New Victoria Oil & Gas PLC (LON:VOG) boss Roger Kennedy told investors that the company was now on the right track, as the company released financial results for 2018 – a period which saw a hiatus in supply to its largest customer which in turn causing sharply lower production volumes.
The AIM-listed group's output was down through most of the year until the company reached an agreement in December with Cameroon power firm ENEO to restart gas supply. More recently, in March, VOG made significant changes to its management team and raised £13.5mln of new equity.
Before these ‘transformational’ changes, the company saw a 62% reduction in gas sales for 2018. At the same time there was a 66% decline in production, to 3.75mln cubic feet per day from 10.98mln cubic feet per day.
Kennedy, who earlier this year replaced Kevin Foo as VOG chairman, commented: "The company is for the first time in many years on the right track with lower costs, a better defined strategy, and the leadership to deliver value to shareholders.
“2018 was a difficult year accentuated by past mistakes; however, the events since the year end, with the injection of new capital by significant shareholders backing our business model, board and management changes, production levels increasing, and a strengthened financial position, ensures that the future looks brighter for shareholders."
Changes are also potentially afoot at Sound Energy PLC (LON:SOU) which this week appointed Simon Davies as the Morocco-focused gas firm’s chairman, for the third time – his prior stints occurred in 2014-16 and 2005-10.
The news came amid a volatile week for the company and its share price.
On Tuesday, Sound revealed that the TE-10 gas well in Eastern Morocco failed to achieve commercial flow rates following a stimulated well test. The disappointing result triggered a 40% drop in the company’s market value.
It was followed up on Wednesday with Sound telling the market that it may hoist the ‘for sale’ sign over its operations in Morocco. In a strategy update, the company told investors that the TE-10 well result, announced on Tuesday, “does not diminish Sound Energy's overall assessment of its Eastern Morocco acreage”.
The explorer said that after five wells it sees a number of remaining high impact plays in the region – including the TE-5 discovery and production concession, as well as additional upside in TAGI and Palaeozoic plays across multiple leads and prospects.
Internally, the company estimates that the up to 20 trillion cubic feet of gas originally thought to be in place may be present across these exploration opportunities.
Nevertheless, Sound Energy said, it is now considering whether a sale of the East Morocco acreage would be a preferred option ahead of the final investment decision for the Tendrara TE-5 production area. It added that Rothschild & Co will support the company in this process.
"We are all very sorry that Jay has had to step down at short notice due to a medical condition which requires immediate attention,” said John Bell, Aminex's chairman.
Bell added: “Since he joined the company in 2013, he has overseen a number of projects, most notably the progress on the Ntorya Field, and has been a well-respected colleague. We wish Jay all the very best as he focusses his efforts on his health in the coming months."
Tom Mackay has been named as interim chief executive and the company intends to start a recruitment process in due course.
It follows on from and replaces a funding deal and management changes in April. The £275,000 investment from Robert Bensh has now been cancelled, and, he will no longer be appointed as chairman.
OCE, an investor in the US onshore upstream sector, has instead taken up all 25mln shares at a slightly better price at 1.2p, raising £300,000 for the AIM-quoted company. Colin Harrington, OCE’s present chief executive, will now be appointed as the new Rose Petroleum executive chairman.
Echo Energy PLC (LON:ECHO) shares shot higher on Monday as the Argentina oil and gas junior reshuffled its priorities and made new arrangements that will allow the acceleration of exploration at the Tapi Aike project.
The group has agreed with its Argentinean partner Compañía General de Combustibles (CGC) that Echo will cut short its participation in the Fracción C, Fracción D, Laguna Los Capones (CDL) group of projects.
That saves some US$11mln of upcoming capex as Echo won’t fund a 3D seismic programme and some US$2.5mln of future acquisition fees will no longer be payable to CGC. Additionally, US$2.06 of the company’s cash held by CGC for work across the CDL assets will now be released.
The attention is now focused solely on the Tapi Aike exploration project, which is seen as a potential ‘multi trillion cubic feet' gas project.
Echo’s decision to walk away from the CDL assets comes after disappointing well testing results - which confirmed sub-commercial discoveries - and a review of the project that concluded there is limited upside to the projects.
The Aussie focused shale company said it had conditionally raised £7mln (US$9mln) with 50.5mln new shares being sold at a price of 14p each.
It noted that the injection of funds will primarily be used to fund Falcon’s share of costs for a new programme of drilling, hydraulic fracturing and testing across its shale acreage in Australia’s Northern Territory.
88 Energy Ltd (LON:88E) shares rose on Thursday after the explorer told investors that a final decision is expected next month for the anticipated farm-out of interests in the conventional portion of Project Icewine in Alaska.
In a statement, the company said that the process is continuing with the preferred bidder and third party due diligence work is now largely complete.
For the unconventional portion of Project Icewine, it noted that the formal farm-out process has been deferred into the second half of 2019 though ‘soft’ farm-out activity is presently underway with interested parties.
Jersey Oil and Gas PLC (LON:JOG) shares jumped higher on Monday as the explorer said it continues to see the positives for the Verbier oil discovery, as it looks forward to the receipt of new seismic data and a detailed re-evaluation of the project.
Everyone was disappointed with the result of the Verbier-2 appraisal well, which last month failed to encounter its targeted reservoir, though untested potential remains for the project.
Originally, the discovery was estimated to host 25mln to 135mln barrels of crude and, in the wake of Verbier-2, it was thought that the actual size of the asset is closer to the low-end of that range.
In financial results statement for the twelve months ended 31 December 2018, published on Monday, the AIM-quoted explorer said that final seismic data sets are expected before the end of June and those findings will feed into a technical re-evaluation being undertaken by Equinor, the project operator.
Equinor will pull in an assessment of deeper targets and other, previously identified, nearby exploration targets.
And TLOU Energy Ltd (LON:TLOU) shares also soared on Monday, as it issued a statement telling investors it has been approved as the ‘preferred bidder’ for a coal bed methane fired power project in Botswana.
The company described it as an ‘enormous step forward’ and it will now work with the Botswana government to finalise all the project agreements.
"The approval of the company's tender represents great progress for Tlou,” said Tony Gilby, managing director. “The proposal that we submitted was very competitive and we welcome this decision by the Government. We look forward to working together to deliver a successful power project.”