WTI (July) $90.54 -$2.50, Brent (Aug) $93.09 -$1.94, Diff -2.55 +56c
USNG (July) $3.23 -11c, UKNG (July) 122.98p +4.34p, TTF (July) €50.7 +€1.77

Oil price

Last week WTI rose $3.18 and Brent, post expiry was up just $1.97 having fallen a couple of bucks on Friday as ceasefire hopes remained. Those hopes have vanished today after Iran started a major missile attack on Israel in retribution for the attacks on Lebanon. Slightly more concerning is that Iran’s proxy, the Houthis, appear to be back and claiming to be able to shut the Bab al-Mandab Strait which is between the Red Sea and the Gulf of Aden. 

This pushed oil prices up by around four dollars this morning and has led to President Trump demanding that both sides ‘stop shooting’. I know that I am not the world’s greatest expert here but I’m sure I heard that US forces had ‘obliterated’ Iran’s navy and missile stocks. But the finest brains in US intelligence and also at Mossad don’t appear to be able to find out where these missiles are being sourced nor where they are being fired from…

At its meeting Opec raised its quotas by 188/- b/d but that’s pretty by the by as most countries can’t sell their previous quotas at the moment. And the rig count rose by just one overall and by two in oil. 

Union Jack Oil

Union Jack has announced the signing of a facility agreement with Egdon Resources U.K. Limited through which Egdon has agreed to provide Union Jack with a secured term loan facility of £1,000,000. The Loan will provide the Company with additional working capital for general corporate purposes.

Egdon is the operator and has a 30% interest in PEDL180 and PEDL182 in the Wressle oilfield located in Lincolnshire and Union Jack holds a 40% interest.

The key terms of the Loan comprise the following:

• The Loan term is 24 months from drawdown 
• The interest rate is 5% per annum, with a default interest rate of 8% (5% + 3% on overdue amounts)
• Security is granted over the Company's interest in PEDL180 and PEDL182 at the Wressle oilfield
• Repayment structure:
  • The Borrower must pay each month 60% of operating free cash flow generated from Wressle - applied firstly to unpaid interest and then secondly to reduce principal. The additional 40% of free cash flow can be retained by the Company 
  • If the monthly operating free cash flow from Wressle is insufficient, interest for that month is capitalised and capitalised interest is added to the loan balance. Interest then accrues on that enlarged balance 
  • Regardless of cash flow performance, all outstanding principal and accrued interest must be repaid in full after 24 months 

Restrictions on the Borrower:

• The Borrower cannot create further security over the secured assets without Lender consent
• The Borrower may not take on additional debt except by way of unsecured convertible loans 
• No dividends, distributions or returns of capital may be paid (other than intra-group distributions) without Lender consent
• The Borrower must continue operating substantially the same business and cannot materially change its nature

Additional provisions:

• If the Borrower wants to sell any interest in PEDL 180, PEDL 182, or the related Joint Operating Agreements ("JOA"), the Lender gets an initial right of first refusal before third parties are approached and a matching right after a third-party offer is received. The matching right of first refusal will prevail for 12 months after repayment of the loan 
• Until final repayment of the Loan, the Borrower must support the Lender's role as operator of Wressle and generally cannot vote or act to remove or replace the Lender as operator (except in cases of gross misconduct)  

This is a convenient loan from Egdon, £1m over two years and at only 5% coupon gives UJO additional working capital and the shared ownership of Wressle mean that the security is straightforward. Higher hydrocarbon realisations will also benefit the company as it moves ahead in both the UK and the USA.

I remain confidant that the outlook for UJO is very positive and with so much operational news in the short and medium term expected, shareholders should remain steadfast as the assets deliver. 

Pharos Energy

Pharos Energy plc, an independent energy company with assets in Vietnam and Egypt, provides an update on its Egyptian assets.

Highlights:

• $12.6 million received year-to-date, clearing all receivables due in Egypt
• Latest collection of $3.8 million in the last week represents full settlement through proactive engagement with the Egyptian Government
• Collection of contingent consideration from the farm-out transaction with IPR
• Return to drilling in Egypt in 2026, with the first well spudded on 4 June

Following receipt of the $20 million payment on 31 December 2025, Pharos has received a further $12.6 million in 2026, including $3.8 million recent payments in June, bringing the receivables position current, the first time since the acquisition of the assets in April 2019.

