WTI $65.81 -$1.23, Brent $76.79 -77c, Diff -$10.98 +46c, NG $2.96 +1c
The greenback was probably as much of an influence on the oil price on Friday as anything else as the economic data all provided ammunition for a rate rise soon and another before the year end. The CFTC data shows the professional punters trimming their length, so to speak, as they consider that $80 Brent has rung the bell somewhat. That level has certainly been of interest, Opec and friends would have taken note that worries about a demand hit are claimed here and the four dollar drop backed up the theory.
Rumours that Russia has already started producing a bit more to keep the market satisfied, how nice, were offset by the Saudis keeping the spigots turned off, at least until 22nd of June. The big discussion point of last month was that WTI actually fell, by $1.53 whilst Brent rose by $2.42 increasing the differential markedly, today it is nearly $11. With the Baker Hughes rig count showing a rise of 1 generally to 1060 and 2 in oil to 861 not giving any clues as to US production only pipeline capacity issues will matter here.
Sound has released the final CPR for the A1 prospect on the Tendrara-Lakhbir permit in Eastern Morocco and whilst it shows no difference to the one published back in April (Gross prospective resources on a mid-case basis of 335bcf) it does signal the start of ‘a period of intensive news flow as we de-risk the development of our existing discovery and finalise preparations for the exploration drill programme’.
The first well, TE-9 will go for the TAGI as its primary target and aim for potentially similar scale volumes in the underlying Palaeozoic as a secondary target. CEO James Parsons suggests that success here could ‘unlock significant value for Sound and our partners, reduce the risk on nearby leads, and further our overall confidence in the broader TAGI Structural Play trend.
Sound is about to emerge from a relatively quiet year which it has spent shooting seismic (at Schlumberger’s expense) and preparing for the next exploration programme. For investors who want to revisit this potentially substantial Moroccan gas story as the newsflow starts again, now may be one of the last opportunities…
Victoria Oil & Gas
VOG has announced a Logbaba field reserves update of significant proportions. 1P reserves of 69 bcf is an increase of 29 bcf or 73%, field remaining 2P reserves are up to 309 bcf up 106 bcf or 52% and the reserves/production ratio is now 10 years at 90 mmscfd which supports growth in the Douala market as well as new long term gas contracts. This security of supply to long term buyers of gas will enable VOG to enter contractual negotiations with companies and generators safe in the knowledge that they will be able to deliver.
Whilst it has a been a difficult year following the ENEO problem VOG are getting themselves into a very strong position in Douala. Businesses, more eager than ever to have a reliable, long term contractual supply of gas will like this news and competitive power generators will thrive also. VOG is likely to end up with a bigger, stronger and higher margin business extremely well placed to satisfy the inevitable growing needs of Cameroon.
SDX has spudded the SD-4X appraisal well at South Disouq the first of two planned appraisal wells on the permit. The well is expected to take up to 30 days to drill and if successful will be completed, flow tested and connected to the infrastructure being developed at the SD-1X discovery location.
RBD as 32.9% owner has published the Schlumberger CPR for Corallian’s 100% owned Outon project in the North Sea. The Schlumberger report attributes 2C contingent resources of 13.9 million barrels of oil and 4.4 BCF of gas. The report attributes a best estimate prospective resource of 31 million barrels of oil and 26 BCF of gas. Along with Colter and Wick, RBD now has an enviable set of projects with near term potential within the Corallian portfolio.
Some good news at last from Pantheon which has been in short supply for some time. It seems that the problems of excess water at VOBM#5 were caused by fraccing ‘communicating with a deeper water source’ below the perforations. This should be solved by perforating only the Eagle Ford sandstone in future, maybe not rocket science?
As for VOBM#1 they hope to spud ‘as early as late July’ the sidetrack to the well where the casing collapsed. Here the operator gives a ‘high probability of success’ as the previous problem was time related. Although these problems have been of an operational nature the market is still indicating that PANR is in the last chance saloon which is understandable, bucket list changes in July are not looking good for them I’m afraid but the shares have at least ticked up slightly this morning…
Chariot Oil & Gas
Chariot has contracted a rig for drilling one firm fully funded well and an optional second well depending on success on Prospect ‘S’ offshore Namibia in Q4 2018. The company describe Prospect S as ‘independently estimated as a gross mean prospective resource of 459 mmbbls and a probability of geologic success of 29% by Netherland Sewell Associated Inc., is one of five dip-closed structural traps, totalling 1,758mmbbls gross mean prospective resources, that have been identified in the Upper Cretaceous turbidite clastic play fairway’.
So that tells us then, they are hoping to farm-out this prospect and told me recently that there are a number of most exciting follow-on opportunities in these Central blocks which they hope to share if successful.
In the Italian MotoGP Jorge Lorenzo scored his first win since joining Ducati. World championship leader Marc Marquez crashed out while trying to put pressure on the lead but Lorenzo never looked threatened and dominated the race from the start. Dovizioso made it a Ducati double in 2nd place and Valentino Rossi in 3rd made sure the Italian fans didn’t have to take their fireworks home with them. Cal Crutchlow was the first Honda home and the highest independent rider again in 6th place.
England won a test match which is a first for some time but several players actually showed grit and determination in a match which was a mirror image of the first in the series. Next test cricket in August and against India who will be no pushover…
The ‘boys in blue’ won the Derby with Masah and against an odds on favourite that just didn’t get the trip. With all the results at the weekend the major races during the summer are going to be most interesting.
And the Golden State Warriors beat the Cleveland Cavaliers to take a 2-0 lead in the series, that awful mistake by the Cavs in the first game may be looking worse every time you see it….
And with apologies from last week, I forgot to mention that Sarries won the Premiership beating the Exeter Chiefs in the final….