WTI (May) $62.35 +$2.77, Brent (June) $65.48 +$2.66, Diff -$3.13 -11c
USNG (May) $3.82 +35c, UKNG (May) 87.90p +2.71p, TTF (May) €35.35 +0.16p

Oil price

After yesterday’s bounce in markets today all is reversed again, oil has fallen over two dollars and indeed bourses have given back a great deal of the gains. I could talk about the pipeline outage, the Russian situation, Opec’s output or even the upcoming US/Iran nuclear talks but actually it is the tariff story that dominates as we all know and the further increase today, taking the China tax to 145% not 125% as believed, makes recession a little more likely.

Arrow Exploration

Arrow has provided an update on recent operational activity on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50 percent beneficial interest.

Highlights

–      Production over 4,500 boe/d.
–      2 horizontal wells drilled since last update.

o  CN HZ10 producing 1,183 BOPD gross (591 BOPD net).
o  CN HZ9 on production. Excellent reservoir sands, but sub-optimal location.

–      Increase in cash position since February 5th update to over US$25 million, while drilling two horizontal wells in the period.
–      Production growth expected in Q2 with drilling underway at CN11
–      Strong balance sheet, no debt or drilling commitments.  Arrow has flexibility in its work program and is able to take advantage of any economic downturn with possible acquisition opportunities.

Production

Total corporate production is currently over 4,500 boe/d net. Arrow’s original 6 horizontal wells at Carrizales Norte have flattened at profiles in-line with reservoir models, from initial high production declines.

Significant additional production is expected to be added prior to the end of the second quarter with planned development wells in the C7 and Ubaque reservoirs. In light of the recent movements in oil prices and current market volatility, Arrow has the ability to prioritize drilling low risk infill and development wells until market conditions stabilize. Arrow has a significant portfolio of low-risk drilling locations which it plans on utilizing, as necessary, to maintain a cost and risk effective production rate and associated cash flows.

Cash Balance

On April 1, 2025, the Company had a cash balance of US$25.1 million and held no debt.  Further, the Company has no long-term rig contracts or obligations to drill wells. Corporate operating netbacks at a US$65/bbl Brent oil price are US$39/bbl. This strong netback underlies the material value embedded in the Llanos Basin Tapir Block. The combination of cash on the balance sheet and robust operating cashflow are key corporate strengths in this volatile market.

Drilling Operations – Tapir Block

Carrizales Norte field
On the Carrizales Norte field, the Company has recently drilled two production wells from the CN pad.

The Carizales Norte HZ9 (CN HZ9) horizontal well was spud on February 8, 2025, and reached target depth on February 24, 2025. CN HZ9 is the first well drilled into the southern area of the Carrizales Norte field. The well was drilled to a total measured depth of 11,506 MD feet (8,419 feet true vertical depth) and encountered multiple hydrocarbon-bearing intervals.  The well was completed with a slotted liner.

On March 3, Arrow put the CN HZ9 well on production in the Ubaque formation which has approximately 1,100 feet of oil charged sandstone. The well encountered an initial high water cut which is believed to be water coning from the proximal vertical CN4 well which has been converted to a water injector after early water breakthrough occurred. CN HZ9 is producing at a stabilized rate of 244 BOPD gross (122 BOPD net) with a water cut of 90%.  Arrow has the ability to increase pump speed and total fluid production, while pursuing a balance of water production and disposal capacity. Arrow is also pursuing alternatives to close off perforations in CN HZ9 proximal to the expected water cone to improve well performance.

The reservoir and oil charged sands at Carizales Norte remain excellent and management believes the reservoir still has tremendous potential.  The sub-optimal location of the heel of the well in CN HZ9 is believed to be the reason for the high water cut experienced.

The CN HZ10 horizontal well was spud on March 5, 2025, and reached target depth on March 23, 2025. CN HZ10 is the first well drilled into the northern area of the Carrizales Norte field. The well was drilled to a total measured depth of 12,911 MD feet (8,510 feet true vertical depth) and encountered multiple hydrocarbon-bearing intervals.  The well was completed with Autonomous Inflow Control Valve (“AICV”) technology.

On March 31, 2025, Arrow put the CN HZ10 well on production in the Ubaque formation which has approximately 1,380 feet of oil charged sandstone. The well continues to clean up with the water cut declining and oil production increasing.  Currently the well is producing at 1,183 BOPD gross (591 BOPD net) with a decreasing water cut of 21%. Additional pump speed increases are contemplated as a measured and slow ramp up in production is executed.

