WTI (Oct) $64.80 +$1.14, Brent (Oct) $68.80 +$1.07, Diff -$4.00 -7c
USNG (Sep) $2.70 u/c, UKNG (Sep) 83.45 n/a, TTF (Sep) €33.625 -€0.4 

Oil price

Last week oil was up modestly but have given up that today. The stories still revolve around Ukraine and Russia who appear to be getting more hardened if anything.

Reabold Resources

Reabold has announced that LNEnergy Limited (“LNE”)’s Small Scale -LNG development plan in Colle Santo, Italy, was granted a positive opinion by the Independent Environmental Impact Assessment (“EIA”) Commission of the Italian Ministry for the Environment and Energy Security. This is a significant milestone towards the final EIA Ministerial Decree and the award of the Natural Gas Production Concession. At the end of the regulatory journey, LNE will be enabled to operate the two existing gas wells and to develop the project to produce liquified natural gas (“LNG”) for maritime and road transportation, as part of the Italian Plan for fighting Climate Change and ensuring Energy Security (“PNIEC”). In July 2025, Reabold increased its interest in LNE to 46.2%.

Mark Frascogna, CEO of LNE, commented: 
“We are pleased with MASE’s decision, which validates our technical and scientific approach throughout the review process. The project fully complies with the strictest environmental requirements under current legislation, and we are confident about completing the final administrative steps towards concession.”

The Colle Santo project will produce clean LNG on a small scale, with near-zero emissions, using 100% renewable electricity. It aims to serve maritime and road transportation while supporting the Adriatic ecosystem and the local industrial, agricultural, and tourism sectors.

Francesco Di Luca of Italfluid and Head of the Colle Santo site, added: 
“This outcome reflects the multidisciplinary work of our technical team and the adoption of cutting-edge plant solutions. The project ensures compatibility with Natura 2000 protected areas, meeting demanding environmental standards.”

LNE is now engaging with institutions, local communities, and businesses in Val di Sangro to establish protocols for territorial development and make LNG available to strategic regional industries.

Highlights and Next Steps:

• Positive Opinion received from the VIA Commission for the development of Colle Santo
• Granting of full Production Concession by MASE
• Finalisation of funding agreements
• EPC contract execution with Italfluid
• Offtake & prepay agreement with Gunvor
• Utilisation of prepay to cover significant share of CAPEX
• Development start with two production wells already drilled and tested
• FID anticipated in the coming months

Stephen Williams, Co-CEO of Reabold, commented: 
“The VIA commission Positive Opinion is an exciting step forward for the project and the key element from a regulatory approval perspective. There is strong momentum behind Colle Santo with offtake terms agreed in the HoA with Gunvor and the EPC contract with Italfluid progressing well.

“As one of the largest onshore gas developments in Europe and, at a time when low levels of investment into indigenous resources has left the continent with significant security of supply issues, Colle Santo is a nationally significant project in Italy. It is both environmental friendly and strategically and economically valuable, and we are delighted to be able to play a part in producing micro-LNG, providing a much needed transition fuel to the region.”

This is very good and important news indeed for Reabold as this positive opinion is the most and particularly key element in getting the project approved, ‘this is a significant milestone towards the final EIA Ministerial Decree and the award of the Natural Gas Production Concession’.

 A failure at this hurdle before means that this is a serious victory for the syndicate at Colle Santo and made even sweeter as many sceptics suggested may never be achieved. I am delighted for the fact that Reabold and that they have been vindicated for the decision to invest in Italy something that they took a lot of heat for. 

The shares have risen around 8% at time of writing which is good but probably could do a great deal more given that now both of Reabold’s projects are showing significant scope to confirming signs of reaching profitable maturity and able to prove to be wise investments. This being the case, the shares are massively undervalued and with risks being reduced substantially recently, offer serious grounds for inclusion in the next Bucket List.

