WTI (Sep) $69.21 +$2.50, Brent (Sep) $72.51 +$2.47, Diff -$3.30 -3c
USNG (Sep)* $3.14 +3c, UKNG (Aug) 83.7p +3.19p, TTF (Sep) €35.15 +€1.235
*Denotes expiry of the USNG August contract

Oil price

Oil is a bit better again today after a mixed session which absorbed the API stats which were mixed, a build rather than the forecast draw in crude but gasoline drew by 1.739m b’s. 

Today its all about Russia, the USA are putting together a deal to increase sanctions and they have also whacked a 25% tariff on India just for buying Russian crude.

Serica Energy

Serica has announced that, having successfully restarted production operations at the Triton FPSO in July, the ramp up to steady-state production has been slower than the timetable provided by the operator, Dana Petroleum (‘Dana’). Production is now expected to reach a stable level in August.

Following the initial resumption of production from the Bittern field (which flows first due to associated gas from the field being used to provide gas lift for other wells and fuel gas for the FPSO), a problem with the gas lift system prevented other Triton fields being restarted. Additionally, other minor work was identified, which required a short cessation of production to repair. This remedial work now being complete, the restart of the Triton fields including new wells should proceed to an expedited timeline.

Production from the Bittern field (Serica 64.6%) will be followed rapidly by the Evelyn (Serica 100%) and Gannet (Serica 100%) fields. Once existing wells resume production, the new wells drilled on the Guillemot North West (Serica: 10%) and Evelyn (Serica: 100%) fields will be brought onstream for the first time, promising an increase to the 25,000 boepd the Triton FPSO was producing net to Serica in January.

The BE01 well on the Belinda field (Serica 100%), which flow tested at constrained rates of 7,500 boepd, is expected to enter production at the start of 2026 following work to tie the well into the Triton FPSO.

2025 Production Guidance

Given the delayed ramp up of production at Triton, Serica now expects production for 2025 to be 33,000-35,000 boepd (previously 33,000-37,000 boepd).

Chris Cox, Serica’s CEO, stated:
“While teething issues with the resumption of production are not entirely unexpected after such a prolonged period of downtime, it doesn’t make it any less frustrating to once again see things at the Triton FPSO progressing more slowly than we would expect. Our production from other assets is currently robust at almost 30,000 boepd and our portfolio has the potential to produce over 55,000 boepd once all Triton fields are back online, levels that we now expect in August rather than July. We are continuing to drive discussions with senior management at Dana regarding the optimal way to run the FPSO going forward.”

“Today’s announcement is no less than I might have expected, as a highly complicated piece of engineering brings a number of wells on and all in the correct order to manage the gas lift and oil and gas product in the right order.

With the deferral in production looking like being a matter of weeks, as CEO Chris Cox says, all Triton fields should be back in August rather than July and this is not a worry in itself. Serica has continued investing across its assets and this should start paying off, once the new Triton wells enter production. They have mentioned 50,000 boepd for production in the past, but I suspect this could prove conservative. They were after all doing that back in January, without the addition of new wells… I therefore expect to see a material lift in production in the second half of the year, consequently Serica shares are already up c.50% over six months and likely to easily get to my 250TP if they carry on doing the right things…”

Serica will issue 2025 half-year results at 0700 BST on Tuesday 5 August 2025, and will host a live presentation on the Investor Meet Company platform at 0900 BST on the day. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 4 August, 0900 BST, or at any time during the live presentation. Investors can sign up and add to meet Serica Energy plc via:

 https://www.investormeetcompany.com/serica-energy-plc/register-investor. 

Zephyr Energy

Zephyr Energy will hold its Annual General Meeting  at 11.00 a.m. today, at the offices of Haynes and Boone CDG LLP, 1 New Fetter Lane, London, EC4A 1AN.

