WTI (July) $96.60 +25c*, Brent (July) $96.14 -$6.44, Diff -$46c -$5.77*
USNG (June) $2.91 -11c, UKNG 112.3p -5.27p, TTF (June) €47.34 -€0.645
*US Market shut for Memorial Day holiday

Oil price

After a long weekend oil has been all over the place but overall the trend is down, last week WTI fell $8.82 and Brent by $13.12,  this was due to talks taking place and the weekend saw what was deemed to be progress. A 60 day ceasefire is proposed and has tentative agreement from both sides but how many times have we said that? But today oil has rallied a little after stories that the US has done some sort of an attack on Iran and that Israel has attacked Hezbollah in Lebanon…

BP

bp Chair removed

The Board of BP has announced that it has today unanimously decided that Albert Manifold should no longer serve as Chair and Director with immediate effect. This follows serious concerns raised to the Board related to important governance standards, oversight and conduct.

Amanda Blanc, Senior Independent Director at bp, said:
“Albert has helped bring a welcome focus and pace to bp’s transformation. However, the board has been surprised and disappointed to learn of governance oversight and conduct issues it deems unacceptable and has taken decisive action.”

The Board has appointed Ian Tyler as Interim Chair with immediate effect.

Ian Tyler, Interim Chair, said:
“The Board and leadership team have deep conviction in the strategic direction we have laid out, and the company is moving at pace to deliver it. bp is building a track record of strong underlying operational performance and a tight focus on financial discipline – all in the pursuit of growing shareholder value and returns.

“The Board has been very impressed with Meg O’Neill since she joined as CEO. She has extensive industry and operational experience and real clarity about the direction and opportunity for the business. She has already taken bold action to simplify and strengthen the organization such as announcing the move to a clearly defined upstream/downstream model. Under her leadership we are building a simpler, stronger, more valuable bp.”

A succession process for a permanent Chair will be initiated.

I often get asked why I have been quite so bearish about the BP (Note none of this ridiculous lower case malarkey) culture for so long but today’s news that Bert has been unceremoniously given the Spanish El-Bow even takes me back. It must be one hell of an offence which I am rubbing my hands together to find out about to get fired on the spot…

After all it follows the catastrophe following Lord Browne and the green over exuberance, Looney and the Loonettes, Bo Diddeley and the Russian disaster and of course the operational Snafu at Macondo which must have cost more than $75bn-ish….

Union Jack Oil

Union Jack has announced its audited results for the year ended 31 December 2025.

Copies of the Company’s Annual Report will be posted to shareholders on or before 30 May 2026 and will be available on the Company’s website: www.unionjackoil.com. The Company’s AGM will be held in the George White Suite at The Bristol Hotel, Prince Street, Bristol BS1 4QF on Friday 26 June 2026 at 11.00 a.m.

Financial Highlights

• Gross profit of £691,001 (2024: £1,968,101)
• Net loss of £7,029,350, including impairment of Biscathorpe, North Kelsey and Sark (2024: £649,213 net profit)
• Basic loss per share 5.68 pence (2024: 0.61 pence earnings)
• Oil and gas revenues £2,489,507 (2024: £3,929,722)
• The Company continues to be debt free

David Bramhill, Executive Chairman, commented:
“The Board is confident the successful transition of focus to the USA will continue to drive further growth.

“In the UK, Union Jack will remain focused on the development of its flagship project, Wressle, where the Operator and Joint Venture partners have high-value appraisal and development programmes planned for the future, in particular the unlocking of the material proven reserves of oil and gas that remain in place within the Penistone Flags formation. The Board is confident that within the Wressle development there remains significant upside which will support the Company with revenues for at least another decade.

“I am confident that an increase in drilling, appraisal and development activity currently being evaluated in the pursuit of growth from our balanced UK and USA portfolios has the potential for notable value creation for shareholders. We believe ongoing heightened activity and the expected additional news-flow generated, combined with effective investor engagement on both sides of the Atlantic, will continue to attract the ongoing support of our existing shareholders and the attention of new investors, broadening the appeal of the Company to a wider audience.

The 2025 finals show production as expected and whilst the loss was higher than forecast it is down to impairments of Biscathorpe, North Kelsey and Sark. (2024: £649,213 net profit) Cash at the period end was £1.6m, ahead of expectations as G&A savings kicked in and capex was lower in the period, there is no net debt.

The flagship project at Wressle is continuing well, 2025 production was 297 b/d and that continued through the first quarter according to the most up-to-date data, upgrades of the facility continue while the capex figure is flexible enough to cope with market and political influences.

