WTI (Jan) $68.10 +10c, Brent (Jan) $71.83 -76c, Diff -$3.73 -86c
USNG (Jan) $3.22 -15c, UKNG (Jan) 121.5p -0.94p, TTF (Jan) €48.695 -€0.26

Oil price

Yesterday Brent underperformed WTI as it settled into the February contract but today both have rallied a fair bit with better news from China and thoughts of an Opec+ meeting on Thursday.

Savannah Energy

Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, provides the following financial and operational update.

Andrew Knott, CEO of Savannah Energy, said:
“I am pleased to provide an operational and financial update which demonstrates the continued progress we have made as a business in 2024. 2025 is clearly going to be an exciting year for our Company: we have a large operational programme in Nigeria which is expected to enhance both our oil and gas production levels and capacity; we intend to progress our R3 East oil development project in Niger; we continue to pursue key acquisitions in the upstream oil and gas space; and we expect to announce plans significantly expanding our renewable energy business. Fundamentally, Savannah remains unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND renewable energy sectors.”

Today’s update from Savannah shows exceptional progress in Nigeria and meaningful performance elsewhere, in both conventional hydrocarbons and in renewables, CEO Andrew Knott is offering significant expansion in its business.

Importantly the Uquo gas compression project in Nigeria is expected to complete construction by the end of this year and to be commissioned in 1Q 2025 but there is already a plan to drill two new wells on the project next year to increase production capability. Savannah has completed conversion of  both the Uquo Field and the Stubb Creek Field and they are now new, 20 year petroleum mining licences. 

Progress on the SIPEC acquisition continues to be made, the asset here being a 49% non-operated interest in the Stubb Creek Field which will immediately be consolidated with SAVE’s existing interest in the field. The company are planning to significantly increase production here and has made it known that they plan an ‘expansionary programme’ which goes further than the original ‘debottlenecking plan’ originally mooted. 

Over to Niger where the R3 East oil development is progressing well, the company is optimising the development plan which now sees peak potential production doubled to 10 kbopd from an original CPR number of 5 kbopd as well as the increase in estimated PV 10 from $150m to $210m. Crude oil is planned to be exported to international markets via the Niger-Benin pipeline which is now fully operational. 

It is worth noting that, of the NGN 340bn four year-term transitional facility that was signed by Accugas in January 2024, some NGN 279bn has been drawn down and funds converted to US$ which has been used to partially pay down the existing US$ facility, with the NGN facility on track to be fully drawn by the end of 2024, leaving a balance of approximately $225m outstanding. The company have therefore requested an increase in the facility, so that they can convert the remaining US$ balance into Naira allowing the remaining US$ facility to be fully repaid in 1H 2025. This of course would solve the currency problems as Accugas’ debt facility will be aligned with the currency in which gas revenues are received, and the long term plan is for a long-dated domestic bond to be issued to ultimately replace the NGN transitional facility.

Savannah is in a strong position with in particular the hydrocarbons businesses in Nigeria performing very well and what is looking like an increasingly robust position in renewables, with further significant expansion signalled there in the coming months. With Niger having the potential to add as well and growth across the board, Savannah is definitely an AND company which should perform well upon return from suspension. 

SAVE continues to make progress and core Nigerian assets continue to perform well. The renewables projects could offer some long-term upside too and would diversify the revenues streams for the company. Shares remain suspended.

We are continuing to seek to progress the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger. The Niger-Benin oil export pipeline, now fully operational, provides a potential route to international markets for crude oil produced from the R1234 contract area of our subsidiary, Savannah Energy Niger SA, with 90 Kbopd reportedly being transported from the China National Petroleum Corporation-operated Agadem PSC area.

During 2024, we have sought to optimise the development plan for the R3 East Area and, whilst there is no change to our resources estimate, we now forecast a peak potential production of approximately 10,000 bopd (vs 5,000 bopd in the previous plan). Management estimates of the forecast PV10 value of the R3 East development project has also increased from US$150 million4 to US$210 million5.

