WTI $29.64 -$1.13, Brent $33.01 -$1.27, Diff $3.37 -14c, NG $1.80 -5c
To be honest there is not much to mention about the oil price after last week. Losing over a buck a barrel on Friday meant that prices were almost exactly unchanged on the week which is probably a fair reflection of what happened. What did we learn? Well, there is a desire, from a number of sources to secure an agreement between Opec and non-Opec producers to get the price up with some coordinated action, no surprise there then. There is also precious little that can be done about it for the foreseeable future, indeed getting a freeze on production, whilst being very laudable ‘aint going to change the market. The bottom line is that there is still a glut which will be made worse next month when refiners do their usual maintenance ahead of the driving season and cut back purchases in the market. Add to that continuing misery on the world economic front and you can see that it will take a bit more than a bit of shuttle diplomacy by the Venezuelans to fix the problem. Further out there is shaping up a storm of considerable proportions on the supply side but at the moment no one is building an Arc…
Two other things, the rig count fell again on Friday, overall it was down 27 at 514, in oil it was down 26 at 413. And worth a quick visit to Houston tomorrow as the Saudi Oil Minister is in town to make a speech I hear…
Whisper it very quietly but things seem to be looking better over at Range which only recently looked like a basket case. Today’s announcement of a strategy and work programme indicates that a number of plans are slipping into place and that hopes of meaningful production maybe justified. The highest priority is being extended to the two waterflood programmes at Beach Marcelle and Morne Diablo where injection on one of the projects is already underway, and first production as a result of waterflooding is expected to commence in 2H 2016. The company has identified $26.5m to spend and five new wells will be drilled this year, overall production will pick up sharply and the company is guiding to 2,500 b/d by the end of 2017. Range is now fully funded with $22m of cash and also has the LandOcean facility to draw upon and even manages to talk in the statement about possible acquisitions, is this what the market has been waiting for? One swallow, as they say, does not a summer make, and I look forward to meeting the company again soon but this does seem like genuine progress given today’s news.
Chariot Oil & Gas
Chariot has released a bunch of stats ahead of today’s analyst meeting which I had hoped to be at, maybe I will get a chance to pop round for a chat about things. Overall Chariot is doing all the things it has promised in the last 18 months by maintaining its interests in Morocco, Brazil, Mauritania and Namibia whilst spending as little as possible. With 2015 year end cash of $39.7m, of which $11m is held as security against commitments and will fall with the Brazilian seismic completion, Chariot looks sound enough. 2015 spend was $13.8m and this year it is forecast to be around $18.8m. The company has managed to hunker down yet keep its acreage and options open, whilst it is taking advantage of current low costs, particularly in areas such as seismic, to be prepared for the upturn.
Cape has announced a contract with Samsung for work on Shell’s Prelude FLNG project, no amount disclosed but nevertheless useful I imagine.
EnQuest and Cairn have tidied up their Kraken exposure by taking First Oil’s 15% stake between them. EnQuest now have 70.5% and Cairn 29.5% each.
Nostra Terra has done what looks like quite a smart deal by acquiring Permian Basin assets whereby it adds P1 reserves of 1.6m barrels of which less that 20% are in production which gives a decent bit of upside. The cost is $3m which is covered by a debt facility which is serviced by current production revenues. I’m not quite sure whether Matt is focusing on the USA or Africa at the moment but seems to be holding up both ends ok.
Hurricane Energy has announced that John Hogan is stepping down as Chairman to be replaced by Rob Arnott, another equally well known and highly respected industry face.
Argos has signed a participation deal with Noble and Edison after their Rhea well went west with the Premier rig episode recently.
And Petroceltic have two announcements out, their debt has another two week extension and their first development well at Ain Tsila has been spudded.
Be warned that the blog may be sporadic this week as the results season gets underway with its associated meetings…
And finally, apparently the videos that I added on Friday didnt come out well in some formats, here they are again, Interactive Investor, IGTV and TipTV discussions about the bucket list:
England’s cricketers should not be stopped from playing their attacking game, given how the South Africans played yesterday its probably worth just taking a leaf out of their book…
In the FA Cup it was most interesting, the Gooners could only draw with the Hull City Tigers and relish another game, Reading beat the Baggies and the Eagles flew high over White Hart Lane. the Noisy Neighbours rested most of their squad ahead of chicken Kiev on Wednesday and got done 5-1 by Chelski. The same score at Blackburn where the amazing Hammers ran away with it and it might have been many more, as they say. Their reward may be a trip to Shrewsbury who have every chance against the dullards of the Premiership the Red Devils…