Malcy’s Blog: Flash blog: Angus, Hunting, Predator, Jadestone.

A flash blog today as I’m in the smoke for meetings, any further follow up in the next day or two. 

Angus Energy

Booster Compressor Update

The new booster compressor at the Saltfleetby Gas Field commenced operation on 11 April 2025. The compressor operates at a lower suction pressure than the two existing compressors at the field, allowing more pressure drawdown of the wells and helping to alleviate the impact of liquid loading in the wells, which has been increasingly impacting gas flow rates in the last three months. The introduction of the booster compressor has resulted in an 18% increase in production compared with the average production for the first 10 days of March and a 15% increase compared to average daily production in March. Work is continuing to optimise plant and well performance with the new compressor, with the aim of further improving and stabilising gas flow rates from the three wells in the field. 

Production and Operations Update

Gas sales from the Saltfleetby Field equalled 4.55 million therms in aggregate for the months of January, February and March 2025, compared to 5.73 million therms sold in the fourth quarter of 2024. First quarter 2025 production equates to an average of 1.52mm therms per month (1.91 mm therms per month in the fourth quarter of 2024). Gas condensate (liquid) production averaged 82 bbl/day, against an average of 102 bbl/day in the fourth quarter 2024. Saltfleetby operational efficiency was 90% for the Quarter compared to 94% for the previous Quarter.  Brockham operational efficiency was 98% for the Quarter compared to 90% for the previous Quarter.

Lower production at Saltfleetby this first quarter reflects the impact of cold weather on well and plant performance in January and the increasing effect of liquids, mainly condensate, restricting gas flow in the 3 wells in the field. The introduction of the booster compressor will reduce well head pressures and increase gas flow rates and gas velocities from each of the wells and assist in the lifting of liquids to surface and improve the stability of production.

Estimated revenues of £5.21m are down c.15% compared to third quarter revenues of £6.12m, with lower gas volumes being partially offset by higher gas prices over the winter months. As previously announced, legacy hedging volumes will remain at 1.25m therms per month until they roll off in June 2025.

Oil volumes produced from the Brockham Field equalled 2,150 barrels in aggregate for the months of January, February and March 2025, an average of 24 bbl/day, compared to 2,130 barrels for the fourth quarter of 2024 averaging 23 bbl/day.

The increase in production following the installation of the new booster compressor at Saltfleetby is very welcome and substantial. With work continuing to optimise plant and well performance with this new piece of kit the company are aiming to make further improvements from across all three wells in the field.

Readers know that I am very happy with the way Angus is heading and of course come the summer when the shackles are off…

Hunting

Hunting has issued the following Trading Update for Q1 2025, ahead of its Annual General Meeting that will take place today at 10:30a.m. BST in London.

Q1 2025 Trading Update

The Group has traded in line with expectations during the quarter, delivering an EBITDA of c.$38.7 million (Q1 2024 – c.$28.9 million) at an EBITDA margin of 14% (Q1 2024 – 12%).

All product groups have traded in line with management’s expectations in the quarter.

As is typical for this time of year, the Group has invested in working capital in the period to satisfy committed orders, which has led to a net cash outflow in the quarter, leading to a cash and bank / (borrowings) position of c.$58.0 million (31 December 2024 – $104.7 million). This outflow also includes the maturity of certain bank acceptance drafts, in relation to working capital instruments utilised in 2024, and the purchase of Ordinary shares by the Company’s Employee Benefit Trust to satisfy the vesting of future long-term incentive awards, with $3.4 million absorbed purchasing 849,701 Ordinary shares in Q1 2025.

In line with the Hunting 2030 Strategy, in the quarter the Group completed the acquisition of the Organic Oil Recovery technology from its founding shareholders for a consideration of $17.5 million and disposed of its non-core interest in Rival Downhole Tools for a consideration of $13.1 million.

Management continues to assess bolt-on acquisitions, with a number of transactions being progressed during the period. Areas of focus remain subsea and intelligent well completion businesses.