• Progress continues on the planned acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited, whose principal asset is a 49% non-operated interest in the Stubb Creek Field (the “SIPEC Acquisition”), consolidating our interest in the field, with regulatory approval being targeted in early 2025;
• US$60 million reserve-based lending (“RBL”) facility signed in October 2024 with The Standard Bank of South Africa Limited and Stanbic IBTC Bank Limited to fund the SIPEC Acquisition;

Highlights

• Average gross daily production of 22.7 Kboepd for 10M 2024, in line with 10M 2023 (22.9 Kboepd);
• US$45 million Uquo Central Processing Facility (“Uquo CPF”) compression project in Nigeria on track for completion of construction before year-end, with commissioning taking place in Q1 2025;
• Three gas contracts with customers agreed and extended in the year-to-date for a total of up to 105 MMscfpd;
• Conversion of both the Uquo Marginal Field (the “Uquo Field”) and the Stubb Creek Marginal Field (the “Stubb Creek Field”) oil mining leases to new 20-year petroleum mining leases, both effective 1 December 2023, in accordance with the Republic of Nigeria’s Petroleum Industry Act 2021;
• Plans underway to commence a two-well drilling campaign on the Uquo Field in H2 2025, with an additional gas development well expected to add up to 80 MMscfpd of incremental production capability and an exploration well targeting an Unrisked Gross gas initially in place (“GIIP”) of 154 Bscf of incremental gas resources.
• Progress continues on the planned acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited, whose principal asset is a 49% non-operated interest in the Stubb Creek Field (the “SIPEC Acquisition”), consolidating our interest in the field, with regulatory approval being targeted in early 2025;
• US$60 million reserve-based lending (“RBL”) facility signed in October 2024 with The Standard Bank of South Africa Limited and Stanbic IBTC Bank Limited to fund the SIPEC Acquisition;
• Up to 696 MW of renewable energy projects currently in motion, including the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon;
• The Company continues to target a portfolio of up to 2 GW+ of renewable energy projects in motion by end 2026;
• 10M 2024 Total Income1 of US$320.3 million (10M 2023: US$231.0 million) and 10M 2024 cash collections of US$239.8 million (10M 2023: US$189.2 million). As at 31 October 2024, cash balances were US$53.4 million (31 December 2023: US$107.0 million) and net debt stood at US$568.7 million (31 December 2023: US$473.7 million);

Financial guidance for 2024 is reiterated at:

• Total Revenues2 ‘greater than US$245 million’;
• Operating expenses plus administrative expenses3 ‘up to US$75 million’; and
• Capital expenditure ‘up to US$50 million’; and
• Continuing to progress a potential alternative transaction structure to acquire a material stake in producing oil and gas assets in South Sudan.

Hydrocarbons Division

Nigeria Existing Business
Average gross daily production was 22.7 Kboepd for 10M 2024 (10M 2023: 22.9 Kboepd), of which 88% was gas (10M 2023: 91%).

The US$45 million compression project at the Uquo CPF is progressing on track and on budget with construction anticipated to be completed prior to year-end and commissioning to commence in Q1 2025. Completion of this project will enable us to maintain and grow our gas production levels over the medium and long-term. We would note that, however, for 2025, we do not currently anticipate any material increase in sales volumes delivered to our customers.

We are currently working on a proposed further development programme for the Uquo Field, which is expected to see an additional gas well drilled in H2 2025. The Uquo NE well (“Uquo NE”) is forecast to provide gas volumes of 60-80 MMscfpd to supplement the production capacity of our current Uquo well stock. An additional exploration well in the Uquo Field (“Uquo South”) is also currently under consideration, which may be drilled back-to-back with Uquo NE. Uquo South is a well targeting an Unrisked Gross GIIP of 154 Bscf of incremental prospective gas resources on the Uquo licence area.

During 2024 YTD, three gas contracts have been agreed and extended for a total of up to 105 MMscfpd, including:

• An extension of the agreement with First Independent Power Limited (“FIPL”) was signed, effective January 2024, for an additional 12-month period, whereby our Accugas subsidiary is supplying FIPL’s Afam, Eleme and Trans Amadi power stations with up to 65 MMscfpd of gas;
• A new 24-month agreement was signed in July 2024 by our Accugas subsidiary with Ibom Power Company Limited, owner of the Ibom power station, to supply up to 30 MMscfpd of gas. This follows the expiration of the previous 10-year agreement; and
• An extension of the agreement with Central Horizon Gas Company Limited (“CHGC”) was signed in August 2024 for an additional 12-month period, whereby our Accugas subsidiary is supplying CHGC with up to 10 MMscfpd of gas.
• Conversion of the Uquo Field and the Stubb Creek Field to New 20-Year Petroleum Mining Leases

The Uquo Field and the Stubb Creek Field have been converted to petroleum mining leases (“PMLs”) in accordance with the Petroleum Industry Act 2021. Both PMLs have been granted for a 20-year period effective from 1 December 2023.

