Oil price

Oil completed a reasonable week, WTI was up $1.80 and Brent $1.19 and with the former expiring tomorrow night the market is contemplating any effects of the loss of the Iranian President and Foreign Minister in a helicopter crash at the weekend.

Elsewhere economic data in China was a bit better than expected as was the Government support, more likely the Ukraine hitting Russian refineries had more effect.

Chariot

• Chariot  announce the spud of the OBA-1 well on the Dartois prospect in the Loukos Onshore licence onshore Morocco (Chariot, Operator 75%, ONHYM, 25%)
• Dartois target has Best Estimate recoverable prospective resources of 12 Bcf
• Independent prospect targeting a different trapping style to the Gaufrette prospect drilled by the RZK-1 well
• Success could potentially unlock a trend of prospects with combined Best Estimate recoverable prospective resources of 20 Bcf
• Results will be announced on completion of drilling

Duncan Wallace, Technical Director of Chariot commented:
“We are pleased to be underway with our second well in this drilling campaign, having spud the OBA-1 well within short order of completing operations at Gaufrette. We are now testing an independent prospect at Dartois, which is in a different reservoir fairway and along trend from an existing gas discovery, and we look forward to providing an update on the results in due course.”

Chariot continues to offer a Moroccan experience for shareholders who should benefit from the high natural gas prices and generous fiscal terms on offer in country. They have this low cost, shallow programme which if successful will come onstream quickly and profitably, they also have the subsequent development at Anchois which should deliver a substantial prize. All in all Chariot offers a combination of upside designed to work across the board for investors.

Union Jack Oil

Union Jack has announced its audited results for the year ended 31 December 2023.

Operational Highlights

• Flagship Wressle project continues to deliver following a workover, installation of a down hole pump and other significant site upgrades
• Wressle Competent Person’s Report upgrades Reserves by 263%
• Application submitted for the drilling of two back-to-back Wressle development wells and the Penistone Flags gas monetisation
• Positive Biscathorpe planning appeal decision
• Sale of 2.5% interest in offshore North Sea Claymore Area Royalty
• Commencement of acquisition of United States Mineral Royalties and drilling activity in Oklahoma
• Planned drilling and development during 2024 to encompass both sides of the Atlantic
• Post Balance Sheet date, the Andrews 1-17 Well, in Oklahoma, USA, has been declared a commercial discovery

Financial Highlights

• Gross profit of £3,298,844 (2022: £5,100,479)
• Net profit of £859,089 (2022: £3,606,624)
• Basic earnings per share 0.79 pence (2022: 3.20 pence)
• Oil revenues £5,065,679 (2022: £8,507,050)
• The Company continues to be debt free
• Post Balance Sheet date, a dividend of 0.25 pence per ordinary share was declared, payable on 26 July 2024

David Bramhill, Executive Chairman, commented:
“The Board’s confidence has once again been supported by the Company’s solid 2023 financial results, confirming its resilience, both financially and operationally.

“In the UK, Union Jack will remain focused on the development of its flagship project, Wressle, where the Operator and joint venture partners have ambitious near-term appraisal and development programmes planned. The Board is of the opinion that, within the Wressle development, there remains significant material upside which will support the Company with revenues for at least another decade.

“I also look forward to progress at West Newton. Encouragingly, the results from this key project to date signal a potentially highly valuable onshore project with resources comparable to those usually reported offshore. A significant onshore domestic gas resource, as indicated at West Newton, has the potential to become an important transition fuel in helping the UK achieve its 2050 Net Zero target.

“Union Jack’s initial successes in the USA, in just a few months, highlight the ease of entry and ability to execute business in that country, justifying the Board’s decision to seek further growth opportunities internationally to bolster its flagship production and appraisal assets in the United Kingdom.

“Following the Company’s USA entry, involving both the Andrews 1-17 discovery well and the financial attractions of Union Jack’s expanding Mineral Royalties portfolio, I believe that the Board’s optimism and our further expansion in the USA, executed alongside a proactive drilling campaign, will deliver material rewards in due course.

“Our appetite for additional growth opportunities has been whetted by our recent positive experience in the USA and discussions are at an advanced stage with Reach in respect of materially expanding our activities over the coming months and beyond.

