WTI $49.96 -56c, Brent $50.79 -67c, Diff -$0.83 -11c, NG $2.77 -6c
Oil price
Oil remains under some pressure as the faults start to develop in the Opec agreement scheduled for November 30th. After Iran, Iraq now wants exemption from the agreement and that comes as it looks like their output was 4.45m b/d last month. With the US having been invited to join the production cuts and so far having had no reply, it looks at the moment it is a Saudi/Russian agreement…
The API stats last night do not bode well for the EIA tonight, stock build in crude was 4.8m barrels, nearly three times analysts guesses, gasoline built as well although distillates fell as one might expect at this time of the year.
Jersey Oil & Gas
JOG has announced that a site survey is underway on the Verbier prospect on block P.2170 which was recently farmed into by Statoil in preparation for drilling next year. Yesterday I interviewed Andrew Benitz, CEO of JOG in order to get behind what might be one of the most exciting stocks for 2017. The Statoil deal was interesting from a number of points of view, they were incredibly keen to get it underway and completed the deal in record time, they are treating the prospect as one of their best in the portfolio and that is why the drill bit is planned for next summer. Make no mistake, this farm-out will transform JOG’s prospects from a standing start.
The link below should give an idea of what the team at JOG has been up to, there is more than a possibility that this very small company with a very strong team has got something here, investors would be wise to at the very least put it on the watch list…
TipTV CEO Interview: Andrew Benitz, Jersey Oil & Gas PLC
Pantheon Resources
Yesterday PANR announced the successful drilling of the VOBM#3 well in Polk County, Texas. After the hullabaloo surrounding the last well the announcement was timely and remarkably brief. The well drilled to 14,500 ft and will now pursue vertical completion, the logs showed hydrocarbons in a ‘potentially significant reservoir’ in the primary target being the Eagleford/Woodbine sandstone as well as gas in the Austin Chalk. Now it would be wrong to draw any material conclusions from this announcement because you genuinely cant tell what you are going to get in terms of a flow rate until the test is done but the omens are good enough. The company has drilled the well on time and budget and will be able to do many more if necessary, this means that should it be a success the economics of wells like this will be ‘extraordinary’. If it is a success then the company will finalise the gas processing facility and bring wells VOBM#1 and 3 onto production. In the meantime the well is being prepared to mobilise on the next Tyler County location. PANR creates tremendous arguments within the sector which until these wells are firmed up will be difficult to be settled. For the moment I am going to give the team the benefit of the doubt and stick with my 200p target price…
Xcite Energy
Xcite announced yesterday that the bondholders were ‘not satisfied’ with the current plan and that they expect to appoint a liquidator ‘within the next 4-6 weeks’. The directors believe that ‘On the basis of advice received by the Company and the directors, the directors believe that liquidation is unlikely to result in the return of any value to the Company’s existing shareholders’.
Sundry
Today’s operational update from Genel is effectively another profits warning as production and revenue fall as the decline at Taq Taq and Tawke continues. Whilst this is still bad news the company is still loaded with cash and the area is slowly getting more attractive. On that subject GKP announced this morning that some of its August invoices from Shaikan had been paid with plenty yet to come.
A number of results in the last 24 hours from the US, best of which was probably the Valero number where earnings beat the whisper coming in at $1.24, against forecasts of around 97c. Baker Hughes reported -15c against expectations of -45c, Nabors missed by 1 cent and WFT by 14 cents.
Egdon has increased its stakes in two East Midlands licences PEDL 334 and PEDL 306 having been assigned interests from Celtique at no cost.
And finally…
Twas the Michael Mouse Cup again last night and the HubCap Stealers beat Spurs 2-1 and the Gooners beat Reading. Tonight whilst the teams will be unrecognisable the Chelski go to the London Stadium to take on the happy Hammers, the Maccams make the long haul down to the Saints and of course the Noisy Neighbours slip down the road to Old Trafford.
It’s that time of year, yup it’s World Series time where only one continent gets involved… With the resurgence of Cleveland continuing and the Cubs back in for the first time for decades last night the Indians saw off the cubs 6-0……..only 6 games to go now…
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