Zephyr Energy

Further to its announcements on 24 June and 30 July 2025, Zephyr has announced the completion of its US$7.3 million acquisition of working interests in accretive, mature proved developed producing assets in core Rocky Mountain basins, U.S. The Acquisition has an effective date of 1 June 2025, with cash flow accruing to Zephyr from that date. 

In addition to the PDP assets, the Acquisition includes attractive, near-term proven undeveloped (“PUD”) upside and additional acreage with potential for future development.

Upon the completion of the Acquisition, the Company elected to divest a small package of the newly acquired operated wells in North Dakota and Wyoming (the “divested assets”) to a neighbouring private upstream operator. In exchange for the divested assets, Zephyr received total consideration of US$1.5 million, comprised of US$679,000 in cash and the assumption of US$822,000 in mostly near-term plugging and abandonment liabilities.

Based on management forecasts, the Acquisition, adjusted for the sale of the divested assets, will add production of approximately 388 barrels of oil equivalent per day (“boepd”) net to Zephyr in the first month of production (versus an initial, pre-divestiture estimate of 400 boepd). Zephyr will continue to actively manage its asset portfolio and will consider both acquisitions and divestitures which are deemed value-accretive and in the best interests of Shareholders.

In addition to the existing production, the Acquisition has already provided investment opportunities suitable for Zephyr Hawk LLC, the US$100 million strategic partnership announced by the Company on 13 May 2025 (the “Joint Venture”). From the 1 June 2025 effective date, the Acquisition has provided 18 new development well participation opportunities suitable for Joint Venture funding (an increase from the 5 opportunities at the time the transaction was initially agreed upon).

Colin Harrington, Zephyr’s Chief Executive, commented: 
“We are delighted to complete the Acquisition, which adds high-margin production and additional proved reserves to our existing asset base. We now have cash-flowing non-operated investments across key Rocky Mountain regions, our longstanding area of focus. In particular, this enhanced geographical position will give us a new foothold into active developments in the Powder River Basin, as well as increased exposure in the Williston Basin.

“The Acquisition also provides us with the opportunity to execute the first transactions through our US$100 million Joint Venture, and we look forward to advancing further opportunities through the Joint Venture.

“I’d like to reiterate that Zephyr has always actively managed its asset portfolio to create Shareholder value, and the Acquisition has offered immediate opportunities to do so. During the period between the signing of the initial Letter of Intent and the completion of the Acquisition, we received an offer related to the divested assets. In addition to providing immediate cash consideration and the assumption of near-term liabilities, the sale of the divested assets also saves significant future costs related to maintaining operatorship in two new jurisdictions. As such, we elected to divest these wells immediately after their acquisition, without significant impact to our previously released Acquisition production forecasts.  

“We look forward to providing further updates on the Acquisition and our Paradox project, where we expect to publish a revised Competent Person’s Report in the near-term.”

Completion then for Zephyr of this previously announced acquisition. which fills in the jigsaw giving a foothold in the Powder River Basin plus increased exposure in the Williston Basin. It also has the new $100m JV and it looks like they have the first targets to invest in.

Along with some divested wells which don’t change the numbers much, the upside is substantial. Finally those with a short memory will remember that I recently reminded shareholders that there is a potentially huge upside across the portfolio, best in class management will attract similar predators….

Williston project update

The Company will provide the results of hydrocarbon sales and production from its non-operated Williston project for the second quarter of 2025 (“Q2”) as part of its half-year financial results which are expected to be published by the end of September 2025.

The Q2 results will incorporate production from the Acquisition, which became effective on 1 June 2025.

Petro Matad

Petro Matad Limited, the AIM quoted Mongolian oil company is pleased to provide the following update. 

Key updates

• Block XX well testing operations are underway at Heron-2.
• Oil sales payments for the months of May and June have been received and the July payment is being processed by PetroChina.
• Block XX Exploitation Licence extended by three years along with customs duty payment holiday.
• Application for a new PSC has been withdrawn as coordinates have not been confirmed.
• Block XX farm out discussions ongoing.

