WTI (Nov) $81.23 -92c, Brent (Nov) $85.49 -83c, Diff -$7.26 +9c, USNG (Oct) $6.87 -22c, UKNG (Nov) 390.0p +85.1p, TTF (Nov) €201.875 €-13.11

Oil price

Oil was off the top yesterday and is virtually unchanged today, the signs of money managers doing the ‘window dressing’ on the last day of the month and the quarter and when it precedes a weekend followed by an Opec + meeting the cojones of the traders are as small as hazelnuts on a cold night…

Savannah Energy

Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter in Africa, is pleased to announce its unaudited interim results for the six months ended 30 June 2022.

H1 2022 Financial Highlights

• Total Revenues of US$128.7m (up 10% on H1 2021: US$116.5m);
• Adjusted EBITDA of US$100.3m (up 10% on H1 2021: US$91.5m);
• Operating expenses plus administrative expenses of US$24.5m (H1 2021: US$22.4m);
• Loss before tax of US$11.3m (H1 2021 profit before tax: US$7.7m);
• Capital expenditure of US$14.0m (H1 2021: US$5.2m);
• Net debt position as at 30 June 2022 of US$327.1m (Year-end 2021: US$370.0m) with Adjusted Leverage4 of 2.0x (Year-end 2021: 2.5x); and
• Total cash of US$182.8m as at 30 June 2022 (Year end 2021: US$154.3m)

H1 2022 Operational Highlights

• New gas sales agreements (“GSAs”) were signed with Central Horizon Gas Company Limited (“CHGC”), a major gas distribution company situated in the South-South region of Nigeria, and TransAfam Power Ltd, a licensed power generation company in Nigeria and, post-period-end in August 2022, with Notore Chemical Industries PLC for its fertiliser plant.  These customers are accessed via Accugas’ pipeline network to Ikot Abasi and on to the Port Harcourt area via third party infrastructure, thus no capital expenditure is required;
• A contract extension was signed with First Independent Power Limited (“FIPL”) to supply gas to its Eleme and Trans Amadi power plants, bringing the total number of power plants supplied under the contract to three, including the FIPL Afam power plant;
• During the period, Savannah commenced gas deliveries to three new customers in Nigeria, FIPL’s Trans Amadi power plant, TransAfam’s power plants in Rivers State, and CHGC.  Savannah now has operational GSAs with power plants comprising 24% of Nigeria’s thermal generation capacity;
• Average gross daily production, of which 89% was gas, remained almost constant during H1 2022 at 22.5 Kboepd (H1 2021: 22.6 Kboepd). The broadening of our customer base during H1 2022 has enabled us to increase gas deliveries to support Nigeria’s power generation needs;
• A new gas production well, Uquo 11, commenced production in April 2022 and produced at an average rate of 68 MMscfpd up to 30 June 2022; and
• Our Renewable Energy Division signed agreements for the development of up to 750 MW large-scale greenfield solar and wind projects with the Governments of Niger (Parc Eolien de la Tarka) and Chad (Centrale Solaire de Komé and Centrales d’Energie Renouvelable de N’Djamena).

Chad and Cameroon Assets

• Work continues to complete our proposed acquisitions of ExxonMobil’s and PETRONAS’ assets in Chad and Cameroon (the “Chad and Cameroon Assets”) by the end of the year.
• Savannah has undertaken significant preparation work ahead of completion including recruitment of the operational team and enhancements to organisational systems to ensure that the transition of operatorship can be completed.

FY 2022 Guidance Reiterated

Savannah reiterates full year 2022 guidance as follows:

• Total Revenues greater than US$215.0m;
• Group Operating expenses plus administrative expenses of up to US$75.0m;
• Group Depreciation, Depletion and Amortisation of US$21m fixed for infrastructure assets plus US$2.3/boe for oil and gas assets; and
• Capital expenditure of up to US$85.0m.

H1 2022 Corporate Events

In June 2022, Savannah announced several changes to the Board:

• Nick Beattie was appointed as Chief Financial Officer and was appointed to the Board of Directors;
• David Jamison retired from the Board at the Annual General Meeting on 30 June 2022, and assumed the (non-board) role as Honorary President of Savannah;
• Steve Jenkins will step down from his role as Non-Executive Chairman at or prior to the 2023 Annual General Meeting. A search for a Chair-Designate is underway and it is anticipated that an appointment will be made during H2 2022, and
• It is intended that three new non-executive directors (Sylvie Rucar, Sarah Clark and Dr Djamila Ferdjani) will be appointed to the Board following completion of the proposed acquisition of the ExxonMobil upstream and midstream assets in Chad and Cameroon.

