A slight disappointment today for SDX as the KSS-2 well has come in as ‘not a commercial success’. With the well attempting a step out location with directional drilling targeting the upthrown side of the main bounding fault it showed that the fault has isolated the source rock. CEO Paul Welch suggested that ‘whilst not successful it proves that the main bounding fault provides a good seal and gives us a further confidence in the forthcoming projects’.
With a 4/6 hit rate and two potentially exciting exploration wells to drill still in this campaign the model remains very much intact and SDX very much remains one of the most attractive stocks in the sector.
A promising update from ECO this morning from the Orinduik block offshore Guyana. Eco and Tullow have identified leads which have the potential of over 1bn barrels of oil equivalent up dip from the Liza discoveries. With Total, in my view it should be noted, likely to take up their option Eco are in a strong financial position and with today’s announcement suggesting drilling late this year or early next it is likely to be an exciting time for the company.
Independent Oil & Gas
IOG has announced further funding from the London Oil and Gas this morning via a £10m convertible loan. This will see IOG through to FID in August 2018 for its SNS gas hub project.
The company also announce that Andrew Hockey is to take over as CEO with Mark Routh becoming Non-Executive Chairman. These moves should give those of us who have supported the company through thick and thin some degree of comfort and London should be congratulated on doing the same with hard cash. Now with further financial support and with a clearer management team IOG should be an interesting prospect over the next year or two.