REG - Pennpetro Energy PLC - Operational Update

Pennpetro EnergyAnnouncement

06/10/2022 07:00

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RNS Number : 9520B  Pennpetro Energy PLC  06 October 2022

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO
THE UNITED STATES, AUSTRALIA, CANADA, OR JAPAN

 

This announcement is not an offer for sale, or a solicitation of an offer to
acquire, securities in any jurisdiction, including in or into the United
States, Canada, Australia, or Japan. Neither this announcement nor any part
of it shall form the basis of or be relied on in connection with or act as an
inducement to enter into any contract or commitment whatsoever.

 

 

Pennpetro Energy PLC

("Pennpetro", the "Company" or the "Group")

 

Operational Update

 

Proposed US Gulf Coast Joint Ventures, Tunisian Update and New Appointment

 

London, 6 October 2022 - Pennpetro Energy PLC ("Pennpetro"), an independent
oil and gas company focusing on production in the Gonzales Oil Field in Texas,
USA, today announces that, through its wholly owned subsidiary Nobel Petroleum
USA Inc. ("Nobel"), it has signed a heads of terms ("HoT") agreement with ESG
Energy, Inc. ("ESGY") for a proposed petroleum joint venture covering multiple
counties in East Texas.

 

Nobel has also agreed terms for a joint venture focused on the Austin Chalk
covering 250,000 acres in Gonzales County, Texas. The Gonzales joint venture
("Gonzales JV") with an experienced and successful private, independent oil
and gas company, does not impact Nobel's City of Gonzales ("COG") development,
which will continue to be owned 100% and operated by Nobel.

 

Drilling for both joint ventures is expected to start in January 2023. Nobel
will be the designated operator in East Texas. It will also remain operator in
COG and will be non-operating partner in the Gonzales JV.

 

East Texas Joint Venture

 

Nobel will enter into a Joint Venture and Standard-Form Joint Operating
Agreement with ESGY pursuant to which Nobel will be responsible for up to 75%
of the cost to drill and complete two exploration wells ("Commitment Wells")
to a depth sufficient to test certain shallow gas seismic prospects for early
production. Nobel will be appointed as the Operator and will carry ESGY for
12.5% working interest of the cost to drill and complete each well to the
tanks and ESGY will have the right to back-in for a further 12.5% working
interest after Nobel fully recovers its expenditures.

 

Nobel will select the Commitment Wells from ESGY's inventory of more than 300
shallow gas prospects, further defined as those seismic anomalies identified
from a major Exxon 2-D seismic dataset in the north Houston salt dome and
adjoining counties of Texas, as well as Rapides Parish and adjoining parishes
of Louisiana. Nobel will further select an additional twenty-eight shallow gas
prospects ("Highgraded Prospects") in which Nobel will be granted a Right of
First Refusal ("ROFR") by ESGY.

 

Upon fulfilling its obligations by the drilling of the Commitment Wells, Nobel
will have earned the ROFR with respect to the Highgraded Prospects and an
additional right to participate in other like prospects, under the same
participation terms as the Commitment Wells, within the East Texas Shallow Gas
Play Area on the same terms and conditions as agreed between the parties
relative to the first thirty prospects. Nobel will be responsible for its
prorated share of any supplemental leasing costs associated with each selected
prospect.

 

Gonzales County Joint Venture

 

Nobel has agreed terms relative to an Area of Mutual Interest ("AMI") covering
250,000 acres in Gonzales County, Texas. Nobel will pay 33.33% of the cost to
drill and complete up to ten development wells to the tanks for a net 25%
working interest in each well.

 

Nobel will enter into a Farm-In Agreement with the existing operator to
participate in up to ten development wells ("Initial Wells") to a depth
sufficient to test the target Austin Chalk interval. Nobel will be granted a
ROFR to participate on the same terms and conditions for any subsequent
exploration and development wells within the AMI once the Initial Wells have
been drilled.

 

The existing operator, who has successfully drilled and completed five Austin
Chalk development wells within the AMI to date, with excellent oil production
from their current wells, will retain operatorship and a formal Farm-In
Agreement and Standard-Form Joint Operating Agreement will be executed between
the parties.

