WTI (July) $88.68 -$5.21, Brent (July) $94.29 -$5.29, Diff -$5.61 -8c
USNG (July)* $3.10 +11c, UKNG (July)* 115.33p +2.14p, TTF (July) €47.405 +€0.68
*Denotes expiry of the June contracts

Oil price

Oil is, to be frank, all over the place and no surprise there you will say. Last night it closed five bucks off which is at least for WTI some 15 dollars off the recent peak. This came about yesterday as Iranian newswires claimed that the US ceasefire memo was in the building and as reported here yesterday would have meant the reopening of the Strait of Hormuz.

But all that changed overnight after various skirmishes between the two countries, which reportedly included the US firing at drone launch stations and Iran attacking US shipping and even an airbase. Kuwait also reported inbound missiles which were defended by anti-missile defences whilst rumours that Oman and Iran were discussing a joint approach to policing and charging for access to the Straits of Hormuz went down badly in Washington, unsurprisingly…

So, oil is up a dollar today and we wait….The API inventory stats showed a draw in crude of 2.8m barrels, gasoline was down by 3.199m b’s but distillates built by 1.1m. As expected the SPR was drawn down by 9.1m barrels. EIA stats are due anytime now.

Touchstone Exploration

Touchstone has provided an update on its recent operational activities in the Republic of Trinidad and Tobago.

Highlights

• Oil production growth: The FR-1835 and FR-1836 development wells on the WD-8 block were successfully completed and placed on production in mid-May 2026. Since startup, the wells have collectively averaged approximately 175 bbls/d of medium-gravity crude oil, performing in line with expectations.
• Optimized gas pricing outlook: The Company has been advised that Atlantic LNG Train 4 is undergoing a scheduled 54-day maintenance shutdown that commenced on May 26, 2026. During this period, Central block gas volumes will be redirected to Train 2/3 and the domestic market, which is anticipated to enhance our realized natural gas pricing.
• Progress at Cascadura: Mechanical and electrical installation of the Cascadura facility booster compressor continues to progress on schedule, with commissioning expected to commence in June 2026.
• Carapal Ridge 3 production optimization: Touchstone is preparing for a coiled tubing cleanout and acid stimulation program at the Carapal Ridge 3 (“CR-3”) well to address an inflow restriction and maximize production performance.

Paul R. Baay, President and Chief Executive Officer, commented:
“Operationally, our focus remains on efficiently converting reserves into near-term cash flow. The addition of two development wells on our legacy WD-8 oil block provides immediate, stable cash flow that capitalizes on current strong global crude oil prices. Crucially, these wells were funded via our strategic exchange of the Fyzabad asset last year, which produced approximately 49 barrels per day in 2025, representing an excellent allocation of capital.

Simultaneously, we are on the verge of expanding our natural gas throughput capacity at Cascadura as compressor installation advances toward a June 2026 commissioning. At the Central field, the CR-3 well is awaiting coiled tubing services to commence a well intervention to unlock its full productivity. We continue to prioritize disciplined capital allocation, focusing on high-return well and facility optimizations.“

This is a good operational update from Touchstone, with the FR-1835 and FR-1836 wells successfully being completed and placed on production in mid-May, and averaging some 175 boe/d which is ‘in-line with expectations’ and as above were funded by a smart exchange of assets last year.

I have noted a number of times recently that natural gas pricing has been positively been affected and Touchstone gains from the enhanced realisations that the LNG market affords. Today the company note that the Atlantic LNG Train 4 is undergoing a scheduled 54-day maintenance shutdown which started on May 26th. The company state that ‘during this period, Central block gas volumes will be redirected to Train 2/3 and the domestic market, which is anticipated to enhance our realized natural gas pricing’.

And the release also notes that progress is being made at Cascadura where mechanical and electrical installation of the facility booster compressor continues to be on schedule for commissioning which is expected to start in June.

