WTI $45.93 +$1.45, Brent $47.35 +$1.46, Diff -$1.42 +1c, NG $3.00 +4c
Ahead of tomorrow’s ‘Opec’ meeting in Algeria hope springs eternal as bulls think a deal will be done. Even if a deal is apparently done that will only be part of it as previous deals have shown. Call me a cynical old sod but the agreement is only part of it, consummation is rare and I suspect referral to the official meeting on November 30th likely.
Other factors affecting the oil price include the apparent victory of Hilary Clinton in the first TV debate of which I am not so sure and maybe more apposite the action by the Niger Delta Avengers Group in closing two export lines yesterday. Inventory stats tonight are expected to show a build of around 2.8m barrels.
Range has issued a Trinidad waterflood update which shows that all is going to plan at the moment and they say that they are making ‘significant progress’ and aims to increase the total recovery factor to over 30% within the next 8 years.The company’s forecast of 2,500 b/d by the end of 2017 is primarily from these waterflood projects. With all environmental approvals granted and the 2016 capex budget of $17m covered by LandOcean, the stage seems set for Range to concentrate on these waterflood projects above all else which seems eminently sensible to my eyes.
EOG has sold 3.34% of its stake in PEDL’s 180 and 182 to Union Jack for £600,000 leaving it with 30% of the licences which hold the Wressle Field and Broughton North. (see yesterdays blog for CPR) This values the remainder of EOG’s stake at £5.4m which they carefully point out is around half of its market cap. For EOG it gives it some cash to fund other onshore commitments whilst for Union Jack they have used their recent raise wisely by increasing their stake in these interesting projects which should be close to throwing off some cash plus of course adding to reserves.
I always get a huge amount of stick when I write up BPC, partly as my views rarely change and partly as the huge number of shareholders, some of whom I class as friends think that I am unjustly harsh on them. This is made worse by the fact that I like Simon Potter and I know that he has been very busy at a time when enticing senior players in the data room is far from easy. Nevertheless, despite the commendable cost cutting and significant personal salary deferrals nothing much has changed. There has been no farm-out which means that the company has no money and no rig and therefore no drilling. Drilling by April 2017 now looks a rather forlorn prospect although the one good thing is that locally the politicians appear to have been squared off and would likely accommodate extensions if they were needed. I have no doubt that when the farm-out happens and the company is funded for an exploration programme, the lure of what are genuinely substantial volumes according to WoodMac will fire up the shares but in the meantime it takes a leap of faith to be an investor…
As part of my follow up work on the Amerisur trip to Colombia I have done a Vox Markets podcast with some general observations on what I saw, here is the link…
Savannah Petroleum announce interims today which are of little or no interest. However 2H 2016 is shaping up to be more exciting what with the placing, the seismic and the potential of an analysts visit to Niger. Although this is a slow burner Mr Knott has a most interesting play and a blue chip list of backers.
Providence has announced that its new Chairman is to be Pat Plunkett who is the former Chairman of Tullow Oil and current Chairman of T5 Oil & Gas, a company scheduled to come to the market in its own right.
Last night Burnley beat Watford 2-0 and tonight sees both Spurs and the Foxes in Champions League action against CSKA and Porto respectively.
And for you UFC fans Conor McGregor will face lightweight champion Eddie Alvarez as he attempts to become the first UFC fighter to hold two belts at the same time. This is scheduled for 12th November at Madison Square garden.