Andrew Knott, CEO of Savannah Energy, said:
“Our half year results again demonstrate the continued strong underlying progress we have made in our existing producing business with a 10% year-on-year increase reported for both Total Revenues1 (to US$128.7m) and Adjusted EBITDA2 (to US$100.3m). Further, I am pleased to report that our growth trajectory has continued into H2, with average daily production to 26 September 2022 having increased by 55% to 34.8 Kboepd versus the H1 average of 22.5 Kboepd and 118% versus the 16.0 Kboepd level at the time of acquisition in November 2019. This H2-to-date growth reflects the impact of the three new gas sales contracts and the contract extension we have announced in 2022, with Accugas now supplying gas to approximately 24% of Nigeria’s thermal power generation capacity as compared to approximately 10% at the time of the original acquisition.  In the first half, we also announced agreements for the development of up to 750 MW of large-scale greenfield solar and wind projects in Niger and Chad, which have the potential to transform the electricity access rates in both countries.

Looking forward to the rest of 2022 and 2023, I remain confident in where we are as a business. We look forward to closing our Proposed Acquisitions of the Chad and Cameroon Assets in Q4 of this year. We expect to deliver on or exceed our financial guidance. We expect to announce further hydrocarbon acquisitions and to expand our Renewable Energy Division with several new large-scale greenfield opportunities currently under review and negotiation. We continue to work towards completing the refinancing of our Nigerian debt and to announce the development and exploration plans for our assets in Niger.

Lastly, I would like to express my gratitude to all of those who contributed to the progress in our business in H1 – my incredibly dedicated and passionate colleagues, our host governments, communities, local authorities and regulators, our shareholders and lenders, and our customers, suppliers and partners. Thank you all.”

This is a confident and upbeat statement that yet again has franked the company’s guidance of continued growth in its core business. In addition to that growth the agreements for the development of up to 750 MW of large-scale greenfield solar and wind projects in Niger and Chad give the potential to transform the electricity access rates in both countries.

In addition the company are confident of closing the proposed acquisitions of the Chad and Cameroon Assets in Q4 of this year with further acquisitions in hydrocarbons trailed and of course the expansion of the renewables division continues. 

Things are always on the move at Savannah and there is little doubt that the team are continuing to develop the company on many levels. Like other shares since the oil price tipped over Savannah has fallen recently but now offers significantly more value and I’m very happy to keep it in the Bucket List. 

IOG

IOG provides an update on Saturn Banks production.

Andrew Hockey, CEO of IOG, commented:
“Over 2H 2022 to date, average gross gas rates have been 28.6 mmscf/d, with average realised gas prices of 274 p/therm, resulting in higher revenues in both July and August than previous months. In September, saline liquids production has constrained average gas production to 21.8 mmscf/d, with latest rates of 32 mmscf/d as we work to restore higher flows.

Working closely with Perenco and ODE, we have secured short-term aqueous liquids handling capacity and are pursuing more attractive medium-term solutions. As the water is most likely being produced via a natural Blythe reservoir fracture, we are also working to optimise reservoir management.”

Blythe and Elgood production

In September, Saturn Banks combined gross flow rates have averaged 21.8 mmscf/d at uptime of 87%, building up to a latest gross production rate of 32 mmscf/d. The volume weighted average realised gas price (VWAP) in September, factoring in the 30,000 therms/day fixed at 444 p/therm for this month, was 290 p/therm. IOG has fixed the same volume at 263 p/therm for October.

Build-up of stable gas rates has been constrained by intermittent flows of aqueous liquids into the Saturn Banks Reception Facilities. Condensate and aqueous liquids have each averaged approximately 300 bbl/d in September. The aqueous liquids consist of saline water and monoethylene glycol (MEG), which is injected in the wells to inhibit hydrate formation.

When liquids arrivals reduce available storage capacity, the Perenco Bacton terminal control room reduces gas flow to avoid overfilling the Saturn Banks slugcatcher and shutting in production. As liquids are let down from the slugcatcher and removed, gas flow rates can be gradually increased. 

