WTI (Apr) $65.63 -68c, Brent (Apr) $70.73 -76c, Diff -$5.10 -8c
USNG (Mar) $2.92 -7c, UKNG (Mar) 74.15p -2.57p, TTF (Mar) €30.585 -€0.63

Oil price

Oil fell last night, partly due to the API inventory stats showing a build of 11.4m against the whisper of +1.85m and partly as Tehran said that it was willing to make concessions in the talks which restart tomorrow ‘but only if the USA allow peaceful nuclear enrichment’. I would suggest Bob Hope or no hope there and as they say, Bob Hope is out of town. 

Tonight the EIA stats will be important, particularly if they corroborate the API numbers but ahead of the talks tomorrow books may be flat. It is also worth noting the comments by Diamondback Energy, a major Bakken player who said yesterday that ‘fears of a glut to crater commodity prices are fading’ not gone but fading. Oil is up 30 cents this afternoon…

PetroTal Corp

PetroTal has announced the results of its 2025 year-end reserve evaluation by Netherland, Sewell & Associates, Inc. All currency amounts are in United States dollars unless otherwise stated.

Key Highlights:

• Proved (“1P”) and Proved and Probable (“2P”) reserves of 66.4 million barrels of oil (“mmbbls”) and 110.2 mmbbls, respectively, approximately unchanged YoY;
• Replaced 106% and 76% of Bretaña 1P and 2P reserves, respectively, after the field produced 6.9 mmbbls in 2025;
• PDP and 1P after-tax reserve value per share (PV10AT) estimated at $0.48/sh (C$0.66, or £0.36) and $0.75/sh (C$1.03, or £0.56) respectively;
• Changes to PV10AT relative to YE24 are primarily due to a substantial reduction in forecast oil price assumptions, as well as higher development capital assumptions associated with the incorporation of additional production and water disposal wells in the Bretaña field development plan;
• PDP and 1P reserve life index (“RLI”) estimated at 5.2 and 9.3 years, respectively;
• Bretaña 1P and 2P original oil in place (“OOIP”) unchanged at 377 mmbbls and 494 mmbbls, respectively.

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
“PetroTal’s 2025 year-end reserves evaluation highlights the underlying strength of our asset base. While we have adjusted the pace of investment in response to lower commodity prices, the technical foundation that guides our development of the Bretana field remains consistent. Our independent reserves evaluator continues to support an original 2P OOIP estimate of 494 million barrels – unchanged from year-end 2024 and significantly higher than the 329 million barrels estimated when we began development in 2018. Bretaña remains a large, high-quality oil resource with significant long-term potential, justifying continued investment of capital in a proven asset.

Although 2026 requires a disciplined approach to capital allocation, the scale of the Bretaña resource gives us flexibility as market conditions evolve. We are focused on protecting value today while preserving the opportunity to grow reserves over time, particularly if stronger oil prices support additional investment. With a stable technical framework and continued independent validation of our resource base, we remain confident in the long-term outlook for Bretaña and its ability to deliver future reserve growth. We look forward to the planned resumption of drilling in October 2026 and will continue to update the market on our progress as necessary.”

This is a pretty good result from PetroTal, in what was a difficult year in which management acted decisively to mitigate investment ‘in response to lower commodity prices’ which has proved wise and given these numbers, reflect the nature of the world class asset that is the Bretaña field.

Those numbers, year end 2P reserves of 110.2m virtually unchanged year-on-year, after production of 6.9m gives a reserves replacement figure of 76% which is impressive in the circumstances. Even more impressive is the Bretaña 2P OOIP number of 494mmbbls which is unchanged, again very positive and and ‘significantly higher than the 329 million barrels estimated when we began development in 2018’.

For this year the company continues to advocate ‘a disciplined approach to capital allocation, the scale of the Bretaña resource gives us flexibility as market conditions evolve’. This protects value and ‘preserving the opportunity to grow reserves over time’ particularly in times of higher oil prices when higher levels of investment are deemed appropriate. 

PetroTal has the optionality to resume growth and the Bretana OOIP number validates that, a resumption in drilling and maybe even a more favourable commodity price, should mean that at these prices the shares will look like good value going forward.

