WTI (Apr) $66.36 +5c, Brent (May) $69.46 +16c, Diff -$3.10 +11c
USNG (Apr) $4.30 -15c, UKNG (Apr) 90.84p -9.05p, TTF (Apr) €37.75 -€3.95

Oil price

Oil has rallied a bit today, Brent is back over $70 but there is little feeling of real confidence, looks like a dead cat bounce more likely. Today is Non-Fram Payroll day and markets are expecting c.170/-. 

Diversified Energy Company

Diversified Energy has  announces the recently announced acquisition of Maverick Natural Resources remains on track with previously announced deal specifics, including share consideration, which is not, and will not be, impacted or adjusted as a result of any movement in the Company’s share price.. The General Meeting will take place at 1:00pm (London Time) on Monday, March 10th, 2025, and the acquisition is now anticipated to close prior to the end of the first quarter of 2025, subject to customary closing conditions and Diversified shareholder approval.

Good news here but it shouldn’t really be necessary to tell sophisticated markets but there are always a few who try and spoil it for others. DEC has had to remind the markets that the Maverick deal is on track and which ‘is not and will not be impacted or adjusted as a result of any movement in the company’s share price’. 

With the General Meeting on Monday and completion surely after that, the company can get on with delivering the inevitably good results from Maverick and Summit and resume the upward share price movement that gave them such a great rise last year. 

Serica

Serica notes the recent media speculation and confirms that it is in discussions with EnQuest plc regarding a possible transaction to combine Serica and EnQuest.

The Board of Serica believes there are substantial potential benefits to the Possible Transaction, including increasing scale and diversification, unlocking significant synergies and providing a stronger platform for further growth.

Although discussions are ongoing, it is currently envisaged that the Possible Transaction will be structured as an all share offer by EnQuest for Serica by way of a reverse takeover under the UK Listing Rules. It is expected that the Possible Transaction would involve a return of capital to existing Serica shareholders conditional upon completion of the Possible Transaction (the “Expected Return of Capital”), and that Serica shareholders would hold a majority of the shares in the enlarged company with shares listed on the ESCC market of the London Stock Exchange. There can be no certainty either that an offer will be made, nor as to the terms on which such offer will be made. A further announcement will be made when appropriate.

This announcement has been made with the consent of EnQuest.

The person responsible for arranging the release of this announcement on behalf of Serica is Chris Cox, CEO.

Important Code notes

For the purposes of the Takeover Code, Serica is considered the offeree company.

In accordance with Rule 2.6(a) of the Code, EnQuest is required, by not later than 5.00 p.m. on 4th April 2025 to either announce a firm intention to make an offer for Serica in accordance with Rule 2.7 of the Code or announce that it does not intend to make such an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

In accordance with Rule 2.5(a) of the Code, EnQuest reserves the right to introduce other forms of consideration and/or vary the form and mix or composition of consideration of any offer. EnQuest also reserves the right to make an offer on less favourable terms than outlined in this announcement:

i. with the consent of the Board of Serica;
ii. if a third party announces a possible offer or firm intention to make an offer for Serica on less favourable terms than outlined in this announcement; or
iii. if Serica announces a Rule 9 waiver transaction pursuant to the Code or a reverse takeover.

EnQuest will reduce the terms of the Possible Transaction to take account of the value of any dividend or any other distribution or return of value to shareholders which is paid, or becomes payable, by Serica after the date of this announcement, with exception of the Expected Return of Capital.

Impossible to comment on this at such short notice and without any metrics on the deal.

Jersey Oil & Gas

Jersey Oil & Gas has noted that Dana Petroleum has terminated the agreement with NEO Energy, in relation to the proposed purchase of the Western Isles floating, production, storage and offloading (“FPSO”) vessel.  This follows the agreement having reached its longstop date at the end of February 2025, as previously reported. The Buchan Horst joint venture’s ability to recommit to the acquisition of the FPSO is naturally linked to the satisfactory conclusion of the on-going fiscal and regulatory consultations and completion of the required pre-handover works on the vessel.

Andrew Benitz, CEO of Jersey Oil & Gas, commented:
“The route to unlocking the Buchan development continues to depend on achieving satisfactory conclusions in respect of the on-going fiscal and regulatory consultations.  The fiscal consultation was kicked off yesterday and encouragingly, while the details are yet to be fleshed out, it was apparent that the government has heard many of the concerns of the industry.”

