Energy talk has the market buzzing right now, and oil and gas stocks are here to ride the wave.
Whether it’s green or still in the ground, prolonged conflict in Eastern Europe and trade disruptions have trained investor eyes on energy sources around the world.
Amid the boom, there’s a suite of ASX listers with oil and natural gas assets in production or development.
We’ll look at how they fared in the last three months and what’s in the pipeline as the market heats up.
Energy frenzy
Much like we’ve seen in the gold market, war in Ukraine and geopolitical volatility have caused energy prices to skyrocket.
The World Bank is calling it the biggest commodity shock since the 1970s and says war in Eastern Europe will keep food and energy prices high over the next three years.
Looking at the next eight months, the World Bank predicts a 50% spike in energy prices and for Brent Crude to fetch US$100 a barrel — its highest level since 2013 and an increase of more than 40% compared to 2021.
There’s a way to go before years’ end, but current indications say the energy frenzy is here to stay.
Brent Crude futures December 2021 – May 2022. Source: Bloomberg.
In the spotlight: ASX oil and gas stocks
Leadership changes and exploration programs were among the highlights this quarter for oil and gas companies.
Tamboran Resources
In the Northern Territory, Tamboran Resources Ltd (ASX:TBN) is hard at work commercialising its low-carbon dioxide gas resource in the core Beetaloo Sub-basin.
Over the quarter, the energy stock announced a 428% increase to its unrisked, net 2C contingent gas resources, bringing the resource up to 153 billion cubic feet.
It also secured a grant, worth up to A$7.5 million, thanks to the Commonwealth Government’s Cooperative Drilling Program — a funding package that’ll support drilling at the M1H well, which is scheduled to spud mid-this year.
Ultimately, Tamboran hopes to become a net-zero gas producer when it kicks off production from the Beetaloo Sub-basin in 2025.
Brookside Energy
The March quarter proved busy for Oklahoma explorer Brookside Energy Ltd (ASX:BRK), both on the financial and operational front.
Brookside nabbed slightly more than $7.9 million from oil, natural gas liquid and gas sales over the quarter and booked $2.36 million in net positive operational cashflow.
On the production side, the company’s Jewell well — the first to spud in a trifecta of wells under a held by production program in the Anadarko Basin — achieved payout in a record-breaking six months.
Brookside’s Rangers well was also completed during the quarter, and soon after entered commercial production, while the Flames asset has also been spudded.
Some of the largest oil and gas producers in the US have joined Brookside as working interest partners at Flames, and the energy stock is determined to advance the well through the June quarter.
The Rangers well stimulation operation. Source: Brookside Energy.
Calima Energy
Calima Energy Ltd (ASX:CE1) booked a 56% revenue increase and a 93% earnings surge (excluding non-recurring items) over 2022’s first three months.
The Canada-focused energy stock continued to develop oil plays across its Brooks and Thorsby assets and ended this year’s maiden quarter producing, on average, more than 4,300 barrels of oil a day.
March production metrics. Source: Calima Energy.
There’s more to ponder over the June quarter: Calima is considering the next chapter for its Montney portfolio — a suite of development-ready natural gas assets in northeast British Columbia, Canada.
With energy security at the forefront of the global conversation, Calima’s position in a prolific gas play — estimated to hold 449 trillion cubic feet of gas and 1.1 billion barrels of oil — is increasingly attractive.
Triangle Energy
Triangle Energy (Global) Ltd kicked off the quarter with new leadership at the helm.
Greg Hancock, Conrad Todd and Mike Collins joined as directors in February and have since gone on to become non-executive chair, managing director and non-executive director, respectively.
The new joiners spent the quarter advancing the Perth Basin’s Cliff Head Joint Venture, which generated 61,319 barrels of oil through March.
In early May, the plan is for the CHJV to sell an estimated 140,000 barrels of oil — currently stored in Kwinana — to BP, taking advantage of current high oil prices.