“I am confident that the significant increase in drilling, appraisal and development activity now planned in the pursuit of growth from our balanced UK and USA portfolios has the potential for significant value creation for shareholders. We believe our heightened activity and the expected additional news-flow generated, combined with effective investor engagement on both sides of the Atlantic, will continue to attract the ongoing support of our existing shareholders and the attention of new investors, broadening the appeal of the Company to a wider audience.

“Overall, Union Jack is in sound financial health with a robust Balance Sheet and continues to be debt free.

“The future of Union Jack remains bright.”

Full year numbers from Union Jack with nothing we dont know already, Wressle continues to deliver and with two wells to come and production and reserves rising the backbone of the company continues to flourish. 

The company has started a programme in the USA and its first well has already come in, more is planned and the company is planning to ‘materially increase’ its presence out there. If nothing else it proves that such an exploration move can prove mighty rewarding and UJO are succeeding ‘on both sides of the Atlantic’.

With cash being thrown off and the company being debt free it has just announced 0.25p per share in the way of a dividend and a great deal to come all across the portfolio in the next year or two. The shares are far too low and the longer they carry on like this the more attractive they become. 

Serica Energy

Serica has announced that it has received final approval from the NSTA to develop the 100% owned and operated Belinda field. The field will be tied back to the Triton FPSO following the drilling of the development well which is scheduled to take place in the first half of 2025. The Belinda well is the 5th well in Serica’s Triton area drilling campaign, which commenced in April this year using the COSLInnovator drilling rig. All these wells are designed to enhance production via the Triton FPSO.

Proven and probable reserves in the Belinda field are estimated at about 5 million barrels of oil equivalent (80% oil). Production is scheduled to commence in 1Q2026 following the tie-back work to the Triton FPSO.

David Latin, Chairman and Interim CEO of Serica commented:
“We are delighted to have received approval to develop Belinda. This will build on our strong track record of delivering growth and adding value through investment in our assets. We have further potential projects in our portfolio which we continue to assess, including the possible re-development of the Kyle field, which could, like Belinda, be another low emissions tie-back candidate to the Triton FPSO. We look to the UK government to implement tax and licensing arrangements that support investments like Belinda, thereby creating UK jobs, earnings and tax receipts instead of increasing reliance on energy imports.”

Another smart move from Serica, a useful add to the production at extremely low cost and handy closeness to the Triton FPSO which makes the timescale even better. The low emissions tick another box and of course this is a sensible way of carrying on and also putting the Government on notice…

Nostra Terra Oil & Gas

Nostra Terra has announced changes to its board of directors with effect from today.

Matt Lofgran, Nostra Terra’s long-serving CEO, has stepped down from the role to concentrate on other interests. Matt has led the Company since 2009 and he will continue to provide support to the Company as an advisor for a 6 month transition period. 

Paul Welch, currently a non-executive director of the Company, will move to the role of CEO with immediate effect. Paul has extensive experience of working in the Texas oil and gas industry. Overall, he has more than 30 years of industry experience, having worked for Shell Oil Company for 15 years and for several large independents, including Hunt Oil Company and Pioneer Natural Resources. Paul was CEO of AIM-listed explorer Chariot Oil and Gas (2009-2012) and subsequently of Sea Dragon Energy and SDX Energy, the latter until 2019. He was appointed as CEO of Cosimo Holding Ltd in 2019. Paul was also appointed Chairman of Main Market ACP Energy PLC in 2022. He graduated from the Colorado School of Mines with bachelor’s and master’s degrees in petroleum engineering. He also holds an MBA in Finance from Southern Methodist University (SMU) in Dallas, Texas. 

Steve Staley, Nostra Terra’s Chairman, said: 
“On behalf of the Board I would like to thank Matt for his long service to Nostra Terra and am glad that he will continue to provide support to the Company as we move forward.

I would also like to welcome Paul to the role of CEO and look forward to working with him in that new capacity as we embark on the next phase of growth.”

I mention this story only briefly as Matt Lofgran has been a dedicated follower of the sector for many years and I wish him well.

Also readers will remember Paul Welch who has been away from our patch for a while since leaving SDX in 2019, it will be interesting to see what becomes of NTOG under his leadership and indeed of Steve Staley..

KeyFacts Energy Industry Directory: Malcy's Blog