At the AGM, Rick Grant, Zephyr’s Non-Executive Chairman, will make the following statement: 

“Over the 2024 financial year, and in the period since, we have continued to deliver solid operational progress across both our operated and non-operated portfolios.

“On our project in the Paradox Basin, Utah, U.S. (the “Paradox project”), we are at a pivotal stage. Following our successful recent drilling operation and production test, we’ve been able to advance the design, engineering and negotiations work needed to enable access to gas export markets through the nearby third-party pipeline. An updated Competent Person’s Report is underway, and we expect to publish results by the end of September 2025. We are also progressing discussions with potential industry and finance partners as part of a structured asset level funding process in order to accelerate drilling activity at the Paradox project.

“Alongside this, our non-operated portfolio in the Williston Basin, U.S., continues to provide meaningful cash flow to support operations and growth, and closing our proposed acquisition will add additional reserves, production and scale across key Rocky Mountain basins.

“We have strong momentum, a clear strategy, and the right resources in place to successfully deliver additional progress in the period ahead. We look forward to a prolonged period of positive news flow as we complete the proposed acquisition and move towards first production at the Paradox project.”

This is only an update for the AGM and I see nothing that isn’t already in the market place. Drilling at the Paradox was successful, the non-operated portfolio in the Williston provides ‘meaningful cash flow to support operations and growth’ and they are processing an acquisition in further accretive production in the Rocky Mountain basins.

I made my views perfectly clear in my most recent blog, I feel that shareholders have front and centre seats in the development of a potentially huge prospect in a country that encourages such wealth creation. This has not been appropriately valued by the market and I have no qualms whatsoever in remaining very positive on the shares.

Proposed Acquisition update

Further to its announcement on 17 July 2025, Zephyr is finalising all remaining documentation ahead of its proposed US$7.3 million acquisition of working interests in accretive, mature PDP (proved developed producing) production assets in core Rocky Mountain basins, U.S. (the “Proposed Acquisition”). 

In preparation for the completion of the Proposed Acquisition, Zephyr has applied for regulatory approval to become an operator of record in the states of Colorado, Wyoming and North Dakota.  The Proposed Acquisition remains on track to complete in the near-term, with an effective date of 1 June 2025.

Angus Energy

Angus Energy (AIM: ANGS) is pleased to announce that the planned annual maintenance shutdown at our Saltfleetby site completed ahead of schedule on the 25 July. Maintenance and improvement project work scopes were delivered successfully within the scheduled outage with no safety incidents and with no harm to the environment.

Excellent news for Angus as the landmark Saltfleetby site is back onstream with its positive revenue implications.

Eco (Atlantic) Oil & Gas

Eco has announced its audited results for the year ended 31 March 2025. 

Highlights:

Financials (as at 31 March 2025)

·    The Company had cash and cash equivalents of US$4.7 million and no debt as at 31 March 2025.

·    The Company had total assets of US$21.6 million, total liabilities of US$1.2 million and total equity of US$20.4 million as at 31 March 2025.

Post-period end

·      Following completion of the Block 3B/4B farm-down offshore South Africa in 2024, Eco has received an initial milestone payment of US$8.3 million from its JV partners in August 2024. An additional US$11.5 million in two tranches is expected between Q4 2025 and Q2 2026 under the terms of the same agreement upon Environmental Impact Assessment and spudding of a first well.

Operations:

South Africa

·    South Africa Portfolio Rationalisation – on December 11, 2024 the Petroleum Agency South Africa (PASA) confirmed Closure Certificate and full relinquishment of Block 2B in South Africa where Eco drilled the Gazania 1 well, previously announced June 5, 2024.  

Block 1

Post-period end

·      On May 6, 2025 Eco completed the acquisition of Block 1’s extensive subsurface data set from the PASA, which includes: Two 3D seismic surveys covering a combined 3,500 km² (2,000 km² and 1,500 km²), over 20,000 line kilometres of 2D seismic data and well logs from three past exploration wells drilled on the block. 

