Oil price, Sound, Genel, Tower, Amerisur, Getech And finally…
WTI $61.40 -85c, Brent $69.88 -$1.36, Diff -$8.48 -51c, NG $2.54 +1c
Oil prices continue to fall with the biggest reason being the recent moves by President Trump with regard to tariffs, observers are now convinced that there will be no deal but surely it could still be part of the endless game of poker being played and one should rule out nothing at this stage. Markets all took this badly and are definitely risk-off at the moment.
Elsewhere the news was mixed, the EIA STEO showed a higher domestic production estimate of 12.45m b/d but against that Chinese oil demand is still rising. The API stats showed a bigger than expected stock build of 2.8m barrels of crude but gasoline actually drew 2.8m b’s and distillates also drew.
In an Eastern Morocco update today Sound has confirmed previous announcements that they would perform unstimulated and stimulated flow tests on multiple intervals in the TAGI reservoir. The unstimulated test is now largely complete over a gross interval of 158m in the TAGI and the company is ‘delighted’ to report that it has secured hydrocarbon gas to surface from the primary shallow zone without stimulation or artificial lift.
The next step in the operation will be to mechanically stimulate the most prospective zones, in order to seek to establish potentially commercial flow rates of gas. Given what the company has already told the market regarding its assessment of the reservoir section a stimulated flow rate of approximately 1.5 mmscf/d to 2 mmscf/d is likely to be commercial and would be tied back to TE-5.
Sound also announced that it has been awarded an EIA for future drilling in the Greater Tendrara permit and the majority of the Anoual permit covering some 9,400 km², this is a large amount of acreage and gives Sound maximum flexibility in selecting sites for not only TE-11 but other drilling locations. Exciting times indeed for the company in Morocco.
A Tawke update this morning from the operator which is continuing to deliver the goods in no uncertain manner. 1Q average production from Tawke and Peshkabir was 126,759 bopd and currently Tawke is producing 73/- and Peshkabir 54/- bopd. The area has an active drilling programme with 4 Peshkabir wells and up to 14 Tawke wells expected this year.
At Peshkabir P-9 went on production in Q1 whilst P-10 spudded in February and is expected onstream soon. P-11 is expected to spud later this month and will maintain the excellent record, Peshkabir has generated $1bn in gross revenue which is four times the spend to date. At Tawke the T-52 well was completed and went on production during the quarter, the T-54 well which spudded in February came onstream in April and the T-55 spudded in April. All is going very well for Genel at the moment and the stock looks significantly undervalued compared to rapidly increasing revenues and a substantial drilling campaign.
Tower has announced in an update from the Thali block in Cameroon that the well has been pushed back from late May to July 2019. This is due to further data arriving requiring extra site preparation work. Given the nature of the rig contract the company is still within the original date range agreed last year.
Due to delays in announcements yesterday from the LSE a couple of news items nearly slipped under the bridge, two here to catch up on. Amerisur announced that it had received 3rd party transportation approvals for the OBA pipeline that give potential for ‘material revenue generating opportunities’. By H2 2019 the company plan to be shipping volumes of around 2,000 b/d and having already achieved significant cost savings the OBA is now a profit centre as was always planned. It is worth noting that CEO John Wardle specifically mentioned that this was a ‘significant factor’ in sealing the Occidental farm-in and also a major step forward in the profile of the Putumayo Basin. All in all more good news as AMER secure another source of revenue in the region.
Getech announced 2018 results yesterday and with revenue up 11% at £8m on a leaner and more focused operational base the company is getting fitter all the time. Clean net profit of £0.5m and a healthy but confusing rise in EBITDA due to restructuring costs and write-downs show that, along with cash and receivables of £2.5m (due to a significant Q4 multi product sale) financially Getech is looking up. The restructuring programme has been very successful and the company looks well placed for the future leveraged to industry growth as it is.
Yesterday I was able to get Gil Holzman, President and CEO of Eco (Atlantic) Oil & Gas into the studio for an interview. With an exciting drilling programme in Guyana only a month away there is much to be positive about and also signs of majors circling their acreage in Namibia is further good news.
A properly great achievement by Liverpool last night as they beat Barca 4-0 at Anfield to go through to the final 4-3 on aggregate. They will meet the winner of the Ajax v Spurs tie which is tonight.