Oil price

WTI (Dec) $69.49 +23c, Brent (Jan) $73.10 -6c, Diff -$3.61 =6c.
USNG (Dec) $2.67 -1c, UKNG (Dec) 101.56 +2.86p, TTF (Dec) €39.595 -€0.46

Oil has rallied today as Opec+ confirm that it will delay by at least a month the 180/- b/d scheduled for release after the 1 December meeting.

With the US election tomorrow and a Fed decision on Thursday we are in for a monumental week.

Savannah Energy

Further to its announcement on 30 September 2024, the Company advises that its ordinary shares remain suspended from trading on AIM pending publication of an AIM Admission Document setting out, inter alia, details of a proposed alternative transaction, should it be concluded, or confirmation is provided that a proposed alternative transaction is not proceeding.

A further update on progress, and associated matters, is expected to be made by mid to late December 2024.

Just the necessary advisory from Savannah with regard to the share price suspension. 

Touchstone Exploration

Touchstone has announced initial production from the Cascadura C well pad. 

Touchstone has safely commissioned the flowline connecting our Cascadura C surface location to the Cascadura natural gas processing plant, which ties in our Cascadura-2ST1 and Cascadura-3ST1 wells. Additionally, a new natural gas separator has been installed and brought online, expanding the plant’s gross natural gas processing capacity to approximately 140 million cubic feet per day.

We are currently conducting production testing operations on the Cascadura-2ST1 well and expect to advance to the Cascadura-3ST1 well thereafter. Isochronal tests will be performed on both wells to evaluate their production capacity and refine future production models. These tests involve flowing each well at various choke sizes to measure flow rates and pressures, followed by pressure buildup periods to assess reservoir performance. During this testing phase, all produced gas will be processed and sold. We expect to complete testing operations within the next two weeks, after which both the Cascadura-2ST1 and Cascadura-3ST1 wells will enter continuous production. Touchstone will provide additional flow rate details once testing concludes.

Paul R. Baay, President and Chief Executive Officer, commented:
“We are excited to announce the commencement of production from the Cascadura C pad, marking a significant milestone as tested volumes from these wells begin generating revenue. Following these well tests, our focus will be on determining optimal production levels to maximize recovery from this portion of the structure. Positioned at the boundary of our reserves booking, these wells offer an exciting opportunity to expand our reserves potential across the field as we continue to evaluate the Cascadura structure to the east.

With the recent flowline installation and facility expansions, we have established strategic infrastructure throughout the Cascadura field, creating efficiencies that are expected to greatly reduce future cycle times from drilling to production.“

This is exceptionally good news for Touchstone and its shareholders who have waited patiently for this next significant move at Cascadura which has now been connected and is producing. TXP will do production tests on Cascadura-2ST1 and Cascadura-3ST1 to identify potential capacity and refine production and reservoir models.

Additionally, a new natural gas separator has been installed and brought online, expanding the plant’s gross natural gas processing capacity to approximately 140 million cubic feet per day which will mean considerable revenue and as CEO Paul Baay says, ‘a significant milestone’.

A recent visit to Trinidad enabled a group of analysts a chance to see not only the upgraded facilities but the uniquely strong team of people on site making things happen. Expect a few updates as the facility, including the new gas separator which will deliver the increased production after testing in the next few days. 

I expect that as the Touchstone management carefully deliver Cascadura to its peak performance the share price value will start to go to that which I had previously predicted at the beginning of this year. As further news comes to the market I plan to add to the notes I wrote about on my recent visit, this is a very positive story indeed. 

Challenger Energy Group

Challenger has provided the following update for its AREA OFF-3 block, offshore Uruguay.

Highlights

• The Company has entered into a licence agreement to secure access to necessary historic 3D seismic data over AREA OFF-3, for the purposes of reprocessing.
• The program of reprocessing work is underway, and the Company expects preliminary outputs prior to year end, with the work expected to be fully completed in Q2, 2025. 3D seismic reprocessing work will be supplemented with a range of other seismic workflows including Amplitude Variation with Offset, which was utilised successfully on AREA OFF-1.
• The objective of this work is to mature the available data set for AREA OFF-3 in an accelerated time frame, sufficient to enable a robust prospect inventory to be mapped and for potential drill locations to be identified, in support of a formal farmout process which the Company is targeting to commence in mid-2025.
• The Company and the vendor of the seismic data have agreed an uplift licencing model, whereby agreed licence fees will become payable only if/when a farmout for AREA OFF-3 is concluded. The total of other costs associated with the AREA OFF-3 work program in 2024 and 2025 (reprocessing, interpretation, mapping and complementary technical work) is expected to be in the range of US$1 million -$1.5 million.

Eytan Uliel, Chief Executive Officer of Challenger Energy, said:
“Over the last few months, while focussing on finalizing the farmout for our AREA OFF-1 licence in Uruguay, we also have been preparing the initial AREA OFF-3 work program, centred on reprocessing of existing 3D seismic in support of defining the block’s prospect and lead inventory and possible well locations, which we believe will be the key inputs into the farmout process we are aiming to begin in mid-2025. Following the close of the AREA OFF-1 farmout, we have now moved to immediately accelerate work on AREA OFF-3, given our view that the block has significant exploration upside and scope and, like AREA OFF-1, presents an exciting near-term value-creation opportunity. We will keep shareholders informed of our progress”.

Now that the AREA OFF-1 is up and running, CEG report that reprocessing historic 3D seismic on AREA OFF-3  is already underway and will have given appropriate results ahead of launching a farm-out for the block mid-2025 and the vendor only get their fees when a farmout is agreed.

Last week, after the farmout was announced CEG also had a new presentation as well as directors share interests and the resignation of the CFO. Things are moving fast at Challenger and with movement now on AREA OFF-3 there should be significant upwards share-price movement. 

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog