AIM-listed Molecular Energies has provided a corporate and business update.
Highlights:
- Tapir x-1, the Paraguay exploration well, has been successfully spudded;
- First monies received to the UK from former Argentine business; and
- Green House Capital IPO approved by directors and continuing to progress towards Admission to trading on AIM.
Tapir x-1, Paraguay
Molecular has confirmed that the Tapir x-1 exploration well at the Pirity Concession in the Chaco, Paraguay has been spudded. Molecular has a 50% interest in the Concession with OPIC, ultimately beneficially owned by CPC, the state energy company of Taiwan, being the other 50% holder. Molecular is the operator.
Target depth is approx. 3,800 metres with an estimated drilling time of 45 days. The prospect and the adjacent complex of prospects being drilled are covered by good quality 3D seismic data from a survey conducted for Molecular in 2013/14.
The data suggests a clear structural feature being a four-way dip closure with seal and target formations of volcaniclastic sedimentary rocks and lecho sands. The prospect is located approx. 40km in an easterly direction from the formerly prolific Palmar Largo oil field in Formosa Province, Argentina where a major producing formation is from volcanic rocks. If successful, the well would unlock a complex of adjacent prospects estimated by the Company to hold over 260 million barrels of oil of Pmean unrisked resources.
Molecular estimates the main geological risk is that of migration from the source rock which, in the absence of other data, the Company believes is from the same or similar source to that which filled the reservoir in Palmar Largo. Whilst migration paths are capable of being postulated on available data, the overall distance and other migration features mean that, despite the suggested availability of good quality reservoir rocks, the chances of success are assessed at 17%. A success would then prove up the main risk of migration thereby unlocking the complex of prospects as above.
Even with a conservative recovery factor of 5% and an oil price of US$70 per barrel with incentivised fiscal tax rates of 10-14% royalty and a tax on profit limited to 10% the prize therefore makes the well compelling to drill. Oil is the more likely hydrocarbon if a commercial discovery is made. Paraguay currently imports all its oil over 1000km upriver from the South Atlantic.
The Company expects that its next announcement in relation to this well will be the achievement of target depth in approximately 45 days.
Argentina monies
The Company's sale of its Argentine business in September 2023 provided for inter alia repayment to Molecular over time and subject to certain conditions of the inter-company loan of approx. US$13 million.
Molecular is any event pleased to announce that a first installment of monies comprising approximately US$500,000 has been received by Molecular in the UK within the last month after the change of President and Government in Argentina.
Green House Capital IPO
Work on the AIM IPO of the Company's 75% owned alternative energy development division, Green House Capital Group plc ("Green House") is progressing and the IPO is expected to take place in Q1 2024.
The IPO will be subject to a separate substantive announcement anticipated to be made later this month. Excellent progress is continuing to be made by Green House's subsidiaries with particular progress being made by Duel Fuel Limited, whose innovative and proprietary hydrogen injection technology was the subject of a separate announcement made on 18 December 2023.
Source: Molecular Energies
