WTI $47.10 -$2.53, Brent $49.86 -$2.79, Diff $2.76 -26c, NG $2.54 +3c
After a good, if short run, the oil price came back a fair bit yesterday on the back of a number of maybe related pieces of news. Opec produced their monthly which made quite good reading but also announced that the cartel’s production was up to 31.57m b/d, possibly near a three year high. They did move slightly towards the IEA stance by upping their Non-Opec supply numbers by another 200/- b/d for this year and a much more substantial 500/- b/d for next year.
Kuwait also added to the mystery by saying that ‘there are no calls within Opec to change the group’s production policy and lower output from higher cost producers could support prices in 2016’. Inventory figures tonight are important as there is a seasonal product imbalance on the way and refiners are taking less crude.
I wrote about AMER yesterday and mentioned this well but hadnt realised quite how quickly and efficiently they would set the liner and get the log analysis under way. However, Loto-2 on the CPO-5 block in Colombia appears to be very encouraging as those logs indicated 54 ft of net pay thickness in the Mirador formation. The company are now designing a programme to test the Mirador reservoir so we should have more news in the next 14 days.
Circle has also announced a decent well result in the Ksiri West -A well on the Sebou Permit onshore Morocco. The well tested the primary Main Hoot and the target interval flowed gas at 8.0 MMscf/d on a 24/64″ choke. CEO Mitch Flegg is highly encouraged as the discovery can be tied back to the infrastructure and pipeline only 680m away where there is a ready market for the gas.
I have only recently picked up coverage of Empyrean after having a long chat with CEO Tom Kelly but the news seems to get better all the time. Today sees the announcement of an updated reserve report on the company’s flagship Sugarloaf asset and the numbers look good indeed. 1P reserves are up 13.84% to 6.58mmboe, 2P up 11.63% to 14.11m and 3P rises by 10.9%. With NPV10 at 1P of $45.7m, 2P of $135.9m and 3P of 294.7m not even including the Upper Eagle Ford shale or the Austin Chalk, the discount of market cap to NPV is as high as almost anything in the sector. And this is a Marathon project with all the positive support that entails. Certainly a market valuation of only £15.5m seems a serious anomaly to me…
England duly beat Lithuania last night, or should I say England B’s as many were injured, rested or Woy didnt want to upset their club managers… Tonight Wales dont even need to beat Andorra but the Netherlands are up against it v the Czech Republic and are not guaranteed to go through.