WTI (Oct) $64.60 +45c, Brent (Oct) $68.62 +57c, Diff -$4.02
USNG (Oct) $2.94 +5c, UKNG (Oct)* 78.45p -o.3p, TTF (Oct)* €31.86 +€0.345
*Denotes expiry of September contracts

Oil price

It’s a funny old world and the oil price is being as tricky as ever in response to its reaction to events. Historical actions that might have had a material effect on the price, particularly geopolitical ones are now tossed aside very lightly.

So last night, less than a week after the two Presidents were warmly shaking hands, Russia destroyed significant infrastructure in Kiev including British and European diplomatic buildings and Ukraine hit further refineries in Russia leaving them with a substantial loss of 4.6m tons of product off the market according to Reuters.   

As for good old fashioned supply and demand economics and you can go whistle for help, India can buy what it likes off Russia, because its that cheap and China are filling inventories from the same source. Highly regarded CNBC anchor Steve Sedgwick says that in this scenario there appears to be little that can ignite the upside, maybe he’s right but then the IEA have been consistently wrong in over-egging the renewable share of the energy market…

Monday sees Labor Day in the USA which apart from its traditional significance is also known as the end of the summer driving season. Back to school, put the gas guzzler back in the garage until Thanksgiving…

Rockhopper Exploration

Rockhopper has provided the following update in respect of the insurance policy announced on 14 October 2024, intended to protect against an unsuccessful outcome in the Ombrina Mare ICSID arbitration, and the exit of Rockhopper’s other Italian assets, as also announced on 14 October 2024. 

Annulment Insurance

Rockhopper is delighted to confirm that it has now received the full €31 million entitlement under the insurance arrangements (the “Insurance Proceeds”).

A new request for arbitration has been drafted and is expected to be submitted in the coming weeks. An update will be provided in Rockhopper’s interim results to 30 June 2025. Under the agreement (the “Monetisation Agreement”) with the new funder announced on 20 December 2023, the costs of contesting the new request for arbitration are borne by the new funder.

To the extent that Rockhopper makes a financial recovery from any new arbitration, after deductions for any reasonable costs and expenses incurred, that recovery will be utilised to reimburse the insurers in respect of the Insurance Proceeds.

Italian Disposal

On the 14 October 2024, Rockhopper announced its planned exit from Italy through the signing of a share purchase agreement (“SPA”) with Zodiac Energy Limited (“Zodiac”). The SPA is for the sale of Rockhopper Civita Limited (a wholly owned subsidiary of Rockhopper Exploration Plc). Rockhopper Civita Limited holds all Rockhopper’s Italian assets and liabilities, except for the Ombrina Mare arbitration.

The SPA is conditional on receipt of approvals from the Falkland Islands Government and the Italian regulator. As part of this approval process, the Italian regulator requested the recapitalisation of Rockhopper Civita Limited (the “Recapitalisation”) before consideration be given to the proposed transfer. 

The Recapitalisation has occurred; however, this was not envisaged under the SPA and so an amended SPA (the “Amended SPA”) has now been agreed and signed. Under the terms of the SPA, Rockhopper would have paid Zodiac in two instalments, with a retained upside participation to Rockhopper in two undeveloped licences (the “Earn Out Agreements”). Under the SPA, the second of those instalments and the Earn Out Agreements were contingent on successfully defending the Republic of Italy’s annulment application and receiving a minimum of €10 million from the Monetisation Agreement. Following receipt of the €31 million of Insurance Proceeds the substance of the Amended SPA is as previously announced, except the second contingent tranche and associated Earn Out Agreements are no longer contingent and as if Rockhopper had won the annulment. The key terms of the Amended SPA are:

• As consideration for the transaction, Zodiac will pay £1 and assume any outstanding liabilities from Rockhopper to Rockhopper Civita Ltd, such amounts not to exceed €4.5 million.