Indeed there is a plan for what is an exciting long term future at Wressle, the company has  ‘high value appraisal and development programmes planned for the future, in particular the unlocking of the material proven reserves of oil and gas that remain in place within the Penistone Flags formation’. I share the board’s confidence that the Wressle development still has significant upside ‘which will support the company with revenues for at least another decade’.

There has been a great deal of excitement by the partners at West Newton where this potentially substantial asset looks to be preparing for activity in both the short term and potentially in the medium and longer time frame. 

I am expecting the A2 recompletion well before long, this has been mooted as a short term producer as well as an opportunity to gather more data centred around potential flow rates and the operator has talked about a possible data centre or cryptocurrency mining centre on site to de-risk sales and broaden the potential. 

After that the JV has plans for a new horizontal well which itself will bring substantial data on things like flow rates and the potential size of the prize at West Newton including any expansion of the footprint. It should be remembered that the prize is thought to be a possible near 200 bcf of 2C gas resources and so very much a modest risk worth taking. 

In the US the UJO portfolio continues to build strongly with a number of successful wells adding both production and reserves and with a number of wells planned I expect this to continue. For example the Moccasin 1-13 well is producing with more reservoirs still to test where oil shows were encountered and could be returned to as well as potential from seismic data analysed in the area. 

Other wells at Taylor and Andrews continue to produce and the recent Crossroads well has found oil shows in many levels and where a flow-test is expected next month, I am confident that this could also add to production for UJO. 

After a strong run recently in which the shares have risen by around 40%, the shares have fallen today probably as the market looks at the impairments but I am more confident about the short and medium term as the company has significant potential. 

The Chairman comments that UJO has a balanced portfolio geographically and with ‘potential for notable value creation for shareholders’ with which I concur. My target price of 30p does not seem overly optimistic given the upside in the portfolio and the current state of the hydrocarbon markets and the company’s strong position is enviable. 

Arrow Exploration Corp

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

Icaco 1

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 7,800 feet (7,524 feet true vertical depth) and encountered multiple hydrocarbon-bearing intervals.

As previously disclosed, the log analysis shows a total of 30 feet of pay in the Carbonera C7 formation (“C7”), 15 feet of pay in the Gacheta formation, and 26 feet of pay in the Ubaque formation.

Arrow put IC-1 on production on May 15, 2026, in the C7 where the pay zone that was perforated is comprised of two clean sandstones with an average porosity of 25%. An electric submersible pump (“ESP”) was inserted in the well after perforating. During the clean-up period the well reached an average rate of 735 BOPD gross (368 BOPD net) with a 50% water cut for a 15 hour period before settling into the current stable production rate.

The well is currently on production at 15/128 choke, 30 Hz pump frequency resulting in a restricted rate of approximately 628 BOPD gross (314 BOPD net). The oil quality is 27.8° API and there is a 46% water cut (completion fluid and formation water).

The testing results indicate that the well is capable of higher rates, with well and pump optimization, and the ultimate flow rate will be determined over the coming weeks of production.

Initial production results are not necessarily indicative of long-term performance or ultimate recovery.

Icaco 2

The Icaco 2 (IC-2) well, a significant step out from the IC-1 well, was spud on May 18, 2026. The IC-2 well will give Arrow an opportunity to increase production from Icaco, as well as provide further information on the size and materiality of the Icaco discovery.

Forward Drilling Plans

The Company plans further appraisal and development drilling at the Icaco field including potential horizontal well development. With continued positive results at Icaco, the Company would build additional cellars and continue with development drilling that could last until the third quarter.  After initial development at the Icaco pad has concluded, the Company plans development drilling at the AB and CN pads.

Production

Including the restricted production from the IC-1 well, total gross corporate production is approximately 5,100 boe/d. Currently the CN-HZ12 well is offline waiting on a workover. The well was producing approximately 330 BOPD gross (165 BOPD net) when it was shut in. Arrow has continued to shut in the Pepper gas field due to low natural gas prices in Alberta, which was producing approximately 130 boe/d when it was shut in. The Company believes that AECO gas prices will improve in the third and fourth quarter of 2026 once the region moves into the winter months. At that time the Pepper field is expected to be brought back on production.

Marshall Abbott, CEO of Arrow commented:
“Management believes the Icaco 1  well result is a material discovery in the southeastern area of the Tapir Block. Icaco 2, a significant step out to the north, will help delineate the pool and determine initial volumes and areal extent of each individual oil producing zone.”