Currently, letdown capacity is restricted by storage availability (shared with other non-Saturn Banks liquids), tanker removals and the cycling of letdowns between Saturn Banks and other Bacton gas streams. IOG is working with Perenco on modifications to enable continuous letdowns.

Due to salinity levels, the aqueous liquids cannot currently be regenerated at Bacton as originally planned, but are stored onsite or offsite to be either regenerated for reinjection or disposed. Up to four tankers per day are transporting liquids to offsite storage facilities and several MEG regeneration routes have also been identified. 

Analysis indicates that a sub-seismic resolution natural reservoir fracture encountered during Blythe development drilling is the most likely source of the saline water. IOG is therefore evaluating ways to optimise Blythe reservoir management.

The intention over the coming weeks is to continue restoring higher stabilised flow rates, subject to liquids handling constraints. As gas rates are increased, the extent to which aqueous liquids production increase will be assessed.

Separately, in November the Perenco Bacton terminal is scheduled to undergo annual maintenance, during which Saturn Banks production is expected to be suspended for up to two weeks. Meanwhile, as work continues to establish remote platform restart capability offshore, IOG retains permanent standby logistical capacity to ensure that, in the event of platform trips, restart interventions can be expedited typically in well under 24 hours.

IOG have had their fair share of teething troubles with the latest problem being saline liquids in production limiting gas production which the company are working on at the moment. However average gas prices of some 274 per therm led to July and August being better than previous months. 

With annual routine maintenance expected shortly at Bacton there will be further suspension but only for two weeks, hopefully the other problem will be sorted by then. I am confident that IOG has the potential to make significant returns to investors over the longer term and its gas will become increasingly valuable and it retains a place in the bucket list.

San Leon Energy

San Leon today announces its unaudited interim results for the six months ended 30 June 2022. These results include an update on its indirect interests in OML 18, a world-class oil and gas block located onshore in Nigeria, and Energy Link Infrastructure (Malta) Limited, the company which owns the Alternative Crude Oil Evacuation System project.

Corporate

On 8 July 2022 San Leon announced, amongst other matters, that it had entered into a series of agreements with Midwestern Oil & Gas Company Limited (“Midwestern”) to consolidate Midwestern’s holdings in San Leon, Midwestern Leon Petroleum Limited (“MLPL”) and Energy Link Infrastructure (Malta) Limited (“ELI”) into a single holding in San Leon (together the “Proposed Midwestern Reorganisation”). In addition, San Leon announced further conditional investments in ELI (together the “Further ELI Investments”). Taken together the Proposed Midwestern Reorganisation and Further ELI Investments are collectively referred to as the “Proposed Transactions”.  The Proposed Transactions are transformational for San Leon and once complete will:

• Consolidate and simplify the group structure;
• Increase San Leon’s exposure to the world class OML 18 asset fourfold to a 44.1% initial indirect economic interest; and
• Increase San Leon’s ownership of ELI to c.50% and a total of US$48.3 million loans (plus accrued interest) to ELI.
• On 27 January 2022 San Leon announced that it was proceeding with its investment in the Oza oil field in Nigeria and upon completion it will have the following interests in Decklar Petroleum Limited:
• A total of US$5.5 million 10% unsecured subordinated Decklar Petroleum loan notes; and
• An equity interest in Decklar Petroleum Limited of 11%.
• On 31 January 2022 San Leon announced that it had successfully concluded its ongoing legal proceedings with TAQA Offshore BV (“TAQA”) in relation to San Leon’s legacy interest in two royalties in Block Q13A, which is located offshore Netherlands. San Leon received payments totaling more than €5.7 million in settlement from TAQA.
• On 15 February 2022 San Leon announced a further loan of US$2.0 million to ELI at a coupon of 14% per annum over four years which is payable quarterly following a one-year moratorium from the date of investment. In addition, the loan was accompanied by a transfer of a 2.0% equity interest in ELI to San Leon which was acquired at nominal value, a consideration of approximately US$91.