Nigeria Proposed SIPEC Acquisition

In March 2024, we announced the proposed acquisition (via two separate transactions) of 100% of SIPEC for a total consideration of US$61.5 million. SIPEC’s principal asset is the 49% non-operated interest in the Stubb Creek Field. We are currently targeting receipt of regulatory consent for the acquisition in early 2025, with completion following later in Q1 2025.

In October 2024, our subsidiary, Savannah Energy SC Limited, signed a new 4.5 year, US$60 million RBL facility arranged by The Standard Bank of South Africa. The RBL is structured along standard terms for a facility of this nature with amortisation commencing 12 months after drawdown and carries an interest rate of SOFR + 8.5% (reducing to 8% once certain milestones have been achieved).

As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. Following completion of the SIPEC Acquisition, Savannah’s reserve and resource base is, therefore, expected to increase by approximately 46 MMboe from 158 MMboe to 204 MMboe (on a pro-forma basis as at 1 January 2024). SIPEC oil production is estimated at an average of 1.8 Kbopd for 2024.

Following completion of the SIPEC Acquisition, we plan an expansion programme to increase the processing capacity of the Stubb Creek Field facilities. It is anticipated that this will lead to Stubb Creek Field gross production increasing from 2.6 Kbopd (average for 1 January – 31 October 2024) to approximately 4.7 Kbopd. Importantly, the SIPEC Acquisition also secures significant additional feedstock gas available for sale to our Accugas subsidiary.

Niger
We are continuing to seek to progress the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger. The Niger-Benin oil export pipeline, now fully operational, provides a potential route to international markets for crude oil produced from the R1234 contract area of our subsidiary, Savannah Energy Niger SA, with 90 Kbopd reportedly being transported from the China National Petroleum Corporation-operated Agadem PSC area.

During 2024, we have sought to optimise the development plan for the R3 East Area and, whilst there is no change to our resources estimate, we now forecast a peak potential production of approximately 10,000 bopd (vs 5,000 bopd in the previous plan). Management estimates of the forecast PV10 value of the R3 East development project has also increased from US$150 million4 to US$210 million5.

Renewable Energy Division
We are currently seeking to develop a portfolio of up to 696 MW of wind, solar and hydroelectric energy projects across West Africa. Of these projects our principal focus has been on the up to 250 MW Parc Eolien de la Tarka project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon.

Niger Parc Eolien de la Tarka
Located in the Tahoua Region of southern Niger, Savannah’s Parc Eolien de la Tarka wind farm project is anticipated to be the country’s first wind farm and potentially the largest in West Africa, with a total power generation capacity of up to 250 MW. Our subsidiary, Savannah Energy RN Limited, has signed agreements with two leading international development finance institutions (the International Finance Corporation, which is a member of the World Bank Group, and the US International Development Finance Corporation, which is America’s development finance institution) to fund approximately two-thirds of the pre-construction development costs of the project.

The project has made significant progress in the year-to-date with all key studies now either complete or at an advanced stage. We submitted our Environmental and Social Impact Assessment (“ESIA”) scoping report to the Government of Niger and have been continuing to progress the ESIA field work additional studies required for the submission of the full ESIA report, expected in 2025. We are negotiating a term sheet in relation to the project’s proposed power purchase agreement and electricity tariff and anticipate this to be agreed in the coming months.

Parc Eolien de la Tarka is expected to produce up to 800 GWh of electricity per year, representing approximately 24% of Niger’s annual electricity demand, based on the country’s projected energy demand in 2026. The construction phase is expected to create over 500 jobs, while the project has the potential to reduce the cost of electricity for Nigeriens and avoid an estimated 450,000 tonnes of CO2 emissions annually.

Cameroon Bini a Warak
We continue to progress the Bini a Warak hybrid hydroelectric and solar project in Cameroon, following the approval of the optimisation and proposed redesign of the project given by the Minister of Water and Energy. The redesigned project, involving the construction of a hydroelectric dam on the Bini River in the Northern Adamawa region of Cameroon, now incorporates photovoltaic solar, raising its installed power generation capacity from up to 75 MW to up to 95 MW. Anticipated sanction for this project is in 2026, with first power targeted in the 2028 to 2029 window.

