Oil price, JOG, Premier, SDX, Getech, Falcon – And finally…
WTI $55.35 -33c, Brent $59.92 -38c, Diff -$4.57 -5c, NG $2.16 -1c
A quiet day to be frank in markets ahead of the speech by Fed Chair Jerome Powell from Jackson Hole. The US manufacturing index fell below 50 according to Markit which may affect the rate call although it is turning increasingly political. With Genscape announcing that Cushing inventories fell by another 1.5m barrels up to Tuesday that keeps the stocks data in reasonable nick. As we go through August the familiar distortions in product data manifest themselves so expect some crazy numbers.
Forty years ago this weekend I travelled to Edinburgh and joined the first ever Wood Mackenzie trainee input, I have somehow stayed in the industry since then, no little thanks to the Wood Mack team who fuelled my interest in the sector. Slange Var!
Jersey Oil & Gas
Another good day for JOG who have announced the additional award of 100% of block 21/2a in the 31st Supplementary Offshore Licencing Round, this contains the Glenn oil discovery and JOG will be operators. It is in the company’s favoured Greater Buchan Area and adds a further 14 mmboe of discovered mean recoverable resources.
CEO Andrew Benitz said ‘this makes 100% of all we applied for in the round and adds discovered resources as well as operatorship in our Buchan centred development hub plans for the GBA’. I remain convinced that JOG is in a very strong position and whilst the management remains in a company building mode shareholders can look forward with optimism.
Interims from Premier yesterday but as always not much to add to recent operational updates. Operationally PMO has maintained its strong performance, shown in record production of 84.1 kboed led by Catcher with an operating efficiency of 99%.
Tolmount-the next Catcher- is on schedule with development, appraisal and exploration opportunities and is under budget and will be the medium term driver for Premier’s performance. As for Zama, readers will know that I am not at all surprised that is up for sale, as a stand alone unit in a hot area of the world raising some much needed loot to pay down debt it has been an obvious candidate for the exit door.
Selling Zama conveniently leaves Sea Lion, where the farm-out process has been formally restarted, as the next big growth project for Premier and with all the documentation in place the company cannot be far from the final stages of what has been a long process. Finally from the statement it seems that the company is following some of the smaller companies in the sector into Alaska which increases the risk in the portfolio, something I have to say comes as a surprise to me. Apart from that Premier is in outstanding nick and like a number of others in the sector, way too cheap.
Interims as well from SDX yesterday where H1 production was up 9% at 3,539 boe/d but where 2Q production was 9% lower at 3,366 boe/d. At South Disouq construction continues and first gas is still on target for 4Q 2019. In Morocco, the 12 well drilling campaign is on track to begin Q4 2019 through H1 2020 targeting 15 Bcf of unrisked prospective resources and the sales guidance for this year remains at 6.0-6.5 MMscf/d.
A trading update for H1 from Getech yesterday where revenue of £2.5m was below that of 2018 as the geosciences services team was reduced in size and restructured in Q4 2018 to address its loss-making position. £1.6m of new forward sales were closed in the period, an increase on 2018 and a significant portion will unwind into revenue in 2H 2019.
The order book is up by £1m to £3m and with the cost based trimmed by another 10% the effect of lower revenues and lower costs should have a neutral impact on profitability. Getech continue to carefully monitor customers needs and is aligning itself with the albeit slow rise in customers investment budgets.
Falcon Oil & Gas
Another piece of good news for Falcon yesterday as the all clear was given for its environmental plan for the drilling programme in the Beetaloo Basin. The first of the two wells in Stage 2 will now commence next month and a further two wells are planned for Stage 3 in 2020.
FOG is carried for costs up to A$65m in Stage 2 and A$48m in Stage 3 and having raised $9m in May 2019 is well funded for the duration. It has been a long wait for Falcon investors but despite the protests etc there is now the distinct possibility of drill bit action and I for one am looking forward to the results.
It was England’s day at Headingly but this morning it is rapidly becoming Australia’s, latest score England 20-3…
In the footy the standout game is Liverpool v the Gooners, the Noisy Neighbours are at the Cherries, Chelsea go to the Canaries, Spurs host the Magpies, The Red Devils entertain the Eagles whilst the South Coast Riviera derby pits the Seagulls against the Saints.
Anthony Yarde has his work cut out tomorrow, he goes to Russia to box Sergey Kovalev and you know what they say, you have to knock them out to win on points over there…
And racing continues at York with Newmarket and Goodwood if that’s nearer…