WTI (June) $102.18 +$4.11, Brent (July) $107.77 +$3.56, Diff -$5.59 -55c
USNG (June) $2.84 -7c, UKNG (June) 113.50p -1.46p, TTF (June) €46.485 -€0.44

Oil price

Oil is up slightly today as President Trump leaves for China and his meetings with President Xi. The line being offered is that the war may not be on the agenda, at least formally but US oil and gas exports to China is more likely to be. Trump said overnight that he didn’t need help from China with regard to Iran as he has it ‘under control’. 

The API stats showed a draw in crude of 2.2m barrels with little change in products, the EIA later today is expected to show a draw of around 2-3m barrels across all three categories.

And we have the US retail gasoline numbers for last week, overall the price is $4.50, up another 4.8c w/w, a rise of 37.7c m/m and +$1.38 y/y. And if you are unlucky enough to live in California you will pay Exxon $5.969 for each of their gallons.

Arrow Exploration

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

Icaco-1 Exploration Well

The Icaco 1 exploration well (IC-1) was spud May 5, 2026, and reached target depth on May 9, 2026.  The IC-1 well was drilled, on time and under budget, to a total measured depth of 7800 feet (7524 feet true vertical depth) and encountered multiple hydrocarbon-bearing intervals.

Log analysis shows 30 feet of pay in the Carbonera C7  formation, 15 feet of pay in the Gacheta formation and 26 feet of pay in the Ubaque formation.

Arrow plans to production test the IC-1 well in the three formations that are hydrocarbon-bearing on petrophysical analysis, the Carbonera C7, Gacheta and Ubaque.  After tests and clean up of the wells has been completed, over the coming weeks, Arrow will provide production testing results.

Marshall Abbott, CEO of Arrow commented:
“We are very encouraged by the well log results of the Icaco 1 exploration well. The upcoming tests, and any subsequent development wells, will give Arrow an indication of the magnitude of the discovery. These initial drilling results are better than we anticipated and display once again the hydrocarbon density of the Tapir Block.”

“The Icaco prospect, highlighted by the proprietary 3-D seismic, supports the scope and repeatability of this suite of conventional reservoirs in Tapir Block.”

“Arrow has now drilled five successful exploration wells in the Tapir Block which have subsequently resulted in 40 development wells. This demonstrates significant value additions to the Company. Management looks forward to updating shareholders on the exciting progress at Icaco in the near term.”

While this is early days for the Icaco exploration well the initial findings look exceptionally good, It took only four days to drill to TD and obviously on time and under budget. The well ‘encountered multiple hydrocarbon-bearing intervals’ with 30′ of pay in the Carbonera C9 formation, 15′ in the Gacheta and 26′ in the Ubaque formation. 

Arrow will now test and clean up the well before completing and they will analyse the data over the coming weeks before providing results. CEO Marshall Abbott states that they are ‘very encouraged’ by the logs and will lead to an idea of the size of this discovery. Once again the results, which exceeded expectations, and also validates the huge ‘hydrocarbon density of the Tapir Block’. 

The shares are starting to motor and are up 10% today but if the results here are proven to be as good as it first looks, then onwards and upwards. My target price is still 40p but could easily look conservative if the basin comes in as I expect it to. 

Afentra

Afentra has announced its audited annual results for the year ended 31 December 2025 as well as providing detail on its debt refinancing and an update on the Strategic Review process.

Strategic Announcements

• Strategic Review concluded: The Afentra Board has concluded a comprehensive review of the strategic options to realise maximum value for shareholders from the significant Angolan portfolio assembled since the company’s inception in 2021. The Board has determined that given today’s announcement of a successful re-financing at a reduced cost of capital, the significant change in the macro environment and the early start to infill drilling focussed on delivering material production and reserves growth, where the company’s costs will be carried, Afentra is well placed to pursue the next phase of growth as an independent E&P company, ensuring that the value of Afentra’s significant potential will be to the benefit of the Company’s shareholders. As a result, the Company is no longer in an “offer period” as defined by the Takeover Code.
• Debt Refinancing secured: $125 million Gunvor Pre-Payment Facility secured, will replace the existing Reserve Base Lending (“RBL”) and Working Capital Facility; 4-year tenor to 2030, lowering cost of debt and providing long-term funding to support the Company’s investment programme.
• Pacassa SW drilling underway: the high impact Pacassa SW well operations were initiated in April, the well, which is carried, has the potential to add material production and reserves with results expected in June 2026. 