Touchstone Exploration

Touchstone has announced 2025 year-end reserves. Touchstone’s independent reserves evaluation was prepared by GLJ Ltd with an effective date of December 31, 2025. Highlights of our total proved developed producing (“PDP”), total proved (“1P”), and total proved plus probable (“2P”) reserves from the Reserves Report are provided below. Unless otherwise stated, all financial amounts referenced herein are stated in United States dollars. Readers are further cautioned to read the applicable advisories contained herein.

Paul Baay, President and Chief Executive Officer, commented:
“Our year-end reserves report highlights the strategic integration of the Central block into our producing reserve base, establishing a new pillar for LNG-linked growth alongside our stable oil production and Ortoire natural gas assets. This year’s report also reflects the expansion of our gas marketing portfolio, underpinned by fixed-price sales at Ortoire and high-value LNG contracts tied to Central block production.

While data from the Cascadura-5 well necessitated a downward revision to our Block B reserves, Block A remains on forecast and continues to represent a significant opportunity for production growth, particularly as natural gas pricing is subject to redetermined in October 2027.

This independent evaluation underscores the substantial value of our Trinidadian portfolio. The NPV10 of future net revenues for our 2P reserves was estimated at approximately $653 million before tax and approximately $315 million after tax, which represented a 2 percent increase over 2024 despite our 2025 production.

Furthermore, the addition of medium-gravity oil reserves from Cascadura-5 reinforces the potential of our emerging Herrera play. Through low-cost recompletion opportunities, we are well-positioned to efficiently enhance our production base by tapping lower-zone oil within our Block B assets.

Looking ahead, we remain focused on execution. We look forward to tying in Carapal Ridge-3 for production in late March 2026, commencing our legacy oil block drilling program in March, and commissioning the Cascadura compressor in the second quarter of 2026.“

With regard to reserves, relative to year-end 2024 and after accounting for 2025 production, gross PDP reserves increased by 45 percent to 9,933 Mboe. Gross 1P reserves declined by 5 percent to 27,559 Mboe, and gross 2P reserves decreased by 1 percent to 49,558 Mboe, an impressive number under the circumstances. 

The change is reflected by the acquisition of the Central block which in addition to adding to reserves gives Touchstone access to the high-value LNG contracts, significantly enhancing pricing and ‘expands the gas marketing portfolio’ underpinned as it is by fixed-price sales at Ortoire.

There has been a downward revision of the Block B reserves as a result of the data from the Cascadura-5 well but over at Block A forecasts are unchanged and  it ‘continues to represent a significant opportunity for production growth, particularly as natural gas pricing is subject to redetermined in October 2027’.

All in all this evaluation is a healthy one for Touchstone, providing, as it does, an ‘underscoring of the substantial value of our Trinidadian portfolio’ and the NPV10 of future net revenues for the  2P reserves was estimated at approximately $653 million before tax and approximately $315 million after tax, which represented a 2 percent increase over 2024 despite our 2025 production.

As I said the reserves number looks very respectable despite the Cas-5 downgrade and the production last year and the hit by lower commodity prices. Such resilience in the overall number, only slightly down, gives me confidence in the value of the reserve base which significantly exceeds the market cap. It is time for Touchstone to narrow the gap and the shares to consolidate at a much higher level. 

