WTI (Apr) $71.33 -$3.47, Brent (Apr) $77.45 -$3.32, Diff -$6.12 +15c
USNG (Apr) $2.57 -3c, UKNG (Apr) 110.52p -14.56p, TTF (Apr) €43.90 -€3.53

Oil price

No hiding place for oil as markets continue the melt down after various economic data this week and last, PPI fell today giving fears of a recession. Opec gave a more positive stance in the oil markets but it was all lost in the panic about the banks and as Credit Suisse yet again proved that the whole lot of them are totally bankers.

As today unfolds oil is down another $4…

Sound Energy

Sound has provided a project financing update in relation to the Company’s Tendrara Production Concession, onshore Morocco.

Phase 2 Development – Lead Finance Arranger Mandate Update
The Company announced on 23 June 2022 that it had entered into an Arrangement and Mandate letter with Attijariwafa bank, a Moroccan multinational bank and one of the leading banks in Morocco, under which the Company mandated the Arranger in relation to the arrangement of project debt financing for the Phase 2 development of Sound Energy’s Tendrara Production Concession.

Pursuant to the Agreement, the Arranger was mandated, and provided with exclusivity by the Company for a period of eight months, to arrange a long-term project senior debt facility with a term of no more than 12 years of up to 2.250 billion Moroccan dirhams (approximately US$215 million using current exchange rates) for the partial financing of the currently estimated approximately US$330 million total Phase 2 development cost (including development wells post-first gas) of the Tendrara Production Concession (the “Financing”).

In December 2022, the Company announced that the parties had agreed to amend the Mandate to seek to negotiate binding terms for the Financing by 15 March 2023 whilst also agreeing to an extended period of exclusivity provided to the Arranger under the Mandate to 1 June 2023 in order to arrange the Financing.

Significant progress is being made with the Arranger, who has recently completed legal and technical due diligence in respect of the proposed Financing. Whilst additional pre-Financing aspects such as Phase 2 Engineering contracts remain subject to award, finalisation and review, the parties have now moved on to more detailed financial structuring of the proposed Financing, particularly in respect of taxation, and consequently the parties have entered into a further amendment to the Mandate in order to extend the date by which the parties will seek to negotiate binding terms for the proposed Financing to 28 April 2023.

Commenting, Graham Lyon (Executive Chairman) said:
“The Phase 2 senior debt process is continuing to move forward favourably. It is a significant and complex undertaking for all parties involved, and I am pleased that the level of engagement that we have with Attijariwafa bank and our respective legal, tax and technical advisors is very collaborative and positive. I am sure all stakeholders support the construction of a robust, well structured financing arrangement.  We look forward to providing further updates as the process moves forward.”

This seems to be further good progress from Sound who are clearing all the regulatory hurdles before final approval of the senior debt. Some inevitable parts of the diligence have taken time and I understand all is comfortably in hand.

With a modest delay for Ramadan I expect this funding to conclude pretty swiftly after which engineering and technical  developments and other non financial matters will be ready to go ahead before the FID announcement.

It has not gone unnoticed here that Sound has recently had some challenges with the local tax authority, given that curious philosophy it is understandable that banks are paying a close eye on restructuring. 

In the meantime I am confident that Sound are well on the way to completing the new Tendrara project. With that under their belt I can see the stability and growth in the share price as investors appreciate a real turnaround situation which should see the shares rally back towards 3p. 

Reabold Resources

The Company notes the speculation in a recent website report and confirms that it has received an unsolicited approach from Kamran Sattar on behalf of Portillion SPV O&G (which, whilst no such company of that name is incorporated in the United Kingdom, the Company believes is an affiliate of Portillion Capital Limited) (the “Possible Offeror”), which may or may not lead to an offer being made for the entire issued and to be issued ordinary share capital of the Company. This highly preliminary approach was made yesterday at 4.46 p.m. (London time) via a succinct email, with no details included, save for it referring to a possible offer price at a 10% premium to yesterday’s closing price, implying a value of 0.2035 pence per ordinary share of 0.1 pence each (“Ordinary Share”), based on the middle market closing price of an Ordinary Share (the “Possible Offer Price”).