Finally, at Carapal Ridge 3 the company is ‘preparing for a coiled tubing cleanout and acid stimulation program at the CR-3 well to address an inflow restriction and maximize production performance’ and thus optimise production and unlock its full productivity. 

All in all this is good news from Touchstone, increased production with gas realisations high and helped by the LNG premium adding to increased revenues. My 30p target price doesn’t look over ambitious and the shares are therefore excellent long term value.

Operational Update

WD-8 Block Drilling

Following the conclusion of the WD-8 drilling campaign, the FR-1835 and FR-1836 development wells were completed and brought online in mid-May. Combined production from the two wells has averaged a field estimated 175 barrels per day of medium-gravity crude oil, performing in line with internal expectations. Field operations teams are currently optimizing production flow rates.

Turnkey drilling costs for both wells were funded by the drilling operator under the terms of the strategic asset exchange agreement executed by the Company in 2025.

Central Block Natural Gas Marketing

Atlantic LNG Train 4 is undergoing planned maintenance from May 26 through July 19, 2026. Additionally, the main transportation pipeline serving Atlantic LNG will be offline for planned maintenance between June 15 and June 29, 2026.

During these scheduled infrastructure outages, Touchstone’s natural gas volumes from the Central block are being redirected to Atlantic LNG Train 2/3 or the domestic market. The Company expects this temporary diversion to positively impact its net realized gas price. Based on current benchmark strip pricing, the pricing formula allocated to Train 2/3 is structurally higher than Train 4, while domestic industrial demand remains exceptionally strong, driven by robust local petrochemical and fertilizer (methanol and ammonia) production.

Cascadura Booster Compressor

At the Cascadura facility on the Ortoire block, installation of the new booster compressor is advancing rapidly across both mechanical and electrical work streams, with facility commissioning remaining on schedule to begin in June 2026.

The compressor is designed to lower wellhead backpressure, mitigating regional pipeline capacity limitations and allowing the wells to flow more freely. This project is expected to enhance overall production efficiency and facility reliability. 

CR-3 Well Intervention

Since commencing first production to the facility, the CR-3 well has delivered stable flowing pressures and gross field estimated production rates of approximately 2.2 million cubic feet of natural gas per day and 14 barrels of condensate per day, with no prior interventions performed.

As previously announced, ongoing reservoir performance analysis indicates a localized inflow restriction within the formation, likely caused by residual drilling and completion fluids. To unlock the well’s full productivity, Touchstone has designed a targeted coiled tubing cleanout and acid stimulation program.

Operations are currently contingent on the availability of a local coiled tubing unit. The sole local service provider capable of executing this program is currently addressing mechanical issues with its unit and sourcing replacement parts. Given the favourable gas pricing associated with the Train 4 diversion, Touchstone is evaluating whether it is commercially advantageous to defer the CR-3 shut-in and optimization program until the Atlantic LNG maintenance window concludes.

Prospex Energy

• Prospex has announced its audited Final Results for the year ended 31 December 2025 and Notice of the Annual General Meeting on 23 June 2026.
• Corporate Highlights
• Acquired 100% ownership of Tarba Energía S.L., including the El Romeral gas-to-power project and Tesorillo permit
• Selva Malvezzi signs new 12- month gas sales agreement with Hera Group S.r.l.
• Successfully completed a c. £1.2 million placing and subscription to support operational and development activities
• Invested c. £3.8 million into our assets in the first three quarters of 2025, with c. £2.6 million (70%) funded from internal resources
• Appointment of Hannam & Partners (‘H&P’) as Joint Broker
• Appointment of Richard Jameson, as Chief Operating Officer