Pharos has continued to receive payments from EGPC on a regular basis throughout the period, in addition to the larger payments to settle all historic overdue receivables.

The settlement of Pharos’ overdue Egyptian receivables reflects the Company’s proactive and constructive engagement with government partners, alongside continued commitments from the Egyptian Government to settle all outstanding receivables to international partners in the oil and gas sector. This progress has been underpinned by the stronger fiscal framework established under the new consolidated Concession Agreement, which received approval from EGPC’s Executive Board in late 2025 and expects Parliamentary ratification in 2026.

Furthermore, as at 3 June 2026, Pharos has collected all contingent consideration from the farm-out transaction from its partner IPR.

Pharos is excited that drilling in Egypt has recommenced with a six-well work programme, demonstrating the Company’s investment back into its assets and leveraging the improved fiscal terms to drive additional value. The first well, Silah 8-2, spudded on 4 June 2026 and is expected to complete in June.

Pharos remains on track to execute its $11 million capital investment in Egypt to unlock further value across its asset base. 

Katherine Roe, Chief Executive Officer, commented:
“We are extremely pleased to have settled our outstanding receivables balance with the Egyptian Government; a significant milestone since acquiring the assets in 2019, with $12.6m paid in the year to date. The government’s collaborative approach to working with international oil and gas companies has been very productive and reflects our strong working relationship, as well as their continued commitment to supporting investment in the country’s energy sector. 

“Coupled with the settlement of outstanding payments with IPR, Pharos is in an even stronger and stable financial position. We are excited to return to drilling in Egypt with our anticipated six-well work programme to continue to deliver value from our Egyptian operations. We look forward to updating the market on our progress.” 

More good news today from Pharos where things are really going well, in this Egypt update the company announces that they have achieved total clearance of all Egyptian receivables, the first time since the acquisition in April 2019.

The company say that last week it received from the Egyptian Government $3.8m making receipts of $12.6m in the year to date which clears all receivables and ‘represents full settlement through proactive engagement with the Egyptian Government’.

The company also announced that it has collected all contingent consideration from the farm-out with IPR which further strengthens the company’s finances. In addition to this on the operational front Pharos has spudded the first well on its return to Egyptian drilling on the 4th of June, it is a six well programme with great opportunities to add value to the portfolio. 

This all means that the strong combination of the robust balance sheet and exciting operational programme will open up positive sentiment to the Egyptian assets as the first drilling result should be with shareholders later this month.

This brings together a number of very positive pieces of news across the Pharos portfolio, the results from the soon to be completed campaign in Vietnam have been good and with this news from Egypt all is set fair for the company. 

The shares have been performing well, up 10% on one month, +51% over six months and rising 36% y/y but I consider that there is plenty of further. At 29p today there is plenty of scope to outperform a good deal more, my target price of 50p is conservative enough especially when looking at the longer term potential. 

Touchstone Exploration

Touchstone has announced the completion of its WRAP Retail Offer, which closed on June 5, 2026, together with the previously announced Subscription, Placing and LIFE Offering.

The Fundraise has raised aggregate gross proceeds of US$10.9 million (approximately £8.1 million and C$15.1 million) before expenses. The proceeds comprise approximately US$1.9 million from the subscription by Purebond Limited, approximately US$8.4 million from the issuance of unsecured non-convertible Debt Securities pursuant to the Subscription Agreement with Purebond, and approximately US$0.6 million in aggregate from investors participating in the Placing, LIFE Offering and WRAP Retail Offer.

In aggregate, 26,631,330 new Common Shares have been conditionally placed with, or subscribed for by, new and existing investors at the Issue Price of 7 pence and C$0.13 per New Common Share. The New Common Shares represent approximately 8.2 percent of the issued share capital of the Company prior to the Fundraise.

Of the 26,631,330 New Common Shares, 20,235,000 Common Shares are being subscribed for by Purebond, raising gross proceeds of approximately US$1.9 million (approximately £1.4 million and C$2.6 million). In addition, pursuant to the Subscription Agreement, the Company has issued unsecured non-convertible debt securities to Purebond for gross proceeds of approximately US$8.4 million (approximately £6.3 million and C$11.7 million). The Debt Securities were not issued at the Issue Price. Investors are referred to the Company’s fundraise launch announcement dated June 4, 2026 for further details of the Subscription Agreement.