Financial

• Cash and cash equivalents as at 30 June 2022 of US$0.3 million (30 June 2021: US$12.1 million of which US$6.8 million was restricted and held in escrow for the Oza transaction).
• As disclosed in the Company’s AIM Admission Document published on 8 July 2022, a loan facility of US$50.0 million has been made available to the Company by MM Capital Holding for the purposes of funding its working capital requirements and financing the Further ELI Investments (otherwise known as the New Facility).  The New Facility currently remains undrawn, at San Leon’s election, as the Company is currently examining whether additional or alternative financing might be available on terms that may be better aligned with the Company’s overall strategic and financing objectives, and San Leon is in discussions with several counterparties in this regard.  As a result of electing not to drawdown the New Facility, the Company’s current trade creditors amount to approximately US$3.5 million (predominantly related to advisor fees incurred in relation to the Proposed Transaction) and with current cash resources being limited, a drawdown of funds under the New Facility or an alternative debt financing arrangement is required to allow trade creditor settlement. Depending on progress with the discussions on this alternative financing, the Board intends, in the near-term, to either draw down on the New Facility or put a different debt financing arrangement in place which will be drawn down once it is finalised, to allow trade creditors to be settled and the Further ELI Investments to be financed.
• In the six months ended 30 June 2022 US$0.3 million (six months to 30 June 2021: US$0.8 million) has been received by the Company in relation to payments due to San Leon under the MLPL Loan Notes. San Leon has agreed with MLPL, Midwestern and Martwestern to a Conditional Payment Waiver to 31 December 2022 to allow for the completion of the Proposed Transactions. As at 29 September 2022, the Conditional Payment Waiver relates to US$108.8 million, being a principal amount due of US$82.2 million and total accrued interest due of US$26.6 million, which will be payable 90 days after such expiry, save for, inter alia, if there is an event of default.
• Completion of the Proposed MLPL Reorganisation (which is part of the Proposed Transaction) is subject to a number of conditions, details of which were set out in the Company’s announcement of 8 July 2022 and in the Admission Document.  In order to acquire additional interests in OML 18 and take its economic interest to 45% of OML 18, Eroton proposes to enter into new senior secured reserve-based lending facilities totaling US$750 million (the “New Eroton Debt Facilities”), to be provided to Eroton by a lending consortium headed by Afreximbank.  Whilst this process has made good progress in September 2022, it remains a complex procedure with several interested parties and, as a result, further additional time is needed to finalise the loan agreements and ancillary documentation.  Consequently, the condition relating to the New Eroton Debt Facilities, which had been had already been extended to 30 September 2022, has now been extended to 31 October 2022 by agreement with Midwestern.  Aside from the extension of timing, the structure of the New Eroton Debt Facilities remains in accordance with the description set out in the Admission Document. In addition to the requirement to enter into the New Eroton Debt Facilities, the MLPL Reorganisation Agreement requires the Sahara OML 18 Acquisition Agreement (as defined in the Admission Document) to be entered into by all parties by 30 September 2022. The Sahara OML 18 Acquisition Agreement is not expected to be entered into until after the New Eroton Debt Facilities have been entered into and the funds are available, so this date has also been extended to 31 October 2022 by agreement with Midwestern.
• The board of San Leon still remains confident that the Proposed Transactions will complete during the final quarter of this year, as originally set out in the Admission Document.

Operational

Eroton – OML 18

• Oil delivered to the Bonny terminal for sales averaged approximately 1,130 barrels of oil per day (“bopd”) in H1 2022 (6,600 bopd in H1 2021). The figure has been affected by continued losses and downtime associated with the use of the Nembe Creek Trunk Line (“NCTL”), and reduced operations both as a result of the Covid-19 pandemic and also due to prudent capital discipline ahead of the availability of the ACOES.
• Gas sales averaged 41.8 million standard cubic feet per day (“mmscf/d”) in H1 2022 after downtime (17.8 mmscf/d in H1 2021).
• Production downtime of 17% in H1 2021 (3% downtime in H1 2021) was caused by third party terminal and gathering system issues. Such issues in the third-party export system are expected to be substantially resolved by the implementation of the new ACOES for the purpose of transporting, storing and evacuating crude oil from the OML 18 export pipeline.
• Pipeline losses by the Bonny Terminal operator have been markedly higher during this year (30 June 2022: 91%; 30 June 2021: 65%). The ACOES export Pipeline and FSO system are expected to reduce losses significantly when operational.

