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Proactive oil & gas weekly highlights: 88 Energy, COPL, Bahamas Petroleum, SDX, United Oil & Gas, Mo


88 Energy Limited (LON:88E, ASX:88E) on Friday said it is set to expand its footprint in Alaska as the group has been named as the high bidder on the Tract 29 area, via the 2021 Coastal Plain Lease Sale.

Tract 29 is positioned as a 23,446 acre area adjacent to the company’s Yukon leases.

The company described the expansion as “a logical step in the company’s aggregation strategy” in the North Slope region.

“Tract 29 is considered highly prospective as there is evidence of existing discoveries to the west extending into this area,” said Dave Wall, 88 Energy managing director in a statement.

On Wednesday, 88E told investors it is advancing “full steam ahead” towards the spudding of the planned Merlin exploration well, part of Project Peregrine.

Spudding is on track to take place in ‘mid to late February’.

Canadian Overseas Petroleum Limited (LON:COPL) is advancing its deal to acquire Atomic Oil & Gas LLC and said it has achieved two important milestones. The company said it had paid US$8mln as the second payment under the agreement to buy Atomic, which secures it a 15% interest in Atomic’s leases.

At the same time, COPL confirmed it had closed an equity issue to raise GBP3mln which is in addition to a GBP6mln raise announced at the end of December 2020. The share issue is at the same price and same terms.

“The US$8mln payment to Atomic announced today is the first milestone achieved to complete the overall acquisition,” said Arthur Millholland, COPL chief executive in a statement.

Bahamas Petroleum Company PLC (LON:BPC) was earlier week cleared to continue drilling the Perseverance-1 exploration well offshore Bahamas. The company noted that in a court hearing Justice Petra Hanna-Weekes refused to grant any orders that would affect Bahamas Petroleum’s current operations.

At the same time, she granted the application by environmentalists which seek leave to bring judicial review proceedings in respect of various decisions taken by the Government of The Bahamas in relation to Bahamas Petroleum’s licences.

Bahamas Petroleum chief executive Simon Potter described it as a “very positive outcome” for the company.

SDX Energy PLC (LON:SDX) on Tuesday said that it has tapped ‘first gas’ from the South Disouq SD-12X well in Egypt, six weeks ahead of schedule.

The 100% owned well unearthed a commercial discovery in mid-2020 and subsequently came online on December 21, 2020, the company revealed in an update. It is anticipated that SD-12X is host to 24bn cubic feet of recoverable resources and can produce at 10 to 12mln cubic feet per day (presently the rate is reported as 5mln to 7mln).

At the same time, SDX reported group production of 6,400 barrels of oil equivalent (boepd) for the twelve months ended December 31, 2020. That exceeds guidance, which was pitched at 6,000 to 6,250 boepd, and marks a 58% improvement on 2019 with the performance driven by new wells coming online at South Disouq.

SDX, meanwhile, highlighted that in Morocco its customers have returned to pre-COVID-19 gas consumption levels. Across the group’s core assets, SDX said production has either exceeded or reached the ‘top end’ of guidance.

United Oil & Gas PLC (LON:UOG) has announced the spudding of the ASH-3 development well at the Abu Sennan licence, in Egypt. The company owns a 22% interest in the Kuwait Energy operated well which will target Alam El Bueib reservoirs, at a depth of 3,600 to 3,950 metres, in a location up-dip of the ASH-2 production well.

ASH-2 was brought online a year ago and has to date yielded over 1mln barrels, and is currently flowing around 4,500 barrels of oil per day. The ASH-3 well is expected to take 60 days to drill and test. It is the first well in the new 2021 well campaign and it will be followed by the ASD-1X exploration well.

On Monday, Mosman Oil and Gas Ltd (LON:MSMN) agreed to sell its interest in the Welch project, Texas, in a cash deal worth US$420,000, after a prior deal failed to close.

The new deal is with Steadfast Energy Partners LLC and Silver Dollar Energy Investments LLC. This transaction is expected to close on January 15, 2021. The company pointed out that project ranking in its recent strategic review prioritised assets with lower operating costs.

Zephyr Energy PLC (LON:ZPHR) announced that the drill crew for its State 16-2 well in Utah has been operating around the clock since the December spud and progress to date is fully in line with expectations.

The company also noted that following the spud it subsequently received the third US$600,000 tranche of the US$2mln grant funds allocated by the US Department of Energy. A final tranche of US$200,000 is due once drilling operations are complete.

Zephyr highlighted that its strategic goal for 2021 is to establish production and positive cash flow, either with its existing assets or through acquisition.

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