WTI (Mar) $72.62 -$1.15, Brent (Mar) $76.58 -91c, Diff -$3.96 +24c
USNG (Mar)* $3.17 -1c, UKNG (Feb) 128.75p +5.75p, TTF (Mar)* €50.725 +€1.19
*Denotes February contract expiry

Oil price

A modest rally for oil today, as markets assess the EIA inventory stats which were mixed, the crude build was in line with the kiddies forecasts for once and, like the API but bigger, was the draw in distillates which came in at minus 4.994m barrels something to do with the icy cold blast probably.

Right now the market’s thoughts are turning to the upcoming Opec meeting next Monday and whilst we are only early in the quarter and decisions regarding quotas have yet to be made, the comments made by President Trump about both Saudi Arabia and Opec need to be given some thought.

Reabold Resources

Reabold has announced that, further to the previous announcement of 24 October 2024 regarding its investments into LNEnergy Limited, the option period associated with LNEnergy’s acquisition of an additional interest in the Colle Santo gas project has been extended by an additional two months. 

LNEnergy is the manager and owner of a 20% interest in LNEnergy S.R.L. the Italian company which has applied for the Colle Santo gas field concession (with a 90% interest), and has an option to acquire the remaining 80% interest in LNEnergy SRL on or before 1 April 2025 (the “Option”), with an exercise price of US$11 million.

The Colle Santo gas field is a highly material gas resource with an estimated 65Bcf of 2P reserves(1), with two production wells already drilled and flow-tested, making the field development ready. LNEnergy believes that the field has the potential to generate an estimated €11-12m of gross post-tax free cash flow per annum.

(1) RPS estimate, September 2022

Reabold has noted that this option period with regard to LNEnergy’s interest in the Colle Santo gas project has been extended by an additional two months which helps while they wait for the final stage of the regulatory approvals. 

As I understand it that process will not be long and I would expect that approval would be very favourably received by shareholders and the market alike. With European gas demand remaining strong this looks like a perfect asset for its time. 

Corcel

Corcel recently announced that, through its subsidiary Atlas Petroleum Exploration Worldwide Limited (“APEX”), it has been informed that the Block KON-11 Operator in Angola will shortly recommence intervention activities at the Tobias-13 (“TO-13”) and Tobias-14 (“TO-14”) wells.

The results of this work will provide additional information relating specifically to the TO-13 and TO-14 wells. Further details regarding these operations will be shared in due course.

Scott Gilbert, Corcel’s Chief Executive Officer, commented: 
“Although the initial results from the drilling of the Tobias wells in late 2023/early 2024 did not yield the expected results, the Operator is confident on the potential of the field. While the transformational value for the Company is expected to be highlighted through the forthcoming seismic campaign targeting the pre-salt and post-salt leads and prospects in our various blocks in the Kwanza basin, the historic Tobias Field in KON-11 is an important opportunity for the Company and we are eager to explore the field’s remaining potential.”

There clearly isn’t much that I can add to this announcement or the CEO’s comments but I am following Corcel closely as I consider some parts of the portfolio most interesting. I say that because as the company changes, the new management give me confidence that either they will drill more in Angola, and be successful on that front or they might do a deal on what looks like a very valuable block.

Afentra

Afentra recently provided an operational and financial trading update for the year ended 31 December 2024.

Key Highlights

• 2024 Net Average Production: 6,229 bopd
• Strong Asset Performance: redevelopment activity boosted reliability, production and water injection
• Oil Sales: 2.27 million barrels sold at $82/bbl average price, generating $186.7 million revenue
• Asset Level Net Cash Flow: $87.2 million generated post capex, opex and fiscal take
• Year-End Net Cash Position: $12.8 million
• Kwanza Onshore: KON19 license awarded; KON15 award expected early 2025

Operational & Corporate Overview

Production and Field Operations

• Gross average production for 2024 was 21,111 bopd (Net: Block 3/05 5,972 bopd; Block 3/05A 257 bopd).
• A 21-day maintenance shutdown in October 2024 delivered critical upgrades to the power supply, subsea infrastructure, and gas metering systems, ensuring improved operational reliability and extended field longevity. A further shutdown is planned for 2025 to further progress the asset redevelopment plans.
• Strong operational performance post-shutdown positively impacted production and water injection rates:

o  Gross average oil production from Block 3/05 and 3/05A reached an average of 24,381 bopd (Net: 7,203 bopd) in December 2024, with the asset remaining on track to deliver the long-term production outlook previously communicated.
o  Water injection system upgrades boosted capacity, achieving rates exceeding 80,000 barrels of water per day (bwpd). A further water injection pump is scheduled to come online in 2025, with injection rates expected to increase to in excess of 100,000 bwpd.

