WTI $56.06 +47c, Brent $66.50 +25c, Diff -$10.44 -22c, NG $2.62 n/c
Oil had a quiet day, it was Presidents Day after all and information was hard to come by. There are still worries about the trade deal and GDP issues but the main thing is that Opec+ is still cutting back.
Diversified Gas & Oil
DGO has announced that it has signed a five year agreement with the Kentucky Department of Natural Resources regarding the company’s well asset retirement obligations. Kentucky accounts for only 7,500 of the company’s 60,000 wells and as part of the agreement will complete an assessment of them all by 30 June 2019. By 2023 the company appear to have agreed to have plugged or returned to production some 300 wells which given the announcement seems quite a small percentage (4%) of the total out there but given that this should negate any potential decommissioning liability it should allay fears.
There is also the matter of liabilities for decommissioning so many other wells but it seems that the company has at least taken the necessary steps needed with local jurisdictions on this matter. The market is clearly harbouring some concerns about this matter but it is clear that it is nothing like the problem that 60,000 wells makes one think.
Touchstone has raised £3.8m at 12p per share, a discount of only 4% to fund the drilling of an exploration well in the Corosan West region of its Ortoire property (80% WI) in Q2. It is clear that the company is concentrating on drilling the really big prospects and those with a minimum tax obligation if successful which is certainly wise.
In that respect the company announce that due to crude price volatility they have ‘held back from recommencing our development drilling programme’ and will drill only based on the ‘prevailing’ commodity market. Again the use of cash flow is to be carefully monitored and money raised will be for the transformational prospects such as at Ortoire.
Chelski are very patchy at the moment and lost 0-2 in the FA Cup 5th round last night to the Red Devils who progress to the quarter finals.
Tonight it’s back to the Champions League and Liverpool host Bayern Munich at fortress Anfield.