Proactive Investors - December saw the small-cap oil and gas sector was awoken from inertia with a flurry of activity.
In part one of the list, we looked at some of the recent deal makers and what the coming year.
Looking into 2024, there are also several small cap oil and gas firms with exciting and potentially impactful well plans in the docket.
Here we take a look at part two of the small cap oil and gas stocks to watch out for in 2024.
Deltic Energy
Deltic Energy PLC (LON:DELT) investors can look forward to two significant North Sea wells, drilled by Shell PLC (LON:SHEL), in second half of 2024.
One is a follow up appraisal well to this year’s Pensacola discovery well, which quickly impressed with larger than originally expected resources.
The other will be an opportunity for Deltic to bank a second discovery with Shell (LON:RDSa), as the exploration well will target more than 300 billion cubic feet of potential gas resources. Here Deltic retains a larger stake than Pensacola (with 50% rather than 30%).
At the Pensacola discovery, the company highlighted in December that the Shell-led joint venture partnership has now "finalised the positive well investment decision" which approves the 2024 work programme and budget. This allows the Pensacola appraisal well to be drilled in late 2024.
Meanwhile, for Selene, Shell has informed Deltic that geotechnical site investigation works have been successfully completed. Operational drill planning is continuing and the project is on track for a well to be drilled in the third quarter of 2024, Deltic noted.
Challenger
Challenger Energy Group PLC (LON:CEG) has this week seen multiple significant points of progress in Uruguay which altogether boost its farm-out prospects.
An update in December highlighted that, in 2023, the company has seen multiple significant points of progress in Uruguay which altogether boost its farm-out prospects.
Chief executive Eytan Uliel described “important commercial, technical and operational inputs” that support the partnering process which he expects can successfully conclude in the first quarter of 2024.
Successfully securing a deal that takes the project forward will likely set the tone for a busier and more impactful 2024. Investors will await this news keenly.
Tower Resources
Tower Resources PLC (LON:TOWR) is another small-cap oil and gas firm on the cusp on a long awaited breakthrough, with the company and its partners working to seal a rig contract for the NJOM-3 well which could be drilled in mid-2024.
Farm-out news is similarly awaited by Tower investors who clearly have multiple value catalysts to look for in the coming months.
EnergyPathways
EnergyPathways PLC (LON:EPP), a fresh-out-of-the-box AIM market newbie is perhaps the most stark of the 2024 chances for oil and gas investors.
Here, with EnergyPathways is a micro-cap scale company with a low-cost, potentially quick start-up UK offshore field development with a solid ‘energy transition’ narrative, and the sort of ‘blue-sky’ roadmap that traditionally whets the whistle of AIM punters.
So, with a stream of achievable and unintimidated project milestones and catalysts in the coming year, EnergyPathways is certainly a name to watch.
It joined AIM just days before the Christmas break so could possible pass by some investors unnoticed.
The company raised £2 million, giving the newly listed business a valuation of £6.32 million.
On paper, this looks like a bargain valuation given EnergyPathways has a fully appraised gas field in the UK portion of the Irish Sea. Containing up to 35.3 billion cubic feet (Bcf) of undeveloped gas, the Marram Project is a low-cost development that has the potential to grow its reserves base.
The initial project has a modest estimated capex of around £76 million, of which around 70% is already pencilled in in the form of debt project financing. Right now, management has sufficient funds to bring the project to FID and the submission of a field development plan.
These development-unlocking milestones could feasibly come within the year.
Beyond the start-up gas field is ambitious regional exploration potential, stated by the company as being ‘up to 1.5 trillion cubic feet’ (which would put in close to the world-class bracket).
Those are extraordinary numbers for the portfolio in the “east Irish Sea” - or Merseyside and Morecambe Bay, as more casual geographers might call it – especially given the company’s current market valuation, nevertheless it would appear this AIM newbie is neither short of confidence nor ambition.
Europa Oil & Gas
Europa Oil & Gas Holdings (LON:EOG) is another company with strong British ties which, with small money, is tapping into big ideas.
A new deal, announced 21 December, sees Europa picking up an interest in a ‘drill-ready’ opportunity offshore Equatorial Guinea with a modest US$3 million investment.
The company is acquiring a 42.9% shareholding in Antler Global, which in turn owns an 80% stake in the EG-08 production sharing contract in partnership with Equatorial Guinea’s national oil company.
This new venture has “enormous near-term, infrastructure-led, near-field exploration potential”, according to Europa.
"We are very excited about this potentially transformational deal for Europa, which adds another high-impact exploration prospect to our portfolio and ties with our strategic approach to replenishing the portfolio with potentially high impact but relatively low risk prospects,” chief executive Will Holland said in a statement.
Antler is pursuing a farm-out partner to fund drill plans, and this could be the very early days for this venture, nonetheless, it has certainly injected some serious blue-sky into the Europa.