“The Icaco prospect has been developed by the Arrow team using both 2D seismic and the more recently shot 3D seismic program. The Icaco prospect demonstrates the same technical scope and repeatability of the play type that has proven to be highly successful for Arrow in the Tapir Block in the Llanos Basin of Colombia. Management looks forward to updating shareholders on the progress at Icaco in the near term.”

“With production over 5,000 boe/d, Arrow aims to maintain a strong balance sheet with a healthy cash position, no debt and significant cash flow as seen in our 2025 audited Financial Statements. In the current oil price environment, the Company continues to build cash resources. This provides a stable platform with optionality to pursue both organic growth and accretive acquisitions.”

This is yet another highly successful result from Arrow, and ‘as a significant step out to the north, will help delineate the pool and determine initial volumes and areal extent of each individual oil producing zone’. With IC-2 already spudded and a ‘significant step-out to the north’ I have great confidence that Arrow do indeed have a new oil province on their hands.

The IC-1 well has been brought onstream and having seen peak production at a maximum rate of 816 b/d is now doing 628 b/d on a restricted choke. The oil quality is 27.8° API with a 46% water cut and the company say that the well is capable of higher rates and that ‘with well and pump optimization, and the ultimate flow rate will be determined over the coming weeks of production’. And this is only from the C7 interval, the Gacheta and the Ubaque formations where previously announced logs encountered hydrocarbon bearing intervals.  

This takes production to 5,100 b/d and brings in significant revenue at current realisations and it really does look good at Icaco going forward as the company is planning further appraisal and development drilling including horizontal wells so successful in previous operations. Expect use of four locations already prepared and also the construction of more cellars and drilling into the third quarter.

So Arrow has good production and that is without the CN-HZ12 which is offline awaiting a summer workover and would add another 165 b/d net as well as the shut-in Pepper production. This cash flow means that the balance sheet is robust and building, the company are in a very strong position with solid organic growth and as Marshall Abbott states  ‘provides a stable platform with optionality to pursue both organic growth and accretive acquisitions’. 

The shares are up over 103% in the last six months but there is much more to come and whilst I am maintaining my 40p target price I am already feeling that it is somewhat conservative. Meanwhile Arrow stays in the Bucket List, of course it does…

Southern Energy Corp

Southern has announced its first quarter financial and operating results for the three months ended March 31, 2026. Selected financial and operational information is outlined below and should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related management’s discussion and analysis (the “MD&A”) for the three months ended March 31, 2026, which are available on the Company’s website at www.southernenergycorp.com and have been filed under the Company’s profile on SEDAR+ at www.sedarplus.ca. 

All figures referred to in this news release are denominated in U.S. dollars, unless otherwise noted.

FIRST QUARTER 2026 HIGHLIGHTS

• On February 12, 2026, the Company completed a financing and royalty transaction with certain arm’s-length investors pursuant to which it issued the 2026 Debentures (as defined below) and new common shares in the capital of the Company (“Common Shares”) and granted a 6% gross overriding royalty (“GORR”) on its existing and future developed production (collectively, the “February Financing”). The Company issued 17,000 $1,000 face value senior secured convertible debentures (the “2026 Debentures”) for gross proceeds of $17.0 million, 30.0 million new Common Shares at a price of CAD$0.07 ($0.05) per Common Share for gross proceeds of CAD$2.1 million ($1.5 million) and received $5.0 million of proceeds from the sale of the gross overriding royalty. The February Financing generated aggregate net proceeds of approximately $22.0 million, which were used in part to repay and retire the Company’s senior credit facility (the “Credit Facility”), with the remainder intended to fund development capital and general corporate purposes. The 2026 Debentures mature on December 31, 2028, and bear interest at 7% per annum.
• Following the February Financing, Southern exited Q1 2026 with no senior bank debt, extended maturities to December 31, 2028, and materially reduced its annual cash interest burden from 15% to 7%
• Average realized natural gas and oil prices for Q1 2026 of $5.82/Mcf and $66.99/bbl, compared to $4.14/Mcf and $71.19/bbl in Q1 2025. Southern achieved an average premium of $0.78/Mcf (approximately 16% above the NYMEX Henry Hub benchmark) in Q1 2026
• Petroleum and natural gas sales of $5.5 million during Q1 2026, an increase of 8% from the same period in 2025
• Generated $1.4 million of Adjusted Funds Flow from Operations in Q1 2026 ($0.00 per share basic and diluted), an increase of 115% from the same period in 2025
• Average production of 10,167 Mcfe/d (1,695 boe/d) (96% natural gas) during Q1 2026, a decrease of 21% from the same period in 2025, primarily reflecting the voluntary shut-in of approximately 400 boe/d of production from the Mechanicsburg and Greens Creek Fields in May 2025 due to an ongoing transportation dispute with a third party pipeline operator
• Net loss of $1.3 million ($0.00 per share basic and diluted), compared to a net loss of $3.9 million in Q1 2025