Post-period Corporate Highlights

• The Company strengthened the board with the appointment of Tom Reynolds as Chief Executive Officer and Simon Ashby-Rudd as Non-Executive Director
• The board undertook a strategic review of the Company’s asset portfolio and corporate objectives to refocus on shareholder value creation
• Total of £2 million raised via Convertible Loan Note (“CLN”), 25% above the original £1.6 million target. Funds used to support the Company’s ongoing activities and anticipated 2026 cash call needs, ensuring the company retains its current ownership stake in all its investments.
• Enhanced shareholder communications and engagement activities to increase shareholder understanding and strengthen market confidence
• Advanced its strategy to expand into a third European country – Poland, with the award of the San and Dunajec exploration licences 

Financial Highlights

• The Company recorded a loss for the year of £2,795,169 (2024: loss – £46,759). The current year’s loss includes an unrealised loss on revaluation of investments of £2,541,311 (2024: unrealised gain £713,583) primarily related to depletion of reserves through production from the Selva Field in 2025 and lower gas prices used for valuation at 31 December 2025.
• The Company is reporting a decrease in shareholder equity (net asset value) at 31 December 2025 of £1,650,233, to £22,939,921 (2024: £24,590,154).
• Total Assets decreased by £1,248,677 to £24,509,190 (2024: £25,757,867).  The decrease is primarily attributable to a decline in the valuation of the Company’s investment in PXOG Marshall Limited, the investment vehicle that directly and indirectly holds 37% of the Selva Malvezzi production concession in Italy, primarily related to depletion of reserves through production from the field and lower gas prices at year end.
• At 31 December 2025, the Company held cash and cash equivalents of £38,935 (2024: £1,185,386). Post period the Company extended the CLN offer raising an additional £653,950 which, together with higher than budgeted cashflow from gas sales, saw the company ending Q1 2026 with a cash balance of £907,000 (unaudited). This is expected to cover general working capital requirements as well as anticipated capex costs for the balance of 2026.

Operational Overview

Selva Field – Northern Italy

• Consistent gas production throughout 2025 from the Podere Maiar-1 well.
• The share of production for the year attributable to the Company’s investment was 10.4 MMscm, and the share of gross revenue earned from gas sales was €4.1 million.
• Signed a new 12-month gas sales agreement with Hera Trading to supply approximately 27.96 MMscm at prices linked to the Italian Gas Index (IG Index GME), which typically trades at a premium to TTF.
• Secured INTESA approval and final MASE authorisation for a 3D seismic acquisition campaign
• In December 2025, the operator completed the acquisition of approximately 140 km² of 3D seismic data, on time and within budget.
• Continued technical and permitting work in support of the planned four-well development programme.

Post-Period Selva Field Highlights

• In Q1 2026, stable production continued with gross production of 7.26 MMscm (net to Prospex 2.69 MMscm), which was sold at an average realised price of €0.43/scm, generating €1.155 million net revenue.
• Gross cumulative production exceeded 72.9 MMscm, passing the milestone certified P1 reserve level.
• Progress made on Environmental Impact Assessment (EIA) updates and development planning for the Casale Guida-1d, Ronchi-1d, Bagnarola-1d, and Selva Malvezzi-1d wells, incorporating feedback from the Ministry.
• Data from the 3D geophysical survey is undergoing processing by Schlumberger Italy

Tarba Energía, El Romeral licences and Tesorillo/Ruedalabolia Permits  – Southern Spain

• In April 2025, the Company announced the acquisition of outstanding shares of Tarba Energía, resulting in full ownership of the El Romeral gas-to-power project and the suspended Tesorillo and Ruedalabola permits.
• Generated 3,752 MWh of electricity during H1 2025, delivering revenue of €365,152; however, the plant was offline from 1 July 2025 due to transformer availability issues. A new transformer was ordered in November 2025.
• Progressed permitting for five new development wells, with the EIA consultation process completed without objections from statutory consultees or the public.
• EIA statutory consultation for five new wells was publicly gazetted in February 2025 following the submission of the permit application in May 2024.

Post-Period Tarba Energia Highlights

• Production restart at El Romeral following the installation of a replacement rental transformer.
• Continued to engage with Spanish regulators regarding the delivery of permits to drill five wells at El Romeral and connect to the Spanish gas grid, supporting direct gas export.
• Engaged with potential third-party investors who have appetite and financial capability to support development of the El Romerol assets. 