·      On June 5, 2024, Eco announced acquisition of a 75% interest in Block 1 Offshore South Africa Orange Basin; with the governmental title award and the Exploration Right and Operatorship having been received on June 4, 2025.

·      Eco’s G&G team is busy preparing the seismic interpretation and targets selection and the Company is planning to open a farm out process and data room in Q3 2025.

Block 3B/4B

·      Environmental Authorization was granted by the Department of Mineral Resources and Energy for the Republic of South Africa on September 16, 2024.  The legislative notification and appeals process was carried out with the relevant regulatory agencies and the Block JV Partners await imminent final Minister decision on the Environmental Authorisation. 

·      August 28, 2024 Completion of a previously announced farmout agreement in which the Company reduced its interest in Block 3B/4B by 13.75%, after receipt of the requisite regulatory approvals (Section 11) from the government of South Africa. On completion Eco received an aggregate of $8.3 million.  Further details can be found in the South Africa section below.

·      On January 13, 2025 completion of previously announced July 29, 2024, transaction with Africa Oil for the sale of a 1% Participating Interest in Block 3B/4B, including the associated Exploration Right and Joint Operating Agreement rights in return for a full cancellation of Africa Oil’s shares and warrants held in Eco (amount to ~16% of the Company’s issued capital).

Namibia

·       In August 2024, the Company purchased the license to 1,324 km of existing 2D seismic survey in the Tamar Block area (PEL 100), technical evaluation and interpretation to define additional seismic acquisition areas within the Block, along with new leads and prospects.  

·      A multi-block farmout process remains underway for all or part of Eco’s four offshore Petroleum Exploration Licences (“PEL”): 97, 98, 99, and 100.  Eco holds Operatorship and an 85% Working Interest in each PEL representing a combined area of 28,593 km2 in the Walvis Basin. 

Guyana

·      An active farmout process continues for the offshore Orinduik Block. Eco was encouraged to note the recent news from neighbouring Stabroek block, where the Operator ExxonMobil is planning for a seventh development at the Hammerhead discovery.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented: 

“The year to 31 March 2025 was highly active and saw Eco deliver progress across its existing portfolio, in addition to the Company adding new and exciting exploration assets into the fold.

In South Africa, we continue to work with our Joint Venture Partners on Block 3B/4B, in order to undertake a drilling campaign as soon as is practically possible.  We are currently awaiting the final environmental permits from the South African government agencies and will update our stakeholders on the likely timings in due course.  On Block 1, we have already received early, informal, interest from a number of parties and we plan to launch a formal farm out process towards the end of August 2025.  We have acquired all existing 3D and 2D seismic surveys previously shot on the block and we are busy with the initial interpretation, including the mapping of all oil and gas targets and leads.  The Orange Basin has become one of the most attractive exploration destinations for global oil and gas companies, so we are excited about what the future has in store for Block 3B/4B and Block 1.

Guyana continues to be one of the most prolific hydrocarbon regions in the world, and our farm-out process for the Orinduik Block remains ongoing, including a reassessment by our team of the Jethro discovery parameters.

The remainder of 2025 and into 2026 has the potential to be a highly exciting period for Eco.  We have farm-out processes underway, data analysis ongoing and a drilling campaign to plan for.  All of which has the potential to deliver significant value for all of Eco’s stakeholders in due course.”

These figures are as usual a historic look at what has been going on at Eco and given what has been going on there is nothing that the market doesn’t know already. The portfolio has been reshuffled and Eco are poised to strike in the key areas they have targeted. 

At 3B/4B they are waiting for environmental permits, no timeline indicated but I imagine quite soon which would hopefully lead to drilling. Block 1 has seen interest and the farm-out is expected to be launched at the end of August. Finally Guyana, where the farm-out is currently ongoing and one should expect something before too long. 

