Oil price, Rockhopper, Reabold, Getech, Faroe And finally…
WTI $46.54 +$1.13, Brent $54.91 +$1.11, Diff -$8.37 -2c, NG $2.96 +2c
A much more turbulent day yesterday, when I checked at one stage Brent was up three bucks but most grades lost a lot of the gains. Economic data remains poor, especially from China where bad news piled on with dismal manufacturing numbers. Sources claimed that Russia had not cut back yet but put 2018 production at 11m b/d but news from the Opec camp suggests that good cuts are already well under way, that’s what makes a market I guess…
A corporate update from RKH this morning where all is going according to plan. Sea Lion phase 1 in the North Falkland Basin is making ‘good progress’ with LOI’s signed with contractors extended by up to 12 months and progress also being made on the financing details. All is going well too in Egypt, at the Abu Sennan concession production remains solid at 3,800 b/d (840 b/d net to RKH) and at Al Jahraa-10 production is 130 b/d and subject to further increases. The ASX-1X well on prospect S came in as an oil discovery where the company are preparing to test and produce. 2019 will see further drilling activity across the portfolio.
Rockhopper is seeing continued payments in Egypt and receivables are now only around $1.5m, another fall from the last update. Year end cash is $40m with costs for Sea Lion of $5m due making the balance sheet strong and able to cover drilling in Egypt at all sites. In Italy the proposed disposal of Civita to Northern (Cabot) has unsurprisingly fallen through and RKH keep the 130 b/d of production. The Ombrina Mare arbitration hearing is expected in February and the outcome later in the year.
A sort and sharp announcement from RBD this morning just saying that the VG-4 well at the West Brentwood field in California has had significant oil and gas shows in the targeted Second Massive formation. The company plan to put the well into production. That’s it, no numbers, no timescale but pleasingly Co CEO Stephen Williams states that it is ‘ a great result in terms of substantial increase in cash flow and proving the significant running room in the Californian portfolio’.
Good news this morning from Getech Group who has announced a ‘substantial sale of data and products’ which will generate gross income of $3.2m the majority of which is to be recognised in the FY ending December 2018. The client is a ‘leading oil and gas company’ and this means that revenue will now exceed 2017 by ‘at least 10%’ and adds recurring revenue via a new customer subscription to the Globe product, thus building repeat business. This is a very good piece of news for Getech shareholders as business has been quite tight in recent months across the board and this demonstrates solid collaboration with clients working well and keeps the sales campaign, initiated in 2018, going through into 2019.
A couple of announcements re Faroe since yesterday’s blog. Last night DNO had a go at smashing into the FPM team and its record, something that it would appear unwise to do as it would surely itself like such a sector leading position. Indeed the rant was of such significance I suspect that some shareholders are wondering why DNO wants to buy a company that is so bad….
The answer came today when it was announced that at the first closing date DNO had received just 13.1% of acceptances for its bid and has resorted to buying more shares in the market to take it mandatory. With a very low ball bid presented whilst the oil price has had a fall, it is clear that DNO are using its cash which carries at least temporary currency to some shareholders, as a tempter, like sirens calling sailors onto the rocks….Wise investors will not be tempted by such creatures….
Last night saw an almost full house of Premiership games, with Chelsea dropping points with a 0-0 at the Bridge they might be in what could be an epic battle for fourth place. The Red Devils went to the Magpies and won 0-2 so putting pressure back on albeit only ahead of playing Spurs at Wembley.. Elsewhere it was not good news for the Terriers who lost to Burnley and Wolves who lost at home to the Eagles.
It’s all about tonight really as Liverpool travel to the Etihad where the Noisy Neighbours pretty much have to win, anything else will see the HCS’s putting more than one hand on the trophy.