• Over 40 light well interventions (‘LWIs‘) were completed in 2024, successfully contributing over 2,000 bopd of incremental production. A similar number of LWIs are planned for 2025.
• Opex for Blocks 3/05 and 3/05A in 2024 averaged approximately $23/bbl and is expected to be similar in 2025.
• Substantial progress was made in our gas management plan in 2024 with new gas meters successfully installed to allow accurate measurement starting in 2025 and to enable the JV partnership to develop a fieldwide gas export plan.
• Around $150 million gross (Net: $39 million)1, including life extension costs, was invested in 2024 in the asset redevelopment plan. Gross investment to increase to around $180 million (Net: $54 million)2 in 2025 to continue to underpin our long-term production outlook.
• End of year Competent Person’s Report is ongoing and is anticipated to demonstrate strong reserve replacement. An update to the market will be provided when the report is finalised, expected Q1 2025.

Kwanza Onshore Licenses

• The Company continues to advance its exploration portfolio in the Kwanza Onshore Basin. The license for KON19 was awarded in 2024 and the KON15 license is expected to be formally approved in early 2025. We continue to evaluate additional opportunities in the Kwanza Onshore area. As part of our 2025 work programme for both blocks, the Full Tensor Gravity Gradient (eFTG) survey initiated in 2024 will be completed, enabling a geological overview of the full license areas.

 Financial

The company’s financial position has undergone a significant transformation over the past 12 months, demonstrating the value generated through strategic acquisitions, stable asset performance, and effective management. Afentra closed 2024 with $54.8 million in cash ($19.6 million at 31 December 2023) achieving an end of year net cash position of $12.8 million. Strong crude oil sales totaling 2.27 million barrels at an average realised price of $82/bbl drove asset level cash flow generation of $87.2 million related to Afentra’s equity in 2024. With this robust financial foundation, Afentra enters 2025 well positioned to deliver further growth and strategic M&A. The Company intends to release its financial and operating results for the full year 2024 in April 2025.

Key Financials at 31 December 2024

• Revenue of $186.7 million
• Cash resources of $54.8 million (includes $7.9 million of restricted funds)

Debt drawdowns:

• Reserve Based Lending Facility: $42.0 million
• Working Capital Facility: zero
• Net cash of $12.8 million

Crude Oil Sales and Hedging

• Total crude oil sales for 2024 totaled 2.27 million bbls, with four liftings completed during the year.
• At year-end 2024, Afentra held approximately 32,000 bbl of stock-in-tank.
• Average realised price for crude sales in 2024 was $82/bbl.
• Four liftings are anticipated, evenly distributed, across the four quarters of 2025, supporting steady cash flow generation.
• Afentra has currently hedged around 60% of production in 2025 using a combination of put options and collar structures. Current quarterly hedging uses a combination of $60 to $65/bbl put options over 60% of estimated sale volumes and call options between $80 to $89/bbl over 35% of estimated sales volumes.

The Company will maintain a disciplined approach to financial management ensuring operational investments are supported by a robust balance sheet and proactive risk mitigation measures, such as hedging, to manage oil price volatility. The Company will continue with its balanced approach, continually reviewing capex plans, to prioritise investments that deliver clear returns and align with long-term objectives.

Paul McDade, Chief Executive Officer, Afentra plc commented:
‘2024 was a transformative year for Afentra, marked by the successful completion of the Azule transaction, through which we now hold a 30% interest in Block 3/05 and a 21.33% interest in Block 3/05A. These asset acquisitions have transformed our company, delivered strong cash flow and, following the receipt of proceeds from the Q4 lifting, we achieved acquisition payback for the three completed deals. Combined with our disciplined financial management, this underpins our strong financial position.

Operationally, we made good progress in executing the redevelopment plan presented in our webinar in June 2024, achieving improved production performance and a substantial increase in water injection capacity, setting the stage for sustainable growth in the years ahead. With a clear focus on continuing our asset redevelopment strategy, we expect strong reserves replacement in 2024 and remain on track to deliver the long-term production growth potential outlined in our June 2024 webinar.

A key highlight of the Azule transaction was our ability to complete it without raising equity, reflecting our commitment to preserving and enhancing shareholder value. As we look to further growth through strategic M&A, our disciplined approach will prioritise high-quality, cash-generative assets that align with our strategic priorities.’

When this announcement first came out I hinted that a meeting with the company would be a treat, as is often the case with treats it didn’t materialise so I waited until today’s Investor Meet presentation which was very good.

Indeed I heard pretty much everything I wanted to hear this morning and my only question wouldn’t have been answered anyway on grounds of being too cheeky. 

Afentra went into the Bucket List almost immediately after coming to the market and has stayed there ever since reflecting the fact that they have amongst the best management in the sector. That management did the offshore deal in Angola which while taking a while to get rolling has proved too be of significant value and will deliver for many years.

Ongoing I rate the stock amongst the best in the sector so when the updated Bucket List appears shortly it will remain in there loud and proud. With the strong cash production and the robust balance sheet comes the opportunity to do more deals either in Angola or elsewhere as will be shown in the upcoming CPR. 

Company presentation can be accessed here: https://afentraplc.com/wp-content/uploads/2025/01/FY24_Trading_Update.pdf

1 Net 2024 investment reflects spending attributable to Afentra’s working interests in Block 3/05 and 3/05A during the year, both pre and post the Azule transaction completion in May 2024, and does not reflect pro-rata spend based on Afentra’s current working interests.
2 Number reflects Afentra’s working interest in Block 3/05 & 3/5A.

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