WTI $37.96 -42c, Brent $40.71 -25c, Diff -$2.75 +17c, NG $1.64 +2c

Oil price

Oil drifted a touch yesterday after slightly indifferent inventory stats where crude built by 1.2m bbls but gasoline and distillates both drew by over 1m b’s. Refinery utilisation rose by 0.7% to 73.8% with gasoline production up to 8.4m b/d as America continued to get back on the roads.

The Opec+ Joint Technical Committee had a virtual meeting yesterday and today the more influential JMMC meeting takes place. The Opec monthly report has demand figures down 11.9m b/d in H1 and off 6.4m in H2 and are clearly more bullish on supply with May down 6.3m b/d to 24.2m b/d, the call on Opec in 2H 2020 is expected to be 29.5m b/d.

PetroTal Corp

PTAL announces that the £14.1m placing has completed and the shares have been issued and trading commences this morning. The company has agreed to structure the contingent liability due to Petroperu into a liability to Petroperu to be paid by PetroTal over a three year period.

At May 31st 2020 approximately 2.1m bbls of oil production by PetroTal and sold to Petroperu under the contracts were either in the pipeline or storage tanks  and the amount, expected to be to be finalised within the next 30 days and is expected to be c.$26m, is to be paid in equal monthly payments over 36 months. This could be adjusted as PetroTal benefits from the higher forecast oil prices in the second half of 2020 and into 2021, when the underlying barrels are physically sold by Petroperu.

Finally, the imminent return of the Bretana field where production should resume at the level that it was shut-in at and the average for this year should be c.9,100 b/d being 11,190 b/d in the second half.

Block Energy

Block announce that the Early Production Facility has arrived on site from Canada and should enable gas sales to commence in H2 2020. The Georgia borders are expected to be opened in July giving all the opportunity for the company to move ahead. The company has appointed EPI to outsource its sub-surface reservoir department which is a very wise move.

Reabold Resources

Reabold has announced that the workover rig mobilisation is expected to commence tomorrow in preparation for testing of the successful IMIC-1 well. Production testing will commence following the rig up of the work over rig, the removal of well head, the installation of permanent production tubing and flow control equipment, as well as the perforation of the well casing utilising underbalanced inflow techniques to maximise well production.

Sachin Oza, co-CEO of Reabold commented

“The work programme in Romania continues to progress and we look forward to the results from testing the IMIC-1 well, which will determine the production capacity of the well and confirm the suitability of the gas composition for commercial sales. We are looking at ways to commercialise future production in Romania and are encouraged by the potential resource upside across the licence, which will be further assessed during the seismic programme across the IMIC-1 and IMIC-2 accumulations later this year.”

And finally…

Royal Ascot continues today, if the rain hasn’t been too much Stradivarius is expected to start as favourite in the Gold Cup.

Last night the footy returned and with Villa and the Blades drawing 0-0 but the Noisy Neighbours made light work of the Gooners 3-0.