Today's Oil and Gas Update: Tlou Energy, Sound Energy, Petroneft Resources, Ascent Resources


Tlou Energy (LON:TLOU, ASX:TOU – 5p/A$0.10) – Project Upgrade a Vindication: Today's news that the Company's initial 10MW project has been approved up to 50MW is a vindication of Tlou's plans. However, we continue to stress that a vindication at government level doesn’t resolve the most significant risk attached to the project, which remains the well and coal series productivity. In this respect, while the Company has made solid progress thus far, there is (in our mind at least) a number of elements that need to be completed before this can be classed as a development project, and the Contingent Resources classified as Reserves. That said, so far every milestone the Company has said they would meet it has, and we believe that Tlou's technical team have a solid understanding of the coal series.  Investors should be happy with the continued progress of the Company, and awaiting the news of the dewatering trials.

• Sound Energy (LON:SOU – 21p) – Chairman Adds Gravitas: Today's appointment of Stephen Whyte as Non-Exec chairman is a solid step for the Company, especially if it frees up time for the CEO, which was fast becoming one of our key concerns for the continued growth. It remains to be seen what burden he does lift, but given his track record, we see his appointment as a positive in any regard.

Petroneft Resources (LON:PTR – 2.23p) – Operations Update: Today's operational update underlines the fact that following a hiatus in the immediate aftermath of the deal with Oil India, the operating group have used the time wisely to study the field and undertake a refined development plan. Fields in this part of the world are generally shallow and have low energy, resulting in low productivity. Consequently, news that the well is “pump constrained” is a subtle but significant technical achievement, which the Company deserves plaudits for. While "one swallow does not a summer make," this news is encouraging, not least for the fields' potential, but what this team could achieve with them.

Ascent Resources (LON:AST – 0.75p) – Operational Update: There have been a number of setbacks for the Company in developing what is a relatively simple field (in a sub-surface sense). The key issue here has been the regulatory environment, or rather, the need to be partnered with the right group, which given that the country is in the EU, is a concern. Nevertheless, we believe that the management team will get there, and once it does, that the revaluation will be worth investors’ wait.

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