In turn, on completion, Rockhopper will:

• Provide evidence of the Recapitalisation and any subsequent additional recapitalisations;
• Provide evidence of there being no less than €5.5 million, in aggregate, in Rockhopper Civita Limited’s cash and term deposits balances; and
• Receive the Earn Out Agreements – meaning that Rockhopper will retain a royalty on two assets within the Rockhopper Civita Limited portfolio, those being AC19 (a northern Adriatic licence with two gas discoveries and an additional adjacent prospect) and Serra San Bernado (which contains the Monte Grosso exploration prospect).

The royalties will take the form of either 10% of the revenues of the interests acquired by Zodiac or, should they realise value by on-selling the licences acquired, 25% of the gross proceeds received for the part sold.

The transaction continues to be subject to both Italian regulatory and Falkland Islands Government approval, the timing of which is uncertain. To allow for the delays caused by the Recapitalisation, the longstop date under the Amended SPA has been revised to 31 March 2026, which should be sufficient to enable these approvals to be given.

Following completion of the transaction, Rockhopper will have no remaining liabilities relating to its Italian licences, its P&A liability will have been reduced by some US$12.6 million (as at 31 December 2024) and its annual cash burn reduced by approximately €500,000 – €750,000.

Samuel Moody, CEO of Rockhopper, commented:
“The steps announced today provide us with further strategic and commercial clarity as we continue to focus on progressing the Sea Lion development. The combination of the insurance and transaction with Zodiac allows us to refocus the Company on Sea Lion by further reducing both short- and long-term costs, reducing risk, and protecting our balance sheet whilst maintaining some potential upside in two Italian licences.”

See RNSs dated 20 December 2023, 17 June 2024 and 21 June 2024 for further background on the monetisation of the Ombrina Mare award

This amended SPA seems rather complicated but I am assured that it is done to give the effect of winning the annulment rather than getting the insurance …

Hunting

Hunting yesterday today announced the commencement of a share buyback programme in respect of its ordinary shares of 25 pence each (“Ordinary Shares”) for a maximum aggregate consideration of up to $40 million (the “Share Buyback Programme”), which is expected to run from the date of this announcement until completion.

As noted in the Group’s trading update on 9 July 2025, the Directors are pleased with Hunting’s financial performance since 2023 when its capital allocation framework was published at its Capital Markets Day (“CMD”). Given the strong trading reported since the CMD, the Directors have reviewed the Company’s capital allocation priorities and, following discussion with major shareholders, have announced an increase to the dividend distribution ambition together with a proposed share buyback, which reflects a rebalancing of its capital allocation priorities.

The Share Buyback Programme has been launched in consideration of the Group’s sustainable cash generation and strong balance sheet. In addition, the launch of the Share Buyback Programme reflects the Directors’ continued confidence in the prospects for the business following the strategic and operational progress made since the CMD.

Details of the Share Buyback Programme

The Share Buyback Programme is expected to be phased over three tranches, with the first tranche being for a maximum aggregate consideration of up to $15 million (the “First Tranche”). The First Tranche will commence today and is anticipated to end during Q4 2025, whereupon the second tranche for a maximum aggregate consideration of up to $15 million (the “Second Tranche”) will commence, and which is anticipated to complete during early 2026. The third and final tranche for a maximum aggregate consideration of up to $10 million (the “Third Tranche”) will commence on the conclusion of the Second Tranche and is targeted to complete during Q2 2026. All proposed timings are subject to market conditions.

Hunting has entered into non-discretionary agreements (the “Agreements”) with each of: RBC Europe Limited (“RBC”) instructing RBC to purchase Ordinary Shares in respect of the First Tranche; Canaccord Genuity Limited (“Canaccord”) instructing Canaccord to purchase Ordinary Shares in respect of the Second Tranche; and Joh. Berenberg, Gossler & Co. KG, London Branch (“Berenberg”) instructing Berenberg to purchase Ordinary Shares in respect of the Third Tranche, in each case, of the Share Buyback Programme. RBC, Canaccord and Berenberg are hereafter referred to as the “Brokers”.

