WTI $45.41 +27c, Brent $46.76 +36c, Diff -$1.35 +9c, NG $2.80 +2c
The oil price rallied modestly on Friday but it was still down around 3 bucks on the week. The rise was primarily down the the non-farm payroll number of +287/- jobs easily beating the whisper of +180/- but the rig count showed a rise of 9 to 440 and plus 10 in oil units to 351 which counterbalanced the news-flow. With more strife in Nigeria and a confident statement by the Saudi oil Minister last night adding to the upwards pressure one might have expected a bright start this morning but economic worries have left both crudes around 60 cents off as I write.
Petrofac has announced an agreement with Petronas for the cessation of the Berantai RSC which will become effective on 30th September of this year. This has always been in the offing and should result in some reimbursements from Petronas although PFC will make a slight impairment charge for the closure. PFC has rallied very slightly off the recent low but still looks tempting to me at these levels. Although the order flow was poor in the first half, the company have a number of bids at the late stage of process and I expect positive news to come through before long and therefore would be adding at the moment.
An excellent announcement from Sound this morning who bring more good news from their Tendrara well onshore Morocco. Results so far are ‘significantly’ above expectations and a significant stable flow has already been achieved despite having accessed only 18% of the reservoir and using no stimulation. After initial perforation of only 5m of the 28m of net pay the well has flowed at a stable flow rate of 1.36 mmscf/d using a 16/64″ choke. Accordingly, and even at such an early stage in the process, the well has exceeded forecasts and with further testing still to come should be declared commercial before long. CEO James Parsons stated that this ‘appears to be an early and potentially very material success at the first of our three strategic plays’ and I would suggest that with canny accumulation of acreage nearby and a strong partner the outlook looks very exciting.
A small update from Ithaca this morning which adds a little to our current sum knowledge but confirms its gilt edged credentials in the sector. First half production was 9,400 boe/d on average and of course Stella will contribute substantially in the second half. A very slight fly in the ointment appears to be another small delay in FPF-1 which is now slated to be on the move in late July and producing in early 4Q 2016. However this is semantics in the overall nature of things, by the end of the year Ithaca will have a serious increase in revenue, be paying down debt with little upcoming capex and continues to tick all the right boxes.
Faroe has announced the findings of the side-track to the recently announced Brasse oil and gas discovery. The well has been highly successful and very similar in pressure etc to the first part of the well, current estimates are for 28-54 mmbbls of oil and 89-158 BCF of gas. As the find is close to any number of infrastructure points, is cheap, efficient and meaningful to Faroe(50%) being in their core area of the Norwegian North Sea what’s not to like about this discovery?
Somewhat mysteriously Aminex announced on Friday afternoon that they were raising up to £19.5m via a placing and open offer at 1.3p. The new cornerstone investor is Zubair Corp from Oman who are taking the bulk of the potential issue and given that the current market cap of Aminex is only £27m this is indeed a very decent raise and at a premium to the recent price and will leave Zubair in a strong position. The money raised will be used to drill the appraisal well on Ntorya-2 and the exploration well on Ntorya-3 and should open up the potential within Aminex that I believe is there. More when I have spoken with Jay as I suspect there is an interesting story…
It was indeed a marvellous sporting weekend led by Andy Murray who won the men’s singles at Wimbledon yesterday afternoon.
Over at Silverstone Lewis led from start to finish and it was another second place for Max Verstappen after Nico was dropped a place after a visit to the stewards room and ended up third.
Over in Paris it looked like curtains for Portugal as Ronaldo left the field early with a sore knee but les bleus were unable to overrun them and the reds of Portugal nicked one in extra time to win 1-0.