There are many things going on for JOG right now, with so many discussions that could lead to any number of outcomes. Time is on their side and the FPSO isn’t yet ready to move into action yet so no need to panic.

Hunting

Hunting has today announced the acquisition of the Organic Oil Recovery (“OOR”) technology from its founding shareholders, for a consideration of $17.5 million.

Hunting has acquired the entire portfolio of intellectual property, comprising over 25 discreet patents, the distribution rights for the technology, and the laboratory located in California, US. Following the acquisition, the Company will hold the global rights for the OOR technology and is now well placed to further accelerate commercialisation across North America and the rest of the world. 

OOR is an enhanced oil recovery technology, which provides the following benefits to operators:

• It improves ultimate recovery of oil reserves from a well;
• Is a cost-efficient technology that reduces capex requirements and is simple to deploy;
• Lowers the water cut during end-of-life production;
• Lowers hydrogen sulphide levels in production offtake; and
• Extends the life and increases the economic returns of a producing field.

The consideration for the acquisition is $17.5 million, with Hunting agreeing to pay a 15% royalty to the sellers on revenue earned for a period of 15 years, post-completion.

Field trials of the OOR technology are currently underway with numerous blue-chip exploration and production companies across North America, Europe, the Middle East, and Asia Pacific.

As previously announced in 2024, Hunting secured up to $60 million of orders from operators in the UK North Sea, with a strong pipeline of opportunities likely to be secured in the coming years, as the oil and gas industry embraces the production benefits of this enhanced oil recovery solution. With additional geographic opportunities, as a result of the transaction, the outlook for expansion is robust.

Hunting is also looking to build its presence in the Middle East with the construction of a small laboratory in the UAE to service clients in the Eastern Hemisphere. With the establishment of this laboratory, the sample lead time and overall analysis time will decrease as a result of closer proximity to the customer. 

Following the acquisition, all technical employees of the OOR business will join Hunting either as an employee or long-term consultant. 

Commenting on the acquisition, Jim Johnson, Chief Executive of Hunting, said:
“Following the acquisition of this exciting business, Hunting now has the ability to deploy this remarkable technology globally. The technology is currently being evaluated by many blue-chip customers, with the benefits to the operator clear. For Hunting, the business will be margin accretive and strongly position the Company to reach its Hunting 2030 Strategy targets in the medium term as commercialisation accelerates.”

In their analysts meeting yesterday Hunting made it perfectly clear that they were seeing plenty of M&A opportunities, that they were sensibly priced and they were actively engaged with a number of candidates. And with ‘plenty of firepower’ they have already announced the acquisition of OOR , they even mentioned that enhanced oil recovery technology is going to be a big part of the future. 

For those people who hadn’t picked up on the way Hunting is going, the clue is in yesterday’s tag line of ‘Precision Engineering from Subsea to Space’ that doesn’t sound like a company on a P/E of 9 to me and I think that the shares should be nearer 500p.

Tower Resources

Tower has announced that its wholly-owned subsidiary Tower Resources (Namibia) Limited (“TRNL”) has agreed to purchase an additional 5% interest in the PEL96 license offshore Namibia from its local partner, ZM Fourteen Investment (Pty) Ltd (“ZM”), and is also pleased to provide investors with a general update on preparations for drilling the NJOM-3 well on the Thali license, offshore Cameroon. 

Namibia
TRNL has agreed to purchase a 5% interest in the PEL96 license from ZM, half of ZM’s current 10% interest in the license, for a cash consideration on completion of US$375,000. ZM’s remaining 5% interest in the PEL96 license will be fully carried through to production, as is the 10% interest held by the National Petroleum Corporation of Namibia (Proprietary) Limited (“NAMCOR”). TRNL has already funded all of the expenses associated with ZM’s interest to date, so no further reimbursement of past costs is due to ZM. Completion of the purchase is subject to usual conditions precedent, identical to those in the farm-out agreement that TRNL concluded with Prime Global Energies Limited (“Prime”) in January 2025, including Namibian government approvals and consent of the other partners in the PEL96 license, and the two transactions are expected to complete at or about the same time, as both are subject to similar government consents. ZM has also confirmed its consent to the TRNL-Prime farm-out agreement. Tower expects to fund this acquisition on behalf of TRNL using a portion of the substantial amount of cash it is due to receive from the TRNL-Prime farm-out completion.

