WTI $51.30 +38c, Brent $56.94 +33c, Diff -$5.64 -5c, NG $2.89 n/c
Another up day for crude yesterday, Opec kicked of the monthly reports session by increasing demand forecasts for next year by an albeit modest 200/- b/d. The EIA STEO is out this morning and at first glance is uncontentious. Crude drifted late in the day and when the API inventory stats came out after the bell oil fell on the news that according to them stocks built by 3.1m barrels against a predicted draw. This morning crude is around 50 cents off last nights closing numbers.
Independent Oil & Gas
It’s a red letter day for IOG as their updated CPR done by ERC has shown that gas reserves at the Vulcan satellites, plus the Blythe and Elgood assets are significantly higher than before. It is almost entirely due to the Vulcan satellites being included as from what I can see Blythe, at 2P 33 BCF and Elgood, 22 BCF are similar to previous numbers. The Vulcan satellites are given 248 BCF giving a total of 303 BCF up from 34 BCF last time with the Harvey numbers still to come. The CPR gives 2P peak production of 200 MMcfd and an NPV 10 valuation of £331m which should at long last put some meat on the bones of the IOG strategy. Part of this strategy is the use of the Thames pipeline which given what it cost, ie next to nothing, will provide a highly efficient transportation method.
This CPR, along with continued strong support from London Oil & Gas, should mean that IOG starts to move forward on a much more secure footing. Although this CPR isn’t per se the golden ticket to future riches, it should make planning for the future a good deal easier.
Tullow has acquired 90% of four onshore blocks in Côte d’Ivoire with the state oil company taking the remaining 10%. There is no indication that at this stage that this might be in any way material but adds to the company’s modest in country exposure.
Link- President Energy
Yesterday I was at Core Finance again to interview Peter Levine, Chairman and CEO of President Energy. We discussed the political state in Argentina where a number of majors have recently entered and the opportunities that lie in the country. We got together primarily though to talk about his recent acquisition and how swiftly the assets are being put to work. With much confidence for the future PPC still looks significantly undervalued to me, the link to the interview is here.
A bit quiet on the sports front this week, the international break for World Cup qualification has though kept the headline writers busy. For the home nations it was a mixed bag, England are into the finals but playing like this they need only book the hotel for the first stages, Northern Ireland are into a two leg qualifier but Scotland and Wales have the summer off. Further afield, Argentina were 1-0 down until a Messi hat-trick put them through and Holland failed to score the 7 goals they needed so they are missing as well.