Despite widespread concern among traders about the state of the global economy, most investment banks and energy consultancies continue to predict higher oil and gas prices in 2023.
The explanation for these bullish forecasts is the tightening of supply on a global scale, while demand is set to rise in 2023 compared to last year.
Resurgence in oil and gas investments
The International Energy Agency expects oil demand to hit a record this year and exceed supply in late 2023.
After being dismissed by advocates of green energy as too polluting to serve as a bridge fuel, natural gas is also making a resurgence.
The recent energy crisis in Europe resulting from a shortage of gas has forced decision-makers to realise that people need energy now, not in the distant future of 2050.
This realisation has sparked a surge in new US LNG capacity, as the country takes over from Russia as Europe's primary supplier of LNG.
Gas developments in Australia, Africa and Asia are also receiving more support as countries scramble for new energy sources.
Wood Mackenzie expects capital spending in upstream oil and gas to rise to around US$470 billion in 2023, lifting the sector further above the cyclical low of US$370 billion in 2020.
In the spotlight: ASX energy stocks
There was no shortage of good news from small-cap oil, gas and coal companies during the March quarter, with many reporting strong numbers and new exploration developments.
Brookside Energy
Brookside Energy Ltd (ASX:BRK) continued its strong operational performance in the March quarter with quarterly sales of A$9.0 million, A$17.7 million in working capital and no debt after fully funding the successful Wolf Pack Well (horizontal Sycamore well) in the Rangers Drilling Spacing Unit (DSU) and the exciting Juanita Well in the Bradbury AOI.
Quarterly sales were down quarter on quarter as a result of temporary shut-in of its operated SWISH AOI wells to avoid interference from nearby hydraulic stimulation operations resulting in decreased production and revenue for the quarter.
All wells are now back online with the Jewell and Rangers back at full production and the Flames performing in line with expectations, continuing to recover towards pre shut-in levels.
Aspire Mining
Aspire Mining Ltd (ASX:AKM) is developing metallurgical coal assets in Mongolia, principally its wholly owned Ovoot Coking Coal Project (OCCP).
During the quarter, Aspire invested $0.5 million in exploration and evaluation activities in relation to the OCCP.
Testing of raw coal samples obtained from the exploration drilling program completed in Q4 2022 was completed, as was float/sink washability testing on working section composites.
Product coal composite and coke testing is now being completed and is expected to be finalized in Q2 2023 in conjunction with a ‘Value in Use’ study to be produced by independent Chinese experts highlighting the unique value of this coal to coke producers.
Carnarvon Petroleum
Carnarvon Energy Ltd (ASX:CVN) is focused on advancing the Dorado discovery within the Bedout sub-basin on Western Australia’s North West Shelf.
Two key milestones were achieved during the quarter, being the acceptance of the Offshore Project Proposal (OPP) by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and the divestment of a 10% interest in the Bedout Sub-basin assets to CPC Corporation, Taiwan (CPC).
The company’s key strategic priority is to reach a Final Investment Decision (FID) for the Dorado development.
Triangle Energy
Triangle Energy (Global) Ltd (ASX:TEG) and joint venture partner Pilot Energy (ASX:PGY) Ltd generated crude oil sales revenue of A$5.7 million for the quarter from the Cliff Head Joint Venture (CHJV).
CHJV produced 53,871 barrels during the quarter for an average production of 600 barrels of oil per day.
Triangle and Pilot are working cooperatively to maximise production and income from the Cliff Head oil field whilst finalising working arrangements and JV alignment regarding the future development plans for Cliff Head.
Blue Star Helium
During the quarter, Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) agreed to acquire further strategic mineral leases and access rights in the Voyager area in Colorado.
The additional surface access of 2,987 gross acres (1,382 net acres) will allow optimisation of the planned siting of the helium processing facility at Voyager and a more efficient gas gathering system layout.
These additional leases are expected to facilitate an increase in the contingent resource base at Voyager.
Talon Energy
Talon Energy Ltd (ASX:TPD) believes it could be sitting on a material gas opportunity thanks to three emerging prospects in the prolific Perth Basin.
Together with JV partners Triangle Energy (Global) Ltd and New Zealand Oil & Gas Ltd (ASX:NZO, OTC:NZEOF), the L7 joint venture vehicle (Talon 25%) has identified three standout targets that could each host upwards of 50 billion cubic feet of gas.
At the Walyering Project (Talon 45%) in the Perth Basin, excitingly, development activities and on-site construction are continuing at pace, with all the relevant approvals now received, construction underway, and first gas forecast in the second quarter of 2023.
Tamboran Resources
During the quarter, Tamboran Resources Ltd (ASX:TBN) completed its 25-stage stimulation program at Amungee 2H well in the 38.75% owned and operated EP 98 permit of the Beetaloo Basin in the Northern Territory.
This is the first well to be finished using the optimal 5-½-inch casing within the Mid-Velkerri ‘B Shale’ and the total expenditure for the A2H well to date is around $32 million, including drilling and stimulation.
The company now expects to announce 30-day initial production (IP30) flow rates during the second quarter of 2023.
Kinetiko Energy
Kinetiko Energy Ltd (ASX:KKO, OTC:KKOEF) made progress during the quarter with its 270-03C core well intersecting what it calls 'significant gassy zones' just 10 kilometres from South Africa’s largest gas pipeline.
The company has now encountered significant gassy intersections on all three of its recent core wells drilled in exploration right 270.
The favourable exploration results have grown the company’s confidence that the regional geology surrounding the three core wells is consistent and has the potential to host multiple production well clusters.