ELI – ACOES pipeline

• There have been various logistical delays to the implementation of the ACOES project in the first half of the year.
• The Floating Storage and Offloading (“FSO”) vessel is now on station, approximately 40 kilometers offshore, and is expected to be spread moored and operational for receipt of barging cargoes in the coming weeks.
• Oil barging operations from OML 18 to the mother vessel continued during the period. Once the mother vessel has reached its capacity of 250,000 barrels, the oil will be transferred to the FSO.
• Good progress has been made during the period on commercial negotiations with third parties who are expected to use the FSO when it is fully operational. Third parties will barge oil to the FSO when its operations commence.
• The pipeline contractor has recently commenced mobilisation to site and will recommence laying the pipeline component of the ACOES imminently. The full ACOES which will be utilised by Eroton, including the pipeline, is now expected to be operational in Q1 2023.

Chief Executive Officer of San Leon, Oisín Fanning, commented:
“We were delighted to have entered into a series of agreements for the Proposed Transactions in early July 2022. We believe that this series of transactions, when completed, will be truly transformational for the Company and will deliver significant value to our shareholders. We are making good progress on clearing the conditions associated with the agreements and still expect to complete the Proposed Transactions in the fourth quarter of 2022.

“These transactions will pave the way for the Company to deliver its strategy of becoming a significant participant in the Nigerian oil and gas market, positioning San Leon to take advantage of further transactional opportunities to enhance and grow our business.”

There is nothing to add today as the market is fully up to date with events at San Leon as they inform the shareholders of every move. Suffice it so say that the team at SLE are meticulously building a very substantial company indeed and with promised distribution of rewarding investments in the longer term my confidence remains undimmed, a lay down cert in the Bucket List for the patient.

Diversified Energy Company

Diversified Energy has announced further details regarding the parameters of the Share Buyback Programme previously announced on 26 September 2022.

As previously announced, the Company’s Board of Directors has approved the terms of the Programme to buy back the Company’s ordinary shares of 1p each. Under the Programme, the Company, at its discretion and on occasion, may purchase its Shares in open market transactions depending on market conditions, share price, trading volume and other factors. The Board believes that the Programme, if and when implemented, will represent an appropriate use of the Company’s cash resources relative to its net asset value.

The Company intends to conduct the Programme concurrent with the following parameters:

• The maximum number of Shares repurchased shall not exceed 85,004,655 Shares
• The total consideration of Shares repurchased under the Programme shall not exceed an aggregate market value of  £108 million
• The Programme will expire at the earlier date of the 01 June 2023 or the Company’s 2023 Annual General Meeting of its Shareholders

Diversified will execute the Programme on the London Stock Exchange within the limitations of the shareholder authority granted at the annual general meeting held on 26 April 2022 and within the parameters of the Market Abuse Regulation 596/2014/EU and the Commission Delegated Regulation 2016/1052/EU (in each case, as it forms part of UK law pursuant to the European Union (Withdrawal) Act 2018) and Chapter 12 of the Financial Conduct Authority’s Listing Rules. The Company will hold as treasury shares any Shares repurchased in accordance with the provisions of the Companies Act 2006 and will cancel the Shares thereafter. Diversified will make appropriate disclosures during the buyback period of the number of Shares that the Company has repurchased.

Just some more details from DEC about the buyback programme recently announced in which it will buyback a maximum of 85m shares.

Scirocco Energy

Scirocco Energy, the AIM investing company targeting attractive assets within the European sustainable energy and circular economy markets, is pleased to announce its unaudited interim results for the six months ended 30 June 2022.

Period Highlights:

·    In line with the Investing Policy approved at AGM in July 2021, the Company continued to support Energy Acquisitions Group Limited (“EAG”), where Scirocco has a 50% ownership interest, to identify additional investment opportunities building on the acquisition by EAG of 100% of Greenan Generation Limited (“GGL”) and associated 0.5 MWe Anaerobic Digestion (“AD”) plant located in County Londonderry, Northern Ireland. AD is a process that creates biogas, a renewable energy source that will help the UK deliver on its decarbonisation commitments

During the period, GGL has continued to out-perform original expectations:

• Revenue supported by higher NIROC payment levels and higher power sales prices
• EBITDA for H1 2022 was £253k on track for a 2022 full year estimated EBITDA of c. £600k.

