Oil price, Range Resources, VOG, RockRose, Genel, 30th round And finally…

WTI $71.84 -36c, Brent $79.80 +23c, Diff -$7.96, NG $2.91 +1c

Oil price

The oil price has again been mixed, some weakness as the market think that Opec and Non-Opec will break ranks, not something I think will either happen or make much difference at the moment. The EIA stats were much worse than expected, a build of 5.8m barrels when expectations were for a draw of 2m, gasoline also added 1.9m barrels but that is to be expected ahead of the Bank Holiday weekend.

Range Resources

Range has announced that it has exceeded its production target of 800 b/d in Trinidad ahead of schedule and it also now exceeds guidance. The 820 b/d produced in the last week is a 43% increase in the last 12 months and is an even better performance than I had expected when I visited the country earlier in the year. The optimisation programme has handled 34 wells and there are 24 more currently planned.

In addition the company has upgraded the facilities at Beach Marcelle and can now handle three sales of oil per week and with extra storage capacity being installed will be able to carry 2,100 barrels onsite. The company is ‘currently reviewing’ an accelerated and increased development drilling work programme which should further add to the progress Range is currently making in country.

Victoria Oil & Gas

It has not been the best few months for VOG and their Q1 operations and outlook report today reflects that situation. With gas sales at Logbaba unsurprisingly down significantly after the ‘non-renewal’ of the ENEO grid power GSA there was little that the company could do immediately although signs are clear that remedial action is being taken. The company is ‘confident’ that a resolution can be found to the problem which should be in all party’s interests but probably best to take the believe it when you see it approach for the time being.

In the meantime there are actions that can be taken that will at least in part make up for the loss of the ENEO contract such as getting one new client online and three more now commissioning gas fired gensets. (It’s not just VOG who suffer at times like this, business and the community suffer power blackouts as well and have to make alternative arrangements) New clients at higher margins will take time to recover anything like the volumes but start chipping away at the gas sales shortfall. In addition there is potential for non-grid revenue generating business and other grid power customers are in discussions with the company.

There is no way of gilding this particular lily much, the company states that y/e production targets will be 11.3 MMscfd with ENEO or 7.8 MMscfd without it but clearly actions are being taken to remedy the situation in both the ENEO case where discussions are continuing and for alternative sources of gas sales. The company are aware that even with a resumption of the contract it can never be allowed to be as significant a part of the business again, the future is good as the demand will always be there and VOG are the only onshore suppliers of gas in Cameroon but a lesson has been learned here.

RockRose Energy

Another deal for RockRose who have landed the Netherlands reserves and production from Dyas for €107m from SHV. The deal brings with it the non-operated gas and condensate producing assets and the amount paid will be offset by a ‘significant’ working cap payment in due course.

The deal adds 13 MMboe of net developed reserves plus potentially considerable upside and over 5/- boe/d of production. This will mean that RRE have net 1P reserves of 23 MMboe and proforma production of over 10/- boe/d, short term there is no doubt that AA can say that is job done, but I am sure he is already looking for the next one…

The deal is being paid for by existing company resources and will be helped by that w/cap adjustment and needs no shareholder approval and is effectively a done deal. The RockRose story continues and surely will continue.

Genel Energy

Genel has announced a payment of $11.81m from the Tawke licence, $3.74 from Taq Taq and of course $6.85m from the RSA, following the positive AGM statement last week there is much good news coming from Genel right now.

30th Round

A number of 30th round announcements have been made, I will follow up individually after I have spoken to the companies, however

Parkmead announce nine blocks and part blocks in the CNS, SNS and West of Shetlands.

United Oil & Gas have provisionally been awarded two blocks including the Crown oil discovery.

Serica has three new exploration licences.

Faroe has one block which straddles the UK/Norway border and contains the Edinburgh prospect.

Corallian (Reabold interest) has three blocks in the Central Graben.

IOG has three blocks in the SNS as one might expect.

As I said much more later.

GDPR

After today the blog will move onto its new mailing list and many thanks to those of you who have kindly ‘moved over’ to the new system. After today if you havent already done so it will be just as easy as before to sign up by going to www.malcysblog.com thank you.

And finally...

Today you can tell it is the first home test match of the summer as it is raining outside…England take on Pakistan at Lords and have yet another new spinner to try…

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