WTI $61.44 -57c, Brent $67.62 -45c, Diff -$6.18 +12c, NG $2.80 -9c

Oil price

Last week WTI was up $1.02 and Brent rose by 90c, forecasts of economic growth were good and international bourses mainly continued to rise. The more of this we can get in the seasonally tricky first half the more likely the oil price is likely to hang on to recent gains. Most of my chartist contacts are expecting a little further on the upside before a correction and today crude is up a bit more. Friday saw the rig count, down 5 overall to 924 and oil also down 5 at 742.

Victoria Oil & Gas

VOG announced late on Friday that it had been informed that GDC had been informed by ENEO that it ‘was not in a position to extend the gas supply agreement’ that had been currently been under negotiation. As a result it had to stop receiving gas from GDC who switched off the supply. ENEO said that the reason for this was that it was due to growing arrears from the Cameroon Government and therefore specifically not a pricing issue.

VOG has said that this is a ‘temporary issue and expects a resolution in the short to medium term’ but clearly will affect GDC for the time being. Apart from a sharp cut back in costs, VOG can accelerate its focus on thermal customer demand in Douala where it already has 30 existing customers, and is already building solutions for new ones, albeit that will take a little time.

Gas is still, after hydroelectric power, the cheapest fuel for power generation in country and in the dry season increasingly one upon which industry and business has become dependent. For this reason one must carefully consider whether the Government, by starving ENEO of money to pay for gas supplies and hence electricity through the grid, is making a wise choice. This will result in load shedding and blackouts which would be increasingly unpopular in what we must remember is election year.

Whilst losing 53% of one’s business overnight is hardly business school protocol, longer term there is much to be gained from this move. It will, as I have said, accelerate GDC’s move into the thermal customer market which it should be remembered carries a much higher margin, and in future lead to significantly less of a reliance on ENEO. After all the Douala and Cameroon energy blueprint envisages the use of not only Logbaba but Matanda gas for power generation and thermal supply to business customers, it is unlikely that this action will have been fully thought through and may yet prove unwise. Having said that it will increase to focus of GDC to engage with other customers across the board and lessen their dependence on a small number of power generators.


A short update from Aminex this morning in which they announce that Ntorya-3 is being prepared to drill ‘as soon as possible’ and rig sourcing etc is being  undertaken. Also at Kiliwani N-1 95 MMcf/d was produced in December and they are getting on with installing compression facilities.

Ascent Resources

AST provide investor comfort this morning by announcing that they have received settlement for their November invoice which gave them net proceeds of €303,181 as expected. November production was 2.1 MMscfd and this number rose to 2.3 MMscfd in December.

And finally…

Time is short but in the FA Cup the Noisy Neighbours, Red Devils, HubCap Stealers all went through, Chelski drew at the Canaries and the Gooners went out to Forest. Good performances by Yeoville, Fleetwood, Posh, Burton and Covo plus others I apologies for not remembering..

Cricket went from bad to worse and due to ITV changing channels so regularly the racing didnt tape…Grrrrr