Viura Field – Northern Spain

• Gross production from start-up in December 2024 to end-Q1 2025 totalled 30.2 MMscm (1.1 Bcf) gross, or approximately 4.4 MMscm (154 MMscf) net to Prospex.
• Undertook a workover programme on the Viura-1B well following the detection of a tubing leak at the beginning of April 2025, which resulted in the well being shut down.
• Resolved wireline equipment issues encountered during testing operations in August 2025.
• The Viura-1B well was brought back online on 17 October 2025 with gas production increased in stages.
• Achieved average production rates of approximately 190,000 scm/d during November 2025.

Post-Period Viura Field Highlights

• During Q1 2026, operator HEI conducted a series of production trials to support the construction and calibration of a dynamic reservoir model, which will be used to inform future development drilling decisions.
• Average production rates during Q1 2026 were 107,800 scm/d gas and 163 scm/d water, although these are not indicative of steady state production.
• Modelling work is ongoing with a steady-state regime expected after the calibration trials
• 2026 focus is on the preparation of an independent reserves report with the potential to underpin a debt facility at HEI, minimising shareholder dilution and planning for future drilling and tie-in activities.

San and Dunajec Licences – Poland

• Applied for two exploration licences in the Carpathian Foreland Basin.
• San and Dunajec licences awarded post year-end with Prospex holding 100% ownership.
• Expanded the Company’s European portfolio into a new operating jurisdiction with established oil and gas infrastructure.
• Began compilation and review of historical geological and production data across both licence areas.
• Continued technical assessment of the Mniszów undeveloped oil discovery within the Dunajec licence area to understand potential for near term drilling and development.

Commenting on the results, Tom Reynolds, Prospex’s CEO, said:
“First of all I would like to thank Andrew Hay for his support since I joined Prospex and also for his service on the audit committee in preparing these accounts.

“Since my appointment in February, I have undertaken a comprehensive review of the Company’s asset base and believe Prospex is well positioned with an enviable portfolio that combines existing cash flow, development upside and longer-term exploration potential. Selva Malvezzi continues to demonstrate its importance as the Company’s foundation asset, delivering stable production and revenue while supporting the technical work required for the planned multi-well development programme. At the same time, El Romeral has returned to production, Viura offers significant potential to deliver future shareholder value through increased production and planned development activity, and our newly awarded licences in Poland provide additional longer-term upside exposure.

“I was also grateful to our shareholders for their continued support, which was evident during our extended CLN offering, which took place post period. Their support, and the additional circ. £654,000 raised, means that we are fully funded for our anticipated capex commitments this year.

“Meanwhile, European energy security and domestic supply remain high on the political agenda, and natural gas prices continue to reflect broader geopolitical pressures. We believe Prospex offers investors rare exposure to these macro tailwinds as well as attractive opportunities to add value at the asset level across its portfolio.”

This is a big wide-ranging announcement which covers a lot of ground, it is worth assessing the progress made last year but given how much is going on shareholders will undoubtedly concentrate on the here and now, and the future.

In 2025 Prospex invested in its main assets, led at Viura as it participated in the capex necessary to re-instate safe production following a casing leak. At Tarba it increased its stake to 100%, supporting the business and thus preserving the opportunity to pursue the gas resources at Romeral. 

And finally at Selva it funded its share of the seismic acquisition costs which supported a better understanding of the subsurface targets ahead of a 2027 drilling programme. As a result of these moves the company is in a strong position, the company say that there is no significant planned capex for the balance of this year and as they say, ‘the bases are loaded’.

As the company works through the portfolio it has a number of significant projects on the go, as I see it a great deal has happened and developments are happening at a pace. Firstly the award of the Polish licences was important and they have serious potential, in particular there is an undeveloped oil discovery which Prospex are assessing as a path to early cashflow. 

