WTI (Mar) $62.39 +$1.76, Brent (Mar) $67.57 +$1.98, Diff -$5.18 +22c
USNG (Feb) $6.95 +15c, UKNG (Feb) 101.35p +0.85p, TTF (Feb) €36.855 -€3.40

Oil price

Oil has rallied again today, the usual combination of Kazakh shortfall which will continue for at least a fortnight and it’s worth noting that it hits higher grade crudes thus widening the differential of Brent to WTI. 

In Libya the Tripoli Protection Force is agitating and threatening to stop oil & gas production unless the current Government falls. Add to that a huge US force is assembled in the Gulf, 2m b/d off the market in Texas and a weak dollar and so the oil price remains high despite the laughable IEA predicting 3.8m b/d of oversupply…

The API stats showed a very small draw of 247/- barrels of crude despite the whisper of a 1.45m build but after this week figures will be affected by the Winter Storm Fern, retail gasoline prices have arrested the long fall and are up this week to an average of $2.853 per gallon. 

And with the Fed announcing rates today, no change expected and Opec + on Sunday, also no change much is happening…

Diversified Energy Company

Diversified has announced that its wholly-owned subsidiary Diversified Gas & Oil Corporation has successfully placed a USD 200 million tap issue of the outstanding senior secured bonds due April 2029. The total bond amount outstanding under the 2029 Secured Bonds will increase to USD 500 million.

The Company intends to use the net proceeds from the tap issue for general corporate purposes.

A successful tap issue to the 2029 bonds which has been well received by the market and thus the amount outstanding rises to $500m. This makes total common sense to the company and adds to the strength of the balance sheet and gives more flexibility at a time when the company are probably still seeing opportunities in the market place. 

The shares still offer excellent value and with its high quality management and potential return in both capital and income makes a compelling investment. 

Arrow Exploration

Arrow has provided an update on the operational activity at the Mateguafa Attic field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50 percent beneficial interest.

Mateguafa 8 well

The Mateguafa 8 (M-8) well was spud on December 14, 2025, and reached target depth on December 18, 2025.  The M-8 well was drilled, on time and on budget, to a total measured depth of 9,764 MD feet (9,308 feet true vertical depth) and encountered multiple hydrocarbon-bearing intervals, including the Gacheta, the Carbonera C9 formation (“C9”) and three sands in the Carbonera C7 formation (“C7”).

Arrow began a testing program on the three C7 sands by initially putting all three sands on production and later isolating the top C7 sand.  The two tests had uneconomic results, and the decision was made to complete the well in the C9 formation.

Arrow has put the M-8 well on production in the C9 formation, which has approximately 30 feet of oil pay.  The pay zone is a clean sandstone exhibiting an average porosity of 23% with high resistivities. An electric submersible pump (ESP) has been inserted in the well after perforating.

The well was put on production at a heavily restricted rate, 21/128 choke and 30 Hz pump frequency, of approximately 230 BOPD gross (115 BOPD net). The oil quality is 31° API and there is a 78% water cut (completion fluid and formation water).

The M-8 well also encountered approximately 12 feet of net oil pay (true vertical depth) in the Gacheta formation that has not been tested and will be exploited in future wells.

The testing results indicate the well is capable of higher rates and the ultimate flow rate will be determined in the first few weeks of production.

Initial production results are not necessarily indicative of long-term performance or ultimate recovery.

Mateguafa HZ7 well

The Mateguafa HZ7 (M-HZ7) continues to produce at a current rate of approximately 1,300 BOPD gross (650 BOPD net) with an 8% water cut. The M-HZ7 well is producing from the C9 formation.  The well has experienced very low decline rates during this initial production phase.

Mateguafa 6 well

The Mateguafa 6 well (M-6) continues to produce at a current rate of approximately 465 BOPD gross (232 BOPD net) with a 20% water cut. The M-6 well is producing from the C7 formation.

Mateguafa 5 well

The Mateguafa 5 well (M-5) continues to produce at a current rate of approximately 780 BOPD gross (390 BOPD net) with a 60% water cut. The M-5 well is producing from the C9 formation.

Mateguafa HZ9 well

The Mateguafa Horizontal 9 (M-HZ9) spud on January 21, 2026.  This well is targeting the C9 formation, which all wells drilled at Mateguafa have encountered.  Expectations are that the well will take approximately three weeks to drill and complete and will be put onto production thereafter.  Original planning had the M-9 well being drilled to be a water disposal well, however, as water production has been lower than forecast, the M-9 well was reengineered to be a horizontal producer.