2025 Operational Highlights

• Transformational acquisition: Closed and integrated the acquisition of a 65 percent working interest in the Central block, successfully adding base LNG production and significant reserves to the Company’s portfolio.
• Facility optimization: Implemented operational enhancements at the Central block natural gas processing plant, driving an approximate 20 percent production increase over acquired levels.
• Cascadura-4 drilling: While the well successfully encountered hydrocarbon-bearing zones, the drill string became irretrievably stuck during operations. Following an assessment of potential completion options, the Company has determined that the ability to safely and reliably produce from the current wellbore is unlikely.
• Cascadura-5 drilling: Drilled and brought onstream the first Block B well to produce both natural gas and medium-gravity crude oil, diversifying the Cascadura production stream. The well contributed a field estimated gross average sales of approximately 1.9 MMcf/d of natural gas and 46 bbls/d of medium crude oil (approximately 362 boe/d) in December 2025.
• Carapal Ridge-3 drilling: Drilled the first new well in the Central block in over 17 years, encountering approximately 1,000 feet of net Herrera sand pay.
• Post-year-end progress: Successfully completed the well in the Herrera formation. Following perforation, cleanup operations recovered natural gas and associated liquids, confirming hydrocarbon presence. The well is currently shut-in and is scheduled to be tied into the Central block facility for production in late March 2026.
• Base oil stability: Maintained consistent performance across the CO-1, WD-4, and WD-8 blocks through a disciplined program of optimizations and workovers, ensuring a stable production foundation throughout 2025.
• Post-year-end progress: In December 2025, the Company completed the sale of the non-core Fyzabad property in exchange for three turnkey drilling wells on the WD-8 and WD-4 blocks. A drilling rig is currently mobilizing to WD-8 to commence the first of a four well campaign, with spudding anticipated in early March 2026.
• Production: Achieved 2025 annual average net production of 4,686 boe/d, with fourth quarter performance climbing to 4,877 boe/d following the startup of Cascadura-5 and Central block optimizations.

Year-end 2025 Reserves Overview 

Touchstone’s year-end reserves reflect the strategic addition of natural gas and NGL reserves from the Central block acquisition, alongside a technical revision to Block B at Cascadura. The Cascadura subsurface model has evolved with each development well, providing a foundation for full-field development. The Cascadura compressor is targeted for commissioning in the second quarter of 2026, which is expected to provide a stable production profile to enhance future forecasting and well-deliverability modeling. With an established pipeline network and infrastructure in place, the Company is positioned for efficient and cost-effective future development.

• Reserves changes: Relative to year-end 2024 and after accounting for 2025 production, gross PDP reserves increased by 45 percent to 9,933 Mboe. Gross 1P reserves declined by 5 percent to 27,559 Mboe, and gross 2P reserves decreased by 1 percent to 49,558 Mboe.
• Asset base evolution: The increase in year-end 2025 PDP reserves reflect the acquisition of the Central block and the addition of Cascadura-5 to the producing base, partially offset by the disposition of the Fyzabad block.
• Technical revisions: Changes to 1P and 2P reserves reflect technical revisions to natural gas and NGL reserves at Cascadura Block B and the Fyzabad disposition, offset by the Central block acquisition and positive technical revisions to crude oil reserves at CO-1, WD-4, and WD-8.
• Before tax value: The before-tax NPV10 of future net revenues increased 35 percent year-over-year to $107 million for PDP. Before-tax NPV10 for 1P reserves was $336 million (down 5 percent from 2024) and $653 million for 2P reserves (down 3 percent from 2024).
• After tax Value: Realized after-tax PDP NPV10 reached $89 million, a 34 percent increase from the prior year. After-tax 1P and 2P NPV10 increased by 2 percent compared to 2024 levels.
• Extensive reserve life: The Company maintains a robust reserve life index of 13.3 years (1P) and 23.2 years (2P), highlighting the long-term sustainability of the asset portfolio.

Star Energy

Star Energy has provided the following trading update for the year to 31 December 2025. The figures have not been audited and are subject to change.

Key highlights:

• Delivered material cost reduction: G&A savings of more than £2.0 million year-on-year, with further cost discipline continuing into 2026.
• Significantly reduced geothermal expenditure in 2025 (down c.£1.2 million versus 2024), while maintaining progress on the Company’s highest value opportunities in our geothermal portfolio, such as projects in the Manchester and Southampton areas. 
• Net production for 2025 averaged 1,886 boe/d; the Company anticipates production of c.2,000 boe/d in 2026, supported by a flexible capital programme focused on quick-return, cost-saving and resilience projects.
• Strong liquidity and active balance sheet management: cash at 31 December 2025 was £7.6 million (excluding restricted cash) and the Company had drawn £11.9 million (€13.6 million) under its loan facility; restricted cash of £4.5 million (€5.2 million) relates to performance bonds for Croatian licence commitments.
• Monetised non-core assets: completed the sale of non-core land, receiving proceeds of £6.3 million in H1 2025.
• Disciplined investment in the producing portfolio: £5.3 million invested in oil and gas assets in 2025, including £2.7 million on the Singleton gas-to-wire project and the remainder on production optimisation and plant upgrades. In addition, we are forecasting £1.4 million spend on abandonment activities.
• Maintaining flexibility in 2026 capex (currently forecast at c.£6.3 million), including £2.6 million to complete Singleton gas‑to‑wire (targeting Q2 2026 start-up; forecast production c.74 boe/d).
• Realised oil hedging gain of £1.2 million in 2025. The Company has continued its hedging programme in 2026, placing hedges to protect the downside given the forecast oversupply in the market.
• The Company made Energy Profits Levy payments of £1.7 million and £1.0 million based on taxable profits for the years ended 31 December 2024 and 31 December 2023, respectively.
• The Company continues to assess value-accretive acquisition opportunities where the Company’s substantial UK tax losses and allowances can be utilised to enhance returns for shareholders.