Capitalised terms used in this announcement but not defined have the meanings given to them in the Fundraise Announcement.

Debt Securities Shareholder Approval

As disclosed in the Fundraise Announcement, subject to approval by independent shareholders at the Company’s 2026 annual general and special meeting of shareholders, to be held on or about July 23, 2026 (the “General Meeting”) and the receipt of all required regulatory approvals (including TSX approval), the Debt Securities are expected to be repaid in full and the repayment proceeds applied to subscribe for Common Shares. If the required approvals are not obtained, the Debt Securities will remain outstanding in accordance with their terms.

Related Party Participation

Purebond entering into the Subscription Agreement with the Company is deemed to be a transaction with a related party pursuant to Rule 13 of the AIM Rules for Companies by virtue of Purebond being a substantial shareholder of the Company. A special committee of independent directors of the Company, which excluded Mr. Bhupendra Kansagra and Mr. Paul Baay (the “Special Committee”), was constituted to review and oversee the related party aspects of the Fundraise. Upon recommendation of the Special Committee, the Board of Directors of the Company (with Mr. Kansagra abstaining) consider, having consulted with the Company’s nominated adviser, Canaccord Genuity Limited, that the terms of the Subscription Agreement are fair and reasonable insofar as the Company’s shareholders are concerned.

Purebond entering into the Subscription Agreement and the related arrangements described in this announcement also constitute a “related party transaction” for the purposes of applicable Canadian securities laws, including Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). In connection with the issuance of Common Shares to Purebond at First Admission (as defined below), the Company is relying on the exemption from the minority approval requirement in section 5.7(a) of MI 61-101 on the basis that the value of the Common Shares to be issued to Purebond at First Admission is not expected to exceed 25 percent of the Company’s market capitalization.

In connection with the issuance of the Debt Securities to Purebond, the Company is relying on the exemption from the minority approval requirement in section 5.7(f) of MI 61-101 on the basis that the Debt Securities constitute non-convertible debt on reasonable commercial terms. The Company expects that any repayment of the Debt Securities and redirection of the repayment amount into a subscription for Common Shares pursuant to the repayment and subscription agreement will be subject to receipt of the required shareholder and regulatory approvals.

A material change report will be filed in connection with the related party transaction. The Company expects that such report will be filed less than 21 days prior to closing of the Fundraise due to the accelerated timetable required to complete the financing. The Company believes that this shorter period is reasonable and necessary under the circumstances.

Following First Admission, Purebond’s interest in the Company’s then total issued share capital is expected to be equal to approximately 19.99 percent. Subject to approval at the General Meeting, redirection of the Debt Securities into a subscription for Common Shares is expected to increase Purebond’s interest in the Company’s then total enlarged issued share capital to approximately 36.3 percent.

Admission and Total Voting Rights

Application has been made for the 26,631,330 New Common Shares to be admitted to trading on AIM (“First Admission”). Application has also been made to list the New Common Shares on the TSX. Subject to the receipt of required regulatory approvals, First Admission is expected to take place at or around 8:00 a.m. (BST) on June 10, 2026, and listing of the New Common Shares on the TSX is expected to take place at the market open on June 10, 2026.

The new Common Shares to be issued pursuant to the WRAP Retail Offer will be issued free of all liens, charges and encumbrances and will, on First Admission, rank pari passu in all respects with the existing Common Shares and the new Common Shares to be issued pursuant to the Subscription, the Placing, and the LIFE Offering.

Immediately following First Admission, the Company’s issued share capital will consist of 351,364,939 Common Shares. The Company does not hold any Common Shares in treasury. Shareholders may use this figure to determine if they are required to notify their interest in, or a change to their interest in, the Company.

Capitalised terms used in this announcement but not defined have the meanings given to them in the Company’s Fundraise Announcement.

I think that I pretty much covered everything on the raise on Friday but to finalise everything this was a good raise, well supported with two big institutions now on the register, it was tight to the market price and sorts out the going concern worries in the balance sheet. The operational activity will now continue and with new gas pricing through Central Block agreements giving spectacular realisations bringing in much higher revenues the outlook has got a lot brighter.  

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