Following an exhaustive sales process over c. 24 months, the Company announced on 13th June 2022 that it had reached agreement with Wentworth Resources plc to sell its 25% interest in the Ruvuma asset for a total consideration of up to $16 million:

• Initial consideration of US$3 million payable on completion of the Proposed Transaction;
• US$3 million payable upon final investment decision being taken by the parties to the Ruvuma Asset Production Sharing Agreement or the JOA as the case may be;
• Deferred consideration of up to US$8 million payable in the form of a 25% net revenue share from the point when Ruvuma commences delivery of gas to the gas buyer;
• Contingent consideration of US$2 million payable on gross production reaching a level equal to or greater than 50Bcf.
• The Ruvuma disposal was approved by Shareholders at a general meeting held on 29th June 2022
• The Prolific Basins financing facility outstanding balance was part settled through the issuance of Scirocco shares on two occasions and a waiver fee associated with approval of the Ruvuma divestment with the outstanding balance at 30 June of $545,000;
• The Company disposed of part of its remaining shareholding in Helium One realizing c. £160k in proceeds during the period;
• Continued the Company’s focus on cost discipline and cash preservation; and
• Held cash at 30 June 2022 of £1.03 million

Post Period Highlights:

• On 12 July 2022 the Company received formal notice from ARA Petroleum Tanzania Limited (“APT”), the current 50% interest holder and operator of Ruvuma,  that it was exercising its pre-emption rights with regards to Scirocco’s proposed divestment of the Ruvuma asset (“Ruvuma”) to Wentworth Resources plc (“Wentworth”) in addition to a separate letter received from the Tanzania Petroleum Development Corporation (“TPDC”) stating that it is considering exercising its statutory rights of first refusal in relation to the Ruvuma pursuant to Section 86(5) of the Petroleum Act 2015. On 19 August 2022, the Company received written confirmation from the Tanzania Petroleum Development Corporation (“TPDC”) that it was not exercising its statutory right of first refusal with respect to the Company’s divestment of its 25% interest in the Ruvuma asset.
• On 31 August 2022, APT and Scirocco entered into binding agreements which, inter-alia, provides access to cash call cover through the previously announced loan facility (with Wentworth Resources plc) and 1st drawdown notice for $1.614 million. Other than for adjustments with respect to conditions precedent then fulfilled, APT entered into all of the same agreements (and on the same terms) as Wentworth Resources plc (as detailed in the Company’s announcement of 13 June 2022).
• On 2 September 2022, the Company received a letter from a group of shareholders of the Company requesting the Company to convene a general meeting of the Company’s shareholders pursuant to section 303 of the Companies Act 2006 (the “Act”). Pursuant to this request on 15 September 2022, the Company published a Circular to Shareholders, along with accompanying Notice of General Meeting and Form of Proxy.
• On 14 September 2022, the Company noted the announcement by Reabold Resources plc regarding the conditional sale of its investee company, Corallian Energy Limited in which Scirocco owns 83,333 shares following a subscription by Scirocco in 2018 at a price of £1.50 per share. A price of up to £3.20 per share will be paid to Corallian shareholders as a combination of initial cash plus contingent payments offering a profitable exit with up to £267k of proceeds net to Scirocco (based on estimated £3.20 per share).
• On 27 September 2022, the Company announced that the subscriber (the “Subscriber”) under the share subscription deed governing the investment facility (“Investment Facility”), the details of which were announced to the market on 29 June 2020, had issued the Company a settlement notice for US$100,000. Accordingly, the Company issued and allotted 44,923,630 ordinary shares, with a deemed price of £0.0020 (“Settlement Shares”) to the Subscriber. The Subscriber’s investment was made as a prepayment for ordinary shares in the Company, the number (and price) of which were to be determined at the time the Subscriber elected to receive such shares, according to the average of five daily volume-weighted average prices during the twenty trading days prior to the date of such election.

At the time the Company sent out its Notice of its 2022 AGM held on 3 August, and continuing through the actual AGM, it was not aware it would be able to rely on the authority granted at the 2020 AGM, hence why Resolution 5 was proposed. Following the defeat of Resolution 5, the Company therefore believed, at that time, and as stated in the Result of AGM RNS on 3 August, that it was in default of the Prolific Basins facility.

Subsequent to the 2022 AGM, the Company reviewed prior authorities as part of a discussion with Prolific Basins regarding settlement of the facility. At the 2020 AGM, approval was taken to allot shares on a non-pre-emptive basis in favour of Prolific and the resolution included the wording as follows: “… save that the Company may make an offer or agreement before the expiry of the authority which would or might require shares to be allotted or Rights to be granted after expiry of the authority and the Directors of the Company may allot shares and grant Rights in pursuance of that offer or agreement as if the authority had not expired.”