Commenting today, Ross Glover, Chief Executive Officer, said:
“Our focus remains on deploying our capital as rigorously as possible combined with delivering a strong operational performance.  Against the backdrop of significant volatility in oil prices during the year and a challenging operating environment we strengthened the resilience of the core oil and gas business, delivering material administrative cost savings of more than £2.0 million and maintaining effective downside protection through our hedging programme. We also materially reduced geothermal expenditure versus 2024.  We maintain a low cost development platform, ready for investment when the right policy frameworks are put in place.

Cash generated from operations, alongside the £6.3 million proceeds from the Holybourne disposal in April 2025, supported continued investment in the asset base and reduction in net debt. These actions have helped underpin a meaningful re‑rating in the Company’s equity, with the share price increasing from 7.4p on 2 January 2025 to 9.5p on 31 December 2025 and standing at 13.5p as at 24 February 2026.

Production volumes in 2025 were below our expectations, driven by a number of discrete issues. At Gainsborough and Welton, unplanned National Grid power outages during summer infrastructure upgrades, together with a process pipeline failure, impacted output; the grid works are now complete, no shutdowns are scheduled for 2026 and the pipeline issue has been resolved. At Stockbridge, water disposal constraints reduced production and we are addressing this through conversion of a production well to a water injector, with production expected to be reinstated in Q3 2026. Across the portfolio we are working to minimise downtime and have a programme of work that will holistically assess, on a field by field basis, the opportunities to improve oil recovery. 

Our Singleton gas‑to‑wire project has been delayed due to protracted regulatory approvals required and delays to the final connection to the grid. All major plant items are installed onsite and we are working constructively with the operator to complete the grid connection. We continue to target commissioning in Q2 2026.

In 2026 we will continue to improve the profitability and resilience of the oil and gas business, whilst also seeking to generate shareholder value from our geothermal assets in the UK and Croatia. In parallel, we are actively evaluating value‑accretive acquisition opportunities where our substantial UK tax losses and allowances can be utilised to enhance after‑tax returns and create shareholder value.

I believe that domestic onshore oil and gas continues to play an important role in the UK’s energy mix and energy security and note the increasing public recognition of this, with both the Conservative and Reform Parties emphasising the importance of oil and gas in the national energy balance.

I look forward to providing a fuller update in April when we release our annual results.

This is an extensive and illuminating trading update from Star which appears to be genuinely on the mend under the leadership of Ross Glover who has steadied the ship and started to ‘strengthen the resilience of of the core oil & gas business’ which I have been applauding. 

Production last year was 1,886 boe/d (1,989) below best expectations but the guidance for this year shows an increase to 2,000 boe/d which is supported by ‘a flexible capital programme focused on quick-return, cost-saving and resilience projects’.

A big plus in this update is the reduction in net debt, at £4.3m against last year’s £7.5m, helped by disposals and a very handy cut in G&A costs of £2m. With regard to capex, guidance for this year is some £6.3m showing an easing off of some geothermal expenditure whilst sticking with the highest value opportunities in the portfolio. 

I have been a solid supporter of Star since Ross Glover took over as CEO, he has backed the oil & gas business and selected geothermal projects whilst clearing up the mess he inherited. Those initiatives are paying off, the shares have increased by 42% over a month, 108% over six months and 64% year on year and with the outlook for more of the same Star is without doubt back on the radar screen.

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