Deal making – almost all of it involving the same company – dominated the week’s big oil and gas news in 2020’s first full trading week.
- Acquires Andrew and Shearwater fields from BP for US$625mln
- Acquires extra 25% of Tolmount field from Dana for up to US$216mln
- Launches US$500mln equity raise, plus US$300mln bridge if needed
- Falklands farm-out to Israel’s Nativas Petroleum, opens up Sea Lion
- Deal agreed to give Premier a full carry at Tuna project, Indonesia
- Zama discovery sales process ongoing, in talks with possible buyers
- Production for 2019 comes in upper end of guidance
Rockhopper Exploration PLC (LON:RKH), Premier’s Falkland partner, was boosted significantly by the Navitas deal as it effectively brings the AIM-oiler’s flagship off the ‘back-burner’ again into the forefront of attention.
Navitas is acquiring 10% from Rockhopper and 20% from Premier. In return the Israeli firm will cover a material portion of Sea Lion’s Phase 1 development costs.
Specifically, Rockhopper today told investors that it will be funded for all pre and post sanction project costs, which are not met by senior debt by Premier and/or Navitas through a combination of carry and loans.
“We will be delighted to welcome Navitas to the Sea Lion project and regard their joining as an important catalyst as well as industry endorsement of Sea Lion’s scale (independently audited 2C resources of c.520 mmbbls) and potential,” said Samuel Moody, Rockhopper chief executive.
He added: “Furthermore, we are obviously very pleased to announce that all of our project costs are being covered from the start of 2020 and in the event of a successful sanction that they will continue to be covered through to Phase 1 project completion … while maintaining a very material 30% stake in the Sea Lion project along with additional upside in the PL004a licence containing the Isobel discovery.
“This transaction will therefore materially strengthen the company financially.”
In a statement, the Iraq-based crude producer reported that the partners in the Taq Taq oil field were paid US$6.7mln gross for oil sales in August 2019, and, its 44% net share amounted to US$3.6mln.
It noted that an override payment of US$7.4mln was also received from the KRG, representing 4.5% of August’s gross licence revenue for the Tawke field.
The company added that an update on further payments will be included in a trading and operations update scheduled for 16 January.
Earlier, on Monday, announced that the TT-34 well at the Taq Taq field will commence production “around the middle of January”. In a statement, the oiler said the well is nearing completion, with a maximum combined flow rate of over 3,900 barrels of oil per day (bopd), while it will have an initial output of between 1,500 and 2,000 bopd once it comes on stream.
The company set up the fund last month in order to give qualifying Bahamian investors a route to invest in the company and its upcoming hydrocarbon exploration activities in the waters off the islands. The fund is open to qualifying investors between 6 January until 7 February 2020.
Utilising the fund, the company aims to provide 100mln new shares in the company at the same price as a recent equity raise – 2p per share – thereby putting Bahamian investors on the same footing as other shareholders.
United Oil & Gas PLC (LON:UOG) said it has received formal technical environmental approval from the Italian Environmental Ministry for the development of the Selva Gas field. It paves the way for the final grant of a production concession by Italy’s Economic Development Ministry, the AIM-listed company said.
In Argentina, Echo Energy PLC (LON:ECHO) told investors that it has carried out perforation and started stimulation operations for the Campo La Mata x-1 well, at the Tapi Aike project. The mechanical stimulation of the Campo La Mata x-1 well’s deeper secondary target, in the Anita formation, will now begin shortly, the company said.
It noted that it will subsequently move on to the shallower primary target, the ‘Magalllanes 20’, which will be perforated and undergo mechanical stimulation. This work is expected to take two weeks.
The company also said that it has also begun drilling the Camp Limite exploration well, in the Palermo Aike concession area – part of the recently acquired Santa Cruz Sur asset package. Echo expects that the Camp Limite well will reach the intended depth within the next week, and it will subsequently carry out wireline logging.
SDX Energy PLC (LON:SDX) announced a significant 35% increase in reserves at the South Disouq gas project in Egypt. The company owns 55% of South Disouq, which came online last year with ‘first gas’ achieved in November.
A new assessment of the field’s reserves by consultant Gaffney, Cline & Associates (GCA) shows gross proved plus probable (2P) reserves increasing to 86bn cubic feet of gas, up from a prior figure of 66bn cubic feet.
The upgrade is the result of new 3D seismic data reprocessing which has provided greater understanding of the reservoir structure and distribution.
Rebooting junior energy firm Nu-Oil and Gas PLC (LON:NUOG) raised £420,000 in a share placing to enable the company’s entry into new contracts. In a statement, said that the injection of capital will allow it to engage consultants and third-party due diligence providers as it moves towards a ‘reverse takeover’ transaction.
It issued 800mln new shares to investors at a price of 0.0525p. The investors will also receive warrants, some 110mln were issued, which are exercisable over the next two years at a price of 0.0625p per additional new share.
Trinidad-focused Columbus Energy Resources PLC (LON:CERP) said it is “very pleased” as drilling operations for the Saffron exploration well, on Trinidad’s south-west peninsular, completed successfully.
The AIM-quoted oiler, in a statement, said that the well was drilled down to a depth of 4,634 feet as planned, and, logging work is presently ongoing. Interpretation results are anticipated in the coming weeks.
Columbus noted that it drilled multiple targets and it has observed multiple oil shows. It plans to evaluate the full potential of the well, following the completion of logging operations. The schedule anticipates that Saffron will have been completed and tested during the first quarter of 2020.
Linn joins from UK onshore shale firm Third Energy and he has previously held senior positions at Lasmo, Cairn Energy, Tullow Oil, ROC Oil, and with Afren during its restructuring. He is a qualified chemical engineer and lives in Ireland.
“The opportunity to lead the commercialisation of an oil and gas field with the potential of Barryroe is very compelling,” Linn said.