This is a standard formulation in non-pre-emptive authorities (derived from s.570(4) of the Companies Act 2006) to allot to cover agreements reached prior to the expiry of that authority to allow allotments to be made after the expiration of such authority.

Therefore the Company considers that the £1m authority taken at the 2020 AGM can be used to allot shares to Prolific on a continuing basis given there is sufficient headroom remaining thereunder. Any subsequent authorities requested (such as at the 2022 AGM), part of an assessment of risk about potential headroom, are not necessary given the share price and amount remaining under the 2020 authority suffices to allot shares to Prolific.

The Company does not have a general authority to allot on a non-pre-emptive basis given this has expired and that resolution did not pass at the 2022 AGM. It is only the ability to allot shares to Prolific that continues pursuant to the authority described above

Commenting on the Interim Results, Alastair Ferguson, Non-Executive Chairman said:
“The first half of 2022 has continued to see significant change for the Company as it continued to implement the Investment Policy which targets assets within the European sustainable energy and circular economy markets.  This policy will see Scirocco allocating capital in assets which support the energy transition and offer a stable, growing source of cash flow going forward.

With the pivot to investment in assets within the sustainable energy and circular economy we made clear that we intend to recycle value delivered from Scirocco’s legacy assets to fund new investment activities.

I was pleased that the Company was able to announce the sale of its legacy interest in Ruvuma following the agreement with Wentworth Resources plc in June for up to $16 million, subsequently pre-empted by our joint venture partner APT. We are now working closely with APT to deliver a timely completion of the sale, which we expect to be by the year end. The proceeds of the divestment – both at completion and any future contingent payments – will be available for reinvestment in assets which comply with the company’s investment policy.

Following the end of the period the Company has also received initial loan funds from APT which are available for investment and general corporate purposes.

The Company is now in a strong position: it has an agreed sale for its most significant legacy asset which is expected to deliver further proceeds in the future to fund new investment and the cash calls for Ruvuma are being funded by the loan arrangement with APT. Taken together the Company represents a solid platform for further investment in its target assets.

We now look forward to growing the portfolio and th e team are working hard to deliver this.”

There is nothing again here that has not already been announced but as time passes Scirocco looks stronger in its pathway towards the acquisitions it wants to make in the European sustainable energy and circular economy markets. 

Angus Energy

Saltfleetby Flow Rates, Second Compressor and Side-Track Update

• Total sales of 1.2 million Therms achieved during September up to the end of the gas day of 29th exceeding obligations under the hedge for that month.
• Flow rate to be ramped up to 6mmscfd (million standard cubic feet per day) in October.
• 2nd compressor to be delivered in December, allowing an increase up to 12mmscfd by January 2023.
• Side Track spudding in October.

Flow Rates

Angus has announced that gas volumes produced and sold equalled 1.2 million Therms comfortably covering any deliverables under the Company’s hedging programme at the end of September.

From the 17th September onward, the Company achieved an average daily flow rate of 5.2 mmscfd and a peak flow rate of 5.7 mmscfd.  These results compare favourably to an expected combined daily flow rate of gas sales from the existing wells of 5.0 mmscfd in our Competent Persons Reports of March 2020 and October 2021. Pressure on the existing two wells A4 and B2 remains high at about 54 bars.

Second Compressor, Side Track and Booster Compressor

The second compressor has already been black-built and is presently undergoing hydrotesting.  Following mechanical completion, electrical and instrumentation work will conclude during November and we expect delivery to site in early December.  This second compressor is largely identical to the first and is expected to double the capacity of the plant.

The side track is expected to be spudded around 20th October with drilling operations expected to have a duration of no more than 35 days excluding well clean up and completion work. Simultaneous operations are permitted but we have allowed for two twelve-hour shut-in periods during this period to undertake critical works and enable certain equipment to be moved on site.

George Lucan, CEO, comments:
“Congratulations to our commissioning and operating team at Saltfleetby for a safe and successful commissioning period.  We now have built the foundation on which to expand our horizons in the energy space.”

Further good news from Angus which is really doing well as it turns up the gas at Saltfleetby.

KeyFacts Energy Industry Directory: Malcy's Blog