The restructuring of the EMEA operating segment continues, with a projected $10 million annualised cost saving being targeted.

International Trade Tariffs

The Group has assessed the potential international trade tariffs proposed by the US administration and presents in the table below a high-level analysis of the potential impact of these tariffs if they are introduced. The analysis is qualitative and has not been audited.

The Directors believe that, subject to international supply chains settling following the announcements made by the US administration in recent weeks, the ongoing impact of tariffs on the Group’s prospects and trading are immaterial and broadly align to the potential impact noted above. This is before taking into account any indirect impact of commodity pricing on the global economy.

Sales Order Book and Commodity Prices

At 31 March 2025, the Group’s sales order book was $439.3 million (Q4 2024 – $506.8 million), which includes the recently announced new subsea orders, totalling $38 million. The order book also reflects the continued work-off of larger orders for clients including Kuwait Oil Company and ExxonMobil. Management currently estimates that 77% of the current order book balance will be traded in the remainder of the current financial year, which supports a good proportion of our targeted revenue. The Group remains focused on reducing working capital and increasing cash generation.

The Directors have also assessed the impact of the decline in commodity prices since 2 April 2025, with the WTI crude oil price trading at c.$61 per barrel as of 15 April 2025. To date, we have not seen any negative response to the lower pricing environment from our client base, but management continues to monitor the situation closely and will provide a further update in the H1 2025 Trading Update. The Group’s consolidated balance sheet remains strong, with the above working capital and cash initiatives providing ongoing flexibility and optionality during this time of increased market volatility.

The H1 2025 Trading Update will be issued on Wednesday 16 July 2025.

We have only recently heard from Hunting so there is nothing new in this AGM statement, the directors do add that they have seen no ‘negative response’ to the lower pricing environment but are obviously monitoring the situation. 

And I suspect with a nod to the rumoured attentions of Oasis Management the company state that ‘Management continues to assess bolt-on acquisitions, with a number of transactions being progressed during the period. Areas of focus remain subsea and intelligent well completion businesses’. It also completed the acquisition of the Organic Oil Recovery technology for $17.5m if it wasn’t clear as crystal in the recent management analysts presentation…My message, just roll with it at OM….

Hunting remains in a sweet spot within the oilfield services sector being at the high tech, high margin end and the shares should appreciate strongly given the constant flow of good news. 

Predator Oil & Gas

Predator has announced its audited financial statements for the year ended 31 December 2024, extracts of which are set out below.

The Company’s Annual Report is available to shareholders to download from the Company’s website at www.predatoroilandgas.com.  In line with ESG best practice no hard copies of the Annual Report will be printed. 

In addition, a copy of the 2024 Annual Report will be uploaded to the National Storage Mechanism and will be available for viewing at

https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The financial information set out below does not constitute the Company’s statutory accounts for the year ending 31 December 2024.

 Highlights of Financial Results for 2024

·    Loss from operations of GBP 2,062,390 (GBP 4,238,363 re-stated for the period to 31 December 2023). The decrease in operating loss is primarily due to decreased drilling activity    in Morocco (which was focussed on preparations for the drilling of MOU-5).

·    Administrative corporate expenses of GBP 1,652,862 (GBP 1,639,501 re-stated for the period to 31 December 2023).

·    Corporate administrative expenses have been prudently managed despite inflationary pressures during 2024 and despite an increase in corporate activities related to the acquisition of 51% of the issued share capital of Caribbean Rex Limited.

·    Executive directors’ fees have decreased to GBP 578,292 (GBP604,506 for the period to 31 December 2023). Included are technical services consulting fees charged by the executive directors for providing technical support and reports that would otherwise be out-sourced to third parties at market rates. 

·    Decreased cash balance at period end of 2024 GBP 3,813,371 (GBP 6,484,034 re-stated for the period to 31 December 2023).

