WTI (Oct) $75.91 +$1.39, Brent (Oct) $79.94 +$1.29, Diff -$4.03 -10c
USNG (Oct) $2.14 +10c, UKNG (Oct)* 94.65p +1.31p, TTF (Oct) €38.89 +€0.01
*Denotes September contract expiry

Oil price

Oil has suddenly fallen today from a standing start and with very little change of influences, the same stories exist, Middle East, Libya and inventory levels on one side but growing concerns about economic drag from the US and China and Opec quota levels come the 4th quarter on the other. At the moment the latter team wins…

Longboat Energy

Longboat Energy, an E&P company focused on Southeast Asia, will release its interim financial results for the period to 30 June 2024 on Thursday, 19 September 2024.

Following the release of its interim results, Nick Ingrassia (CEO) and James Menzies (Executive Chairman) will host a live presentation for investors via Investor Meet Company on 19 September 2024 at 11:00 AM BST.

Investors can sign up to the presentation via: https://www.investormeetcompany.com/longboat-energy-plc/register-investor. Investors who follow Longboat on the Investor Meet Company platform will automatically be invited.

Longboat’s near-term focus remains on its transformational Malaysian activities:

• The farm-out of Block 2A is well underway and the Company remains confident of executing a transaction during Q4 2024; and
• Negotiations on a production sharing contract, located in shallow water offshore Sarawak, Malaysia, containing a portfolio of material, undeveloped gas fields are nearing completion. The negotiations have involved multiple parties, including Federal and State entities, and are anticipated to be announced in the coming weeks.

In order to reflect the recent change in strategic focus, the board has decided to rename and rebrand the Company as Seascape Energy Asia plc and change its ticker symbol on the London Stock Exchange to ‘SEA’. The changes will be effected in the coming weeks and a further announcement will be made in due course.

Nick Ingrassia, CEO of Longboat, commented:
“The change in name to Seascape Energy Asia plc represents the transformation of Longboat into a Southeast Asian-focused E&P company. We are excited about our growing portfolio which we expect to deliver several value inflection points in the near-term. We look forward to working with all of our stakeholders to create value as we seek to grow the business under our new brand.”

It is rare that a company changing its name is done for straight forward reasons such as a change in geography in which it operates which is why it usually comes with some scepticism, made worse by the added costs of such a move of course. In this case I think that what James Menzies is trying to do fully justifies the new Monica, ie disassociation from Norway.

Elsewhere the most important thing for the company is the farm-out of Block 2A and a deal by the end of the year will be exceptionally good for shareholders. Add to that the possibility of a PSC offshore Sarawak which is under discussion at the moment with a number of Federal and State entities and looks to be imminent. This is good given the number of signatures required and also adds to even more potential for Longboat who are set to gain from an immediate portfolio of assets including multiple gas fields. 

From a low of around 6p the shares had a good rally when the long SE Asia short Norway policy was initially announced and was fully justified but after that run the shares are off a little over 20%. But this update reminds us that all is still on course as promised. What seems to have been forgotten is the huge potential in the new SE Asia region of operation for the company and the expertise of James Menzies in that area which is making the shares look outstandingly cheap.

Eco (Atlantic) Oil & Gas

Eco has announced its unaudited results for the three-month period ended 30 June 2024.

Financials

• The Company had cash and cash equivalents of US$1.185 million and no debt as at 30 June 2024.
• The Company had total assets of US$29.65 million, total liabilities of US$0.791 million and total equity of US$28.859 million as at 30 June 2024.

Post-period end

• Following the completion of a farm down of a 13.75% Participating Interest in Block 3B/4B offshore the Republic of South Africa, as announced on 28 August 2024, Eco is due to receive now US$8.3million from the JV partners as part of the milestone payments agreed in the 3B/4B Transaction. This is expected to give Eco a cash and cash equivalents position of over US$9 million on receipt, expected in early September 2024.

OPERATIONS:

South Africa

Block 1 (post-period end)

• On June 5, 2024, Eco announced the Farm-In into Block 1 Offshore South Africa Orange Basin. Through Azinam South Africa, the Company will farm-in and acquire a 75% working interest (“WI”) from Tosaco Energy (Proprietary) Limited (“Tosaco”) and will become operator of a new exploration right.

Block 3B/4B

• In July 2024, Eco signed an agreement to sell a 1% interest in Block 3B/4B in exchange for cancellation of all of Africa Oil’s (“AOI”) shares and warrants in Eco (worth approximately C$ 11.5m at the time of agreement). Upon Completion of the transaction, Eco will hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa, reducing from the current 6.25%. Closing is expected to occur in Q4 2024.

