Malcy’s Blog: Oil price, Union Jack, Chariot, Buccaneer. And finally…

WTI (Jan) $57.44 -16c, Brent (Feb) $61.12 -16c, Diff -$3.68 u/c.

USNG (Jan) $4.11 -12c, UKNG (Jan) 74.43p +3.59p, TTF (Jan) €27.415 +€0.495.

Oil price

Oil started today better but that has evaporated as worries about the Ukraine deal, being discussed today by European leaders in Berlin will favour Russia.

Union Jack Oil

Union Jack has advised that the joint venture partnership has made the decision to withdraw the planning appeal in relation to the refusal of planning consent for a side-track drilling operation and oilfield development at Biscathorpe, contained within PEDL253. The appeal was due to be heard at a public inquiry scheduled to take place in April 2026. Subsequently, the joint venture will fulfil its regulatory obligations and relinquish the licence in due course.

Union Jack holds a 45% non-operated interest in PEDL253.

The licence operator, Egdon Resources U.K. Limited (“Egdon”), had previously secured planning consent in December 2023 for the appraisal and production of hydrocarbon resources from its Biscathorpe wellsite. A subsequent legal challenge in the High Court (July 2024) based on the Finch decision, quashed the 2023 planning consent. In September 2024, Egdon requested the Planning Inspectorate (“PINS”) to redetermine the appeal by written representations. Egdon submitted an addendum to its environmental statement which documented an assessment of the expected downstream greenhouse gas emissions that would be generated from an oil development at Biscathorpe.

At the request of PINS, supplementary information was provided during 2025 that included an updated Statement of Case, an updated Statement of Common Ground, and a Climate Change Assessment. In October, PINS unexpectedly advised that a new Planning Inspector had been appointed and that he had concluded that the appeal should be conducted as a four-to-six-day inquiry, rather than by Egdon’s preference for written representations.

Having considered the commercial aspects, prevailing tax regime and the continued lack of clear case law in respect of oil and gas projects in the UK post-Finch, the PEDL253 joint venture partnership has concluded that it could no longer justify its continued investment in the Biscathorpe project, and that it should therefore withdraw its appeal. This collective decision was augmented by a strengthened legislative duty applying to National Landscapes (formerly AONBs) introduced in late 2024. 

David Bramhill, Executive Chairman of Union Jack Oil, commented:

“With a backdrop of a changing macro-economic environment, along with the continued regulatory uncertainty in relation to how downstream emissions will be considered, we have concluded that this is the correct decision for the Company’s wider objectives, which includes the future development of Wressle and the planned drilling programme in Oklahoma.

“A comprehensive review of all of Union Jack’s projects in the UK and USA will be issued in January 2026.”

What a state this country is in whereby a potential development that would provide clean and efficient oil that would benefit our economy and provide tax take to the treasury can be cancelled due to ‘uncertainty about downstream emissions and a changing macro-economic environment’.

It comes as no surprise then that UJO has made the unenviable decision to walk away from Biscathorpe in favour of the potential growth from Wressle and the, unencumbered by red tape, drilling programme in Oklahoma. 

Union Jack should be congratulated for its independent stance on what must have been a horrible decision to make. The Government, which has fostered a ludicrous and totally inappropriate anti fossil fuel landscape due to its flawed net zero policies and totally incompetent attitude to UK domestic hydrocarbon production…

I remain confident that in difficult circumstances that UJO has made a brave and sensible decision and more importantly in the best interests of its shareholders.  

Chariot

Chariot has announced its involvement in two large wind generation projects, the Zen (100MW) and Bergriver (94MW) wind farms in South Africa, which have a combined export capacity of 190MW and have now reached financial close. These Projects are co-owned by Acciona Energia, the largest pure play renewable energy company in the world and lead sponsor which holds 51%, H1 Holdings (Pty) Limited (“H1”) with 25%, and 24% held by Chariot Generation and Trading Pty Limited, Chariot’s newly incorporated business together with its strategic equity partner, Mahlako A Phahla Financial Services.

