WTI $25.78 +$1.64, Brent $29.98 +35c, Diff -$4.20 +$1.29, NG $1.72 -11c
The rise in the oil price yesterday came as the Saudi million barrel further reduction got into the market and others indicated that they would cut more as well. Some even suggested that they would extend these cuts beyond June which is the Easter meeting timescale.
The EIA published its STEO, more of which another time but it seems that they are still wide of the mark in their US domestic crude production forecasts. They are still running with an average for 2020 of 11.7m b/d and only 500/- b/d less for 2021, US producers would dream of that number.
A bit like the employment data the inventory stats do not offer any meaningful numbers at the moment but the API stats, after the close showed a build of 7.6m barrels but ironically a draw of 2.3m at Cushing.
Predator Oil & Gas
The Trinidad Ministry of Energy has granted approval for AT-5X carbon dioxide and injection system to start injecting for a period of 90 days which will allow maximum CO2 injection rate and pressure as determined by the reservoir engineering forecasts, to be achieved.
CEO Paul Griffiths said ‘this is an important operational development that allows us to increase our ability to sequestrate anthropogenic carbon dioxide whilst accelerating the point at which revenues are generated. Enhancing the scale of return on investment can be achieved by maximising well deliverability. We are pleased that continuing to execute our CO2 EOR strategy by increasing CO2 injection volumes is helping us to reach our near-term goal of developing a carbon-neutral energy business’.
With the exciting Morocco well on hold due to COVID-19 this is good news for PRD in Trinidad. Should this be successful CEO Paul Griffiths is spot on in his comments that the company will be a stand-out carbon-neutral company in the sector, a key feature in the future for oil & gas companies.
A trading and operations update from Premier for the first four months of the year is out today and the company has reduced production guidance to 65-70 kboed due to unplanned Catcher outage and Huntingdon production cessation clearly not previously in guidance. Tolmount schedule now has first gas Q2 2021 and Tolmount East sanction is expected this year.
In other projects, Sea Lion is suspended with farm-in documentation agreed, the Tuna appraisal is to be fully funded subject to approvals and the exploration plans have been deferred. This has all meant that Prems have cut the capex budget by some $240m whilst the company is ‘broadly fcf neutral this year at current forward curve’. Net debt has fallen to $1.91bn (December 1.99bn).
The Company say that the Court approved the creditor schemes of arrangement and that they are ‘re-engaging with stakeholders’ but if I remember correctly there is an appeal lodged by their nemesis ARCM which has to be seen off and there is also a small matter of their 13% short position to be handled. Not that I was expecting anything on this but I assume that reports that the company are seeking to cut a deal with BP are not wide of the mark.