WTI $49.71 +67c, Brent $52.52 +$1.03, Diff -$2.81 +36c, NG $2.94 -3c
A very strong week for oil, WTI was up 8.6% and Brent rose 9.3% and 25% off the June lows. A roll call of potential influences on the oil price continue to favour the upside although much can change, these include; Tick-Nigeria volumes still down, tick- Venezuela nearer basket case status, tick- KSA, UAE, Kuwait cutting, tick-inventories still falling, tick-$ remains weak,tick- Shell’s Pernis refinery in Rotterdam, at 404/- b/d Europe’s biggest, caught fire on Sunday morning and remains down, half tick- rig count on Friday showed a gain of only 2 in oil so month slowed noticeably. Finally the Vampire Squids, having gone uber-bearish right at the bottom, started squealing and said that they saw ‘an onset of rebalancing’ which shows just why their commodity department is such a joke. G Sucks turning more positive is the only bearish thing for the oil price right now. Barring this, one might have expected WTI to make an assault on 50 bucks soon.
Victoria Oil & Gas
Quarterly update time from VOG and things continue to go well across the board, Logbaba gas production had a good quarter, up 11.9% to 14.59 mmscf/d. At La-107 net pay of 35m of high permeability, high porosity gas bearing sands in the Upper Logbaba Formation was slightly better than expected whilst a further 15m of net gas sand has been encountered in the Lower Logbaba Formation. After drilling has been completed here they are going to do the sidetrack on La-108 to access the 100m of gas sands in the original 108 wellbore.
Finances are good despite the cost overrun talked about last time, $7.8m net revenue, $7.6m of cash and $20.7m of net debt as predicted after the recent delay. After La 107 has been flow tested, VOG plans to enter into a number of long-term GSA’s with large offtake customers whilst continuing to supply ENEO under the take or pay agreement. Longer term it is envisaged that an agreement can be reached ‘increasing the current contractual power supply of 50MW to beyond 100MW’. On my recent visit to Cameroon and GDC, I was particularly impressed not just by the ENEO potential but the way that significant customers in Douala are coming to rely on gas from VOG. Finally the company report that the onshore field development work at Matanda is progressing well, saying that there is an “exciting opportunity to develop gas supply for sale from sources with low capex exposure.” I remain convinced that VOG is not yet properly judged by the market and should be back to the 80p high and then some.
An exploration and development drilling update from Premier this morning which has confirmed that Zama-1 has completed with no further hydrocarbons in the deeper target. I suppose that it was a case of ‘while we are here we might as well go a bit deeper’ but the company say that they werent expecting any more oil than the 1 bn+ barrels already announced. The Anoa well in Indonesia has completed and will be brought onstream in early August at a higher rate than previously estimated, the reserves on this well alone are expected to be 75-100 bcf.
The Catcher injection well B12 is being completed and is the last of the twelve pre 1st oil, Catcher is ahead of time, under budget and delivering better than expected reservoir performance for start up later this year. With the refinancing finally completed on Friday and good news expected from Tolmount the shares should hold the recent gain and start heading back to the previous highs, that is if the sector starts to take in that Brent is now $52.50….
In the test match, England are on top but still have three wickets to take, South Africa go into lunch at 205-7 chasing 490 odd.
Enable under Frankie Dettori won the King George at Ascot on Saturday in soft going which didnt seem to do much for his turn of speed.
Back to footy, England beat France last night so go into the Euro ’17 semi finals where they play the Netherlands on Thursday.
And Lewis Hamilton made a heart over head decision yesterday as, having not managed to take the Ferraris he gave back 3rd place to Bottas. Ferrari had no such qualms as they held up Raikkonen behind Vettel…….