Oil price, Sound Energy, Hurricane Energy, Wentworth Resources, IOG, And finally…
WTI $46.40 +38c, Brent $48.84 +42c, Diff -$2.44 +4c, NG $3.09 +7c
A fairly quiet day on the oil Bourses yesterday, the same old supply stories but crude edged up when the KSA export figure for May came out at 6.92m b/d, this was down m/m and to be expected as during the summer a good deal of production is drawn into domestic power generation. June and July are slightly more difficult to call, early in the period Aramco kept its prices high to all customers but word is that at the moment prices have eased which would indicate a slightly higher output, we shall see, at present signs are that the KSA are going to deal with the overproduction problem. After the close the API inventory stats showed a modest build of 1.6m barrels in crude which was the wrong sign for the scribblers but products drew strongly, tonight’s EIA data should give us a better clue.
Sound has announced the progress on the TE-7 EWT which demonstrates very strong pressure recovery which is still ongoing. Pressure stabilisation is expected to take another 6-8 months and estimated gas volumes in place, once the reservoir has reached full pressure stabilisation of 40 Bscf as per the company’s preliminary expectations. This will enable the Company to confirm a field development concept with regular spacing of sub horizontal stimulated wells ‘similar in design to TE-7.
The company has confirmed that option over another $10m of the convertible bond issue recently completed has been exercised as expected and the total is now $230m. With the money raised in the equity market this makes a strong contribution to the EPS for Lancaster which is motoring along well. The link to the interview with Dr Robert Trice is below for anyone who missed it the first time.
An operational update for WRL this morning which announces further payments from the TPDC of $1.2m making $7.9m so far this year. This is pretty positive stuff and with receivables now at four months is on the right track. Also on the right track is production, post the rainy season demand has increased to 45 MMscf/d in June and has picked up more with local maintenance work increasing demand on Mnazi Bay. With FY guidance of 40-50 MMscf/d now maybe looking conservative things are slowly looking up for this company that should do well given time.
Independent Oil & Gas
IOG has announced the FDP for the Blythe Hub which contains the Blythe and Elgood fields both owned 100% by the company. A new CPR for the Blythe Hub is expected soon which should provide up-to-date independently verified reserves and resources. The company talk about it’s great ‘strategic value’ to IOG along with the Vulcan Hub but this can only be translated into moular with ‘deferrals of a substantial proportion of contractor costs and prepayments from potential gas offtakers to help meet funding requirements’. In this market more developments are indeed being funded like this, but it is way less certain than raising money or getting a partner in which if I was a shareholder I would feel more comfortable with, despite that the project still has legs. I am meeting new management soon which might help but Messrs Routh and Young seemed to be doing ok to me…
England’s women won their semi-final against South Africa yesterday which takes them to a final against India or Australia on Sunday. In the meantime greater powers than the atrocious England selectors have ruled Gary Ballance out of the next test which should make room for a better player, where is James Taylor when you need him most…?