WTI $43.73 +55c, Brent $45.11 +58c, Diff $1.38 +3c, NG $2.14 +7c
The oil price finished up at the end of the week, the rig count, showing a fall of 9 units to 431 and 8 in oil to 343 helped as did the CFTC numbers which indicated a big rise of 33m barrels in net speculative length in WTI. The week’s rise was two dollars almost exactly for both crudes and the momentum is still upwards even if the fundamentals still look decidedly dodgy. Gasoline demand and product stocks will be important to watch in the inventory stats crude as the driving season looms and refinery utilisation changes. The final piece in the bullish jigsaw is that I have now heard from a number of sources that China has been a buyer of oil in recent weeks.
An update from PANR this morning as the company is not letting the grass grow underneath its feet at the moment. The company has signed a rig contract with Nabors for a three well back-to-back programme using the same rig as it did before. There will be two horizontal wells on the VOBM#1 discovery in Polk County followed by another horizontal well on the VOS#1 in Tyler County. This third well will be the real test, a step-out well 5 miles west of the discovery is an appraisal but if it comes in will be transformational for the company. The weather in Texas has been truly awful with one day last week recording 27 inches of rain but the company are expected to spud in mid May. It is also interesting to note that the company has done more seismic work and the prospects apparently seem even more visible than before.
Elsewhere they update on both previous wells, VOS#1 in Tyler County is about to be fracced, the weather has delayed this but it will now go ahead in conjunction with the drilling programme. The frac should ‘materially improve’ on the rates achieved last time, this could easily be 3-5x the lower rate of 750 boe/d and the company is confident of success here by the sounds of it. At VOBM#1 in Polk County negotiations have reached their final stages so expect to see production and sales this quarter.
Overall this is further good news from Pantheon, an oversubscribed raise has left them fully funded for this campaign which is going ahead with ‘materially lower costs’ than might have been expected. The gas price has picked up nicely so they will get better prices for that and the liquids off-take after successful negotiations with operators for any further wells into the bargain. I am sticking with my target price of 200p but this could easily be conservative if the wells deliver as I think they will.
Finally I am pleased to report that PANR Chairman John Walmsley is recovering ‘marvelously’ after a four way heart bypass earlier this month.
Finals today from Aminex which are of little interest, all the excitement is in the here and now. Since the year end the gas has started flowing at Kiliwani North which means revenues and of course books reserves. It has been a long wait for management and shareholders alike but when I spoke to Jay last week he was excited about the future but shared my view that the stock is significantly undervalued.
With the Foxes beating the Swans 4-0 yesterday Spurs yet again need a Monday night win to stay in the race when they host the Baggies at the Lane tonight. The Gooners were held 0-0 by the Maccams which lifts them out of the relegation places for the time being. A point at Anfield after being 2-0 down was good for the Magpies but will it be good enough? The FA Cup final will be between the Red Devils and the Eagles after they despatched the Toffees and the Hornets respectively.
In the rugby Sarries won and the Tigers lost which means a cracking final between Sarries and Racing, complete with Dan Carter…
Anthony Joshua has announced that his next fight will be against unbeaten Dominic Breazeale on June 25th.
And once again I would like to thank everyone who donated to the Anthony Nolan Trust which Holly was running for yesterday. The team has raise something over £12,000 in memory of Torsie Haugli which is wonderful and so many thanks to generous blog readers, and they all completed the race fit and well!