WTI $47.05 +$2.38, Brent $48.69 +$2.72, Diff -$1.64 +34c, NG $2.95 -4c
Oil price- Swing when you’re losing
So, with a small puff of white smoke the Opec contingent have packed their tents and headed to the November 30th meeting with a potential deal up their sleeves. The market reacted well, any deal was unexpected and this, whilst not being worth the paper it isnt written on, satisfies the marketing department in Vienna. The basic facts appear to be, a reduction in production from the current 33.24m b/d to 32.5m b/d which magically pushes the balance into draw territory especially as, having taken the lead, the Saudis manage to get the Russians on board. They are, as I said, taking it back to the full conference at which we are reliably informed other key non-Opec producers will be invited to cooperate, ‘reaching out’ as it is being called. But details are thin on the ground, will there be quotas or will the likes of Algeria, Libya, Iran and Nigeria be allowed to produce at will, if so it looks very much like the KSA is back to being the swing producer again? Whatever the situation it cleverly gives the world another two months, maybe more where the oil price risk may now be on the upside…
And if we needed any more reason to get the green pen out then the EIA produce a set of inventory figures that yet again fool the teenage scribblers on the Strasse. Looking for a build of anything up to three million barrels of crude the EIA announced a draw of 1.88m barrels which had the price moving up before news from Algeria started to come out. The product news wasnt so clever with gasoline stocks built by 2m barrels and distillates also higher than one might normally see, even at this time of the year.
Its been a busy time recently as Range update the market on a number of things although at least it is positive news coming through. After Tuesday’s waterflood update we now have a CPR from Trinidad which is pretty positive. 1P reserves are up to 17.3 mmboe whilst 2P increase by 11% to 24.4 mmboe. As I said recently, the company is sticking to the knitting, working hard on the waterflood projects and hoping to deliver the goods, long-suffering shareholders of Range are probably finding the change rather cathartic…
Providence is another company where shareholders are probably considering themselves fortunate to be owning something that has actual value after the recent shenanigans, in particular the Transocean court case. The darkest hour was just before the raise and now, 70m bucks better off and the bluest of blue chip share registers to boast of, the management are pursuing Druid which may be the company’s soothsayer next year. Today, in a long and detailed conference call the strategy was outlined, suffice it to say that when you don’t actually need the money the buyers are apparently queuing up to have a gander at Barryroe, and others in the data room and drilling costs are falling like stones. Tendering for the Druid work continues, as mentioned before the well will now cost around $35m plus another$15 if they go deeper and TOR said in his speech that this may have cost as much as $225m in the old days. The well is scheduled for June 2017 so there is no hurry but I get the feeling that ‘New Providence’ as it should be called will have plenty to say in the meantime…
Another operational update from PPC who have had a little grief in drilling their DP 1002 S/T well in the Puesto Guardian concession in Argentina. Now that the cementing ‘issues’ have been overcome drilling has ‘proceeded satisfactorily’ and hydrocarbon gas readings have been seen through the mud logs. All being well the well should complete before long. The PG concession is producing around 500 b/d at the moment and with some new kit due on site shortly should increase field production by around 20%. I am looking forward to catching up with Peter Levine shortly as I hear there is much to hear on the business plan going forward.
News yesterday from IGas that the planner for the Misson Springs site in North Nottinghamshire has recommended that Notts CC grant planning consent for this development site, with two wells, at their next meeting on October 5th. Again, hoping to have a long promised update with Steve Bowler before long.
Falcon Oil & Gas remain unloved and at a years low of 4.25p despite what looks like a highly successful result on their Amungee NW-1H well where the frac job appears to be going well with flow rates of 1 mmcf/d. The newly elected government has called for a moratorium on fraccing which hopefully will only be a delay in proceedings. There is significant value waiting to be unlocked in Falcon but even they can’t tell when or if that might happen.
It sounds like that there was quite a crowd at Celtic Park last night proving that they can be an extra man as Celtic managed to earn a 3-3 draw with the noisy Neighbours in the Champions League. Elsewhere the Gooners also won making the next round look relatively safe and tonight all the usual suspects line up in the Boropa Cup.
Bedlam Brewery may not ring a bell with anybody, nor should it, but this interesting little company has been supported by a number of oil industry executives and is now preparing to expand and is having a ‘Crowdfunding’ event to raise £500,000. If you are interested in taking a look (I have no interest of any kind!) you can email email@example.com or are invited to meet them either on the 6th October at the Footman pub in Mayfair or on the 27th October at the HSBC European HQ in Canary Wharf.