·    Additional, restricted cash of USD1,500,000 (USD 1,500,000 for the period ended 31 December 2023).

·    The Company has no debt.

·    Placed 45,221,203 new ordinary shares of no par value in the Company to raise GBP2,304,474 (before expenses).

·    No broker warrants or share options were exercised. 

·    7,500,000, 7,855,486, 2,000,000, 2,650,000 share options at an exercise price of £0.10, £0.08, £0.08125 and £0.055 lapsed.

·    3,000,000 and 3,000,000 share options have been issued exercisable at £0.125 and £0.105 respectively.

·    2,400,000, 10,000,000 and 40,0000 broker warrants have been issued exercisable at £0.05, £0.055 and £0.08 respectively.

·    1,491,889 new ordinary shares were issued at a price of £0.0925 in lieu of advisor fees totalling £138,000.

·    Following the admission of the above shares the issued share capital increased to 611,874,754 by the end of the period to 31 December 2024 (565,161,662) for the period ended 31 December 2023).

Highlights of key Operational Activities in 2024

·    Two intervals in the MOU-1 and MOU-3 wells were selected for a first phase of rigless testing to assess formation damage caused by heavy drilling muds used whilst drilling and  for potential gas flow.

Results using the available smaller perforating guns available in Morocco confirmed lack of penetration through the formation damage.

·    Two intervals  in the MOU-3 well were identified for a trial Sandjet rigless testing programme using a high pressure water jet to test its potential to penetrate the formation damage.

Sandjet proved successful in perforating both intervals through the formation damage leading to an initial pressure build-up at surface.

Flow from the two separately tested reservoirs could not be achieved due to insufficient build-up of pressure and possible failure of the reservoirs to clean up.

·    Desk-top studies were initiated to better understand the interaction of the reservoir mineralogy, which was different to the reservoir sands of the gas-producing Rharb Basin, with the drilling mud used in well operations.

The objective of these studies are to determine the range of options available to safely increase drawdown pressure to potentially clean up the reservoirs to promote flow to surface.

·    Whilst awaiting the results of the desk top studies near-term focus moved to how to safely perforate and potentially flow gas from the shallow, moderately over-pressured “A” Sand in MOU-3, where reservoir mineralogy is not an issue, and which represents the earliest opportunity to implement a pilot CNG development in a success case of even modest gas flow rates.

Independent third-party desk top studies by the services providers are directed at finding the optimum solution for perforating effectively through two strings of casing in the shallow hole with equipment that is available within a reasonable time framework.

·    Gas samples collected whilst drilling MOU-3 confirmed the presence of biogenic gas. One sample analysis in the deeper Moulouya fan interval recorded  helium.

·    Planning for drilling MOU-5 was well advanced by the end of 2024. Preparations were modified to include the ability to measure for potential helium concentrations whilst drilling.

·    In Trinidad, the acquisition of the remaining 16.2% interest in the Cory Moruga Exploration and Production Licence was completed.

·    Acquisition of a 51% controlling shareholding in Caribbean Rex Resources (Trinidad) Limited was progressed and subsequently completed in early 2025.

The Bonasse field is being acquired through this transaction together with oil storage tanks.

Production was restored and the first well workovers completed in early 2025. An oil offtake agreement has been executed, to allow for sales revenues to be generated, and a Production and Services Agreement has also been executed with a local services company to retain initially 30% of sales revenues without any exposure to field operating costs.

·    Jacobin-1 in the Cory Moruga exploration and Production Licence was added to the proposed programme of Snowcap-1 and Snowcap-2ST1 well workovers.

A Memorandum of Understanding was entered into for the application of a new wax mitigation treatment technology never tested in Trinidad before.

·    Options for a sales offtake agreement for potential Cory Moruga production are being assessed together with developing oil storage capacity at Cory Moruga.

·    Additional potential acquisitions of producing onshore Trinidad fields are being reviewed and evaluated and some opportunities may be progressed to completion in 2025.

