operational activity.

Highlights

• CNB HZ-6 now on production having cleaned up at an initial rate of 2,250 BOPD gross (1,125 BOPD net to Arrow)
• Post fitting of electric submersible pump (“ESP”) CNB HZ-6 currently flowing at a rate exceeding 1,900 BOPD gross (960 BOPD net to Arrow) with a 31% water cut
• Water disposal facility at the CNB pad began operating on November 2, 2024.  This completes the current water disposal infrastructure allowing Arrow to increase pump rates and production
• CNB HZ-7 spud by Petroworks rig on October 22, 2024.  Once complete, the rig will move to drill the Alberta Llanos prospect (formerly known as Baquiano-1)
• Current net corporate production is over 5,305 BOE/D, inclusive of CNB HZ-6, with cash position exceeding $18 million on November 1, 2024

CNB HZ-6

The fifth horizontal well on the Carrizales Norte “B” pad (CNB HZ-6) is now on production.  The well was brought on production on October 19, 2024, and cleaned up to an initial production rate of 2,250 BOPD gross (1,125 BOPD net). The well has had an ESP fitted and is currently flowing in excess of 1,900 BOPD gross (960 BOPD net to Arrow) with a 31% water cut.  Please note initial production flows are not necessarily indicative of long-term performance or ultimate recovery and a stabilized production rate will be determined in the first few weeks of operations, in keeping with conservative reservoir management.

CNB HZ-6 was spud on September 27, 2024, and reached a target depth of 8,450 feet (true vertical depth) on October 12, 2024.  The well was drilled to a total measured depth of 14,065 feet with a horizontal section of approximately 4,550 feet.

The CNB HZ-6 is the third Arrow well to use Autonomous Inflow Control Devices (AICDs) which are designed to limit the water cut in horizontal wells. Sustained flow rates from wells with AICDs strongly indicate that suppressed water cuts and shallower declines will result in superior ultimate oil recoveries from the Ubaque reservoir.

Disposal Facilities and Production Optimization

Arrow has completed the water disposal facility at the CNB pad.  The facility began operating on November 2, 2024.  Combined with the water disposal facilities at the CN and RCE pads, Arrow believes it has the ability to safely dispose of all water to be produced from those pads in the foreseeable future.

The new water infrastructure will not only make operations more efficient and decrease operating costs, it will also allow for future production growth.  Trucking needs will also reduce, providing benefits for the local communities and the environment.

With the water disposal facilities now in place and operational, Arrows plans to increase pump speed on existing wells.  Arrow estimates that it will be capable to initially add 600 – 800 BOPD from the CN and RCE pads. Arrow’s success in establishing high volume water disposal capabilities enables the Company to produce its oil wells more aggressively. Water production in the Llanos Basin and the strength of the water aquifers in the Ubaque and Carbonera reservoirs are essential to higher-than-average estimated ultimate recoveries.

CNB HZ-5, HZ-4, HZ-3 and HZ-1

The first four horizontal wells (CNB HZ-1, HZ-3, HZ-4 and HZ-5) on the CNB pad continue to perform above third-party modeling expectations with the following flow rates and water cuts:

CNB HZ-5            Gross 1,000 BOPD           Net 500 BOPD                  Water Cut 52%

CNB HZ-4            Gross 1,110 BOPD           Net 555 BOPD                  Water Cut 52%

CNB HZ-3            Gross 1,090 BOPD           Net 545 BOPD                  Water Cut 71%

CNB HZ-1            Gross 1,160 BOPD           Net 580 BOPD                  Water Cut 70%

This performance demonstrates how AICDs are suppressing water production to the benefit of oil production.

CNB HZ-7 and Upcoming Drilling

The Petroworks rig has been moved to the seventh cellar on the Carrizales Norte B Pad where the Company spud the sixth horizontal well (CNB HZ-7) on October 22, 2024.  Once the CNB HZ-7 well is complete, the Company will move the rig to drill the Alberta Llanos prospect (formerly known as Baquiano-1), which is on trend with the Carrizales Norte field.  The Company plans to utilize two drilling rigs in 2025 to develop the Alberta Llanos prospect and drill development wells at the RCE and CN fields.  Also in 2025, the Mateguafa Oeste, Mateguafa Attic and Capullo prospects will be drilled.

Corporate Update

Current net corporate production is over 5,305 BOE/D, inclusive of CNB HZ-6.

Arrow’s cash position exceeded $18 million on November 1, 2024.  Arrow has maintained a healthy balance sheet with no debt.  

Marshall Abbott, CEO of Arrow Exploration Corp., commented:
“The initial production results from CNB HZ-6 are very encouraging and follow the positive trend of horizontal wells at the CNB pad continuing to surpass expectations. Arrow’s focus for the remainder of 2024 will be the completion of the sixth horizontal well in our program, CNB HZ-7 at Carrizales Norte, after which we will move to drill a low-risk exploration well at the Alberta Llanos prospect.”

