WTI $67.59 +26c, Brent $77.62 +73c, Diff -$10.03 +47c, NG $3.18 -2c

Oil price

Little has changed in the energy complex since I last shared my views, with deadline day for Iranian crude sanctions now less than a week away, buyers are walking away but there is plenty of stock on the high seas at the moment.

Russia and the Saudis are playing the ‘I can produce more than you can’ game as the former have eked out another few barrels and the latter remaining confident of 11 if not 12m b/d over the winter. What is for sure is that they will both have to turn the taps down big time come 2019 or it will be $50 they are looking at.

President Energy

Q3 results and highlights from President which is ticking all the right boxes with numbers that are delivering the good in no uncertain way, all the key metrics are very positive. Turnover is up 21% Q3 on Q2 and adjusted EBITDA is up 101% on Q2 to $5.7m running at $2m per month for the first three months and total for the first three quarters now approaching $12m. Operating profit is up 82% at $4.6m and free cash generation is up 59% to $6.8m and with well costs down by 20% current drilling is even more profitable.

With the current drilling campaign going very well, the second well was spudded last week and the first should come onto production soon, the expectation of at least another 600b/d can only add to the value of the company. Completion of the two field deal in the Rio Negro province is expected in early December which adds to production and, more importantly, provides a valuable strategic pipeline for off-take of gas. Overall things are going very well at President where continued increases in production is coming through to the bottom line.

Frontera Resources

Frontera has announced that it has it has signed an MOU with Baker Hughes with regards to future mutual cooperation to enhance service capacity and capabilities and ‘ will collaborate with them to improve efficiency of operations’. This will involve commencing an in-field drilling and intervention campaign to ‘increase production and recovery of resources in the Taribani, Mtsarekhevi and Mirzaani fields of Block 12 in Georgia.

This is just the sort of deal that Frontera should be doing and a tie up with Baker Hughes should give them an opportunity to increase the scale and timings of operations in Georgia with one of the best players in the oilfield services industry. I look forward to hearing news about how the collaboration is going.

 

Faroe Petroleum

Faroe has increased and extended the duration of its RBL in order to ‘underpin its growth plans’. They have exercised the ‘Accordion’ of $100m so now have $350m available to draw, at the same time they have extended it from 2023 to 2025. The company is gearing up in order to be ‘fully fit-for-purpose’ and are  supporting their strategic aims at continuing growth (and having the necessary armour and ability to repel all boarders as since 4th October DNO are clear to return to the fray). Faroe are up there with the very best of UK oil and gas companies and are quite rightly getting their ducks in a row by adding another chapter to their defence document.

And finally…

The Leicester City owner and four others died in a tragic helicopter accident after their game on Saturday. With not only credit for helping the Foxes lift the title he is recorded as being a generous and kind owner and part of the family at Leicester.

Eventually Lewis was anointed World Champion yesterday in Mexico after another race where the Mercedes cars were clearly not even second best. But all the hard work in the mid-season paid off and he joins Fangio on five titles with only Red 5 on seven titles to aim for….

At the Australian MotoGP in Phillip Island, Yamaha finally broke their 25 race duck with a stylish win for Vinales. Iannone’s Suzuki was 2nd. and Dovizioso’s Ducati came 3rd. Although it was a great result for Yamaha they have still to beat the phenomena that is Marquez on the Honda who was taken out by a charging Zarco on lap 6. British hopes were dashed in practice when Cal Crutchlow came off breaking his ankle and probably ruining his chances of ending the season as top Independent rider.