WTI (Sept) $96.70 +$2.00, Brent (Sept) $105.15 +$1.95, Diff -$8.45 -5, USNG (Sept) $8.72 +42c, UKNG(Aug)  327.76p +10.76p, TTF(Aug) €182.0 +€17.0

Oil price

A decent rally yesterday as the dollar weakened ahead of the Fed’s decision on rates. But the market is still tight and seems to be settling around here. One of the reasons is that gasoline demand has fallen and the price is already more realistic. Today a gallon of Exxon’s finest will rush you  a meagre $4.330 which is down 16 cents w/w, a fall of 54c m/m but a rise of $1.194 y/y.

As for gas it is all over the place, Russia has announced that Nordstream 1 will carry just 20% of capacity for 8 months starting on August 1st which puts the rest of the year in some doubt. It is should become obvious to central Government in the UK that a drive for gas, both onshore and offshore should be a massive priority when they get round to choosing our next leader…

Genel Energy

Genel Energy has announced that all payments have now been received from the Kurdistan Regional Government (‘KRG’) relating to oil sales during April 2022.

Genel’s share of those payments is as follows:

Following the receipt of the receivable recovery payment, Genel is now owed $58 million from the KRG for oil sales from November 2019 to February 2020 and the suspended override from April to December 2020.

In line with expectations. 

San Leon Energy

San Leon yesterday noted the announcement made by Decklar Resources Inc. in Canada.  San Leon has a 11% shareholding in Decklar Petroleum Limited, the local subsidiary of Decklar operating in Nigeria, and has also made a US$5.5 million loan to DPL, via 10% per annum unsecured subordinated loan notes.

Part of the text of Decklar’s announcement is set out below:

Decklar Resources Inc. provides an update regarding the resumption of production from the Oza-1 well at the Oza Oil Field in Nigeria.

Decklar and its co-venturer Millenium Oil & Gas Company Limited have received the permits required to resume production from the Oza-1 well at the Oza Oil Field. Production from the well has begun at low volumes initially to reestablish oil flow, with volumes to be increased steadily in order to establish a long-term sustainable rate. Production of crude oil from the Oza-1 well will flow into storage tanks at the Oza Oil Field and then be delivered by truck to the Umugini Pipeline Infrastructure Limited crude handling facilities.”

Good news from San Leon yesterday after the blog was published as Decklar are ready to re-establish production from the Oza-1 well. As I mentioned last week trucking to begin with will be beneficial followed by the secure pipeline. 

Union Jack Energy

Union Jack has announced the appointment of Shore Capital as Joint Broker to the Company, with immediate effect.

SP Angel will continue as Nominated Adviser and as Joint Broker to Union Jack. In addition to this news the company has announced an alliance with Research Tree which provides complimentary access to investment research on Union Jack.

Executive Chairman of Union Jack commented:
“Following a period of strong growth, which has transformed Union Jack into a cash generative producer with a robust balance sheet and no debt, we are delighted to add Shore Capital to our roster of advisers.

“Shore Capital enjoys a strong reputation in the AIM E&P sector and we are confident that this appointment will enhance and broaden Union Jack’s profile amongst institutional investors in particular.”

I wouldnt normally comment on a broker appointment but put both these announcements together I think will make a great difference to the marketing of UJO not just getting the message across but also increasing the profile amongst institutional investors which should do what i mentioned in yesterdays blog. 

Rockhopper Exploration

Rockhopper has announced that all regulatory consents required for the transaction between the Company, Harbour Energy plc and Navitas Petroleum LP as announced on 19 April 2022 have been received from both the Falkland Islands Government  and the UK Secretary of State. As part of the Transaction, FIG has agreed to grant a two-year licence extension to all the licences held by Rockhopper in the North Falkland Basin. Accordingly, the licences will now run until 1 November 2024.

More good news from RKH where Sea Lion is getting closer and looks incredibly positive at current econometrics. 

Advance Energy

The Company announces that it has raised £345,000 (gross), before expenses, by way of a placing (the “Placing”) and, in addition, has received intentions to participate in the Placing and a subscription on the same terms as the Placing to raise, in aggregate, a further £80,000 from certain directors (the “Intended Director Participation”).

The Placing has been arranged by Optiva Securities Limited and comprises the issue to new and existing shareholders of 405,882,354 ordinary shares of no par value (“Ordinary Share”) at an issue price of 0.085 pence per Ordinary Share (“Issue Price”), and the issue of one warrant (“Warrant”) for every one new Ordinary Share issued. Each Warrant gives the holder the right to subscribe for one new Ordinary Share at a price of 0.13 pence per Ordinary Share at any time from the issue of the Warrant up to (and including) 5.00 p.m. on 26 July 2025 (the “Warrant Exercise Period”).

In addition, it is intended that certain directors subscribe for a further 47,058,823 new Ordinary Shares pursuant to the Placing and 47,058,823 new Ordinary Shares pursuant to a subscription directly with the Company at the Issue Price (the “Director Participation Shares”), with such shares also being entitled to one Warrant per Ordinary Share. 

The net proceeds from the Placing and the Intended Director Participation, combined with the Company’s existing cash resources, are expected to provide the Company with sufficient working capital to enable it to select, negotiate and pursue an acquisition that would be considered a reverse takeover under the AIM Rules for Companies and specifically fund the required legal, financial, commercial and technical due diligence, including the preparation of the required Competent Persons Report and Admission Document to enable the Company to undertake an acquisition. Any cash consideration which might be payable to conclude an acquisition will require further funds. There is, however, no guarantee at this stage that any acquisition will be completed.

Larry Bottomley, Interim CEO of Advance Energy said:
“Over the last six months the focus of the Board has been on progressing the deal pipeline. Screening and due diligence has progressed and the Company is now focused on a select number of potentially value accretive deals with an emphasis on proven resources that are intended to provide immediate and sustainable cash flow generation.

“We are now at the stage where we call on the support of third parties to contribute to the relevant due diligence required to progress an acquisition and this funding will allow that work to be undertaken. While the Board is optimistic in progressing an acquisition there is no guarantee at this stage that any transaction will be completed. We will keep the market updated as these projects develop.”

After the year or so that it has had Advance must be pleased to be able to restructure and look forwards. It has a quality board and if anyone can find good deals then it is them. 

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