Oil price, Eco Atlantic, Range Resources And finally…
WTI $58.52 -9c, Brent $67.16 -7c, Diff -$8.64 +2c, NG $2.80 -6c
Last week oil remained strong, WTI gained $2.45 whilst Brent rose $1.42 as markets steadied and confidence was restored. The Saudi Oil Minister, Khalid al Falih stated that he believed that Opec+ will commit to current quotas at their meeting next month and that they will last for the rest of the year.
Friday’s rig count showed a fall of 1 unit overall to 1026 and also down by 1 in oil to 833.
Eco (Atlantic) Oil and Gas Ltd
Eco Atlantic has published an updated CPR on Orinduik this morning following completion of 3D processing and an additional six months of interpretation work. The result is an increase in Gross Prospective Resources P50 (Best) to 3,981 MMBOE from 2,913 MMBOE which is a more than handy 597.3 MMBOE to Eco.
The company has confirmed that the first well in June will be on the Jethro target looking for 214.5 MMBOE and will have a COS of 43.2%, this will be followed by a similarly risked well which the partners are selecting a location for now. Whilst the company are admirably keeping the adjacent Hammerhead-1 discovery by Exxon low key they do confirm that interpretation has confirmed the presence of oil on their block and that Exxon will drill an offset well on the Stabroek block in the near future.
Whilst Eco shares have performed very well of late I am sure that there is still significant upside potential, after all looking at their net resource number of nearly 600 MMBOE and even at a modest calculation of, say, $5-10 per barrel in the ground the £140m market cap looks strangely out of kilter….
Range has agreed to restructure its balance sheet through various measures including extension of maturity on the $20m convertible to November 2022, with no repayments until maturity; $19.7m of debt due to LandOcean to be repaid through issuance of new shares, with balance of debt extended by 3 years; and the $2.8m deposit for the purchase of RRDSL applied towards the outstanding consideration.
They have also announced a potential new acquisition which would take the company in new direction – a pre-school education business in China. Due diligence is currently underway and should be completed during April 2019 when shareholders should find out full details of the deal. The acquisition will be deemed a reverse takeover, so the shares will be suspended until documentation is finalised. In the meantime the company will be undertaking a review of the oil and gas business which might just start the process of some probably necessary consolidation of interests in Trinidad.
The company also announced interim results to 31 Dec 2018. Revenue of $7.0m (1H18 $5.4m), with net loss of $(35.9m) (1H18 $(9.6m)) following a net impairment of $30.2m relating to the asset base in Trinidad and Indonesia. Net debt at December of $89.0m. The small dip in production was widely flagged, and the minor fall in output is offset by higher realisations and lower opex costs.
The Beach Marcelle waterflood continues to perform well at 150bopd, with scope to increase this output through an expansion of the programme – planning is underway. The write down of the portfolio in Indonesia and Trinidad should come as no surprise, as projected work plans were being deferred, and the higher oil price making Range subject to the higher taxes under the punitive Trinidadian fiscal regime.
It was advertised as Super Saturday in the rugby which it sure was, with Italy at one stage looking like they might beat France and Ireland effectively didn’t turn up against Wales the last match at Twickenham was meaningless, or so we thought…After England had taken a 31-0 lead Scotland replied after the break with 38 points which left England scrabbling around trying to salvage a draw which they did, just.
In the FA Cup Wolves easily beat the Red Devils, the Noisy Neighbours got past the Swans with an offside goal, no justice there, Brighton beat Milwall on pens having been a heartbeat away from losing and the Hornets beat the Eagles.
Finally after all the hype about the pace of the new Ferrari the Australian GP in Melbourne was a 1-2 for Mercedes with the only surprise that it was Bottas leading Lewis over the line.