Ian Atkinson, President and Chief Executive Officer of Southern, commented:
“Southern delivered a strong start to 2026, supported by improved natural gas pricing, premium Gulf Coast market exposure and the successful completion of the refinancing transactions earlier this year, leaving the Company with no senior bank debt. During the quarter, we continued to strengthen our financial position, maintain disciplined capital allocation and execute on our strategy of growing funds flow per share through high-return development opportunities.

The retirement of our senior Credit Facility and the establishment of a simplified, more flexible capital structure have significantly enhanced our liquidity profile and reduced financing costs. With the Company funded for currently planned near-term development activity and no near-term bank debt maturities, Southern is well positioned to responsibly advance its inventory of Drilled Uncompleted Wells (“DUC”) and oil and liquids-focused opportunities while continuing to maximize the value of its existing asset base.

Our strategic Gulf Coast positioning continues to deliver a meaningful premium to NYMEX pricing, achieving a 16% premium in Q1 2026, while our fixed-price natural gas hedge program provides additional downside protection and cash flow stability through 2026. As market fundamentals continue to improve, driven by increasing LNG export demand, power generation requirements and broader structural demand growth for natural gas, we believe Southern is well positioned to improve free cash flow generation and long-term shareholder value.

We remain focused on disciplined execution, operational efficiency and prudent risk management as we continue building momentum throughout 2026.”

I remain very happy with Southern and with all the positive news in recent months today adds another plus to the overall financing costs and with positive natural gas pricing is able to really work its excellent portfolio of the strategic Gulf Coast positioning and with it the ‘meaningful premium to Nymex pricing which looks positive in the current environment. The shares have started to perform pretty well, I suggest there is much more to come, Southern has a great portfolio and first rate management. 

Financial Highlights

Operations Update

Southern is pleased to announce that it has executed a Joint Venture Wellbore Participation Agreement (the “Agreement”) in the Williamsburg area with a strategic partner (the “Partner”) to evaluate the Cotton Valley oil prospect. The intent of the partnership for Southern is to reduce our capital exposure on the first two wells and to test this significant resource opportunity at multiple locations. Highlights of the proposed structure include:

Minimum drilling commitment of two wells;

• The Partner will pay $1.95 million of the drilling and completion capital to earn a 50% working interest in each well; Southern will pay the remaining 50% of the well cost to retain operatorship and the remaining 50% working interest;
• Earned working interest is effective immediately, and inclusive of all potential productive zones in the wellbore; and
• The Partner will retain a 5% working interest participation right in each follow-up Cotton Valley well on the established drilling spacing units following the two commitment wells.

Southern has secured a drilling rig for the operation and is expecting to spud the first commitment well (Terrible Creek 21-2 #2) in late July. Well permitting and lease construction is anticipated to begin in late May. The Board of Southern has approved the capital spending of 50% of the gross drill and completion costs of $3.9 million for the first commitment well. Following the successful execution and results of the first commitment well, Southern intends to drill the second commitment well likely in Q4 2026.

Outlook

Southern remains focused on disciplined capital allocation and maximizing funds flow per share through targeted investment in high-return oil and liquids-weighted opportunities across its existing asset base. Following completion of the refinancing transactions earlier this year and the retirement of the Company’s Credit Facility, Southern is now positioned to advance its operational development plans with increased financial flexibility and liquidity. The Company expects development activity to increase during the remainder of 2026, including plans to complete the final City Bank DUC at Gwinville, further enhancing its production profile and operational flexibility. Southern also continues to evaluate additional recompletion and development opportunities across its existing asset base.

The Company continues to benefit from its fixed-price natural gas swap covering 5,000 MMBtu/d at $3.40/MMBtu through December 2026, providing meaningful downside protection and enhanced cash flow stability. Combined with stronger regional pricing and the Company’s improved financial position, Southern believes it is well positioned to execute a disciplined capital program focused on sustainable growth and long-term shareholder value creation.

Southern will continue to actively monitor NYMEX pricing and basis differentials and remains prepared to opportunistically hedge additional production volumes as market conditions evolve. The Company appreciates the continued support of its stakeholders and looks forward to providing further updates as it advances its operational and financial objectives throughout 2026.

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