·    In Ireland the regulatory financial and technical criteria necessary to support the award of the Corrib South successor authorisation were satisfied. It remains the Company’s firm intention only to accept the successor authorisation as part of a back-to-back farm-in transaction already proposed by a Corrib gas field stakeholder.

ESG

·    In 2024 the Company spent 4,127,683 Dirhams in Morocco on local services in relation to its 2024 rigless testing and MOU-5 drilling preparations.

Beneficiaries included civil engineering contractors; field support activities including provision and mobilisation of cabins; provision of Guercif warehouse staff (renting of warehouse in Guercif city); provision of water and waste disposal; fuel supplies; transport and drivers; local hotel accommodation for rig and well services crews; heavy lifting equipment; internet services and provision of office equipment; and accounting and customs administration services. This was a significant boost for the local economy around the city of Guercif.

In Trinidad the Company provided sponsorship to a local soccer team and contributed to providing Christmas hampers to the most vulnerable local communities.

Local security and labour for the Bonasse field is sourced locally.

Highlights of Directorate Changes

·    Dr. Stephen Boldy was appointed non-executive Chairman following the resignation of Lonny Baumgardner.

Post Period End:

·    The Company announced that civil engineering work had commenced at the MOU-5 drilling location.

·    The Company announced the completion of the acquisition of 51% of Caribbean Rex Resources (Trinidad) Limited and the Bonasse field.

·    The Company announced the Placing of 50 million ordinary shares with Eva Pacific Pty of no par value at a price of £0.04 per share to raise £2 million before expenses. 10 million warrants exercisable at £0.06 per share were also granted.

·    The Company announced that it had entered into a transaction to acquire the Challenger Energy Group’s business, producing assets and operations in Trinidad and Tobago for an initial deposit of US$250,000 satisfied by the issue of 4,411,641 Predator shares. Consent for the acquisition is required to be given by Heritage Petroleum Trinidad Limited by 30 April 2025.

·    The Company awarded 45 million unallocated share options, exercisable at £0.055 per share subject to certain operational milestones being met.

·    The Company announced an operational update including the execution of a Bonasse field oil offtake agreement; a Bonasse field Production and Services Agreement; plans to perforate the shallow “A” Sand in MOU-3; and plans to prepare a farmout package for 3D seismic and a well to further evaluate the structure tested by MOU-5 with focus on the helium potential identified in MOU-5 and gas potential over the structure north of the MOU-5 well location.

 Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings Plc commented:

“The extensive MOU-1 and MOU-3 rigless testing programme has made progress in identifying the extent of the reservoir formation damage and the range of potential options required to achieve reservoir clean up to facilitate potential gas flow. We remain confident that the selected option and/or options can eventually be successful.

Prioritising the shallow “A” Sand for rigless testing is driven by the need to demonstrate gas flow and accelerate monetisation through a simpler CNG pilot development option.

MOU-5 demonstrated the presence of our primary target and gave us the encouragement required to develop the helium exploration play and to focus on a large core area north of MOU-5 where reservoir development is predicted.

There is no doubt that the MOU-5 structure offers considerable potential, but unlocking this potential requires a large 3D seismic programme which the Company only wishes to fund through a farmout process given our immediate portfolio priorities to monetise our gas and oil assets in Morocco and Trinidad in 2025.

The Company continues to maintain adequate cash liquidity to fund all our work programmes over the next 12 months due largely to accessing funds in the equity market when the opportunity was presented to us and a very significant and material operational saving on the MOU-5 drilling costs through effective operational oversight.

2025 is already proving to be a year of great challenges due to the turmoil created in the financial and equity markets by uncontrollable political events. This has led to reduced availability of finance; volatile commodity prices; weakened investor sentiment and caused a dash to liquidate assets for cash. Frustratingly this has led to a write-down across the oil and gas sector in general in the public market valuation of companies irrespective of the value of oil and gas resources in the ground.

