WTI (Aug) $80.13 -$2.69, Brent (Sep) $82.63 -$2.40, Diff -$2.50 +21
USNG (Aug) $2.13 u/c, UKNG (Aug) 73.89p -1.1p, TTF (Aug) €31.335 -0.97

Oil price

On Friday morning the RNS system at the LSE went down along with a number of other clients of CrowdStrike and so when results did arrive I wrote the blog in the afternoon, at that time oil was flat and it was the last minute fall that sent it into negative territory for the week.

The Secretary of State suggested that a ceasefire in the Gaza was imminent and with airports, hospitals and many crucial organisations closed down due to CrowdStrike some markets also suffered. 

The news that Sleepy Joe is stepping back from the Presidential race didn’t come as a surprise but looking at Kamala Harriss’s views on oil she is a great deal more hawkish than even he is. 

Chariot

Chariot has announced that further to the Company’s announcement released at 5:00 p.m. on 19 July 2024, the accelerated bookbuild has closed and the Company has conditionally raised net proceeds of US$6.4 million (£5 million), comprising gross proceeds of US$7 million (£5.4 million) less expenses, through the successful Placing of, and Subscription for 83,353,179 New Ordinary Shares, in each case at the Issue Price of 6.5 pence per Ordinary Share.

In addition to the Placing and Subscription, and as set out in the Launch Announcement, the Company proposes to raise up to a further US$2 million (£1.5 million) by the issue of New Ordinary Shares pursuant to an Open Offer to Qualifying Shareholders at the Issue Price on the basis of 1 Open Offer Share for every 46 Existing Ordinary Shares held on the Record Date. Qualifying Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility. Details of the Open Offer and the action to be taken by Qualifying Shareholders to subscribe for Ordinary Shares under the Open Offer will be set out in the Circular, which is expected to be sent to Shareholders on 24 July 2024.

The Placing Shares and Subscription Shares represent in aggregate 7.8 per cent. of the Company’s Existing Ordinary Shares. The Issue Price of 6.5 pence per New Ordinary Share represents a discount of approximately 13.3% to the closing mid-market price of 7.5 pence per Ordinary Share on 18 July 2024, being the last trading day immediately preceding the date of the Launch Announcement.

The net proceeds of the Fundraise will be used as follows in order to:

• Strengthen the balance sheet to continue to progress and deliver value from Chariot’s portfolio of projects
• Secure a material new venture opportunity with multi-billion barrel potential
• Progress onshore gas commercialisation plans in Morocco to build a gas to industry supply

Commenting on the Fundraising, Adonis Pouroulis, CEO of Chariot, said:
“We are very pleased to report the successful completion of our significantly oversubscribed Placing and Subscription, subject to shareholder approval at the General Meeting. The funds raised will enable us to progress with key workstreams and a priority new venture as we concurrently move towards the drilling of the Anchois-East well in mid-August with partners Energean and ONHYM.

We would like to thank our new and existing shareholders for supporting this raise and welcome the participation of our retail investors through the Open Offer. We have material catalysts ahead for our business as we look to unlock the value of our existing assets whilst building out our longer-term portfolio. We look forward to providing further updates across all our activities throughout the coming months.”

Now that this raise is almost complete Chariot finds itself in a very interesting place with several key areas looking to provide exciting growth in the short, medium and long term. Apart from the inevitable strengthening the balance sheet stuff I can identify several ways forward from here.

The company has identified a new ‘material’ venture opportunity which has ‘multi-billion barrel potential’ and could be entered into before long, and could be a game-changer as well as fitting in neatly with the current portfolio. Also on the good news front is the situation at the Transitional Power division where the financing is currently underway and progress is being made. Once this is done it will provide a look-through valuation which should be great news for Chariot and should give that valuation where before there was none. 

Elsewhere of course Anchois is progressing and with Energean carrying them they are preparing to drill the East well in Mid August and that partner is I’m told incredibly keen to move on apace in the offshore development. Onshore of course they are testing the recent successful find and are along with partners Vivo keen to progress onshore gas commercialisation plans in Morocco to build a gas to industry supply business. 

