WTI (Jan) $68.77 -17c, Brent (Jan) $72.81 -20c, Diff -$4.04 -3c
USNG (Jan)* $3.47 +6c, UKNG (Dec) 117.33p -1.17p, TTF (Dec) €46.515 -€0.75

Oil price

Oil drifted after news of the ceasefire in the Middle East finally got out, after all Iran is still the last man standing. 

Eco (Atlantic) Oil & Gas

Eco has announced its unaudited results for the three and six month periods ended 30 September 2024.

Highlights:

Financials

• The Company had cash and cash equivalents of US$7.95 million and no debt as at 30 September 2024.
• The Company had total assets of US$28.74 million, total liabilities of US$1.44 million and total equity of US$27.3 million as at 30 September 2024.
• Following completion of the farm down of Block 3B/4B offshore the Republic of South Africa, as announced on 28 August 2024, Eco has received the first payment of US$8.3 million from the JV partners as part of the milestone payments agreed in the 3B/4B Transaction. An additional $11.5 million is expected to be received by the Company during 2025 when the next milestones are reached.

Operations:

South Africa

Block 1

• On 5 June 2024, Eco announced the acquisition of Block 1 Offshore South Africa Orange Basin. Through its 100% owned subsidiary Azinam South Africa Limited (“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 (the “Block 1 Acquisition”). 

Block 3B/4B

• On 29 July 2024, the Company announced the signing of an agreement to sell a 1% interest in Block 3B/4B South Africa in exchange for cancellation of all of Africa Oil’s shares and warrants in Eco (worth C$11.5 million). Upon Completion, Eco, which currently holds a 6.25% interest in Block 3B/4B, will hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa. Accordingly, the number of shares of the company will be reduced from 370,173,680 to only 315,231,936 shares.
• On 28 August 2024, the Company announced the completion of a farm down of the previously announced 13.75% Participating Interest in Block 3B/4B offshore the Republic of South Africa and the Transfer of Operatorship of the Block after receipt of the requisite regulatory approvals (Section 11) from the government of South Africa. 

Block 2B

• The Company is relinquishing its 50% WI Operated offshore Block 2B in South Africa 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”), being the regulator for the Government of South Africa. Eco’s board considers Block 2B a non-core asset in the portfolio given the Company’s interests in Namibia, Block 3B/4B and Block 1 in SA and the 2 blocks in Guyana. Following acceptance by the PASA of this relinquishment, the Company will have no further liability in respect of Block 2B.

Namibia

• The previously announced multi-block farm out process for all or part of Eco’s four offshore Petroleum Exploration Licences (“PEL”): 97, 98, 99, and 100 has continued.  Eco holds Operatorship and an 85% WI in each PEL representing a combined area of 28,593 km2 in the Walvis Basin.
• Eco Atlantic is witnessing considerable interest in its licenses in Namibia and is currently assessing options to progress its exploration work programmes including a potential farm-out. Eco looks forward to providing more updates on the progress of this process in due course.

Guyana

• Eco has continued to engage in discussions with industry players regarding the farm out initiative for the offshore Orinduik Block. Guyana continues to be an exciting jurisdiction for hydrocarbon exploration and production and Eco is pleased to have exposure to this ever-growing frontier.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented: 
“We are pleased with the continued operational and financial progress achieved in recent months.  Following completion of the farm-down of Block 3B/4B, we received a payment of US$8.3 million from our JV partners, with the potential for Eco to receive a further US$11.5 million in 2025, subject to certain milestones being achieved on Block 3B/4B. This demonstrated our commitment to unlocking value from our South African portfolio while maintaining exposure to the highly prospective Orange Basin.

“Eco also increased its exposure to South Africa’s Orange Basin growing offshore energy acreage through the acquisition of a 75% working interest in Block 1, while taking the strategic decision to relinquish Block 2B.  Both of these developments further indicate Eco’s ability to take strategically prudent decisions to maximise the Company’s exposure to exciting jurisdictions.

“With active farm-out discussions ongoing in Namibia and Guyana, we are well-positioned to capitalise on high levels of interest from potential partners in these exciting exploration regions. We remain committed to delivering value for our shareholders and look forward to sharing further updates in the months ahead.”

Results here are of no significance, for Eco its excitement is all about the trading of its assets, the big farm-out of 3b/4B has brought in plenty of cash with more to come next year whilst incoming acreage included Block 1 and outgoing of Block 2B. 

The company say that discussions are ongoing in Guyana where there should be a great deal of upside, the proof of the pudding, as they say…

Eco is one of the most attractive stocks in the bucket list with a smart management using its portfolio to the full, once it all fires together the potential upside should be huge. 

Prospex Energy

Prospex has updated shareholders on the schedule of the flow testing at the Viura-1B development well, which is expected early in December.  The Viura-1B development well which has been drilled by HEYCO Energy Iberia S.L. (“HEI”) reached its revised targeted Total Depth (“TD”) of 4,500 metres, which is ≈4,100 metres True Vertical Depth (“TVD”), on 21 October 2024 in the 6-inch hole section of the bottom 450 metres of the well.

Prospex owns 7.2365% of the Viura field through its ownership of 7.5% of HEI.  Prospex will receive 14.473% of the production income from the Viura gas field until payback of its initial capital investment from the acquisition in August 2024.

The Viura-1B well is currently being connected to the existing gas processing facilities on site in order to prepare for the imminent flow testing programme, thus immediately generating revenues, with production income expected early in December 2024.  Following flow testing, the well will be placed on long-term production.

As previously reported, the Viura-1B well was deepened by 450 metres in order to appraise the undrilled Utrillas-B formation and assess if it was gas bearing.  Having confirmed the presence of gas-bearing reservoir quality sandstones in the Utrillas-B, the operator completed this interval with a cemented 4½ inch liner.  The flow testing program for the Utrillas B section will be performed during the planned plant shut-down in H2 2025.

The drilling rig has been moved from the Viura-1B well site location to the produced water disposal well Viura-3 site in order to re-instate its operability to better manage produced water from the existing Viura-1 ST3 production well.

Mark Routh, the CEO of Prospex, commented:
“The Viura-1B development well has been successful and we await confirmation of the anticipated flow rates from the substantial reservoir sections encountered in the main reservoir target of the so-called Utrillas-A formation.  Analysis is ongoing to fully assess the implications of the well results to the recoverable reserves from the Viura field, the flow test numbers will enable confirmation that the project has met and hopefully exceeded its pre-drill objectives.

“I look forward to updating shareholders with results from the flow testing and further analysis as soon we have firm data to share.”

Interesting for Prospex but early days until the test results from Viura-1b well but as a development well the company is suber confident as it says ‘confirmation’ of anticipated flow rates. If so then further good news should feed through to the share price.

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