Mateguafa 10 and 11 wells

Arrow is building two additional cellars at the Mateguafa pad to facilitate further development of the reservoir.  Expectations are that Mateguafa 10 and 11 (“M-10”, “M-11”) will be drilled shortly after M-HZ9.

Forward Drilling Plans

After the Mateguafa development wells are drilled and put on production, the Company plans to move the rig to the Icaco pad to drill an exploration well, which is expected to spud in Q2.  The Icaco pad has been completed, and currently five cellars are being constructed.  Expectations are that the cellars will be complete and ready to receive the rig from late February.   After the exploration well at Icaco, and potential follow up wells at that location, the rig will be moved to the RCE, CN, Alberta and Mateguafa pads for follow-up development wells.  Arrow is reviewing oil price and other market considerations and has the flexibility to increase or decrease operations as required.  Arrow’s focus is to increase production while maintaining a strong balance sheet and the financial flexibility to take advantage of acquisition and acceleration opportunities.

Production

Including the restricted production from the M-8 well, total corporate production is approximately 4,625 boe/d.  This does not include any production from the CN-HZ7 well which was flowing at approximately 250 BOPD gross (125 BOPD net) before being shut in due to a pump failure.

Cash Balance

On January 1, 2026, the Company’s cash balance was US$11.5 million.  The Company continues to have no debt.

Tapir Extension

Arrow and its partner in the Tapir block remain in discussions with authorities on the extension of the Tapir block.  To date the dialog has been very constructive.  Arrow is confident that all conditions required for the extension to be granted have been met and management remains very confident that the extension will be granted.  The Company will continue to update the market on developments as they occur.

Marshall Abbott, CEO of Arrow commented:
“With M-8 successfully encountering the C9 formation, we continue to view this as an excellent producing zone into which the Company plans to drill further horizontal and vertical wells.  The M-8 well tested the northernmost extent of the C9 formation and the success of this well in this formation indicates there are additional opportunities to the north.  In the M-8 well the C7 zone was not economic but showed very strong oil shows in petrophysical logs and the Company is exploring strategies to best produce the C7 zone in this area.”

“The M-8 well reinforces the materiality that the Mateguafa Attic discovery represents for Arrow.  Future wells will help determine the extent of the pools and the potential reserves additions.  The area has become another core area for Arrow with the potential for further horizontal drilling development.”

“M-9HZ will be the next well drilled in the Mateguafa Attic discovery and an additional two cellars are being prepared for future wells.  We look forward to providing further updates on the low-risk ongoing development of the Mateguafa Attic field.”

Following on from recent success with the drill bit Arrow have reported another good result, this time at the M-8 well in the Mateguafa Attic field where multiple hydrocarbon bearing zones were intersected in the Gacheta, C9 and C7 reservoirs but the C9 was brought onstream with a restricted choke at 115 b/d net. 

There are now plans to drill further horizontal and vertical wells and the company also advise that there are ‘additional opportunities to the north’. They also note that whilst the C7 zone was not economic it showed very strong oil shows in the petrophysical logs and that the company is ‘exploring strategies to best produce the C7 zone in this area’. 

They also identified 12′ of pay in the Gacheta formation which so far remains untested but clearly the company think that it too has development potential in upcoming drilling campaigns. This includes the M-9HZ well which spudded last week and is also targeting the C9 formation and will be a horizontal producer rather than the originally planned water disposal well. 

After that the M-10 and M-11 wells will be drilled and the company are building two extra cellars to facilitate further development of the reservoir. This will be followed by the rig moving to the Icaco pad where it will drill an exploration well in Q2, after that there are facilities under construction to facilitate follow-up wells there. 

So, as a result of this successful well and with two more to come, as well as the Icaco project which could be highly promising and the planned move to the RCE, CN and Mateguafa pads for development wells Arrow has significant flexibility to increase or decrease operations ‘as required’. 

This will depend on the usual metrics, but with a strong balance sheet, with cash of $11.5m and no debt, the company has the financial flexibility ‘to take advantage of acquisition and acceleration opportunities’. 

With production currently of 4,625 b/d not including the shut-in CN-HZ7 well which had been producing at 125 b/d net before a pump failure. This puts the company is in a strong position with an exciting portfolio of near term projects with an incredible flexibility to develop subject to satisfactory market conditions, optionality is the key which bodes well for the coming year.

I fully expect Arrow to remain in the Bucket List and the recent bounce of some 40% from the lows show that confidence is not misplaced, my Target Price of 40p gives plenty of upside. 

Prospex Energy

Prospex has provided an update from the Selva Malvezzi production concession in Italy following the publication by Po Valley Energy Limited of its Q4-2025 activity report for the period ending 31 December 2025.  Po Valley Operations Pty Limited, a wholly owned subsidiary of PVE, is the operator of the Selva Malvezzi production concession, which has a 63% working interest, while Prospex has the remaining 37% working interest.

Highlights

• Consistent well performance from Podere Maiar-1 (“PM-1”) for the quarter confirming production expectations and driving continued strong operating cashflows
• Focus for the next stages of development is the wells at Casale Guida 1d, Ronchi 1d, Selva Malvezzi 1d and Bagnarola 1d
• EIA and development programme for the four new wells is currently being updated to incorporate further progress on Ministry recommendations
• 3D Geophysical survey field activities completed on time and under budget as a result of careful planning and favourable weather
• Work will deliver a high-resolution three-dimensional subsurface model to support future field development planning and potential resource upgrades

Gas production and revenues from the PM-1 gas well in the Selva Malvezzi Production Concession

Mark Routh, Prospex’s CEO, commented:
“The Selva Malvezzi concession continues to prove its investment value, with the operator delivering a stable operating and financial result from the PM-1 gas well for the quarter and making solid progress as it looks to expand production through the development of four new wells.  The successful completion of a 3D geophysical survey on time and under budget is testament to Po Valley Energy’s disciplined work approach and we look forward to receiving the results of this work programme in due course.”

A good result from Selva which can only improve operationally as it ups production through the development of the four new wells and of course with natural gas prices remaining firm. This along with the increased realisation by most intelligent Governments that domestic gas production should be nurtured and rewarded means that the outlook is getting rosier day by day. Clearly not something that our own Cabinet has realised yet…

Prospex is looking increasingly attractive and whilst the longer term performance has been poor the shares have increased by some 22% over a month and the market is clearly excited about the arrival of Tom Reynolds on Sunday. 

Operational Overview

Selva Malvezzi

The Selva Malvezzi Production Concession is an onshore natural gas asset in the eastern Po Plain, Bologna province, Emilia-Romagna Region.  Granted in July 2022, the 80.68 sq. km concession was carved out of the former Podere Gallina Exploration Permit and includes the producing Podere Maiar gas field alongside nearby gas prospects of Selva Malvezzi 1d, Casale Guida 1d, Ronchi 1d and Bagnarola 1d.

a)    PM-1 gas production and well management

Total gas production (100%) for Q4 2025 was 6.97 MMscm (2.58 MMscm net to PXEN), generating revenue of €2.3 million for the quarter (€0.85 million net to PXEN).  Cumulative gross production since first gas in July 2023 has reached 65.6 MMscm from the C2 level, equating to approximately 95% of the certified P1 reserves reported in the July 2022 CPR.

During the quarter, average daily production remained steady at around 80,000 scm/d, aside from 2 short periods of shutdown for facility maintenance and slick line activities in early October and November 2025.  The facility was shut down for 3 days during slick line activities and pressure buildup with the well returning to production at approximately 80,000 scm/d on 5 November 2025.

Gas sales commenced under a new agreement from 1 October 2025, with Hera Trading, part of the Hera S.p.A. group.

Royalty expenses (on gas production sales) are accrued for the quarter at €144,500 (€704,500 year to date).  Royalties are payable in Q2-2026 following assessment by relevant authorities in respect of the sales for the year to 31 December 2025.

Summary of gas production at PXEN’s 37%-owned Podere Maiar – 1 (PM-1) gas facility in the Selva Malvezzi Production Concession:

b)    3D Geophysical Survey

Po Valley Energy completed the 3D geophysical data acquisition over the Selva Malvezzi concession area.  The programme covered approximately 140 sq. km.  After laying out 8380 wireless geophones, data acquisition commenced on 13 November 2025 using single sweeps from four Vibro-seis trucks operating simultaneously in separate quadrants.  The data acquisition was completed on time and under budget, benefitting from unusually dry weather for November, but its success was driven by extensive planning and outstanding execution by contractors, Geotec for permitting and Geofyzika Torun (“GT”) for acquisition & data recording, and PVO technical team.

