WTI $49.48 -43c, Brent $55.14 -34c, Diff -$5.66 +9c, NG $3.12 -2c
It was a mixed old day yesterday, early on prices rallied and my trading spies thought that they might be off to the races again. This was mainly because ahead of the Opec/Non-Opec meeting later this week, Iraq and ‘several other producers’ had indicated that it would be a good idea to extend the deal. With Nigeria and Libya apparently attending the meeting and both countries exporting less than recent peak production things started to look a little better. Indeed if President Trump hadn’t rattled so many cages in the afternoon at the UN then it might have been fine but the traders ran for cover. Having said that this morning the price has rallied again and WTI for example is back up to $50.
Interims today from SAVP but to be frank there is little one can add to existing knowledge base. The numbers are irrelevant and we know what has been going on even though the shares are suspended. We have had a highly successful 3D seismic survey over a portion of R3 East at $1.2m it was under budget and ahead of schedule. Contracts were signed for a three well programme in Niger with an option for six more after the focus in the first half on the upcoming drilling campaign. The construction of the logistics camp and pipe yard is complete; all equipment is on site and is thus ready to go. With the announcement that SAVP is potentially acquiring assets of Seven Energy which would be a RTO under UK rules, the shares are suspended until documentation comes out or the deal doesn’t complete. Accordingly the company have sensibly put the Niger drilling campaign on hold until the shares return from suspension. Stand by for a great deal of news from Savannah which should be of huge significance.
Interims from IGas today but as with most companies they are irrelevant for the purposes of assessment of value going forward, particularly with its fairly recent funding IGas is in a much stronger position than for a very long time. This is fortuitous as as CEO Stephen Bowler states ” Encouragingly, there is a significant level of activity onshore UK, and over the next 12 months, the industry is expected to have over half a dozen operators either drilling or flowing wells, including a number from IGas. We look forward to the future with excitement not only for IGas, but for the wider UK onshore industry as security of energy supply and diversification of the UK energy mix becomes ever more critical.”
IGas themselves are about to start work on two sites in Nottinghamshire prior to drilling and have an application in for testing at Ellesmere Port and further applications for appraisal and flow testing in the North West and the Midlands. IGas has a $240m carried programme and capital now that can be used for incremental projects in their conventional portfolio. Guidance is down unfortunately but I understand that this is only for maintenance and normal, if not better service will be resumed before long. The shares have drifted lately along with the sector but now look a good deal more interesting having refinanced and are about to embark on an exciting campaign onshore the UK.
Gulf Keystone Petroleum
Interims too from GKP yesterday where production is solid at 36,664 b/d and guidance stays at 32-38/- b/d which is high wide and handsome as targets go. Payments from the MNR in the period totalled $84m and receivables are $33m. Today the company has announced another $15m for Shaikan, net $12m to GKP has been paid. The company aim to get to 40/- b/d and with investment 55/- b/d, a story I have heard for some time. The news is solid from GKP but the real reason to start buying the stock has not yet hit the presses and will require a meeting with the formidable Jón Ferrier which I hope to fix up before long. In the meantime very much one for the watch list.
Cairn has announced that in the Indian tax dispute the final hearing has been set for August 2018 so don’t stand on one foot waiting for that then. To be honest, what with the possibility of 2bn barrels of oil having been discovered offshore Senegal, and an interesting exploration portfolio pretty much whatever happens in India is by the by, it does serve a warning to others to leave this country out of any investment plans. Cairn is most attractive without worrying about this nauseating attempted money grab and whilst not in the bucket list is right up there in favoured stocks.
I managed to catch up yesterday with Paul Welch, CEO of SDX Energy following recent announcements that show that much is going on at the company. Indeed I was lucky to catch him as he is spending a lot of time with the upcoming programme in both Morocco and Egypt. With a host of wells in both appraisal and exploration, SDX is set to grow fast by any stretch of the imagination, indeed, now financed until the end of next year and revenue set to rise dramatically in the period the status looks very solid. I still wouldnt be surprised to see more moves by Paul and the team though, with very solid backing from all his shareholders a number of exciting prospects are being looked at, hold on very tight please…
This one has been talked about for a long time and at long last something is happening. Reabold is raising £3.96m at 0.5p to invest in European oil & gas projects. Some may know the faces behind this company as both Sachin Oza and Stephen Williams have come from M&G Investments and won’t be the first asset managers moving over to the dark side, they will join Executive Chairman Jeremy Edelman, also well known as he was at Leni Gas & Oil….
Better late than never the link below is to Monday’s podcast in which I talk about Hurricane, Frontera, Echo, SDX and Jersey Oil and Gas.
The FT rarely come up with headlines that make you laugh, it is not the currant bun after all, but today I noticed ‘Weetabix owner buys sausage maker’ which must mean something, are they hedging their bets…?
Last night we were back to the Haribo Cup which clubs only take seriously after they are doing well in it. For the HubCap Stealers it must have been of no significance as they went down 2-0 to the Foxes last night. The Eagles got their first win of the season beating the Terriers, and there were wins for Boro, the Canaries, Leeds, the Cherries, the Hammers, the Swans and even Spurs. For football fans in Brizzle things were mixed, Bristol City went through beating Stoke City but over at Bristol Rovers it was bad news as they lost to Wolves…
Tonight it’s the Gooners hosting Doncaster rovers who probably won’t turn up with 20,000 uninvited fans, Chelski v Forest, the Toffees entertain the Maccams, Burton Albion go to the Theatre of Dreams and the Baggies host the Noisy Neighbours.
England won the first one-dayer against the Windies with Jonny Bairstow, needing no further encouragement to cement his place, scoring a century. Whatever happens in the rest of the series it means that the Windies will have to qualify for the next world cup.