Post-quarter end, Triangle and partner Pilot Energy (ASX:PGY) took their first steps to establish the new Cliff Head oil export route.
Emperor Energy
Emperor Energy Ltd (ASX:EMP) is in it for the long haul at the Judith Gas Field in Victoria’s Gippsland Basin.
The ASX-lister is targeting first production in 2027, but it’s hard at work now to unlock the asset’s energy potential.
Over the March quarter, the energy stock upped the unrisked prospective gas resource within Judith’s Vic/P47 permit by 50% to 1.848 trillion cubic feet.
Emperor is also in talks with a suite of exploration partners that could help fund the Judith-2 appraisal well.
Amid plans for amplitude versus offset (AVO) analysis and seismic survey data across the property, Emperor completed a $1.5 million capital in February to support its exploration strategy.
Buru Energy
Buru Energy Ltd (ASX:BRU)’s March quarter highlight was securing encouraging flow test results from its Rafael wet gas discovery in Western Australia’s Canning Basin.
Since then, an independent resources review has confirmed the discovery has the potential for major gas and liquids accumulation.
Next up, Buru has a structured appraisal program in the works. The campaign calls for recompletion and further testing at the Rafael 1 well, as well as a 3D seismic survey over the Rafael structure.
The Rafael-1 flow to flare pit. Source: Buru Energy.
Beyond 2022, the energy company is planning for its 2023 drill program and commercialisation activity.
In the March quarter update, executive chair Eric Streitburg said the company welcomed refocused global capital market support for the energy sector — crucial to developing greenfield oil and gas projects like Rafael.
Kinetiko Energy
Kinetiko Energy Ltd (ASX:KKO) spent the period focused on the Amersfoot Project in energy-hungry South Africa, where it spudded three wells in the December quarter.
Since then, the explorer has put all its efforts into drilling and logging operations at the Korhaan-3, Korhaan-4 and Korhaan-5 assets.
One of the post-quarter highlights was a joint development agreement Kietiko’s subsidiary struck up with South Africa’s Industrial Development Corporation.
Under the deal, in which the IDC will contribute ZAR70 million for a 45% stake, both parties will develop gas fields that will serve as industrial, commercial, transportation or power generation energy sources.
Moreover, Kinetiko is out to bolster its finances after announcing a A$4.1 million raise last month. South African energy investor Phefo Power seeded around ZAR10 million in funding via strategic placement, while KKO hopes to bring in another A$3.1 million through a one-for-15 rights issue this month.
Elixir Energy
The March quarter rang in a key milestone for Elixir Energy Ltd (ASX:EXR): it saw the company kick-off its 2022 exploration and appraisal program over the Nomgon IX coal bed methane production sharing contract in Mongolia.
So far, Elixir’s efforts have centred on drilling the Tim-1 exploration well, through which it discovered a new coal-bearing sub-basin. The discovery is in line for appraisal via the company's Tim-2 well.
Elixir has also struck up formal contracts with three drilling companies, which will come on board throughout the 2022 drill program.
Amid mapping activities, acquiring a seismic program and planning for an extended pilot production test, Elixir found time to take to the field in a different way: the energy stock supported a camel polo tournament in South Gobi in early March.
Camel polo tournament in South Gobi. Source: Elixir Energy.
Community engagement and social responsibility continues to form a key facet of Elixir’s ethos.
FAR
Africa-focused oil and gas explorer FAR Ltd (ASX:FAR)’s quarter was characterised by a suite of leadership changes to bring the company into its next chapter.
Non-executive chairman Patrick O’Connor assumed the CEO role during the transition period, Garth Campbell-Cowan became chief financial officer and Dr Alan Stein joined the board as a non-executive director.
The company also has a cost-saving program underway and is looking at transaction strategies that will maximise the value in its drilling investment in The Gambia.
Moving into the June quarter, FAR had US$39.9 million in the bank to underpin its new strategy. It plans to use the data at hand to chase new discoveries in The Gambia.