Even in the absence of further information, the Board believes that the Possible Offer Price significantly undervalues Reabold’s investment portfolio, the Company as a whole, and its future prospects. Shareholders are advised to take no action in respect of the possible offer at this stage.

In accordance with Rule 2.6(a) of the Code, the Possible Offeror is now required, by not later than 5.00 p.m. (London time) on 12 April 2023, being the 28th day following the date of this announcement, either to announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

As a consequence of this announcement, an ‘Offer Period’ has now commenced in respect of the Company in accordance with the rules of the Code. The attention of the Company’s shareholders is drawn to the disclosure requirements of Rule 8 of the Code, which are summarised below.

A further announcement will be made in due course, as and when appropriate.

This announcement has not been made with the consent of the Possible Offeror.

Here we go again…..Reabold is in the firing line as one of the group who previously had a pop at the company ‘the possible offeror’ has come back with a ‘possible offer’ at a ‘possible price’ of 0.2035p. So that’s all clear then. Except that the Panel have not ruled that it is a ‘possible offer’ they have started an offer period, not a possible offer. 

So, Reabold management who batted off the last approach have to go through it all again, its not as if anything has changed much but they are now in for a period of expensive advisors and a lot of time spent on the defence. 

We now may have to wait until Easter to find out what the bid might be, a cash offer or maybe paper from an SPV and then of course what will the defence document say? Interesting times….

i3 Energy

i3 Energy has announced the following update.

Monthly Dividend
i3 announces its monthly dividend totalling £2.040 million and confirms the following:

• Dividend 0.171 pence/share
• Ex-Dividend Date: 23 Mar 2023
• Record Date: 24 Mar 2023
• Payment date: 14 Apr 2023

Payment to shareholders holding their shares on the TSX will be made in Canadian dollars using the exchange rate from the Bank of England at close on the Dividend announcement date, 15 Mar 2023.

Europa Oil & Gas

The Board of Europa has announced that Mr Simon Oddie, Chief Executive Officer since August 2020 and Executive Director since November 2019, has decided to retire as Chief Executive Officer. Mr Oddie will remain on the Board as a Non-Executive Director. Mr William Holland moves from the role of Chief Financial Officer to Chief Executive Officer with immediate effect.

Brian O’Cathain, Chairman of Europa, commented: 
“On behalf of the Board, I would like to thank Simon for his service to the Company as Chief Executive Officer. Simon was appointed to the Board initially as Non-Executive Chairman in January 2018 before becoming Interim Chief Executive Officer and Executive Chairman in November 2019 and then Chief Executive Officer in August 2020. I am pleased that Simon will remain as a Non-Executive Director to ensure a smooth handover and enable business continuity going forward. I would also like to welcome Will Holland as the new Chief Executive Officer. Will has been Chief Finance Officer and on the Board since April 2022 and has already been able to make a significant contribution to Europa. Will has the skills required to continue to grow and expand the business as we look to create further value for our shareholders.”

Simon Oddie commented:
“I believe this is the right time to pass the baton to Will following a very busy period of real change for Europa. As CEO I have overseen a re-balancing of Europa’s portfolio, notably with first oil and ongoing production at the Wressle field, the addition of a third leg to our business by securing a late-stage appraisal project at Serenity and further progress on the exploration position in the proven gas play of the Slyne Basin offshore Ireland. I look forward to continuing to help grow the business in a non-executive capacity.” 

Will Holland commented:
“I am delighted to be taking on the role of CEO at this exciting time and look forward to realising the further potential of our assets, whilst both accelerating the growth and maintaining the balance within the business.”

Like it or not we live in interesting times, Simon Oddie who has done almost all the board jobs at EOG cedes the CEO position to Will Holland who has experience in the sector. 

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