Production Operations

Mobilisation of equipment and crew for well test operations on the Heron-2 well has been completed and downhole work commenced on 25 August. The planned activities include an acid wash over the reservoir interval and a retest of the well. Work is being carried out by DQE International under the Company’s close supervision. The first phase is expected to take c. 20 days to complete. If a commercial rate of oil production is achieved during the test, then the well will be completed as a producer and production facilities will be installed with the aim to have the well on stream before year-end. If a commercial rate of oil production is not achieved, then a water injectivity test will follow to assess the potential to use Heron-2 as a water injector to provide reservoir pressure support to enhance production at Heron-1. 

Upon completion of well operations at Heron-2, equipment will move to the Gazelle-1 location for well test operations there during the second half of September. A well test at Gobi Bear-1 will then follow.

Oil Sales

Payment for oil sales for the months of May and June have been made by PetroChina with c. $320,000 received. Once again, PetroChina has withheld 30% of the invoiced amount pending progress with the Mongolia tax authorities on its tax concerns related to the oil sales agreement. The July oil sales invoice was submitted as per the signed agreement in early August and we are pushing for payment on this too. In parallel, the Company’s discussions with the Mongolian tax authorities have progressed well and we are advised that they are preparing a letter addressing the concerns raised by PetroChina. A number of meetings have been held with the PetroChina finance team during the month and will reconvene as soon as we have the letter from the tax authorities in hand.

Extension of Block XX Exploitation Licence

The Company has been in discussions with both the industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), and with the Ministry of Industry and Mineral Resources (MIMR) for some time regarding the long delays suffered on Block XX after the July 2021 award of the Block XX Exploitation Licence until the granting of land access in May 2024. We have now secured from MIMR a three-year extension to the duration of the Exploitation Licence in recognition of the time lost. The immediate significance of this is that the five-year payment holiday period for customs duties on imported goods and equipment is also extended by three years which will result in savings in future operations.

Withdrawal of Application for new acreage in the Mongolian exploration licencing round

As reported in December 2023, Petro Matad was chosen by the government as the selected contractor for the award of two new Production Sharing Contracts (PSCs) and we subsequently signed the Block VII PSC in January of this year. On the other block, the Company set a condition precedent in its application that the coordinates of a culturally protected area in one of the larger sedimentary basins within the acreage needed to be confirmed by the government before the Company would sign the contract. The coordinates have still not been confirmed and so Petro Matad has withdrawn its application for the acreage. As and when coordinates are confirmed, Petro Matad will review the acreage again as part of its ongoing evaluation of prospective open areas in the country.

Block XX Farm out

As previously reported, one counterparty in our Block XX farm out process requested and was sent a draft farmout agreement and other pertinent documentation. Further discussions have taken place and a draft Letter of Intent is in circulation for acceptance and signature covering the completion of mutual due diligence and negotiations. Discussions continue.

Mike Buck, CEO of Petro Matad, said:
“We look forward to a busy period with the well test operations planned in Block XX.

We are pleased to have received another payment from PetroChina but we are focused on removing the withholding and getting paid in full and on time as per the signed agreement. Cooperation at site between our production team and PetroChina’s Block XIX field staff continues to run smoothly.

The approval of a three-year extension to the Block XX Exploitation Licence shows that MIMR recognises just causes and remains focused on improving the business environment in the upstream sector in Mongolia. The approval was secured through the persuasion and persistence of our government relations team.

The withdrawal of our application for a second new PSC is prudent given that access to explore prospective areas remains in doubt whilst coordinates are unconfirmed. Our new Block VII PSC has no such uncertainties and the support of central and local authorities in the area has already been demonstrated during the first phase of our activities.”

Today’s announcement seems to cover all sorts of stuff but to be honest its Heron-2 and the operations on there that really catch my eye. They have only just started so there’s nothing to get excited or otherwise yet and so the acid wash and retest should do the trick…

Success will lead to completion as a producer and it will be all smiles and onstream this year, failure means using it as a water injector to enhance the Heron-1 production. Elsewhere payments are coming through from PetroChina but need to get the withholding dramas out of the way. 