Eco has taken longer to get to this point than most had expected but they have created a fantastic portfolio of assets, with more negotiations still to come. When drilling comes, Eco has amongst the biggest pound for pound exposure to what looks like three of the most exciting postcodes worldwide with equally huge upside for investors.

Petro Matad Oil & Gas

Petro Matad has provided the following update.

Key updates

·    Heron-1 production stable in the range of 150 to 160 barrels of oil per day (bopd) with less than 3% water cut – c. 46,000 barrels produced to date.

·    Next oil sales payments expected in August. Discussions on tax treatment progressing.

·    Busy 2025 work programme about to commence focusing on operating cost reduction and production enhancement.

·    Farm out discussions ongoing.

·    Renewable energy projects progressing offering significant value potential when ready-to-build status is achieved.

Production Operations

The Heron 1 well continues to produce at a stable rate in the range of 150 to 160 bopd with less than 3% water cut. To date, c. 46,000 barrels of Block XX crude have been transported to the neighbouring Block XIX facilities for processing storage and export under the oil sales agreement with PetroChina.

Oil sales

As previously reported, PetroChina made payment in June for production to end April and withheld 30% of the invoiced amount pending confirmation from the tax authorities that there would be no customs duties, VAT or other taxes levied on them under the oil sales agreement. PetroChina has asked Petro Matad to get this confirmation. The Company’s tax experts have engaged with the tax authorities and submitted draft documentation for their review and are awaiting their feedback. We remain confident that customs duties and VAT are not applicable on oil sales as the law and precedent are clear on both. We are discussing with PetroChina a revision to the agreement that could remove the possibility that a small amount of VAT and tax may be levied on the handling fees. Our efforts are currently directed at removing the withholding as soon as possible.

Petro Matad has submitted invoices for May and June production as per the oil sales agreement but payment has not yet been received. PetroChina has said it will pay in August citing teething problems with a newly introduced online payment approval system that is delaying all their payments. We are aware that payments to other suppliers in Mongolia are also delayed but knowing it is not just Petro Matad that is affected does not make it any less frustrating.

Preparations for 2025 operational activities

With oil sales revenue sufficient to cover the running costs of the Company, the recently announced capital raise has given Petro Matad the funding needed to embark on a number of low-cost, low risk activities to reduce operating cost, increase production and so maximise revenue.

Heron-1 grid connection. A contractor has been chosen to install the equipment to connect Heron-1 to the national grid through the neighbouring Block XIX infrastructure and so reduce the need to burn diesel for power generation at the well site. PetroChina has provided the necessary support letter to the authorities to allow this work to go ahead. This work will realise a 15% reduction in operating cost. The contractor is ready to mobilise as soon as the province’s power station issues the final approval and we are following up to expedite this.

Heron-2 acidisation and re-test. Studies on cuttings from the Heron-2 reservoir section have determined that a carbonate cement is present in greater amounts than seen in the Heron-1 reservoir so impacting the permeability and so producibility at Heron-2. Plans are in hand to mobilise a small workover rig to site in August to treat the perforated interval with acid to remove any debris and breakdown the cementation to improve near well bore permeability. The well will then be re-tested to see if it can sustain a commercial flow rate. Arrangements are being made for rapid hook up in the event of success.  

Gazelle-1 perforation and test. The workover rig will then move the 5km from Heron-2 to the 2019 Gazelle-1 oil discovery well to perforate and test the pay zone identified in this well. The reservoir quality in the pay zone looks good on logs suggesting that permeability and so deliverability may be better than average for the basin. If successful in establishing commercial flow potential, Gazelle-1 will be put on stream during the 2025 operation season. Testing at Gazelle-1 will not only provide the opportunity to add to Block XX production in 2025 it will also provide useful information about the potential reserves upside in the Gazelle structure and how best to target these through future side-tracking or appraisal drilling operations.