The data acquired is being collated and prepared by GT for the next data processing phase over the coming months.  This work will deliver a high-resolution three-dimensional subsurface model to support future field development planning and potential resource upgrades at Selva Malvezzi.  Subsequent interpretation of the data will be done in-house.  Po Valley Energy is targeting communication of these results with the market in Q2-2026.  The data acquired will be instrumental in fine-tuning the 4 well development programme in this licence.

c)    Casale Guida 1d, Ronchi 1d, Bagnarola 1d, Selva Malvezzi 1d wells

The key area of focus for the Joint Venture with the next stages of development is at Casale Guida 1d (Selva North discovery), Ronchi 1d (South Selva discovery), Selva Malvezzi 1d (East Selva prospect) and Bagnarola 1d (Riccardina prospect), all of which are located within the Selva Malvezzi Production Concession.  The Environmental Impact Assessment (“EIA”) covering the drilling, development, construction and production phases of the four wells filed in December 2024, is under review in order to incorporate recommendations and amendments from the Ministry and also an update of the project which includes the full scope of potential works and impacts (treatment facilities, pipelines, Podere Maiar plant upgrade).  The specialist studies requested by the EIA commission are in progress and expected to be submitted to the Ministry in Q2 2026.

United Oil & Gas

United has announced the commencement of Stage 1 of its planned Surface Geochemical Exploration programme on the Walton Morant Licence, offshore Jamaica, with Multibeam Echosounder operations now underway.

Highlights

• Stage 1 MBES operations commenced on the Walton Morant Licence, offshore Jamaica
• High-resolution seabed imaging underway to refine targets for subsequent heat flow measurements (Stage 2) and piston coring (Stage 3)
• Staged SGE programme designed to deliver progressive updates as operations advance
• Initial geochemical results from the piston coring are expected to begin returning from approximately one month after completion of the offshore survey
• Programme designed to confirm the presence of a working offshore petroleum system and support ongoing farm-out discussions

Operations are being conducted using the R/V Gyre, operated by TDI Brooks International. Stage 1 of the SGE programme comprises a high-resolution MBES survey, which will provide high-resolution seabed mapping and depth information across priority areas of the licence.

The Stage 2 heat flow measurements will proceed after completion of the MBES. Concurrently, the MBES data will be reviewed and used to refine and confirm the final locations for Stage3 piston coring, ahead of core acquisition.

Upon completion and review of the Stage 1 MBES data acquisition, the Company expects to provide an update to the market summarising the key observations from the survey and outlining the commencement of Stage 2 and Stage 3 of the operations.

The offshore SGE operations are currently expected to be completed by mid-February, following which piston core samples recovered during Stage 3 will be shipped to TDI Brooks’ laboratory in the United States for detailed geochemical analysis. The initial results are expected to begin returning from approximately one month post completion of the offshore survey.

R/V Gyre Survey Vessel 

The R/V Gyre is a multi-purpose geophysical survey vessel operated by TDI Brooks International. The vessel is equipped for high-resolution multibeam echosounder (MBES) surveys and offshore geoscientific data acquisition.

(Image Courtesy TDI Brooks International)

Surface Geochemical Exploration Programme

The SGE programme is designed to test for the presence of thermogenic hydrocarbons in seabed sediments at certain locations within the Walton Morant Licence area. The scope and design of the SGE programme have been informed by engagement with potential industry partners and feedback received during data room discussions, with the objective of further strengthening and validating the existing technical interpretation of the licence.

Positive results, where thermogenic hydrocarbons are identified geochemical analysis of piston cores, would provide confirmation of the presence of a working petroleum system offshore and materially de-risk the prospectivity identified to date. This would further support UOG’s technical evaluation and ongoing farm-out discussions.

Brian Larkin, CEO of United Oil & Gas, commented:
“The commencement of MBES operations on the Walton Morant Licence marks an important step forward in offshore Jamaica. This initial phase will refine seabed imaging and allow us to precisely target subsequent piston coring locations.

The data and samples gathered during this programme are intended to provide confirmation of a working petroleum system offshore and materially de-risk the prospectivity identified to date. This is a key part of our strategy to continue to technically de-risk this exciting exploration licence and progress the project toward a potential farm-out, and we look forward to updating the market after completion of Stage 1 and Stage 3, and as initial results begin to emerge.”