Etana Energy (Pty) Limited (“Etana”), the South African electricity trading platform in which Chariot Generation and Trading holds an economic interest of 34% alongside H1, Norfund and Standard Bank, has also signed a 20-year Power Purchase Agreement (“PPA”) for the entire supply of electricity generated from these Projects.

·     The Zen and Bergriver wind farms are located in South Africa’s Western Cape and construction is expected to commence imminently with commissioning scheduled for mid-2027

·      Once operational, these Projects will displace around 600,000 tonnes of CO₂ emissions annually 

·      As announced separately today, Chariot has fully financed its share in these Projects through funding arranged at the subsidiary level 

·      These are Etana’s first wind projects to reach financial close, bringing its generation portfolio to four renewable energy projects, the power from which will be transmitted across South Africa’s national grid and sold to a range of commercial and industrial customers

Adonis Pouroulis, CEO of Chariot, commented:

“Reaching financial close on these Zen and Bergriver assets is a key development milestone and we are very pleased to be working alongside Acciona Energía and H1 as we play a part in building essential infrastructure, contributing to diversifying the energy mix and delivering clean, reliable power across South African industries.

Closing this transaction is also a key milestone for Chariot as we have effectively created two material future revenue streams; through our stakes in these wind generation assets which will sell power and through revenues from the trading of this energy through Etana.  

Renewable power generation and trading have significant potential and growing our exposure to both is a core part of our strategy going forward. Zen and Bergriver add significant scale to Etana, which is making great strides in becoming one of South Africa’s leading energy aggregators, and we have further large projects in the development pipeline. I would like to thank the teams that worked so hard across all workstreams that have been required to execute these transactions.”

These deals and their associated funding deals are a major step forward for Chariot as they move inexorably towards being a major player in South African energy generation and trading as well has having a high quality independent oil & gas business.

Today’s news is highly significant, acquisition of the two major stakes in Western Cape wind farms, where work is about to start and with commissioning expected in 2027. Make no mistake these are both of a huge scale and will make a substantial contribution.

This will happen as Chariot have a JV with Etana Energy which means that they have a play in both generating capacity and also in trading, and again in sizeable scale. Chariot are building a big infrastructure project that will be added to in a number of ways.

I expect further building out of generating projects which will bring substantial, long term income and this is utility scale, not a rooftop solar business which will generate income with potential over many years. I also expect that the ACWA Power discussions are continuing and this will be a long term J/V across South Africa to add to the generation offering. 

As for financing, as you would expect this is very smart, at $100m it is not small but the way that Chariot has got its key players on board and it will fund the stakes in the generating assets, ensure that they retain control over renewables and strengthen the company.

What is perhaps most important is that Chariot are raising all this money as a multi-layered issue and at subsidiary level which ensures that there is no dilution to shareholders and means that they retain control over their own destiny. 

Finally in Oil & Gas, which will remain as a key part of Chariot going forward as they eventually separate the different businesses and will itself be in at least two different areas. Firstly I am expecting that they will remain in Morocco with a re-sized Anchois development maybe with a partner and also with the acreage in Namibia where licence negotiations are continuing. 

In Oil & Gas Chariot have also said that they intend to make a an acquisition in production which the company are confident that will create cash flow for both sides of the business. This would make the, what will be a totally separate business, well financed and sensibly structured.

I am confident that Chariot are putting together what will be a really substantial, fully financed business with great long term potential in what are all growth markets with the ability to deliver big revenues and sizeable profits.

Significant Financing Completed for South African Wind Projects

Securing future revenues through power generation and trading

Chariot has confirmed that it has completed a significant financing and a strategic equity partnership primarily to fund its investment in two wind generation projects, Zen and Bergriver, in South Africa, which have just reached financial close. As announced separately today, these Projects are being led by Acciona Energia, the largest pure play renewable energy company in the world, with construction to commence imminently.

Chariot has incorporated a new subsidiary, Chariot Generation and Trading Pty Limited to consolidate its energy and trading operations in South Africa, as well as to enable this financing. Chariot Generation and Trading now holds a 24% stake in these Projects, as well as a 34% effective economic interest in Etana Energy (Pty) Limited (“Etana”) the South African electricity trading platform.