 

Tunisia Update

 

A recent scouting trip to Tunisia reaffirmed the Company's interest in
establishing a foothold in Tunisia for future growth. The country offers a
large portfolio of attractive opportunities, ranging from potential
acquisitions of existing producing assets, joint venture participation on
development opportunities to low-risk exploration ventures, including the
previously reported Upland Resources' Saouaf Permit, where we have negotiated
a Farm-In Agreement, subject to Tunisian government approvals and the award of
an extension of time to enable the necessary work obligation to be undertaken.

 

New Appointment

 

Pennpetro is pleased to announce the appointment of Andy Clifford as Chief
Operating Officer of Pennpetro as well as his existing role of President of
Nobel Petroleum USA Inc., which will continue in effect. Furthermore, Andy's
appointment to Pennpetro's Board of Directors as an Executive Director,
effective immediately, was unanimously approved by shareholders at the
Company's Annual General Meeting held on 30 September 2022.

 

Tom Evans, CEO of Pennpetro Energy plc, commented:

 

"These proposed joint ventures with these two, exciting Gulf Coast
opportunities complements our existing Gonzales oil development while
increasing our exposure to technological innovation relative to the Austin
Chalk play as well as to natural gas. Furthermore, this larger footprint gives
us a clear path to production, allowing us to accelerate our production
profile in the nearer term on a portfolio basis, meaning we can focus our
efforts to suit any commodity price environment going forward.

 

There are over 300 exciting shallow gas prospects defined by high quality 2-D
seismic data located in eastern Texas and western Louisiana. While we plan to
initially focus on two of the most attractive to drill first, we will have a
right to participate on the remaining inventory.

 

We have agreed terms to participate with another operator in the Austin Chalk
play in Gonzales County, which will not interfere or overlap with our own
development plans in COG. We remain fully committed to continuing our Gonzales
development programme where we hope to resume drilling in early 2023.

 

We had a very good trip to Tunisia in the past few weeks and have been
presented with a large number of exciting projects.

 

As per the Upland Resources announcement from 15 September 2022, we await the
result of Upland's engagement post their receipt of a final notification to
them from the Ministry of Industry Mines and Energy of Tunisia. We continue to
endeavour to complete the Farm-In Agreement, subject to the licence held by
Upland Resources being extended. We bear no financial obligation, current or
future, if the Farm-In cannot be completed on acceptable terms.

 

Finally, we are excited to have Andy Clifford join Pennpetro's Board and help
us build the Company into an internationally-recognised operator and developer
of high-quality assets utilising state-of-the-art technology. In addition to
his own extensive experience including exploration and development drilling
success domestically and internationally, Andy has assembled a cadre of
experienced operational and engineering talent to oversee all drilling and
development activities. We welcome him to the Board and look forward to
working together."

 

Andy Clifford, Nobel's President, added:

 

"With our own Texas COG development an ongoing interest, these JVs represent
an excellent opportunity to further our involvement with a highly experienced
operator in the Austin Chalk. Nobel will likely participate on their seventh
development well and on the subsequent ten wells in a huge AMI.

 

We are eager to start drilling the East Texas play to take advantage of the
high natural gas prices which make this opportunity particularly attractive.

 

I am excited to join Pennpetro's Board and I would like to thank our existing
shareholders for their continued support."

 

-ENDS-

 

This announcement contains inside information within the meaning of Article
7(1) of (i) Regulation (EU) No 596/2014 of the European Parliament and of the
Council of 16 April 2014, as amended (the "EU Market Abuse Regulation") and
(ii) the EU Market Abuse Regulation as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018.

 

Enquiries

 

 Pennpetro Energy PLC
 Tom Evans, Executive Chairman  tme@pennpetroenergy.co.uk (mailto:tme@pennpetroenergy.co.uk)

 Arden Partners Plc
 Simon Johnson                  +44 (0) 207 614 5900
 Ruari McGirr
 George Morgan

 Peterhouse Capital Limited
 Lucy Williams                  +44 (0) 20 7469 0930
 Duncan Vasey                   +44 (0) 20 7220 9797

 Instinctif Partners
 Galyna Kulachek                pennpetro@instinctif.com (mailto:pennpetro@instinctif.com)
 Sarah Hourahane                +44 (0) 20 7457 2020

 

 

NOTES TO EDITORS

 

Pennpetro Energy is an independent oil and gas company focusing on production
in the Gonzales Oil Field in Texas, USA. Shares in the company were admitted
to the Official List of the London Stock Exchange by way of a Standard Listing
on 21 December 2017.

 

Further information on the Company can be found at www.pennpetroenergy.co.uk
(http://www.pennpetroenergy.co.uk)

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