The Brokers will each act as “riskless” principal for the purposes of the Share Buyback Programme, with any purchases of Ordinary Shares made by the Brokers in respect of the Share Buyback Programme to be affected within certain pre-set parameters on an irrevocable and non-discretionary basis and subject to the terms of the Agreements. Purchases of Ordinary Shares will be made on the Company’s behalf in accordance with the Agreements with each of the Brokers, who will make their trading decisions concerning the purchases of Ordinary Shares independently of the Company. Provided the Company is not in a closed period to which it is subject nor in possession of inside information (an “Open Period”), the Company may elect to terminate the non-discretionary nature of the relevant mandates. The Company may subsequently choose to reinstate the non-discretionary mandates of the Share Buyback Programme provided that the Company is in an Open Period at that time. Purchases of Ordinary Shares will continue independently of and uninfluenced by the Company during any closed period to which the Company is subject and/or if the Company comes into possession of inside information.

The sole purpose of the Share Buyback Programme is to reduce the share capital of the Company. As such, all Ordinary Shares purchased under the Share Buyback Programme will be cancelled.

The Brokers will carry out their respective instructions by purchasing Ordinary Shares in the Company on the London Stock Exchange and/or other trading venues. Any purchases of Ordinary Shares by the Company will be in accordance with (and subject to the existence of and/or the limits prescribed by) the general authority to purchase Ordinary Shares granted by its shareholders at the Company’s Annual General Meeting on 16 April 2025 (the “Authority”). The maximum number of Ordinary Shares which the Company is authorised to purchase under the Authority is 24,724,518 Ordinary Shares. The Share Buyback Programme will comply with UK Listing Rule 9.6 of the UK Financial Conduct Authority. The Share Buyback Programme will also be conducted in accordance with the parameters of the safe harbour provisions set out in: (i) Article 5(1) of Regulation (EU) 596/2014 (including the delegated and implementing acts adopted under it); and (ii) the provisions of Commission Delegated Regulation (EU) 2016/1052 with regard to regulatory technical standards for the conditions applicable to buyback programmes and stabilisation measures (in each case as they form part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as implemented, retained, amended, extended, re-enacted or otherwise given effect. There is no guarantee that the Share Buyback Programme will be implemented in full.

Hunting intends to announce any purchase of Ordinary Shares under the Share Buyback Programme on the business day following the calendar day on which the relevant purchase occurred.

In yesterday’s flash blog I couldn’t add this part of the Hunting results announcement, as I mentioned in the text I feel that this is a good move alongside the higher than expected dividend news and will impress shareholders.

Corcel

Corcel has announced that, following the fundraise first announced on 15 July 2025 and the 5 August 2025 General Meeting, all funds have now been received and the fundraise has been completed. The new admission date for the shares will be 1 September 2025.

Angola’s long-overlooked onshore Kwanza basin is attracting fresh industry attention, with excitement building around Corcel’s upcoming exploration plans. For the first time in four decades, a pre-salt exploration well will be drilled onshore, targeting the Sirius prospect in Block KON 16 — a structure thought to contain up to 1 billion barrels of oil in place.

Once a key producing region until Angola’s civil war halted activity in the 1990s, the Kwanza basin is now being revitalised with new technology and investment. Corcel, which holds an 85% stake in KON 16, has partnered with Sintana Energy and is preparing for seismic surveys this year ahead of drilling in 2026. Early data, including gravity and seismic surveys, suggests the basin holds significant untapped potential.

The company is also pursuing producing assets in Angola and Brazil to generate cash flow for its exploration ambitions. If successful, the drilling campaign could unlock hundreds of millions of recoverable barrels, offering Angola a fresh boost in oil production and investment after years of declining output.

Readers know that I have become very keen on Corcel this year, this article is worth reading as it shows what I have been saying about how its very smart management have positioned the company in Angola. With the right backers which they have and good partners, ditto I’m very happy and my TP of 2p is very achievable.

Read the article here.

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