WTI $53.86 +86c, Brent $56.70 +$1.07, Diff -$2.84 +21c, NG $3.03 -11c

Oil price

As if proof were ever needed that crude is trading in a narrow range last week WTI was up 3 cents on the week while Brent was down a whopping 11 cents. The end of the week was best for the bulls as the IEA added to other reporters in assessing the adherence to the quotas as being over 90%. Later today we will see the Opec numbers which might just bear those numbers out. Not much else is around, the rig count was up 12 to 741 overall and the oil number was up 8 to 591, nothing special but it will keep rising and there is little to worry about but I am looking forward to the 2nd March when Hunting comment on the market place.

Genel

The company has announced that the PSC’s and the GLA’s for the Miran and Bina Bawi gas fields that were announced in 2015 have been completed. The company say that now ‘progress on the large scale, low cost onshore gas fields’ can begin  which will need midstream gas processing facilities and a pipeline to be installed under the KRG/Turkey agreement made some time ago. It seems like a very long time ago that I first saw the slides at a Genel presentation but have to assume that it is still good news…

Ophir

I dropped by to see Ophir recently, Bill Higgs had sent me a note following the Schlumberger deal at Fortuna and it was clear that I  hadnt processed it very well in the blog and I needed a bit of education. It turns out that we werent actually very far apart, I hadnt quite got to grips with the integrated value chain or the floor and ceiling protection but was right in thinking that OPHR could draw down on the 33.8% of Fortuna if they needed to. Whether this will be necessary or not is at present unclear, ultimately the project should be the ‘substantial’ provider of free cash flow for the business but first get through to 2020. Capex is capped at $150m and there is $350m of cash, (net $165m) in the balance sheet but there are also commitment wells and other prospects in the portfolio which will need to be looked at. Current commitments are around $90m of which the Cote D’Ivoire well takes $30m and interesting prospects in Gabon, Mexico and in Indonesia with  Statoil in the longer term.

There is a clear ethos at Ophir to play ‘within our means’ and keep a clear line of sight through to 2020 which is admirable given my earlier skepticism about raiding the Fortuna pot but will be interesting to see if it can be done. Having said that, in order to maintain a balanced portfolio and take advantage of upgrading extending existing assets efficiently nothing can or should be ruled out. The asset base is strong with 2P assets of 54.4m boe and powerful 2C resources behind it and unless one of the big oil prospects comes in Ophir will remain a gas play for the longer term. Flexibility is a touch tight at the moment but the Fortuna pot could help, although best not used as a regular ‘well’ to tap whenever the exploration department comes up with a particularly good wheeze. Definitely one for the watch list even after the bounce in the last quarter.

Sundry

Sound Energy has announced the early redemption of a loan of £1m which carries a 10% coupon and matures in July 2017. This will involve the exercise of 9.6m warrants  and obviously some minor dilution.

Ascent Resources has confirmed that the raise announce last week has completed, just under £3m has been raised through PrimaryBid at 1.85p per share.

Links to the bucket list interviews I did last week are below if you are interested.
IG interview: Can the 2017 ‘Bucket List’ beat the 162% gains seen last year?
TipTV interview: Malcy’s 2017 Bucket List

And finally…

In the shock of the decade Joe Root has been named England cricket captain with Ben Stokes as his vice captain.

In the Premiership at the weekend the HubCap Stealers beat lacklustre Spurs whilst Chelski could only draw against Burnley. With the Gooners beating Hull City Tigers and the Red Devils seeing off the Hornets the Noisy Neighbours need a win at the Cherries tonight.

And what a Six Nations weekend, after Ireland put 60 on Italy in Rome the Principality Stadium saw a great display of rugby which saw England come from behind to beat Wales. Yesterday afternoon another good match saw France slip by Scotland who might have thought they had enough for Les Blues, on this occasion in white and orange…