So, Chariot has found a very supportive shareholder base who have ensured that this raise has been oversubscribed and leaves the company very well placed to fund and develop all these exciting, meaningful and potentially company making assets. 

Europa Oil & Gas

Europa has announced that an additional 716 BCF of unrisked Prospective Resources have been identified on the EG-08 block bringing the total gross unrisked Mean Prospective Resources on the block to 2.116 TCFe.

Following the acquisition of a 42.9% equity interest in Antler Global Limited, announced on 21 December 2023, Antler and our technical team has further evaluated the seismic data across the originally identified three prospects and completed a study to identify additional prospectivity on the EG-08 block. Antler holds a 80% interest in the EG-08 production sharing contract, located offshore Equatorial Guinea, with Guinea Ecuatorialde Petroleos (“GEPetrol”), the National oil company, holding the remaining 20%. The further technical evaluation of the seismic data has resulted in a Mean Prospective Resource of 2.116 TCF (internal estimate) for the block as detailed in the following table and summarised below:

The net attributable percentage to Europa is 34%[1]

• 798 BCFe Pmean identified in the primary prospect (“Barracuda”) in strata equivalent to the producing Alen Field (the “Alen Strata”) in Block O located 9 km from Barracuda
• 599 BCFe Pmean identified in two low risk tie-in prospects (Cardinal & Arrowhead) in the Alen Strata
• 344 BCFe Pmean identified in four additional higher risk prospects in the Alen Strata
• 375 BCFe Pmean identified in two additional leads
• Revised economic analysis indicates that the minimum gross volume of a commercial discovery could be in the order of 90 BCFe (15.2 MMBOE)

This stage of technical work on the block is complete and the data is now being loaded into a data room, which will be open in the coming weeks. Upstream companies will be invited to sign a confidentiality agreement and then be given access to the data room, however ahead of starting this process there have already been a number of suitable companies who have expressed interest in farming into the block. Antler will be seeking a CGOS  partner to accelerate drilling an exploration well (the “Farmin Well”) which will target one horizon in the Barracuda prospect, with an estimated GCOS of 70%.  Future wells will target the significant additional upside in Barracuda and throughout the license.

The technical work that has just completed included a petrophysical evaluation of the O-2 well drilled in EG-08 down-dip on the Barracuda prospect by Noble Energy in 2007. This evaluation established that the O-2 well encountered gas condensate in the upper section of the reservoir. The Farmin Well will target the same reservoir section up-dip from the O-2 well.

Initial discussions have also been initiated with rig providers with a view to securing a jack-up rig to drill the Farmin Well in H2 2025. With numerous rigs operating in the area, there appears to be good rig availability over the period when the well is expected to be drilled.

Map showing the prospectivity in block EG-08 and the Alen field to the south in Block O

Will Holland, Chief Executive Officer of Europa, said:
“I am very pleased with the progress that Antler and our technical team has made on the EG-08 licence. The technical work has not only increased the prospectivity of the block by 50% to over 2TCFe, but also further de-risked the Barracuda prospect by identifying gas in the O-2 well, which we will be drilling up-dip from on the same structure.

I am confident that we will be able to secure a suitable partner on EG-08 to carry us through the drilling of an exploration well on the Barracuda prospect. Whilst the setting up of the data room has taken slightly longer than expected, I am delighted with the additional information that can now be offered to potential farminees. Given the proximity to existing infrastructure, any discovery can be brought online quickly, resulting in impressive economic returns. In addition, the block has plenty of additional prospectivity, all of which will be attractive to major upstream companies.

I look forward to updating the market further as we continue to progress this highly prospective asset located in a region which is well supplied by service companies and supported by an efficient and sophisticated local regulator and ministry.”

This further work with Antler has de-risked Barracuda as well as substantially increasing the prospectivity of EG-O8, with the data room being filled it won’t be long before Europa find a partner and with a 70% CGOS the well should justify the management’s confidence in it. Should that be the case then EOG are onto a good thing here and well deserved.

KeyFacts Energy Industry Directory: Malcy's Blog