Gobi Bear-1 perforation and test. It is also planned that the workover rig will move the 9km from Gazelle 1 to the 2024 Gobi Bear-1 exploration well to perforate and flow test the zone of interest identified on logs. The potential for oil pay being present in the well has been enhanced by the identification of migrated oil in cuttings samples but to be definitive a well test is required. A successful oil test at Gobi Bear-1 would be a significant result as the structure has substantial resource potential.

Block VII. Work on this 2025 addition to the portfolio continues to progress. The tapes of the 2D seismic survey acquired in 2015 have been found and are being evaluated for the potential to reprocess. Reports of the whereabouts of the cuttings from the well drilled by the previous operator are being followed up. Meanwhile all the necessary environmental studies including sign off by the governors of the districts within the block have been completed allowing the application for the formal Exploration Licence to be submitted to the Ministry of Industry and Mineral Resources.

Farm out

As previously reported, the Company has stepped up its efforts to find partners to join it in Block XX development and Block VII exploration. On Block XX one counterparty has reported that it is in the final stages of its evaluation and asked for a draft farmout agreement which has been provided. Petro Matad has focused its most recent efforts on potential Chinese partners including companies active in the producing basins in northern China that extend into Block VII. The Company’s goal is to have partners fund a work programme in return for a working interest and in the case of Block XX is looking for an injection of capital to fund enough wells to allow production to reach a level that will sustain the ongoing development of the reserves.

Renewable Energy

As part of the recent fund raise, it was important to secure development funding for the two latest and largest additions to the Sunsteppe Joint Venture’s portfolio, namely the 200MW Hybrid project and the 1.5GW Export to China project. With a power purchase agreement already in place and only requiring amendment to reflect the change from a coal fired to a renewable source, the 200MW solar and wind project has the potential to reach ready-to-build status rapidly. Sunsteppe needs to start gathering wind data to determine the best site for the wind farm. Interest from well funded potential investors has been expressed in this project. Meanwhile, the Mongolian government is keen to move forward on export to China projects. Sunsteppe, through its cooperation with leading Chinese utility the State Power Investment Company (SPIC), wants to increase its land bank with areas close to the border and to start gathering wind data.

In Mongolia, developers such as Sunsteppe have been able to attract development premia in the range of $50,000 to $100,000 per MW for ready-to-build projects that have good commercial potential. Sunsteppe’s portfolio has three, near-term projects comprising a total of 274MW plus the longer term 1.5GW project with SPIC. This demonstrates the significant value proposition that these renewable energy projects offer to the company. Whilst Sunsteppe is looking to originate more projects and has been approached by many would-be partners, it is focusing efforts on getting projects to ready-to-build status in order to crystallise value.

Cost control

Recognising that cash is a precious resource, through 2025 Petro Matad has been carefully reviewing its cost base and seeking to make sure it is running as efficiently as it can. To this end cost saving measures have been introduced and will be maintained. Steps taken include a reduction of salary costs achieved thanks to the three expatriate staff members, including the CEO, agreeing to salary reductions of 70%. Opportunities to trim costs whilst maintaining the Company’s operation capability and competitive advantage continue to be evaluated.

Mike Buck, CEO of Petro Matad, said:
“Stable production from Heron-1 is pleasing to see and resolving the remaining payment issues is a priority. Meanwhile we are putting our newly raised funds to good use on activities targeting opex reduction and revenue increases.

Our farm out efforts continue and we believe are enhanced by the ongoing production operations and our pursuit of low cost add-ons.

We look forward to advancing development operations on our two large renewable energy projects as they have the potential to add significant value to our portfolio.”

Further operational updates will be provided in due course.

I don’t think that despite the length of the update, nor the extensive and very good presentation to the market this morning that we know much more than before. Good news that Heron-1 is producing consistently but payments are still somewhat erratic. 

The raise was at a horrible price but it was not an option, staying in the game was mandatory and to his immense credit Mike Buck took the criticisms head-on in the Q&A, some of which were pretty and unoriginally blunt after the presentation this morning. It will be a long walk but if anyone can do it, he can.