We are confident that market conditions will ameliorate during 2025. However we have taken steps to ensure that we prioritise revenue generation from our producing and near-production assets; maintain the ability to sell specific assets if attractive to do so; and, where prudent, acquire additional cash-generating assets.

Improving our cash liquidity through two Placings completed at an opportune time before the market was impacted by the above circumstances  ensures that we are fully-funded to complete our programme to monetise over the next 12 months from a position of strength.

We continue to manage costs by moving towards the implementation of Production and Field Services costs to remove the burden of operating costs and administrative personnel and some capital costs whilst retaining adequate cash flow from a material percentage of sales revenues.”

 Obviously the historic results are just that and the market is up to date with post period end news.

Jadestone Energy

Jadestone has announced that it has divested its 9.52% interest in the producing Sinphuhorm gas field onshore Thailand to PTTEP HK Holding Limited, a subsidiary of PTTEP, Thailand’s national oil and gas company, for a cash consideration of US$39.4 million, with a further US$3.5 million in cash payable contingent on future licence extensions.

The US$39.4 million received consists of a US$35 million base consideration as of the effective date of 1 January 2025, plus adjustments between the effective date and closing date of 16 April 2025. A further US$3.5 million in cash is payable in the event of an extension to either of the two petroleum licences which contain the Sinphuhorm field, which currently expire in 2029 and 2031, respectively.

Since Jadestone acquired its Sinphuhorm field interest in February 2023, and under PTTEP’s excellent stewardship as operator, asset performance has been above expectations. This has been driven by the contribution from recent infill wells, a booster compression project successfully commissioned in May 2024, and recent strong gas demand in northeast Thailand. After an internal strategic review process, Jadestone has concluded to focus its future growth initiatives through its operated positions in Australia, Malaysia, Indonesia and Vietnam, and as such, decided to accelerate value and cashflow for its shareholders through the sale of its Sinphuhorm interest.

The transaction is structured as the sale of Jadestone’s 100% owned subsidiary Jadestone Energy (Thailand) Pte Ltd., which owns (directly and indirectly) a 27.2% interest in an intermediary company, APICO LLC (“APICO”). APICO’s primary asset is a 35% interest in the producing Sinphuhorm gas field. APICO also currently owns a 100% interest in the L27/43 licence, which is expected to be relinquished after two wells are plugged and abandoned. APICO generated a profit before tax of US$7.2 million for the year ended 31 December 2023[1], net to the 27.2% interest being sold. As of 31 December 2024, Jadestone’s independently evaluated 2P reserves included 3.8 mmboe net to the Group’s 9.52% interest in Sinphuhorm.

As a result of the transaction, Jadestone’s 2025 Group production guidance is revised from 19,000-22,500 boe/d to 18,000-21,000 boe/d, reflecting the removal of forecast Sinphuhorm production from the closing date until year-end 2025. 2025 Group operating cost and capital expenditure guidance of US$250-300 million and US$75-95 million respectively are unchanged, as they did not incorporate Sinphuhorm costs[2].

Adel Chaouch, Executive Chairman of Jadestone, commented:

“We remain resolutely focused on executing our strategy to create the leading upstream independent in the Asia-Pacific region. A central pillar of this strategy is portfolio optimization and scale, ensuring that we have critical mass and material positions in each of the countries where we operate. The divestment of Sinphuhorm accelerates the delivery of our strategy.

This transaction is a win-win for both Jadestone and PTTEP. We have delivered an attractive return on an asset that we have owned for just over two years, in large part due to PTTEP’s first-rate stewardship of this asset during the period, and I would like to thank PTTEP for their positive engagement and collaboration through this process.

We will deploy the proceeds of this sale into strengthening our balance sheet and delivering accretive growth in our core areas, where we have significant operating capability.”

Whilst one normally associates Jadestone with acquisitive M&A activity there is always a time that critical mass and ‘material positions’  are more important. Clearly buying more was not a possibility so selling the stake makes a lot of sense.