WTI $51.90 +$1.00, Brent $55.21 +$1.19, Diff -$3.31 +19c, NG $3.41 -2c
A modest end to a tumultuous week and oil prices have pretty much kept to the highs after the Opec deal was announced. With a strong dollar after the Fed meeting and a few pessimists doubting the group’s ability to hold the deal together, that looks good enough to me for the time being. My long held year end price of $60 for Brent looks like by hook or by crook it may not be far away although I have been tempted to move it down often enough since May! The rig count was up, as expected and this week saw general rigs up 13 at 637 and oil units up 12 at 510, expect more on this front.
BP has announced that it has farmed into Kosmos’ acreage in Mauritania and Senegal. The spoils include the huge Tortue gas field and comes at a price of $1bn in exploration carry. Kosmos gain from BP’s deepwater exploration know-how and BP gain from Kosmos’ exploration expertise. BP has also announced that it has done a deal with ADNOC for its ADCO onshore concession for $2.3bn in BP shares, clearly BP are starting to open up the wallet a bit if you add these to Mad Dog 2 which is now going ahead.
Yet again more success for Hurricane as the good Dr Trice returns from the rig bearing gifts. This time it is the well result from Lincoln where an oil column of 660m+ has been found which is even bigger than Lancaster, hydrocarbons were found at TD which is why they drilled deeper. This is another ‘significant fractured basement’ discovery as the company put it and the key oil down to (ODT) @520m TVD below structural closure which is 168m TVD below the ODT in the old Arco well which is important as it was on the flank. The well was not tested, as expected, but I have a shrewd feeling that the API might be similar to that found at Lancaster, even though the Western transfer fault seal providing the barrier between the two was identified.
The first piece of good news to draw from this is that to me this has major implications for Warwick and that isnt even on the list to be drilled yet, but total reserves are adding up all the time. As a rough and I think conservative guide I am now using 500m barrels for Lancaster, 400m for Lincoln and will sit with 250m for Halifax which I think is the pre-drill estimate plus something for Warwick. The rig is in the process of P&A and will go to Halifax this week with the intention of spudding at the weekend, much I imagine to the chagrin of Lady Trice as the CEO will be aboard… If weather permits they may well actually test this one, if that is successful then maybe the testing kit will be taken off and they may go deeper with wireline logging.
After the Halifax well the hard work on the development starts, and of course the discussion about how to fund it will be at the fore. Given that the number looks like being around $400m, all options are being explored but undoubtedly a significant portion will be debt. The remainder might be equity of a farm-in or even a mixture depending on the circumstances. I understand that that there are new faces seen in the data room but farming out the prospects is no certainty, indeed if I was an equity holder and having come so far, I would want to participate one way or another.
Being aboard the good ship Hurricane has been exciting and it looks as if there is plenty of news to come after Christmas. Expect the Halifax result, the FDP, the EPS approval and sanction as well as the CPR of Lancaster to come in the first quarter just for starters. The show has only just begun, Dr Trice and his amazing fractured basements are here to stay…
Also good news from Tanzania where the Government has agreed an extension on the Nyuni Area to 27/10/19, the company also announce that drilling operations are underway and the Ntorya-2 well should spud ‘in the next few days’. All this comes as rumours of a funding by Solo is being considered which isnt exactly needed but probably wouldnt be turned away.
The cricket is only now of interest as the final test match turns into a war of nerves for England. Batting is obviously extremely easy as India showed by declaring at 759-7 this morning after Nair got his 303.
The football at the weekend was fairly predictable, in the big one at Middle Eastlands the Noisy Neighbours saw off the Gooners 2-1 but with Spurs edging Burnley 2-1 and the HubCap Stealers at the Toffees tonight for the Giro derby expecting to win little changed. The Baggies lost 0-2 to the Red Devils and the Hammers contrived an unlikely win against the Hull City Tigers.
And finally, shame if ever any more was ever needed on FIFA as they fine the home countries £80,000 each for wearing poppies, lets hope they all enjoy spending the money the disgraced bunch of xxxxxxxs.