Other Projects
We continue to seek to progress a large-scale solar project in Niger, comprising two photovoltaic solar power plants of up to 100 MW each, expected to be located within 20 km of the cities of Maradi and Zinder, for which we signed an agreement with the Government of the Republic of Niger in May 2023. In H1 2024, we presented preliminary commercial and technical proposals to the Government of Niger. This project, if successfully developed, is expected to generate reliable, affordable energy for Niger and supply up to 12% of Niger’s electricity demand, based on 2026 energy demand predictions. However, the priority of both the Government of Niger and Savannah is to progress the Parc Eolien de le Tarka wind farm project ahead of the solar project.

A wholly owned Savannah subsidiary has also signed an agreement with a development partner whereby an approximate 150 MW wind farm project would be developed on a 70:30 basis (in Savannah’s favour), potentially further expanding the Company’s geographical footprint in West Africa. This project has completed the key technical and environmental studies and has made substantial progress in negotiating the project’s power purchase agreement. Savannah’s commitments to invest will start upon signature of a power purchase agreement for the project, the timing of which is yet to be agreed with the country’s Government and considered in the context of its wider power sector development plans, which we understand to currently be under review.

YTD Unaudited Financial Review

The Group has performed in line with expectations YTD and guidance for the full year is reconfirmed.

Highlights

Total Income1 for 10M 2024 is US$320.3 million (10M 2023: US$231.0 million), comprising Total Revenues2 of US$207.7 million (10M 2023: US$202.1 million) and Other operating income of US$112.6 million (10M 2023: US$28.9 million). Other operating income primarily relates to the re-billing of foreign exchange losses incurred through the conversion of Naira paid invoices into US dollars.

Cash collections for 10M 2024 were US$239.8 million (10M 2023: US$189.2 million). As at 31 October 2024, cash balances stood at US$53.4 million (31 December 2023: US$107.0 million) and net debt at US$568.7 million (31 December 2023: US$473.7 million). 

Adjusted EBITDA6 including Other operating income was US$257.3 million (10M 2023: US$170.8 million).

Debt Facilities

In January 2024, a new NGN 340 billion four year-term transitional facility was signed by Accugas with a consortium of five Nigerian banks. Year to date, NGN 279 billion of this facility has been drawn down, with the resulting funds being converted to US$, which, along with cash held, has been used to partially prepay the existing Accugas US$ facility. It is expected that the NGN transitional facility will be fully drawn by end of 2024 and that a balance of approximately US$225 million will remain outstanding at that point under the Accugas US$ facility.

As contemplated in the documentation for the transitional facility, we have requested an increase in the facility to enable the remaining outstanding US$ balance to be converted into Naira, allowing the remainder of the Accugas US$ facility to be fully repaid within H1 2025. This process, when complete, will align Accugas’ debt facility with the currency in which gas revenues are received.

We also continue to advance plans for a potential long-dated domestic bond issuance to ultimately replace the NGN transitional facility.

Chad Arbitration Update

As previously disclosed in Savannah’s 2023 Annual Report, our wholly owned subsidiary, Savannah Chad Inc (“SCI”), has commenced arbitral proceedings against the Government of the Republic of Chad and its instrumentalities in response to the March 2023 nationalisation of SCI’s rights in the Doba fields in Chad, and other breaches of SCI’s rights. Another wholly owned subsidiary, Savannah Midstream Investment Limited (“SMIL”), has commenced arbitral proceedings in relation to the nationalisation of its investment in Tchad Oil Transportation Company, the Chadian company which owns and operates the section of the Chad-Cameroon pipeline located in Chad. SMIL has also commenced arbitral and other legal proceedings for breaches of SMIL’s rights in relation to Cameroon Oil Transportation Company (“COTCo”), the Cameroon company which owns and operates the section of the Chad-Cameroon pipeline located in Cameroon.

We expect the arbitral proceedings to be concluded in the second half of 2025. SCI and SMIL are claiming in excess of US$840 million for the nationalisation of their rights and assets in Chad, and SMIL has a claim valued at approximately US$380 million for breaches of its rights in relation to COTCo. Whilst the Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to compensation, no compensation has been paid or announced by the Government of the Republic of Chad to date.

