Proactive weekly Oil & Gas highlights: Diversified Energy, Union Jack, 88 Energy, Mosman, Providence

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Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) chief executive Rusty Hutson described today’s third-quarter update as a strong operational and financial set of results, as the company confirmed record average net daily production. Third-quarter production averaged 128,000 barrels of oil equivalent per day for the quarter, with an exit rate of 133,000 boepd.


Hedged earnings came in at US$92mln and margins were ‘nearly 50%’. It noted the quarter saw higher commodity prices and favourable outlook support for its hedging strategy. Some 115 wells were retired amongst its Appalachian territory, which it notes is 144% of the level required under its agreements with state authorities.


DEC is to pay a 4.25 cents per share interim dividend for the quarter, up 13% from this time last year.


Union Jack Oil PLC (AIM:UJO) said the GBP1mln in net revenues it generated from the Wressle field in North Lincolnshire since mid-August was “financially transformational” and 20201 revenue is “guaranteed to eclipse” the previous year.


Daily production remains “well in-excess” of the original 500 barrels of oil per day target for the field, the oil and gas explorer told investors and the well continues to produce under natural flow. Production is highly profitable at current oil prices, Union Jack added.


Chariot Limited inked a preliminary gas sales agreement with what’s described as a leading international energy group ahead of the proposed development of the Anchois project offshore Morocco. A memorandum of understanding has been signed related to possible key terms for the gas offtake and partnering deal, Chariot said in a statement.


The agreement envisages future gas sales agreements will be for 40mln cubic feet per day for up to 20 years, on a take or pay basis, which is expected to underpin the proposed field development.


88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) has contracted Doyon Drilling Inc for the use of the Arctic Fox rig to drill the Merlin-2 appraisal well in Alaska. It is planned that Merlin-2 will be drilled in February 2022. The well has a planned depth of around 8,000 feet, targeting reservoirs estimated to host up to 652mln barrels oil equivalent.


The company, in a statement, highlighted that it has to date identified several appraisal drilling locations to the east of the Merlin-1 well, where enhanced reservoir thickness and quality are expected.


Mosman Oil and Gas Ltd (AIM:MSMN) updated on its asset in the Amadeus Basin in central Australia. The company, in a statement, said that its exploration activities have been ongoing throughout the current calendar year, including the airborne gradiometry acquisition and related geological interpretation work.


Mosman said that it wishes to undertake a follow-up study and is in talks with its contractor Geognostics about the work. It added that it intends to update the geological model and petroleum/helium play.


Earlier in the week, Mosman Oil and Gas Ltd (AIM:MSMN) has confirmed the start of drilling at the Stanley-5 well in Polk County, East Texas. Stanley-5 is a development well targeting the Yegua formation. It will be drilled down to a depth of 5,000 feet.


Mosman’s share of the well’s cost is estimated at US$350,000 and will be covered by existing cash resources.


Providence Resources PLC (AIM:PVR, OTC:PVDRF) told investors that the well site survey for the Barryroe project is now imminent.


The Celtic Voyager survey vessel mobilised on 24 October to Barryroe and once underway it will take up to seven days to complete. The programme will include a seabed, shallow geophysical and environmental baseline survey. It is a precursor to a proposed drilling of a well.


Zephyr Energy Plc said the US Bureau of Land Management approved the formation of a new 25,000-acre Federal Unit in its flagship Paradox Basin project in Utah, to be operated by the company.


The unit, to be named the White Sands Federal Unit (WSU), spans all of the company’s existing leases covered by its historic 3D seismic survey. It includes the lease which hosts the State 16-2LN-CC well.


Zephyr described the move as a key milestone in the ongoing development of the Paradox project. As a result, the company said it can focus more optimally on its long-term development plans as this move consolidates more than 20 leases into one overarching land agreement.


On Monday, Zephyr said production testing will begin on the State 16-2LN-CC well in Utah later Monday after a “smooth” and successful completion process. In the ten days since the last update the well, which is in the oil and gas-rich Paradox Basin, has been stimulated in 14 separate stages horizontally across 4,020 feet.

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