Following completion of this purchase from ZM, and the farm-out of a 25% interest in the license to Prime, the interests in the PEL96 license will be as follows:

• TRNL: 60% (Operator)
• Prime: 25%
• NAMCOR: 10% (Carried)
• ZM: 5%  (Carried)

The next step in the approval process in Namibia is to provide details of both the TRNL-Prime farm-out agreement and this latest TRNL-ZM agreement to NAMCOR, to seek NAMCOR’s consent to both transactions, after which the full package of documents and consents will be forwarded to the Ministry of Mines and Energy (“MME”) for Ministerial approval. However, the Ministry is already aware of both transactions and is expecting the formal documentation in due course.

Tower still anticipates that the completion of the TRNL-Prime farm-out agreement may occur before the end of March, but as previously explained, this depends on the approval processes which involve several counterparties. However, the Company remains confident that the approvals will be provided, and that both the TRNL-Prime transaction and this latest TRNL-ZM transaction will be completed as anticipated in the Company’s announcement on 10 January 2025.

Cameroon
Tower Resources Cameroon SA (“TRCSA”) has already submitted the TRCSA-Prime farm-out agreement documentation and the request for a year’s further extension of the First Exploration Period of the Thali license to the Cameroon Minister of Mines, Industry and Technological Development (“MINMIDT”) for approval in January, and has discussed both matters with MINMIDT, the Societe Nationale des Hydrocarbures (“SNH”) and the Cameroon Prime Minister. The Company’s understanding is that the matter is now with the Office of the Presidency and awaiting formal Presidential approval. As with the Namibia farm-out, the Company remains confident that the approvals will be provided, and still hopes this may be around the end of March.

The Company has been offered a number of rigs which could be available at different times between June and December 2025, and on different, but reasonable, terms. The Company hopes to make a rig selection decision, albeit subject to the requisite approvals being granted, at the end of March or during April. For commercial reasons, the Company will not be commenting further on these discussions until they are finalised.

In order to support the procurement process for the rig and associated services, and to minimise the time required between the farm-out completion and being ready to take delivery of the rig, the Company has already started to make selective hires in anticipation of drilling, initially through flexible contractor agreements. This includes a Senior Operations Geologist reporting to Mark Enfield, Tower’s Exploration Director, and a Senior Drilling Engineer reporting to the Company’s Drilling Manager, Phil Church at Bedrock Drilling. Tower is also adding a highly experienced member of staff to its financial team to support the ongoing discussions regarding future bank financing.

Tower Resources Chairman & CEO, Jeremy Asher, commented:
“We are pleased with the progress we are making and also with the acquisition of this small additional interest in the Namibian PEL96 from our local partner ZM. This acquisition reflects our wish for ZM to move to a more sustainable fully-carried position, and also reflects our faith in the value of the PEL96 license at the same time that we are bringing in a new partner to manage risk and share funding obligations.

“We are already working hard on the well planning in Cameroon, as we are confident about the approval process, and want to ensure we are ready to drill the NJOM-3 well in good time. Forward planning usually improves both time and budget performance. I look forward to keeping you updated with our further progress.”

Jeremy Asher is not hanging around and it’s really good to see things happening at Tower, after all it’s been a long wait! Expect more good news and the progress in recent months has been very reassuring. 

Europa Oil & Gas

Europa has announced that it has submitted a planning application for the Cloughton (Europa interest: 40%) appraisal well to North Yorkshire Council.

The Company has also launched a community engagement website dedicated to its Cloughton gas field appraisal project to provide local residents and stakeholders with information on the project, Europa’s application to drill at the Burniston Mill site, and how the project partners intend to work with local communities.

This site is also intended to help prevent misinformation and address frequently asked questions about Europa’s planned operations.

To visit the website, and submit enquiries on the project, click the following link: www.cloughton-community.co.uk

 No comment from the company on this but it pretty much does what it says on the tin as the planning process for Cloughton gets under way.

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