Arrow is currently drilling the CN11 well, a directional low risk infill well targeting the C7 formation.  The well is expected to take two weeks to be completed and then immediately put on production. Multiple C7 wells are contemplated in the overall C7 reservoir plan at the Carrizales Norte pad.

Alberta Llanos field
Following increased water cut in the Ubaque reservoir, Arrow has successfully re-completed the AB-1 well in the Guadalupe zone which resulted in initial production rates of 400 BOPD gross (200 BOPD net).   The Guadalupe reservoir is producing 31 API oil.  The success of the AB-1 recompletion highlights the potential for further Guadalupe development.

Following the completion of a review of the available alternatives, the AB-2 well is to be recompleted into a water disposal well in order to help with the horizontal development in the Alberta Llanos field.

AB-3 is on production and producing from the Ubaque sands.  The well is producing at 160 BOPD gross (80 BOPD net).  Well performance reaffirms the horizontal well development potential.

Drilling Schedule
In light of the current economic conditions and oil price volatility, Arrow is continuously reviewing the original Board-approved $50MM budget and drilling schedule.  At this time, Arrow does not have any contractual commitments to employ additional rigs or to drill additional wells beyond the current CN11.

Arrow’s strong balance sheet allows the Company to remain flexible in a volatile oil price environment and the Company will make further announcements should modifications to its capital program be determined.

East Tapir 3-D Seismic Program
The East Tapir 3D seismic acquisition program has been completed ahead of schedule and under budget. Processing and interpretation will be completed in the next 30 days. The value added by the initial detailed 100 sq. km 3-D seismic survey shot on the northern part of the Tapir Block in 2023 has been integral in the Company’s development. The current East Tapir 3-D survey covers a further 100 sq. km where existing leads on the 2-D dataset will be defined in more detail. This represents another potential value step change for the Company.

2024 year end results
Arrow expects to announce the financial results for the year ended 31 December 2024 at the end of April 2025.

Marshall Abbott, CEO of Arrow commented:
“Arrow will protect its strong balance sheet during this period of market and commodity price volatility. Arrow has a low-risk portfolio of drilling locations to maintain production with limited capital spend and is able to maintain high netbacks to remain cash generative through weaker crude pricing.”

“The CN HZ10 well is continuing to clean up and is producing as modeling expected. The performance of the well indicates that the use of AICV technology was the best completion method which gives us confidence for future well completion in the area.”

“The East Tapir 3-D seismic program has been completed ahead of schedule and under budget and we hope to develop additional prospects with the same level of success as resulted from our earlier 3-D seismic program northern part of the Tapir Block.”

“The initial six horizontal wells in the Carrizales Norte field have stabilized to lower declines and have now paid out or are in the process of paying out. Arrow expects to add significant production this year through further Ubaque horizontal wells. In addition, we are evaluating the potential for drilling horizontal wells targeting the large C7 Carbonera zone that resides in the Carizales Norte complex.”

“The original US$ 50 million Board approved budget that includes drilling 23 wells in 2025 is continuously reviewed and scenarios are being considered in light of the current economic conditions and the corresponding volatility in oil prices.  Arrow remains flexible with a strong balance sheet and drilling inventory. Additionally, Arrow’s strong balance sheet may allow the Company to take advantage of financially distressed assets and Arrow continues to evaluate acquisition opportunities. We will provide further guidance regarding any modifications to our capital program as the economic and oil price environment stabilizes.”

“We appreciate the support of our longstanding shareholder base as well as the dedication of our talented staff.”

In difficult times Arrow is just what you want to shelter from big fluctuations in the oil price, production remains solid with reserves being replaced in the quarter and with the drilling programme giving ample opportunity to up both those yardsticks and yet with flexibility to only deliver the best.

With over $25m of cash in a very strong balance sheet I can’t think of almost any company in the sector I would rather back in these market conditions and the company is strong enough to take advantage of any acquisition opportunities. Target price unchanged at 75p.

PetroTal Corp

PetroTal has provided the following operational and financial updates. All amounts are in US dollars unless stated otherwise.

Key Highlights

• PetroTal group production averaged approximately 23,280 barrels of oil per day (“bopd”) in Q1 2025, including a full quarter contribution from Block 131;
• Bretana Q1 2025 production averaged approximately 22,660 bopd, a 17% increase on Q4 2024 and a 22% increase on Q1 2024;
• Total cash of $114 million as of March 31, 2025, essentially flat to YE 2024;

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
“PetroTal’s production continues to reach new highs in 2025. We established a new quarterly production record in Q1 2025 and are tracking ahead of our annual production guidance range of 21,000 – 23,000 bopd.

