Another interesting week:
RockRose Energy (RRE) issued an operations update. Cash at close of business on 25 March 2020 was £287 million, of which £248 million was unrestricted. They anticipate unit operating costs of around $30 per barrel of oil equivalent in 2020 and at least $50 million capital expenditure will be deferred. Current market capitalisation is £85 million.
Hurricane Energy (HUR) reconfirmed that it has a strong balance sheet, including $164.3 million of unrestricted cash at 18 March 2020 and is in a strong position to weather this current downturn. However, it warned that should this change in the market environment persist, it is likely to have a material impact on their capacity to fund capital expenditure. A further concern was the announcement on Friday that a crew member on the floating production storage and offloading vessel at the Lancaster field had been evacuated to the mainland for medical reasons and subsequently tested positive for COVID-19. Their current market capitalisation is £213 million.
Gulf Keystone Petroleum (GKP) announced an operational and corporate update, confirming that “at current production levels, the Company covers all operating, general and administrative costs and interest payments with a Brent price of around $35 per barrel.” Production currently is around 38,000 barrels of oil per day and the balance sheet is strong with cash of $154 million at 23 March and no debt repayment until mid-2023. Current market capitalisation is £135 million.
Bahamas Petroleum Company (BPC) has delayed drilling again. Reality is it doesn’t have the cash and little chance of obtaining it via the convertible loan note route. To save the day, since its licences expire at the end of the year, it’s claiming that the Coronavirus constitutes a “force majeure” event under the terms of the licences and has notified the Government of The Bahamas of such. They say it is expected to result in a corresponding extension to the term of the licences. Whatever the outcome, though, I don’t think there’s going to be a drill this year.
Lekoil (LEK) issued a slightly curious announcement that they’re “in the process of making the agreed payment of $2 million for OPL 310 in accordance with the agreement reached and announced by the Company on 21 January 2020.” They say they’ve “given instructions for the payment to be made by [their] bank and will provide a further update when this process is completed.” The wording here reminds me a little of Providence Resources (PVR) and their China payment.
UK Oil & Gas (UKOG) announced that it has filed a planning application with the Isle of Wight Council for the appraisal drilling and flow testing of the Arreton oil discovery, which is a geological analogue of the Horse Hill oil field, containing calculated aggregate gross P50 oil in place of 127 million barrels. It makes for an interesting addition.
The Parkmead Group (PMG) announced interim results. "Gas prices have fallen from highs of approximately 25.70 Euro per megawatt hour in October 2018 to lows not seen in over a decade of around 8.60 Euro per megawatt hour in February 2020 due to the oversupply of liquefied natural gas into the European market.” They've moved from an operating profit in the 6 months ended 31 December 2018 of nearly £4 million to an operating loss of £1.5 million in the 6 months ended 31 December 2019. Let’s now see if they can make the money back from wind power on the piece of land in Scotland they bought from the Chairman’s wife.
Petro Matad (MATD) announced an operational update. They’re progressing the Block XX exploitation licence application and a new CPR increases the total mean un-risked in-place oil resource potential of the Heron structure by 20% to 194 million barrels. Reservoir stimulation studies indicate significant improvements in the recovery factor are possible and the Heron development base case has increased to 33 million barrels recoverable. Challenge is whether they will actually be able to get any further work done this year with the current Coronavirus situation.
Block Energy (BLOE) acquired two blocks in Georgia from Schlumberger for no cash. Reality with this deal is that Schlumberger have successfully binned what they, as experts in such matters, regard as liabilities. BLOE have got the same social media pumpers on it as last time, so perhaps brace for another placing from this one, although perhaps not, since with the credibility of both the company and the pumpers shot after last year’s false production number claims, the initial ramp appears to have failed miserably.
Pantheon Resources (PANR) announced upgraded resource estimates: the shallowest horizon now is estimated to contain 1.8 billion barrels of oil in place and a P50 technically recoverable resource of 483 million barrels of oil. They’re impressive numbers, but will they be able to achieve a farm-out is now the question.
Tlou Energy (TLOU) issued a response to prevailing financial market conditions. Main point is that directors are reducing their salaries by 50%. No such luck for shareholders at Echo Energy (ECHO). They’re just "asking the holders of its debts to defer all cash interest payments during 2020.”
There were other announcements from “old favourites” Anglo African Oil & Gas (AAOG), Ascent Resources (AST) and Zenith Energy (ZEN) too, but I’m not sure that, other than the comedy aspect, there’s that much interest anymore in what are openly non-viable companies.
What there is interest in is the new Special Trading Course and I’d suggest that you at least read the details about it at https://www.oilnewslondon.com/trading I’m confident it will be of significant benefit to you. If you’re here because you’re interested in making money, the trading course is for you: it’s all about eliminating losses and going for the certainties which make you the profits. In the context of the amount people risk (and regularly lose), it’s not at all expensive, a bargain in fact to learn all the things I know and profit yourself from that knowledge. Link again is https://www.oilnewslondon.com/trading
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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research. This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.