Savannah remains ready and willing to discuss with the Government of the Republic of Chad an amicable solution to the disputes. However, in the absence of such discussions, the Group intends to vigorously pursue its rights in the arbitrations.

South Sudan

As previously announced, Savannah continues discussions with the various stakeholders around an alternative transaction structure in relation to the proposed acquisition of the ex-PETRONAS assets in South Sudan. Savannah management believe that any transaction which would ultimately be completed would be on significantly different terms to that envisioned when the transaction was initially announced in December 2022 with the likely involvement of multiple acquiring parties. We continue to believe that a transaction could be potentially accretive to the Company and expect to provide a further update on progress made by mid to late December 2024.

The assets themselves are estimated to have produced an average of 81 Kbopd on a gross basis in 2024 to end October, reduced from approximately 150 Kbopd in FY 2023, given the prolonged downtime experienced by the Bashayer Pipeline Company (“BAPCO”) pipeline, which exports a significant portion of the country’s oil production.

Genel Energy

Genel announced that yesterday it received a copy of the award in respect of the London Court of International Arbitration claim brought by the Kurdistan Regional Government in December 2021 against the Genel subsidiary, Genel Energy Miran Bina Bawi Limited (‘GEMBBL’)

The claim, commenced by the KRG in 2021, sought a declaration that the KRG had the contractual right to terminate both the Bina Bawi production sharing contract and the Miran production sharing contract. Subsequently, the Genel Board concluded that it was left with no practical alternative but to accept that in its view both the Bina Bawi and Miran production sharing contracts were terminated as a consequence of the KRG’s repudiatory breaches and to submit a counterclaim for damages from the KRG for loss of Genel’s rights to develop the Bina Bawi and Miran fields.

The Tribunal has ruled that the KRG validly terminated the Bina Bawi and Miran production sharing contracts and that GEMMBL’s counterclaim is dismissed.  The Tribunal also reserved for determination in a future award(s) the allocation of the costs relating to the arbitration.

Genel’s Chairman David McManus commented:
“We are very disappointed that the Tribunal found against GEMBBL in this arbitration.  We will update the market once we have appropriately analysed the Tribunal’s Award.

We remain of the view that we were left with no option but to seek to defend our rights in this arbitration. Our internal team and external advisors have worked diligently since the case was commenced by the KRG in December 2021 and we thank our team for all that work.”

Genel has fallen today indicating that the market was disappointed and surprised by the arbitrage decision, in my view the fall has been way overdone, my reading was that the company had a very good case but that was probably overlooked by the Tribunal who are reputed for what one might call flaky calls on such important matters.

I look forward to hearing what the board decide after looking at the decision but ironically it comes at a time when Genel are doing things very well in difficult time, remaining solidly funded with costs low and an active M&A team looking at genuine opportunities outside of Kurdistan. The shares look very attractive at this level and in a very strong position whatever the board decide to do.

Zephyr Energy

Zephyr has provided results for the quarter ended 30 September 2024 related to hydrocarbon production from its non-operated asset portfolio in the Williston Basin, North Dakota, U.S.

• Q3 production from the portfolio averaged 1,047 barrels of oil equivalent per day net to Zephyr, and 96,324 barrels of oil equivalent for the period, compared to average production in the second quarter of 2024 (“Q2”) of 1,226 boepd.                                                                                                                                                                                       
• Q3 production rates were in line with management expectations, and were lower than in Q2 due to natural production decline.
• For the 2024 financial year, management continues to expect average production rates in line with its previous forecast of 1,100-1,300 boepd, an increase from an average 1,040 boepd achieved in the 2023 financial year.
• At the end of Q3, 228 wells in Zephyr’s portfolio were available for production (versus 231 wells at the end of Q2).
• Net working interests across the Zephyr portfolio currently average 7.0 per cent. per well (equivalent to 16.0 total wells net to Zephyr).
• The Company has hedged a total of 27,500 barrels of oil (“bbls”) over the fourth quarter of 2024 (“Q4”). 10,500 of these are hedged at a price of US$80.91 per barrel of oil (“bbl”) and the other 17,000 bbls are hedged by way of financial collars with a weighted average floor price of US$71.35 per bbl and a weighted average ceiling price of US$84.38 per bbl.
• The Company’s Q4 update, which is expected to be published by the end of February 2025, will contain an update on sales and revenues from the Williston project for the twelve months ended 31 December 2024.