At Tarba the company are engaged with the Spanish regulators regarding permits and also with potential investors with regard to activity that would be pursued after the permit award, highly promising. Whilst at Selva that seismic data is being processed ready for feeding into an updated CPR and thus planning for a drilling programme in 2027. 

Finally at Viura the operator HEI are engaging in dynamic reservoir modelling and calibration to support planning of further development drilling, again in 2027. Prospex is now in a good financial state following the highly successful, oversubscribed CLN where it should be noted that the company only took what was needed from the raise to ensure that they had suitable cash headroom for anticipated 2026 activity. 

I have been very positive about Prospex for some time, it has an exceptional portfolio of European gas assets at a time when they are needed more than ever before and with what can be described as significant unpriced value potential. 

As can be seen, activity momentum is building across the portfolio as the company develops these assets through this year and into 2027, under CEO Tom Reynolds shareholders have much to be excited about.

Petro Matad

Petro Matad  provide the following operational update.

Key updates

• PetroChina has advised that the 2026 Oil Sales Agreement will be approved imminently.
• Production from Heron-1 and Gazelle-1 continues in line with forecast.
• A technically and commercially attractive proposal to acquire a 3D seismic programme over the Block XX Exploitation Area during the coming months is under review.
• The recent rise in oil price has seen interest from potential partners in Petro Matad’s portfolio increase and farm-in discussions are progressing.
• Work is continuing on our 200MW Hybrid renewable energy project and Sunsteppe Renewable Energy is pursuing three new, sizeable projects.

Oil Sales Agreement

As previously reported, all issues outstanding with the 2025 Oil Sales Agreement were resolved and payments were made. In subsequent discussions with industry regulator the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), with Block XIX operator PetroChina and with the General Tax Authority of Mongolia, a common understanding was reached on the best way to word the 2026 Oil Sales Agreement to align it with the Petroleum Law and tax legislation. Although PetroChina Mongolia approved the new agreement, approval stalled in their headquarters as their Compliance Department sought an amendment to PetroChina’s contract with the refinery to incorporate wording relating to Block XX crude. However, we are now informed that this issue has been resolved and the approval process will be completed shortly.

With Block XX production accumulating in the Block XIX storage tanks and with a rising oil price through 2026, Petro Matad was prepared to give PetroChina time to resolve its issues as the delay in selling the year’s production to date, which totals c.35,000 barrels, gives the Company the chance to secure a substantially higher price per barrel than had the oil already been sold month by month through the year. In parallel, Petro Matad approached Chinese oil traders to set up an independent route to market in case the delay continued. Interest was shown and this remains an option, but with PetroChina’s approval now expected, the tried and trusted export operation remains our strong preference.

Block XX production

Heron-1 continues to perform as forecast with average oil production from the well of 126 barrels per day through the first quarter. The water cut remains low and stable at c.3%. The gradual decline in the oil rate is in line with the production characteristics of the basin. The approved plan of development for Heron includes water injection wells later in the field life to support reservoir pressure and improve recovery per well and increase the overall recovery factor from the field.

Gazelle-1 production has been optimised and the water cut has stabilised at c.20% with daily oil production averaging 123 barrels which is greater than our initial forecast when water breakthrough was first detected.

Since Gazelle-1 came on stream in November 2025, we are pleased to report that Block XX operating costs have not increased above the level they were at when we had only Heron-1 in production. This has been achieved as a result of the savings in power generation realised after connecting Heron-1 to the national electrical power grid. With Gazelle-1 performing above expectation, we are looking at the economics of connecting this well to the transmission line at Heron-1.

Production operations are continuing to run smoothly with excellent cooperation in the field between the Petro Matad and PetroChina teams. 2026 production to date totals c.35,000 barrels of crude and Block XX production since start up now exceeds 110,000 barrels.