Post-Period End Highlights

• Block 3/05 Drilling: fully carried two well programme underway with spud of Pacassa SW

Crude Oil Sales & Revenue(1):

• 0.480 mmbbls sold in April at $119.3/bbl average price, generating $57.2 million revenue, of which $30.0 million was received in advance. Hedge related liabilities of $8.0 million to be settled.
• 0.517 mmbbls sold in January at $65.4/bbl average price, generating $33.8 million revenue.
• Etu Energias transaction revised: Sonangol elected to participate; new SPA signed
• Net average production: four months to 30 April 2026: 5,968 bopd
• Kwanza Onshore: eFTG survey completed; KON4 licence awaiting Council of Ministers approval

2025 Key Highlights

• 2025 Net Average Production (working interest): 6,324 bopd
• Crude Oil Sales: 1.63 mmbbls sold at $70.2/bbl average price generating $114.4 million revenue
• Fourfold contingent resources increase: 2C WI contingent resources increased to 87.3 mmboe
• Block 3/24 award: Afentra’s first operatorship, 40% working interest
• Kwanza Onshore Expansion: KON4 licence contract initialled
• Year-end position: cash $10.2 million, net debt $21.8 million

Financial Highlights

• Revenue of $114.4 million
• Year-end cash of $10.2 million; net debt of $21.8 million
• Borrowings, RBL drawn $31.5 million; Debt / Adjusted EBITDAX 0.6x
• Adjusted EBITDAX of $51.7 million and loss after tax of $3.2 million
• Four liftings totalling 1.63 mmbbls, average price of $70.2/bbl
• Share purchase programme commenced in 2025 to cover future share award requirements, thereby avoiding dilution; 4,943,128 shares acquired to date at average price of 47.7 pence per share

Operational Highlights

• Block 3/05 and 3/05A gross average production 21,268 bopd (2024: 21,111 bopd)

Reserves & Resources

• 2P WI reserves of 31.9 mmbo, 3-year average reserves replacement of 94% to end 2025
• 2C WI contingent resources of 87.3 mmboe, fourfold increase across Blocks 3/05, 3/05A and 3/24

Capex ~$220 million gross (Net: $66 million) covering asset integrity, revamping and drilling preparation

• 28 LWI’s delivered during the period, sustaining production performance
• Water injection averaged 37,798 bwpd; rates of ~50,000 bwpd consistently achieved in Q4 2025
• FSO recertification work programme completed; formal recertification received in early 2026

Portfolio Expansion

• SPA signed with Etu Energias for additional interest in Block 3/05 and 3/05A; transaction subsequently revised post period to acquire 3.33% – Block 3/05; 3.66% – Block 3/05A
• Block 3/24 offshore licence awarded with Afentra as operator at 40% working interest
• KON15 licence formally awarded, 45% non-operated working interest
• KON4 Risk Service Contract initialled, confirming Afentra as operator at 35% working interest
• Somaliland Odewayne Block interest transferred to Petrosoma Limited; $1.97 million received in settlement of carry obligations

Refinancing

Afentra has secured a refinancing of its debt facilities through the entry into a $125 million Pre-Payment Facility (“PPF”) with Gunvor Group, this will replace its existing RBL Facility and Working Capital Facility with Trafigura and MCB.

The new facility comprises $125 million of committed capacity ($100 million initial advance plus $25 million subsequent advance available in 2027 subject to certain conditions), with an uncommitted accordion to scale facility size based on future production growth. The facility carries an interest rate of Term SOFR plus 6% margin with a 4-year tenor maturing in 2030 and a 12-month principal repayment grace period. The facility is secured against Block 3/05 and Block 3/05A liftings, a total committed volume of 8 mmbbls and a targeted minimum annual commitment of 1.8 mmbbls. Proceeds will be used to refinance the existing Facilities, to fund the Company’s near-term work programme and to cover general corporate purposes.