Extension of warrant exercise period

On 26 January 2022, the Company announced that, in connection with a £12 million equity fundraise, it would issue warrants to subscribe for new ordinary shares of 0.1 pence each in the Company (“Ordinary Shares”) (together the “Warrants”). In February 2022, the Company issued 89,566,666 Warrants. The Warrants are exercisable at a price of 7.5p (“Exercise Price”) per new Ordinary Share for a period of three years from the date of issue and are due to expire on 11 February 2025. No director of the Company (the “Board” or the “Director”) holds any Warrants.

The Warrants remain unexercised and, following agreement with the holders of the Warrants, the Board has extended the expiry date of the Warrants from 11 February 2025 to 30 September 2026. All other terms of the Warrants, including the Exercise Price, remain unchanged. The Exercise Price represents a 183% premium to Zephyr’s mid-market closing price on the last trading day before this announcement.

In the event that all the Warrants are exercised, this will generate cash proceeds of £6.7 million for the Company.

Colin Harrington, Chief Executive of Zephyr, said:
“Our non-operated asset portfolio continues to deliver strong cash flows and production rates in line with expectations. Cash generated from the portfolio covers all corporate costs and allows us to continue to advance the Paradox project, where we are preparing to commence drilling operations for the extended lateral section of the State 36-2R LNW-CC well early next year.

“Further to our update on 14 November 2024, I am pleased to report that our asset level funding process for our forthcoming drilling operations continues to progress well and in line with our expectations. We fully anticipate signing the binding documentation for the asset level funding later this month.

“I am pleased that the Board has been able to extend the expiry date of the Warrants, which would provide the Company with significant additional investment and development capital should the Warrants be exercised.”

To be honest this RNS shows that Zephyr is doing what it says on the tin, smart management has over the years put in place the non-operated Williston portfolio that pretty much through rain and shine delivers cash that covers all corporate costs in order that the Paradox Basin can be drilled for its upside.

I very much like the way that the expiry date for the warrants has been extended giving potential for exercise if the share price behaved like that, should the well come in that is. 

As for the well it looks like everything is going according to plan, the asset level funding process is going according to expectations and should be signed later this month. All set for a very exciting 2025…

The Williston Basin assets continue to perform well and provide a stable base for revenue and FCF generation which allows ZPHR to develop its high impact assets in Utah. ZPHR also noted that the 89.6m warrants issued in 2022 have had their expiry date to Sept 2026 (from Feb 2025). These have an exercise price of 7.5p and could raise a further £6.7m if exercised. Near term activity will see the drilling of an extended lateral in the State 36-2R LNW-CC well –this has the potential to materially increase potential production and unlock substantial resources in the Paradox Basin.

United Oil & Gas

United has provided an update before the Christmas period.

Egyptian Receivables

The UOG CEO met with the CEO of EGPC on the 12th November and received confirmation that the $620,000 receivable, as previously announced on 31 October 2024, was expected to be paid imminently. While funds have not yet been received, discussions remain active, and the Company is taking all necessary steps to secure prompt resolution. An update will be provided to the market as soon as funds are received.

Jamaica Farm Out Update

The Company was engaged in discussions with selected parties, but those discussions have been suspended until the new year.  We also continue to explore potential interest from other parties, but we don’t expect those discussions to progress further until the new year either.

Corporate Update

The Company is taking a prudent approach to costs. We are currently reviewing our cost structure and we plan to implement significant reductions effective immediately. As part of this effort, all costs will be cut to a bare minimum. These measures are being taken in order to maximise existing cash balances in case there are further delays in receivables from EGPC and until a potential farm out has progressed.

Brian Larkin, United Chief Executive Officer commented:
“We are continuing to engage with EGPC to secure our receivables due. In parallel, the Company has had to make some decisions to maximise our cash resources. With this in mind, we plan to significantly reduce the Company’s cost base to absolute essential outgoings only, in order to maximise the chances of securing a potential farmout agreement within the constraints of our limited funds and timeframe.”

There really isn’t much I can add here, the scarce piece of good news is that there were discussions about Jamaica but they are suspended until the new year, and hopes for a cheque from Egypt before Christmas come into the No Hope and Bob Hope camp so it’s heads down for a few weeks methinks. 

KeyFacts Energy Industry Directory: Malcy's Blog