Overall optimism all the way round as one would expect from Mike Buck and I wish him well in his hard work. 

Further operational updates will be provided in due course.

Prospex Energy

Prospex has informed shareholders that it has been advised by the Operator of the Viura field, HEYCO Energia Iberia S.L, that the recompletion workover of the Viura‑1B well, in the Viura gas field in northern Spain, was achieved without the need for a coil tubing unit, resulting in significant cost savings.

In addition a short flow test carried out at the well confirmed that the well is operating successfully after the workover, demonstrating strong deliverability from both the well and the Viura reservoir.

During the short flow test the following rates were achieved:

• 100,000 scm/d (3.5 MMscfd) at a 10% choke setting.
• 200,000 scm/d (7.1 MMscfd) at a 25% choke setting.
• Both flow tests produced dry gas with no water from the topmost section of the main Utrillas‑A reservoir, fulfilling one of the main objectives of the workover intervention.

As advised in the RNS of 31 July 2025, the Operator successfully replaced the tubing in the Viura-1B well but now advises of a delay to the reinstatement of production from the Viura-1B well due to technical and equipment issues, both sourcing and implementation, which are delaying the resumption of production and which they are working urgently to address.

The Company is waiting for further information from the Operator, including the likely timing of the resumption of production, which is currently unknown, and will keep shareholders informed of the Operator’s progress as appropriate.

Prospex owns 7.24% of the Viura field through its ownership of 7.5% of HEYCO Energy Iberia S.L. (“HEI” or the “Operator”).  Prospex is accruing 14.47% of the production income from the Viura gas field until payback of its capital investment (expected to be ≈£8 million) plus the accrued 10% p.a. interest thereon.

Mark Routh, Prospex’s CEO, commented:
“Initial production tests at the Viura-1B well have confirmed what we have always known and the reason we invested in Viura – the potential to deliver first class flow rates from this large onshore gas field.  However, interventions in deep, deviated wells such as Viura-1B are technically complex and take time to execute and are not without challenges especially since the necessary equipment may not be immediately available in region. However, we are confident that the Operator is working urgently to bring the Viura field safely back into continuous production from the Viura-1B well and I look forward to updating shareholders on its progress in due course.”

Things are going well at Prospex although typically ‘complex’ and ‘take time to execute and not without challenges especially since the necessary equipment may not be immediately available in region’. This isn’t unusual, neither is the lack of timescale for the restart of production but it seems simple enough and it’s certainly saved them costs which will be retrieved. 

After a long period of underperformance Prospex shares are picking up quite well, when all the potential of this announcement eventually filters though I would expect that to continue. At long last European gas is almost being appreciated, patience is a virtue…

Empyrean Energy

It is with great sadness that the Board of Empyrean advises that the Company’s Managing Director/CEO Tom Kelly passed away after a tragic accident on Friday, August 22.

Non-Executive Chairman Mr John (Spencer) Laycock stated:
“On behalf of the Board and all at Empyrean we extend our sincerest condolences to Tom’s family and friends. Tom was much loved and respected and will be dearly missed by everyone at Empyrean”.  

RIP Tom Kelly

This is terrible news, I knew Tom for many years and for whatever reasons I was one of the few who saw some potential in the Jade and Topaz prospects in the China Sea although it was never to be. I spent hours poring over seismic maps with Gaz and him a few years ago, the potential was huge…

He was sometimes difficult to get hold of and then he would pop up at the crack of dawn updating me with the latest news. I met him last in London and he still had ‘the bug’. My sincere condolences to his family and friends, with whom my thoughts and prayers are resting.

The Board of Empyrean has appointed existing Technical Director Gaz Bisht as interim CEO, effective immediately. The Board will conduct a search process for a permanent CEO in due course. 

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