The refinancing significantly lowers the cost of debt and provides funding to support the Company’s near-term investment programme. The Company will continue to consider expansion of this facility utilising the uncommitted accordion or other sources of finance to ensure we remain fully funded to maximise the value of our current portfolio and pursue opportunities for further inorganic growth.

Strategic Review

The Board appointed Jefferies to conduct a process which could have resulted in a sale of the Company, under the UK Takeover Panel’s Private Sale Process. Jefferies approached a number of potential counterparties, with multiple companies engaging in meaningful due diligence, including further inbound expressions of interest. The oil price volatility, coupled with the significant appreciation in the Afentra share price between initial outreach and the proposal deadline caused a number of parties to withdraw from the process. Ultimately a number of actionable proposals were received and considered by the Board. The Board’s assessment of these proposals was that they did not recognise the significant upside value potential within Afentra’s current business and therefore concluded that given the change in macro environment and the refinancing announced today that greater value potential is offered by Afentra pursuing the next phase of growth as an independent E&P listed company.

All discussions with potential acquirors have been terminated. As a result, the Company is no longer in an “offer period” as defined by the Takeover Code, and the disclosure requirements pursuant to Rule 8 of the Takeover Code are no longer applicable.

Paul McDade, Chief Executive Officer, commented:
“The year under review saw Afentra further consolidate its position as a fast-growth independent E&P company in Angola, which included a fourfold increase of 2C WI resources to 87.3m mmboe and the continued expansion of our portfolio in Angola, including the award of our first operatorship with a 40% interest in Block 3/24.  Beyond the solid performance of the Company, a strategic review designed to assess all options to accelerate value growth from our accretive Angolan asset portfolio was conducted.  Given the significant changes in the macro environment, the new debt facility, which will significantly lower our cost of capital, and the carry of the two highly prospective wells in Blocks 3/05 focused on materially increasing both reserves and production, the Board has decided Afentra should remain an independent company, to ensure all of our stakeholders benefit from the delivery of the significant upside in our Angolan asset portfolio.”  

This is a very interesting statement from Afentra, the results are as guided, and of course historic and it is more important to concentrate on the debt refinancing and the end of the bid period following conclusion of the strategic review.

In the last few months much has happened, there have been a number of bonuses such as the farm-out and a number of key strategic moves that build substantially on the value for the future and my target price will be adjusted in due course. 

The carry for the wells has alleviated pressure on the balance sheet and of course with the current oil price realisations have been very high, another thing that makes the financial situation a great deal better and the debt refinancing has made a significant difference.

This is particularly good and not overly obvious in the statement but as I see it the refinancing has made a massive difference to Afentra and will cut costs substantially as I understand that the marketing cost per barrel are greatly reduced, indeed have collapsed. 

This leaves Afentra in a really strong position for the future and the strategic review needs some attention as it does, as I suggested, make interesting reading. The fact that the company has terminated discussions does not come as a surprise, my feeling is that it was highly unlikely that any bidder would be able to make a $100 a barrel valuation and even declined to make a tapered offer.

This would have been difficult and obviously a valuation at anything at a much lower level would simply be unacceptable, ironically I think that should the oil price fall back towards the, say, $60 level bidders would likely emerge from the woodwork as that would give them the upside scope. 

Finally on the bid front I am also unsure whether  any of the possible suitors had really taken into account the full potential of Afentra’s onshore portfolio in Angola. My guess here is that given that it still has to prove up to date potential the valuation was simply too low, again it won’t take long to prove this valuable asset up and add to the long term upside for the company.

I mentioned that in due course my target price will have to go up, and it will. The company has an exciting time ahead of it with in particular the two wells on Block 3/05 which could add significantly to production and they also have interest in 3/24 and of course the onshore blocks I have already mentioned. 

Accordingly Afentra will remain as a stalwart of the Bucket List, recent performance has been mixed, less so in the short term but over six months the shares are up 62% and over a year have risen by 95%, that makes it a valuable contributor in my book.

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