Our operations team is hard at work preparing for two projects that will ramp up during the second quarter. We are currently mobilizing equipment and steel components for the erosion control project, where field work should commence at Bretana next month. At Block 131, we are preparing a workover program at the Los Angeles field, before our new drilling rig arrives around mid-year.

That said, PetroTal is closely monitoring the oil price outlook. As disclosed previously, we have hedges on nearly 40% of our remaining 2025 oil production. We also have a high degree of flexibility to manage our capital program in line with our funding capabilities. We remain committed to developing our assets at a responsible pace, in tandem with a stable return of capital program, and will provide additional updates to guidance as necessary.”

Another cracking quarter from PTAL who have yet again hit new highs, production averaged 23,280 bopd in the first quarter which included a first full contribution from Block 131. Bretana Q1 2025 production averaged approximately 22,660 bopd, a 17% increase on Q4 2024 and a 22% increase on Q1 2024, again a fantastic performance.

As forecast the company continues to work on the erosion control project where work is due to start next month. Also, as Manolo told me in his last interview with me, the company is planning a workover programme at the Los Angeles field in Block 131 when the new rig arrives ‘around mid year’. 

The company unsurprisingly has some $114m of cash in the balance sheet, flat on year end 2024 and continues to protect revenues with hedges amounting to some 40% of production. The current international circumstances are not helpful but if any company in the sector has the most defensive qualities it is PetroTal. 

Q1 2025 Production Update

PetroTal’s group production averaged 23,280 bopd in Q1 2025, including 22,660 bopd from the Bretana field and 620 bopd from the Los Angeles field. Bretana production increased 17% relative to Q4 2024 and 22% relative to Q1 2024, establishing a new record quarterly high for the field. Bretana production averaged approximately 23,100 bopd in March 2025, a record monthly high for the field. Los Angeles field production was flat relative to Q4 2024 and down from an average of approximately 950 bopd in Q1 2024.

Bretana field production remains supported by contributions from PetroTal’s active 2024 development drilling campaign. Well 23H, which was brought onstream in the last week of February, produced an average of 3,363 bopd in March 2025, reaching a maximum daily high of 5,110 bopd. Well 22H, which was brought onstream in mid-January, produced an average of 4,386 bopd in March 2025.

Cash and Liquidity Update

PetroTal ended Q1 2025 with a total cash position of $113.6 million, of which approximately $103 million was unrestricted. This compares to total cash of $114.5 million at the end of Q4 2024 and $85 million one year ago. Stability in the Company’s cash position compared to YE 2024 is due to a relatively light development program in Q1 2025, offset by the settlement of payables from prior quarters. As of March 31, PetroTal’s unaudited accounts payable and receivable were approximately $60 million and $87 million, respectively (vs. comparable values at YE 2024 of $88 million and $85 million, respectively).

As disclosed previously, PetroTal has entered into production hedges on approximately 40% of its forecast 2025 production volumes. The costless collars have a Brent floor price of $65.00/bbl and a ceiling of $82.50/bbl, with a cap of $102.50/bbl. As of Monday April 7, PetroTal’s production hedges had a present value of approximately $11 million.

Sintana Energy, Challenger Energy Group, Corcel

In my latest Core Finance interview I talk to Robert Bose of Sintana Energy. Robert is also Principal and Managing Member of Charlestown Energy Partners and a Non Executive Director of Challenger Energy Group. We discuss Sintana’s interest in exploring conjugate margins in Namibia, Uruguay and also Corcel in onshore Angola.

Here is the link to the interview.

Core Finance CEO Interview: Robert Bose of Sintana Energy

Sound Energy

Sound has announced its audited final results for the year ended 31 December 2024. 

HIGHLIGHTS

Development of the Moroccan Tendrara Production Concession (the ”Concession”)  

Phase 1 Micro LNG (”mLNG”) project (”Phase 1”):

• Safely installed production tubing and completed workover of both wells necessary for first gas production
• LNG storage tank at the final stage of construction at site, with roof installed
• Extensive activity continued offsite with our contractor and its sub-contractors designing and constructing plant equipment and receiving the equipment at site
• Key equipment arrived at site for commissioning
• Processed gas expected at plant in Q4 2025

Phase 2 Gas (pipeline) development (”Phase 2”):

• Continued progress made for project financing from exclusive lead arranger, Attijariwafa Bank, Morocco’s largest bank

Exploration

• Exploration licences are all in the process of extension and renewal

Corporate

• In December 2024, completed partial divestment of the Concession and Grand Tendrara and Anoual exploration permits, through the sale of the Company’s subsidiary, Sound Energy Morocco East Limited (SEME), to Managem SA. SEME held a net 55% working interest in the Concession and 47.5% interest in the Grand Tendrara and Anoual exploration permits. The Completion of the transaction unlocked significant future funding of the Company’s retained 20% interest in the Concession and 27.5% interest in the exploration permits

Graham Lyon, Executive Chairman said:
”Significant progress has been made in advancing the sustainability of the Company through the transformational transaction with Managem which brings a substantial co-venturer that will operate the mLNG project, provide Sound Energy’s equity funding to take FID on the Phase 2 pipeline project and fund two exploration wells for Sound. Sound is now able to evaluate further growth opportunities, either within the current asset base or externally whilst seeking to further strengthen its portfolio and balance sheet.

