WTI (Jan) $75.84 -$1.56*, Brent (Jan) $80.58 -84c, Diff -$5.04 +32c*
USNG (Dec) $2.86 -4c, UKNG (Dec) 117.0p -1.75p, TTF (Dec) €44.46 -€1.27
* Indicates catch up after being closed for Thanksgiving on Thursday

Oil price

Last week oil actually did nothing much, WTI even after expiry was down 35 cents whilst Brent fell by 3c. With Thanksgiving and the Opec meeting being postponed until Thursday traders are keeping their powder dry. Talk is of Russia doing something and of course with Nigeria and Angola in the firing line.

San Leon Energy

San Leon has provided the following update on the investment of up to US$187 million into the Company by Tri Ri Asset Management Corp. (“TRAM”). The investment was announced by the Company on 10 October 2023 and comprised a loan facility, issue of warrants and subscription for new ordinary shares of €0.01 each in the Company.

As previously announced on 2 November 2023, TRAM had confirmed to San Leon that funds were in the process of being transferred to San Leon in respect of the loan facility.  TRAM also subsequently confirmed to San Leon that funds had been transferred in respect of the subscription.  To date, neither payment has been received by the Company and San Leon continues to work with TRAM to understand the reasons for the delay and to enable funds to be released. 

Further announcements will be made in due course. 

The fact that there appears to have been a technical, maybe back office misunderstanding as to where the funds have been directed means that the shares remain suspended but the two companies are ‘working together’ to sort out the delay in clearance. 

Europa Oil & Gas

Europa has announced that it has received a letter from a group of shareholders, including Paul Barrett and Erika Syba (the “Requisitioning Shareholders”), who own a combined shareholding of approximately 5.24% of the Company’s issued share capital, attempting to requisition a general meeting of the Company’s shareholders under section 303 of the Companies Act 2006 to consider resolutions to remove William Holland and Alastair Stuart from the Board of directors and to replace them with Paul Barrett and Erika Syba.

The Board of Europa notes that both Paul Barrett and Erika Syba are former directors of the Company, who resigned from their respective Board positions on 21 October 2011 and 31 August 2010 respectively, and have previously unsuccessfully attempted to requisition a general meeting, with similar resolutions, as announced on 8 January 2014.   

Whilst the Company recognises certain members have the right to convene a general meeting under the Act, this has to be balanced against due and proper process and the prudent use of shareholder resources.  Having taken legal advice, the Board has ascertained that the documentation as received is materially deficient and is therefore not a valid requisition notice under section 303 of the Act. The Company is writing to the Requisitioning Shareholders to explain the deficiencies in the Requisition.

If the Company subsequently receives a valid requisition notice from the Requisitioning Shareholders, the Board will respond to it in accordance with the Act and will share its detailed views on the proposals with shareholders. However, in summary, the Board does not believe that the proposed resolutions would be in the best interests of the Company and none of the Directors would vote in favour of such resolutions were they to be proposed.  

On 24 November 2023, shortly after submitting the Requisition, the Company was informed by a representative of the Requisitioning Shareholders that a further requisition was going to be submitted, removing the resolution relating to the removal of Alastair Stuart, in light of the support he received at the Annual General Meeting held the previous day.

Shareholders are advised to take no action at this time. Further announcements will be made in due course as and when appropriate.

Whilst I tend to avoid detailed comments until all facts have been presented to the market this does look to me like a somewhat odd time to fire off at two recently appointed executive directors who in my view have actually had a very positive effect on the company in recent months. 

For those who remember the time under the requisitioning shareholders it must take some sort of a stretch of the imagination that would make them want to revisit those times, after all that question was asked in 2014 without any successful conclusion.

It seems that the current board, whilst making its views perfectly clear, have said that should a valid requisition be received then all the appropriate actions will be taken to ensure that the Companies Act is accurately followed. As such whilst not turned away the claimants need to put a more detailed and perhaps more accurate requisition in place. 

SDX Energy

• SDX has announced its new Corporate Strategy 
• Daniel Gould, the new CEO, is leading the evolution of SDX away from a pure oil & gas business into an integrated, hybrid energy-provider in Morocco – becoming a strategic regional player in the energy transition sector.
• SDX is divesting its Egyptian assets – to focus on growing its Moroccan operations and generate initial funding to support the new strategy.
• SDX will maintain its upstream Moroccan gas assets and continue to produce natural gas, selling it to offtakers.
• SDX will operate on the principle of ‘doing more with what we have’ – with a plan to extend its existing gas transportation infrastructure to enable gas imports from Spain, via the Maghreb-Europe Gas Pipeline – expanding gas supply to Morocco’s Kenitra region.
• The Company also intends, in the medium-term, to expand into renewable power generation – leveraging its strong gas offtaker base for a commercially compelling cross-sell of gas and green electricity.
• Delivery of concrete milestones on the Company’s strategic roadmap in the coming six months will demonstrate SDX’s successful shift into the transition energy sector – creating stable cash-flow, re-rating the Company’s valuation and generating value for its shareholders.

