WTI $63.40 -49c, Brent $71.18 -37c, Diff -$7.78 +12c, NG $2.59 -7c
Oil had an indifferent day yesterday, US markets took a turn for the worst and traders suggested that some closing of long positions was noticeable ahead of the long weekend holiday. The Russians also reminded the market that if it wasn’t for them (and Opec of course…) oil would be $40 and the Permian would shut down….
My favourite indicator is still plugging away unnoticed, USA average gasoline prices have risen again, this week we are at $2.83, up 8.3c on the week and 8.1c y/y. Indeed, West Coast prices are up at $3.58 which must be beginning to hurt, they must be asking the President that if we are producing over 10m b/d how have gasoline prices risen so much?
Coro has announced first completion of the Duyung PSC acquisition, the company has paid cash of $10.5m and new shares of $1.85m which are restricted under varying dates effectively after drilling. Coro is doing all the right things and as advertised from the start, I expect significant movement when the market realises the value that James Menzies and team are accumulating.
Premier announce the successful DST of the Zama-2 sidetrack well offshore Mexico. With 7,426 bopd in two separate well tests over a total perforated interval of 248 feet the confidence from the Premier rock doctors is being proven up. The rig now moves to the third and final block 7 appraisal well, Zama-3.
Tower has announced that it is in the final stages of planning for the NJOM3 well in Cameroon and is expected to spud at the end of May. It is still in discussions with regard to a bank loan and indeed with potential partners but in the meantime has announced a bridging loan of $750/- from Pegasus Petroleum, a company owned by Chairman Jeremy Asher to cover immediate working capital. Exciting times for Tower and I am looking forward to catching up with Mr Asher shortly.
MATD has announced rig contract wards, one for Heron-1 and Gazelle-1 in the north of block XX with options should they have success there. The second contract is for Red Deer-1 in the south of block XX, again with similar options, or may move to block V in western Mongolia to drill near previously unsuccessful but promising targets there, it may even duck that and go up north in XX.
The Heron-1 drilling is now expected in early July, a fair bit later than planned as despite the rig being warm-stacked nearby it need some modifications which will hold things up a bit. The second rig is expected to spud in July as well which the company says will give it plenty of time to drill the ‘four well campaign’ before the weather closes in, this is interesting as I’m sure that there was talk that an early start would give an opportunity to drill five wells this summer.
Either way the Heron prospect, being an appraisal has a realistic chance of starting the season well as it is thought to be the southern extension from the oil bearing structure in Block XIX which gives the company multiple opportunities over this campaign. MATD has risen sharply from the lows of January but this news has slightly put a dampener on things which will surely be rectified in the summer.
Briefly… The Gooners beat the Hornets last night but only after a goalkeeping howler par excellence and a red card made it look like comedy night.
The Red Devils face the ultimate challenge tonight, away in Barcelona and a goal down from the home leg, another PSG is probably a wish too far!