Post commissioning, anticipated in mid-2027, Chariot will receive revenue streams both from the generation of electricity from these Projects and from the subsequent trading of this power through Etana. 

Transaction highlights:

Adonis Pouroulis, CEO of Chariot, commented:

“We are delighted to have completed this financing which is multi-layered but carefully structured to enable our first entry into wind generation assets, a key part of our long-term plan as we continue to build our Renewable Power business. We now own a sizeable portion of two utility-scale infrastructure projects, all funded at the subsidiary level, and we are very pleased to welcome Mahlako as co-investors into this business. They are a highly regarded South African-focused investor and we look forward to working with them on these and further projects where we see material growth and potential. I would also like to thank Standard Bank and Investec for their support and we look forward to providing updates on progress.”

Makole Mupita & Meta Mhlarhi, Founders of Mahlako added:

“We are pleased to join Chariot, Acciona Energia and H1 in delivering the Zen and Bergriver wind farms. This investment marks an important milestone for Mahlako as we expand our exposure to the emerging licensed electricity trading market, which we believe will play a critical role in South Africa’s energy future. We look forward to partnering with Chariot as the projects move into construction and as new opportunities in renewable generation and trading continue to grow.”

Key Deal Terms:

Equity Investment

Mezzanine Debt

Project Finance Debt

Buccaneer Energy

Buccaneer has provide an operational update regarding the next phase of development in the Fouke area of the Pine Mills field (32.5% Working Interest). 

Following recent technical evaluation of the recently drilled Allar #1 well results and the newly acquired offset acreage, the Company intends to implement a secondary recovery (waterflood) scheme using the Turner #1 and Daniel #1 wells as dedicated injection wells. The new offset lease provides the injection locations necessary to initiate this secondary recovery scheme. 

Highlights:

Waterflooding has a long history of success in the Pine Mills field and surrounding areas. Primary recovery typically ranges between 5% and 20%, of the original oil in place (“OOIP”), averaging around 15% in the region. Under waterflood, recovery efficiencies commonly improve to between 30% and 50% of the OOIP. As a result, remaining recoverable volumes in the Fouke area are expected to increase by two to three times, with current estimates indicating 667,000 to 1,002,000 bbls could ultimately be recovered.

Before a waterflood can commence, the relevant regulator, the Texas Railroad Commission, requires the formation of a “waterflood unit” comprising all leaseholders and royalty owners within the proposed area. The Company anticipates that forming the unit and constructing the required waterflood facilities will take up to six months. During this period, Buccaneer plans to reinstate production from Turner #1, which is expected to deliver a modest contribution to current field output while preparatory engineering and regulatory work progresses.

Further updates will be provided as the Company advances the development of the Fouke waterflood project.

Paul Welch, Buccaneer Energy’s Chief Executive Officer, commented: 

“The decision to initiate a waterflood in the Fouke area marks a key step forward in maximising long-term value from our Pine Mills assets. Waterflooding has a proven track record in these reservoirs, and we believe the Turner #1 and Daniel #1 wells provide ideal injection points to support a highly effective recovery scheme.

We are confident that this programme will materially increase recoverable reserves and enhance the field’s production profile. We look forward to updating investors as we progress the regulatory and technical workstreams required for implementation.”

This seems like a sensible move for Buccaneer who have had quite some baptism recently, this should settle things down a bit and I expect the new year to be better. I hope that in early 2026 we will get a meeting with Paul Welch, having not had that so far has meant we are giving the benefit of his experience and local knowledge which can only last so long. I certainly have a number of questions to ask him…

And finally…

In the Prem at the weekend there were wins for Chelsea, Liverpool, the Cottagers, the Gooners, the Noisy Neighbours, Forest, the Black Cats for bragging rights in the North East and Villa. Tonight the Red Devils entertain the Cherries who have an excellent record at Old Trafford…

Tomorrow night sees the must win third test against Australia in Adelaide, England have made just one change as Tongue steps up for Atkinson. So Pope gets to stay, but then he is the third highest English scorer in the series… and there is no place for Bashir.