Daniel Gould, Chief Executive Officer said:
“Over the last six months, SDX’s senior management has been working intensively to reposition the Company, setting the foundation to execute the Company’s new strategy. This strategy will help the company to deliver long-term, sustainable value-creation – unlocking new business directions and project opportunities. With the upcoming disposal of Egyptian assets and a series of exciting opportunities in Morocco, SDX has begun repositioning itself corporately and operationally and I am looking forward to steering the Company towards a prosperous future for its shareholders.”

The Company is pleased to announce that its new strategy presentation has been uploaded to its website. The strategy document and its execution will be spearheaded by newly appointed CEO Daniel Gould, who has been working to progress many of the strategic initiatives over the last six months.

So, the grand plan from SDX and it involves energy transition, selling existing Egyptian assets whilst reinvesting more in Morocc,  whilst repositioning in renewables in order to become an integrated, hybrid energy provide. Watch this space…

SDX’s new corporate strategy is to evolve the Company into a vertically-integrated hybrid gas- and renewable-energy producer in Morocco and beyond. The strategy is built on the core principle – ‘Doing more with what we have’. The company will look to leverage its 12+ year presence in Morocco, a successful track-record of delivery, a strong gas offtaker client list and a unique gas transportation infrastructure, enabling gas distribution to one of the largest free trade zones in Africa.

SDX’s vision for a diversified energy transition business is planned to be realised through a series of complementary and modular projects. These consist of the following ‘building blocks’:

(A) Expansion of SDX’s existing gas transportation infrastructure to connect to the Algeria-Spain gas pipeline (“GME”) – once realised this will enable SDX to supply gas from Europe to industrial offtakers in Morocco’s Kenitra region;
(B) Generation and cross-selling of renewable energy together with SDX’s existing gas offtake contracts; and
(C) Vertical expansion into additional power-generation initiatives, on an opportunistic basis.

These projects may be executed in parallel and independently of each other – taking advantage of the high demand and favourable pricing environment in Morocco for additional gas and green electricity. SDX plans to enter into partnerships with key stakeholders in a number of projects and expects to both expand existing and create new joint ventures.

True to its principle of ‘Doing more with what we have’, SDX fully intends to continue its upstream activities in Morocco in the immediate future and beyond, planning additional drilling activity in 2024, planned to be funded by way of a prepayment agreement with the Company’s largest offtaker.

The strategic plan is designed for the short- and medium-term horizon, covering up to four years – with milestones expected to be reached in the near future.

While the primary focus during this period remains on Morocco, the Company remains open to international expansion as opportunities may arise in the future.

The Company looks forward to sharing further information with stakeholders over a series of webinars and scheduled meetings – details of which will be communicated in due course.

Financing Strategy
The successful execution of the Company’s Corporate strategy in the short and medium-term is contingent on the effective divestment of SDX’s Egyptian assets and executing on the management’s funding strategy. The Board remains confident that it is on track for the Egyptian sale as per the Company’s earlier guidance and further announcements will be made once definitive legal documentation has been signed to effect the sale.

Coro Energy

Coro on Friday announced, in anticipation of and in preparation for the rollout  of the recently announced 50MW rooftop solar project in Vietnam, that the Company has restructured its arrangements with its partners in Vietnam, increasing its equity interest in its Vietnamese venture from 85% to 92.5%.

Further to an agreement dated 23 November 2023 Invest Gains Viet Nam Company Limited, the Company’s partner in Vietnam inclusive of Vinh Phuc Energy has agreed to sell to the Company 7.5% of its 15% equity interest in Coro Renewables VN1 Joint Stock Company which is the Vietnamese holding company for Coro’s investments in Vietnam including Coro Renewables Vietnam Company Limited which holds the operational 3MW rooftop solar project. 

The consideration for this transaction is up to approximately US$290,000 based on the current exchange rate, comprising of an immediate cash payment of US$100,000. A further £150,000 in shares of the Company priced at £0.004 per share (a 67% premium to the closing middle market price on 21 November 2023), alongside a further contingent consideration of £50,000 in shares of the Company at that same price in the event that Coro achieves 100MW of solar generation in Vietnam will also be issued to one of the vendors as part of the transaction. The initial tranche of shares will be issued when the Company has secured sufficient authority from its shareholders at the next Annual General Meeting likely to be in June 2024 or a General Meeting if earlier.

Michael Carrington, Managing Director Renewables commented:
“Following our recent Philippines partner restructuring, we are delighted to announce a similar restructuring in Vietnam. This transaction, timed as we move towards finalising our previously announced Vietnam funding arrangements with a view to initiating our rollout of the 50MW rooftop solar project, increases Coro’s equity in the Vietnamese business and aligns our partners with Coro’s shareholders.”

Not much to add to this from Friday, the restructuring in Vietnam ups their stake to 92.5% by investing a small additional amount.

KeyFacts Energy Industry Directory: Malcy's Blog