You have to hand it to UOG who are keeping the drums beating from Jamaica and activity on the Walton Morant licence. Whilst this survey will undoubtedly bring more detailed imaging, and thus ‘de-risk the prospectivity identified to date’ the farm-out is still probably a little while away.

With the shares up some 30% in the last month and indeed year on year the market can clearly see this potential upside but until the results are in it may be best watched until then.

Buccaneer Energy

Buccaneer has announced that it has completed a reserve valuation update in connection with its credit facility with WAFD Bank (“WAFD”), formerly Washington Federal Savings and Loan.

The updated valuation confirms an increase in proved reserve volumes and supports the continued strength of the Company’s asset base, notwithstanding a more conservative oil price outlook applied by the lender. 

Paul Welch, Buccaneer Energy’s Chief Executive Officer, said:
“We are encouraged by the outcome of the latest borrowing base review, which demonstrates the underlying strength and resilience of our asset base. Total proved net reserves increased by 6% while forecast cash flows remain broadly stable year on year, despite WAFD’s near-term oil price assumption being reduced by $7.45 per barrel, or 14%, to reflect its outlook on global oil markets.

Our onshore Texas assets continue to benefit from low operating costs, enabling the business to perform well in the current pricing environment. “

This looks quite impressive from Buccaneer as despite the 14% reduction in the near term oil price by the WAFD bank, the borrowing base availability remains the same which means that the key metrics of the loan are unchanged. 

This means that the interest rate stays the same and perhaps more importantly there is no repayment triggered which is a big plus. Going forward Paul Welch has got to grips with Buccaneer and while the market has yet to appreciate it I think it is worth keeping on the radar screen, the model offers plenty of upside.

Highlights

• Total net proved reserves increased by 6%, based on the latest independent reserve review
• NPV10 of US$9.6 million, reflecting stable underlying cash flows
• Borrowing Base confirmed at US$4.25 million under the WAFD senior facility
• Conservative lender price deck applied; near-term oil price assumptions reduced by 14%
• Texas asset base continues to demonstrate low operating costs and resilience

Tower Resources

Tower has announced a subscription of 1,704,545,454 ordinary shares of 0.001p each at a price of 0.022p per Subscription Share, being at a discount of approximately 8% to the closing bid price of the Company’s shares on 27 January 2026.

The Subscription is being made to fund working capital while the Company waits for the approval documentation required to complete its agreed farm-outs in Cameroon and Namibia.

The Company has agreed to issue the broker, Axis Capital Markets Limited, warrants over 42,613,636 new ordinary shares for arranging the Subscription (“Broker Warrants”). The period of the Broker Warrants will be three years at a strike price of 0.044p per share (representing a premium of 100% to the Subscription Price). 

Share Capital following the Subscription 

The Subscription Shares will rank pari passu with the Company’s existing shares. Application has been made for the Subscription Shares to be admitted to trading on AIM and 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 4 February 2026.

Following admission of the Subscription Shares, the Company’s enlarged issued share capital will comprise 33,984,541,161 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 1,667,509,649 equating to 4.3% of the Company’s enlarged share capital assuming full exercise of all warrants, options and restricted shares.

Tower Resources Chairman & CEO, Jeremy Asher, commented:
“During my visit to Cameroon in November, made together with our intended partners Prime Global Energies Limited following the announcement of the Presidential election result, we were received by both the Prime Minister and the Director of Civil Cabinet at the Office of the Presidency. They confirmed our understanding, previously disclosed to investors, that the President supports our project, and the approvals will be processed when the new government is in place. Since that visit, we have been waiting for the new cabinet to be announced, so that the documents can be processed by the newly installed officials. In his New Year’s speech, the President said the announcement would take place in “days“, so we do expect it at any time.

“Since the holidays, we have also been contacted by the Namibian national oil company NAMCOR to confirm the resumption of their due diligence work and documentation for the additional farm-out agreement with Prime for our PEL96 licence.

“In the meantime, we have been working on financing options for the next phase of development for Njonji, as well as carrying out Namibian data acquisition, ensuring the elapsed time is directed in a productive manner, but since time is passing, when our broker offered us some further funds in response to investor demand, we felt it was prudent to accept them.”

 A raise was inevitable given the delay in the process in Cameroon but a modest discount shows that shareholders are happy to hang in there and top up the coffers when needed.

As Jeremy Asher says in the statement there is optimism that things are moving slowly but inexorably forward, indeed maybe even ‘in days’…

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