“We are also pleased to announce that our water disposal facilities at the CNB pad began operations in early November which will significantly increase our ability to safely dispose of water and in turn reduce bottlenecks to future production and the need for trucking.  The water infrastructure will also allow us to increase production at the RCE and CN pads.  After completing the six well drilling program at Carrizales Norte we also expect to increase pump speed on the horizontal wells.”

“The planning of our capital program for 2025 is well underway with development of roads, pads and other civil works in the Tapir block. The 2025 program will consist of drilling of low-risk exploration wells at Mateguafa Oeste, Capullo, and Mateguafa Attic. In 2025, the Company is also targeting further horizontal Ubaque and vertical C7 development drilling at Rio Cravo Este, Carrizales Norte, and Alberta Llanos.  Current plans are to utilize two drilling rigs in 2025 to accelerate development on the Tapir block.”

“Our use of superior technologies in drilling, completions and production ensures maximum profitability at lowest cost. In particular, the advanced sensory technology used directly behind the drill bit ensures horizontal wells stay in “zone” for the length of the horizontal lateral. In addition, AICDs automatically reduce water cut and allow for prolonged and increased oil production. These innovations allow Arrow to be one of the lowest cost operators onshore Colombia, resulting in superior payouts which provide a future foundation for growth.”

“I would like to thank our talented team and their dedication to Arrow’s success. We look forward to updating stakeholders with the near-term completion news at CNB HZ-7 and further updates as we continue our extensive work program in Colombia.”

This is heartening news as Arrow continues to achieve success in Colombia, this time with the CNB HZ-6 well which has cleaned up at an initial rate of 2,250 bopd gross and following fitting of an ESP exceeding 1,900 bopd with a 31% water cut. Indeed news today with regard to water disposal tells us that facilities for water disposal at the CNB pad have commenced and will significantly increase the company’s ability to handle the liquid. In turn this will increase production at the RCE and CN pads.

There is one more horizontal well to be drilled this year before a ‘low-risk’ exploration well. After that for 2025 there is a substantial programme being put together and the prospect of using two rigs remains on the cards. Exciting times for Arrow shareholders and with production of over 5,305 boe/d and cash of some$18m the shares are well set.

Jadestone Energy

Jadestone has provided the following operational update.

The Company reiterates its 2024 production guidance, as provided in its H1 2024 results on 17 September 2024, being towards the lower end of the 18,500 – 21,000 boe/d range. 

During October 2024,  average daily Group production was over 22,000 boe/d and for various periods reached a record in excess of c.24,000 boe/d as Akatara intermittently achieved its daily contract quantity rate of c.20mmscf/d. Intermittent production is not unusual for the early stages of a project of this nature as commissioning issues continue to be addressed.

Operational performance across the remainder of the portfolio has been in line with expectations, reinforcing the benefit of a diversification of production streams. Drilling of the Skua-11 sidetrack on Montara is expected in the second quarter of 2025, subject to delivery of the rig on schedule.     

Not much here really, some disappointment at production being at the low end of guidance but intermittent production is indeed not unusual, and elsewhere all is going well. 

Nostra Terra Oil & Gas

Nostra Terra has provided a production and operations update on the Company.

Highlights

• Phase 1 workover program complete
• Production increased at Pine Mills Field by an average of 30 BOPD – 60% Increase
• Company oil production is averaging approximately 120 bopd net, up significantly
• Enhanced oil recovery project in the northern end of Pine Mills restarted
• More work-over opportunities identified
• New Fouke area development location adds 200,000 barrels of oil reserves*
• Field operating costs reduced by 25%
• Field netbacks and profitability, significantly increased
• Cash flow positive at the operating level and now also at the corporate level

Production

Company oil production is currently averaging 120 bopd net, up significantly due to the contribution from the first phase of the planned workover program at Pine Mills in which NTOG has a 100% working interest (“WI”).  Five previously shut-in wells have been returned to production. Pine Mills is currently averaging 80 bopd gross. This field rate does not include the Fouke production or any benefit from restarting of the enhanced oil recovery project or “waterflood”. To date, the work-over program has resulted in a production  increase by an average of 30 barrels of oil per day (“bopd”) from the five restarted wells. 

The work in the field, combined with the recent technical work, has identified a number of additional profitable work-over candidates that are expected to be completed in a second phase of the work-over program.

The waterflood in the northern section of the field, which had been shut for over two years, has also been restarted. The waterflood response is expected to take approximately three months from the restart of injection to see the first results, with the full benefit expected after six months of continuous injection. The full benefit of the waterflood response is expected to deliver an additional 15-30 bopd.