We have enjoyed a supportive working relationship with ONHYM, the Ministry and our various contractors in Morocco and, most importantly, we continue to benefit from the hard work and dedication of our own staff. We will continue to work diligently to deliver value, revenue and progress for all our shareholders during 2025 and beyond, as we focus on material developments in transition energy.”

Sound has come a long way in the last five years and is now in spitting distance of revenues and with funding, potential exploration activity is resuming. Add to that the company seem poised for further growth and Sound is changing, one for the radar screen I suspect. 

Coro Energy

Coro has announced that it has conditionally sold its interest in the Duyung PSC.  This represents the final stage of its strategic pivot to clean energy in South East Asia and enables the Company to now focus its resources on its exciting renewables portfolios in Vietnam and the Philippines.

The Company has now entered into an agreement in relation to the sale, by its wholly-owned subsidiary Coro Energy Duyung (Singapore) Pte Ltd (“Coro Duyung”), of its 15% participating interest in the Duyung PSC (the “Participating Interest”) to West Natuna Exploration Ltd (“WNEL”), a subsidiary of Conrad Asia Energy Ltd (“Conrad”).

The terms of the agreement of the sale (“Agreement”) are conditional, inter alia, on: (i) approval from Indonesia’s Ministry of Energy and Mineral Resources (“MEMR”) to the transfer by Coro Duyung of its Participating Interest to WNEL having been obtained on or before 31 August 2025 (“Government Approval”); and (ii) the approval of the terms of the Agreement by Shareholders of Coro at a general meeting of the shareholders of Coro to be held on or before 15 May 2025 (“Shareholder Approval”) (the “Conditions”). 

The terms of the Agreement provide for:

the release of Coro Duyung from any obligation to pay existing or future cash calls;

• a total cash consideration of US$300,000 to be paid by Coro to WNEL following Shareholder Approval.  This payment represents a US$477,000 saving on the amounts Conrad maintains is outstanding by Coro Duyung as at the end of December 2024;
• following receipt of Government Approval, the issuance to the Company of 500,000 new ordinary shares at no par value in Conrad (“Conrad Shares”). The Conrad Shares had a value of approximately US$225,000 based on the AU$0.75 closing share price of Conrad on 9 April 2025; and
• within 45 days of the first commercial production in respect of the Duyung PSC, the issue of further new ordinary shares in Conrad (“Additional Conrad Shares”) to Coro equal in value to US$750,000. To the extent that Conrad or WNEL’s interest in the Duyung PSC falls below 20% at that time, then such payment may be reduced dependent on the extent of that reduction on interest. 

All Conrad Shares and Additional Conrad Shares are locked-up for a period of twelve months from the date of issue.

The proposed disposal follows a long period of continued ongoing costs required to support the asset without achieving expected commercial milestones. The Company’s 15% position in the Duyung PSC was held on its balance sheet at US$18.9 million as at 30 June 2024, however the Company intends to impair the Duyung PSC carrying value down to the transaction consideration.

General Meeting

The Company is intending to hold a general meeting (“General Meeting”) on or before 15 May 2025 at which the necessary shareholder resolution will be proposed (“Resolution”). A circular convening the General Meeting is expected to be posted to Shareholders on or before 30 April 2025 and will be made available on the Company’s website at www.coroenergyplc.com.

Recommendation and Voting Intentions

The Directors consider the transaction to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that the Shareholders vote in favour of the Resolution to be proposed at the General Meeting, as the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares, representing approximately 1.51 per cent. of the Company’s existing Ordinary Shares.

Tom Richardson, Chairman, commented:
“This is a pivotal moment for Coro and the result of a long process to streamline and strengthen the Company’s portfolio and anchor our renewables strategy in SE Asia, which continues to progress very successfully. Having recently completed the restructuring and refinancing of the Company and now brought clarity and focus to our portfolio, I believe we have a strong platform for growth and look forward to updating Shareholders on this transaction and further news-flow.”

Pivotal maybe and a long process without doubt and for what result? If this is what we have all been waiting for then maybe we wouldn’t have stayed the course, writing off what would in the old days been a decent pools win is the result. 