Farm-out

Discussions with the most advanced potential farminee have not yet reached a conclusion. The counterparty chose to do some seismic reprocessing of Block XX data. We await their feedback. We are disappointed that the evaluation is moving so slowly but the current high oil price has led to a significant uptick in interest from other potential partners for Block XX and Block VII and we are following up.

2026 Work Programme

The Company has received a technically and commercially attractive offer from the seismic acquisition contractor with the most experience in Mongolia to conduct a high resolution 3D seismic survey over the Block XX exploitation area. We are urgently evaluating the proposal as the crew is available to begin in late June or early July. With existing 3D covering the northern portions of both the Heron and Gazelle fields but not the southerly up dip culminations of these traps, state of the art 3D seismic will provide the structural definition required to drill future appraisal, development and exploration wells. New data should also improve seismic resolution at the reservoir level compared to that provided by the existing 2D and 3D surveys which were all acquired more than 15 years ago.

On well work for 2026, whilst Heron-1 and Gazelle-1 are still performing at or above forecast, we will not undertake any workover activities on these wells at this time. Petro Matad is in discussion with a specialist company with the capability to workover the Heron-2 well to see if it can improve the flow potential of the reservoir at this location. We are also awaiting feedback from the well test contractor to secure a cost effective proposal for the testing of the Gobi Bear-1 well.

SunSteppe Renewable Energy

SunSteppe Renewable Energy (SRE)’s operational focus in 2026 remains on its 200MW hybrid wind, solar, and battery energy storage project in Tuv Province. Changes at Cabinet level in the Mongolian government in recent months have slowed the Ministry of Energy’s evaluation of the feasibility study for the project and its Science and Technology Committee has yet to meet to review and approve it. Work at site to gather wind data continues.

Following the recent changes in leadership, the government has accelerated renewable energy and battery storage projects to help address growing power demand and grid stability requirements. This is expected to create a supportive environment for SRE’s ongoing and planned developments and 2026 has seen an increase in new projects being offered or becoming available.

SRE is part of a short-listed consortium that has submitted a bid for a 90MW solar/battery project for Ulaanbaatar city. SRE has also submitted an expression of interest on a 100MW wind/battery project being managed on behalf of the government by the International Finance Corporation.

In addition to these two projects, SRE is assessing the potential of another 100MW utility scale solar/battery project under the government’s broader efforts to improve winter power supply reliability. With Ulaanbaatar having suffered power outages last winter due to interruptions in service at its ageing coal fired power plants, the government needs larger scale battery storage projects online this winter and will expedite all necessary approvals to achieve that goal. SRE has had positive discussions with potential financing institutions, construction contractors and strategic partners regarding possible participation.

Mike Buck, CEO of Petro Matad, said:
“The delay in approving the 2026 Oil Sales Agreement has been frustrating but the rising oil price has given us the chance to benefit significantly from a commercial standpoint so the news that the approval is coming soon is most welcome. Interest from Chinese oil traders in our 2026 inventory also means we have an independent export route in case we need it.

We are pleased to see the interest in our portfolio from several new potential partners. Whilst the discussions with these entities are going on, the availability of the crew for a 3D seismic shoot in Block XX presents us with a value-additive opportunity which we are evaluating as a priority.

SRE’s rising profile in-country has generated some new, sizeable renewable energy opportunities which we are excited to pursue and which could deliver substantial value in the near term if the deadlines can be met.”

Not much good news to report from Matad today in this operational update. The Oil Sales Agreement has been delayed but apparently is ‘imminent’ and the oil is being stockpiled which is good given market prices.

Production is still modest, Heron-1 is doing 126 b/d but declining and Gazelle-1 123 b/d which is ‘in line with forecast’ and in the latter greater than initially forecast. 

Finally the farm-out discussions are still progressing but have ‘stalled with the latest potential farminee choosing to do seismic reprocessing of Block XX data’ and whilst this is disappointing the rise in the oil price has led to ‘a significant uptick in interest from other parties’. 

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