Post-period end

• On August 28, 2024, the Company announced the completion of a farm down of a 13.75% Participating Interest in Block 3B/4B offshore the Republic of South Africa and Transfer of Operatorship of the Block after receipt of the requisite regulatory approvals (Section 11) from the government of South Africa.  Eco now holds a 6.25% interest in Block 3B/4B. 
• Further to the Company’s announcement on 6 March 2024 detailing the Farmout Agreement (“FOA”), Azinam Limited, Eco’s wholly owned subsidiary, has farmed down a 13.75% Participating Interest in Block 3B/4B, offshore the Republic of South Africa as part of an aggregate 57% farm down transaction along with its Joint Venture Partners Africa Oil SA Corp. and Ricocure (Proprietary) Limited to TotalEnergies EP South Africa S.A.S., who will become Operator and QatarEnergy International E&P LLC.
• Following Completion, Eco is now due to receive US$8.3million in total as part of the 3B/4B Transaction, including Completion linked milestone payments of US$4m from Africa Oil and US$1.56m from Ricocure, as referred to in the Company’s announcement of 6 March 2024. Further payments, amounting to $11.5m will be payable to Eco from TotalEnergies, QatarEnergy and Africa Oil on spudding of the first exploration well.

Block 2B

• In June 2024, the Company relinquished its 50% WI Operated offshore Block 2B where it drilled its 2022 Gazania-1 well offsetting the AJ-1 oil discovery. The Company has completed all necessary documentation, and environmental audits, and has informed the Petroleum Agency of South Africa (“PASA”), the regulator for the Government of South Africa.

Namibia

• A multi-block farm out process remains underway for all or part of Eco’s four offshore Petroleum Exploration Licences (“PEL”): 97, 98, 99, and 100.  Eco holds Operatorship and an 85% Working Interest in each PEL representing a combined area of 28,593 km2 in the Walvis Basin. 
• Eco added ~1,383km 2D data licensed on PEL100 (Tamar block) to its database, which is being technically evaluated and interpreted by the team to define additional seismic acquisition areas within the Block, along with new leads and prospects.

Guyana

• An active farmout process continues for the offshore Orinduik Block. Eco is encouraged to see the growing activity surrounding its acreage, notably ExxonMobil’s plans for a seventh development at Hammerhead in the Stabroek Block.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented: 
“We continued to make significant progress across our asset base during the period. On Block 3B/4B, we announced the completion of Eco’s farm-out agreement with TotalEnergies and QatarEnergy, which will see Eco receiving US$8.3 million now and additional US$11.5m in the future while maintaining a material fully carried interest in the Block.

“We also announced Eco’s transaction with AOI, where the Company sold a 1% interest in Block 3B/4B in exchange for cancellation of all of Africa Oil’s shares and warrants in Eco amount to 15% of the company. Eco continues to possess significant upside potential and exposure to assets in the Orange Basin offshore South Africa a hugely exciting region for hydrocarbon prospectivity.

“Our active farm-out processes in both Namibia and Guyana have seen Eco actively engaged with a number of potential high-calibre partners as we work to monetise these licences as fast as is practically possible for the benefit of all involved. We look forward to providing updates on material developments to all our stakeholders over the coming months.”

I presume that it was impossible to put out yesterday’s completion announcement at the same time as today’s figures but the complexities of the NOMAD world will never be known to me…

So, Nothing to add here, save that it is very good news for Eco that with all necessary approvals the deal has completed/ results as expected. (Delete as appropriate) 

Eco is sitting on  huge potential in South Africa alone but when you add in Namibia and Guyana you get to a number that is somewhat hard to believe given the massive upside even after discounting substantially. Eco must surely have it in themselves to be a ten-bagger so big is the upside in its portfolio.

Hunting

Hunting yesterday announced that it has secured significant Organic Oil Recovery (“OOR”) contracts to support major North Sea operators. The contracts are worth up to $60 million over a five-year period.

The OOR process is a proven enhanced oil recovery (“EOR”) technology which optimises reservoir performance, improves recovery rates and reduces in-situ hydrogen sulphide levels for operators. The technology is environmentally friendly and requires no additional capital expenditure by the operator as well as having a lower carbon footprint than other EOR methods.

Hunting will deliver the OOR specialised water flood technology to increase recoverable reserves and extend the operational life of multiple assets across the operators’ North Sea portfolios. The application of OOR also plays a significant role in encouraging more sustainable energy practises, by extending the lives of brown-field producing assets.

OOR was one of the key strategic growth pillars of the Hunting 2030 Strategy, which was delivered to investors at the Company’s Capital Markets Day in September 2023. OOR emphasises Hunting’s commitment to offering a diverse array of products and services, including cutting-edge technologies, to drive revenue and profit growth as the energy transition continues to progress.

Commenting on the major awards, Jim Johnson, Hunting’s Chief Executive, said:
“Today’s announcement is a significant step in the expansion of the OOR technology and shows confidence in Hunting’s ability to deliver new technologies to the energy industry. These major OOR orders supports our Hunting 2030 strategic initiatives to deliver revenue and profit growth, with strong margins and cash flows, through new sectors and product lines.”

This was out yesterday but the results rather than the OOR technology for North Sea operators RNS took pride of place. This is really good news, for Hunting obviously but for operators as well, anything that extends asset life, optimises reservoir performance and reduces in-situ hydrogen sulphide levels has got to be worth having, almost a win-win situation. 

But with the British Government intent on closing down the North Sea via punitive fiscal policy has it come too late?

KeyFacts Energy Industry Directory: Malcy's Blog