But the spend spend spend has produced a portfolio of more than decent renewables assets in SE Asia which are indeed progressing ‘very successfully’ and will cost less to grow than an expensive gas plant at Duyung…The new Coro is now unencumbered and ready to fly… 

United Oil & Gas

United has provided a technical and operational overview on the Walton Morant Licence offshore Jamaica. This detail follows the Company’s recent announcement confirming an early two-year licence extension to 31 January 2028, and renewed momentum in the farm-out process with multiple parties now under NDA.

Operational and Economic Highlights:

• Early two-year licence extension to 31 January 2028
• Multiple parties under NDA and farm-out process advancing
• c. 7 billion¹ barrels of potential unrisked prospective resources
• c.$8.5/bbl¹ estimated development cost and c. $25/bbl¹ breakeven in success case
• United’s Internal estimate NPV10 of c. $23 billion based on Gaffney Cline 2.4 billion unrisked mean prospective resource (at $80/bbl oil, 2% inflation)
• Attractive fiscal terms Work programme permitting underway
• Strong government support

Farm-Out Process and Industry Engagement

United have re-engaged with selected parties who had previously expressed interest before the farm-out process was suspended in December 2024, as well as new interest from additional groups. At present, multiple companies are under Non-Disclosure Agreements (NDAs) and actively reviewing data as part of the farm-out process. Further updates on the farm-out process and technical progress will be provided

Jamaica: A Unique Frontier Oil & Gas Opportunity

Jamaica represents one of the last great frontier exploration opportunities globally. The Walton-Morant Licence is a world-class asset, comparable in scale and geological potential to ExxonMobil’s prolific Stabroek Block in Guyana, where over 11 billion barrels of recoverable oil have been discovered. Like Stabroek, Walton Morant features large structural traps with high-quality reservoir potential but remains substantially under explored, presenting a compelling investment opportunity.

The Walton-Morant Block: A Transformational Exploration Opportunity

The 22,400km² Walton-Morant block hosts over 40 identified leads and prospects. Eleven of these have been independently verified by Gaffney-Cline in a Prospective Resources Report (“PRR”), collectively estimated to hold over 2.4 billion barrels of unrisked mean prospective resources. Internal estimates from UOG and previous operators indicate that licence’s total exploration potential could exceed 7 billion barrels.

The licence comprises two distinct geological basins, each offering high-impact exploration potential.

Walton Basin:

• Several large, high-impact prospects including Colibri (406 MMbbl3), Oriole (220 MMbbl3), and Streamertail (221 MMbbl3).
• 29 leads and prospects including five PRR-certified.
• Potential upside exceeding 4 billion barrels1 identified across identified leads and prospects.

Morant Basin:

• Several high-impact structures, including Thunderball (603 MMbbl3) and Moonraker (323 MMbbl3).
• 11 leads identified to date on 2D seismic, including six PRR-certified leads.
• Potential upside exceeding 3 billion barrels1 across identified leads.

Key Licence Attributes:

• Vast Exploration Potential – over 40 identified leads and prospects, with combined unrisked prospective resources exceeding 7 billion barrels1.
• Globally Competitive Fiscal Terms supporting exploration and long-term investment.
• Access to 2,250km² of high-quality 3D seismic data, allowing detailed subsurface imaging to refine prospects and reduce exploration risk.
• Strong government support, providing clear regulatory processes to facilitate exploration and development activities.

Advancing the Farmout and Work Programme

UOG remains focused on securing a farmout agreement to unlock the full potential of the Walton Morant Licence, with multiple high-calibre industry players under NDA and evaluating the asset.

United’s work programme is in the planning and permitting stage, focusing on further technical de-risking activities. This includes piston core sampling to enhance reservoir understanding, and reprocessing of existing seismic data to refine prospectivity across the licence.

Brian Larkin, CEO of United Oil & Gas, commented:
“With our early licence extension secured, we are pleased to present this technical and economic overview, highlighting the world-class exploration potential and compelling economics of the Walton Morant Licence.

With over 2.4 billion barrels independently certified prospective resources and internal estimates exceeding 7 billion barrels, this licence remains one of the most compelling, frontier exploration opportunities globally.

Strong renewed interest from multiple potential partners is clear validation of the scale and potential value of this licence. We remain focused on securing the right farm-out deal for our shareholders.”

Nothing much new here, the extension was the vital bit and at the time we already knew quite how important the Walton Morant licence is to UOG given its proportion of the portfolio. But with ‘multiple parties’ now actually looking at the data and the details are above, it is surely hammer time for the team, I wish them well. 

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