The Fouke 1 & 2 oil wells in which NTOG has a 32.5% WI are producing at a combined average of 105 bopd gross, water-free, and without decline since May 2024. 

Recently completed technical work in the Fouke area has identified a 30-acre structure within the current lease, north of the Fouke 2 well, that is drill-ready and expected to contain more than 200,000 barrels gross of recoverable oil reserves (*) in the sub-Clarksville reservoir. Further work is also being done to evaluate two additional structures within the field that may have similar potential.

Operating Costs, Netbacks, and Profitability

As a result of the recent work-over activity, several changes have been made to the field operations in Pine Mills, which has reduced the overall operating costs by approximately 25%. These reductions, combined with the recent production increases, have reduced the lifting costs per unit by more than 50%. This has improved netbacks to more than $44 and $63 per barrel for the Pine Mills and Fouke areas, respectively, significantly increasing overall field profitability.

Lower costs and higher netbacks are a direct result of the strategy formulated in May 2024 to focus on the Pine Mills Field, which was in decline and had not been a priority under previous management. Cost reductions, coupled with the workover program results, have increased production, improved profitability, and allowed NTOG to become cash flow positive at the operating or field level and also at the corporate level at current oil prices.

Paul Welch, Nostra Terra’s Chief Executive Officer, said: 
“We are delivering on our plans to reduce costs, increase production, and grow our cash flow by focusing our efforts on our Pine Mills asset. It’s been more than five years since an extensive work-over program was conducted in the field, and the results on the first five wells have exceeded our original expectations. We have also restarted the waterflood, which will take three months to show results, and we believe this has the potential to deliver an even greater boost to field performance.

Pine Mills has been an exceptional resource for the Company and can potentially deliver more value in the future. Following this successful work-over program, we have identified additional wells in other areas of the field that will be addressed in a second work-over phase. We have also identified other targets for future programs. In addition, we have recently identified a new drill-ready development location in the Fouke area, which we believe possesses another 200,000 barrels of additional oil reserves, and we are also at an early stage in evaluating two further structures that we think could have similar potential.

The changes we’ve implemented have delivered significant savings and allowed us to improve our margins by more than 50%, with a corresponding improvement in the netbacks. This results in NTOG being cash flow positive at the operating level and now at the corporate level.

I am excited about this asset’s future potential and believe it will significantly exceed our previous estimates.  I look forward to reporting on our newly identified opportunities in future periods.”

Note (*): NTOG Management calculated proved undeveloped reserves (based on the SPE PRMS Standard).

I don’t cover NTOG but am interested to see what Paul Welch is up to and look forward to catching up to hear about his plans for the company. After I have done that I will write more.

Tower Resources

Tower has announced a subscription of 1,018,518,519 ordinary shares of 0.001p each at a price of 0.027p per Subscription Share, being the same price and on the same terms as the placing announced on 16 October 2024, and being at a discount of approximately 3.6% to the closing bid price of the Company’s shares on 8 November 2024.

The Subscription has been arranged by the Company’s joint broker, Axis Capital Markets Limited, and is in response to further demand from institutional and other investors, many of whom are already shareholders in the Company, following the previously announced Placing.

The Subscription is being made to fund working capital, including work commitments on the Company’s licenses.

The Company has agreed to issue the broker, Axis Capital Markets Limited, warrants over 50,925,926 new ordinary shares for arranging the Subscription (“Broker Warrants”). The period of the Broker Warrants will be three years at a strike price of 0.027p per share.

Share Capital following the Subscription

Application has been made for the Subscription Shares to be admitted to trading on AIM. It is expected that Admission of the Subscription Shares will become effective and that dealings will commence at 8.00 a.m. on or around 25 November 2024.

Following admission of the Subscription Shares, the Company’s enlarged issued share capital will comprise 23,394,207,794 Ordinary Shares of 0.001p each with voting rights in the Company. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in the interest in, the share capital of the Company under the FCA’s Disclosure and Transparency Rules.

Warrants and Options in Issue

Following the issue of the Broker Warrants, the total number of warrants in issue is 1,919,350,883 equating to 7.1% of the Company’s enlarged share capital assuming full exercise of all warrants and options.

Tower Resources Chairman & CEO, Jeremy Asher, commented: 
“Since our update of 16 October 2024, we have made a good deal of progress on the detailed points of the Cameroon farm-out that remain under negotiation, and the other various discussions we have underway, including future bank financing. We are very happy that both existing and new investors wish to support the Company at this crucial time and to participate in our future success.”

Another modest raise for Tower and most importantly the demand has come from existing and new shareholders who want to participate. It’s been a long journey but maybe the denouement is on the way.

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog