WTI $41.82 +39c, Brent $44.34 +59c, Diff -$2.52 +20c, NG $2.71 +2c
Oil was up yesterday but it could have been better, the rather mixed EIA inventory stats with a small build in crude, a 2.6m rise in gasoline and a substantial draw in distillates obfuscated. Refinery capacity utilisation was 77.4% and with a fall in oil consumption gasoline production declined.
More good news from Zephyr where the company has commenced operational activity on the dual-use 16-2 well in the Paradox Basin in Utah. The pad preparations and road work are expected to take less than five days, and will be completed well ahead of the scheduled rig mobilisation in early December.
Colin Harrington, Zephyr’s Chief Executive, said: “I am delighted that we have started operational activity on the ground, fully in line with our plans to spud the State 16-2 well before the end of the year.
“Furthermore, in line with our mission to be responsible stewards of both our capital and of the environment in which we work, it should be noted that one of many benefits to the State 16-2 site selection is co-location of the new well on a pre-existing well pad. By re-utilising this particular pad, we will minimise environmental disruption by taking advantage of existing road and site infrastructure – thereby reducing cost, timeline and surface footprint impacts. We have also worked with the State of Utah to develop a plan to responsibly plug and abandon the existing inactive well on site, an activity which we will undertake shortly after the road work is complete.
“The next few weeks will be a period of intense activity for the Company, and we look forward to keeping the market updated on our progress as we deliver on the key milestone of drilling the State 16-2 well.”
Nine month figures from SDX where they report production figures of 6,646 boe/d (3,501) up 90% with the increase mainly down to South Disouq which delivered 48.6 MMscf/d of dry gas and 467 bbl/d of condensate. Guidance for this year remains at 6,000-6,250 boe/d up 48-54% y/y.
Mark Reid, CEO of SDX, commented:
“I am pleased to report another strong period of production and cash generation from our portfolio in what remains a challenging period for businesses globally. Despite this, we reiterate our production guidance for 2020 and feel that we are in a very strong position to continue our excellent cash generation with approximately 90% of revenues being derived from our fixed price gas contracts. Our discovery at the SD-12X well in Egypt towards the beginning of the year is quickly being developed with initial production expected in Q1 2021.
Growth remains a key focus for the Management team at SDX and we were pleased to announce the identification of c.233bcf of close to infrastructure resource in drill-ready prospects at our South Disouq concession. In Q2/Q3 2021, the Company will drill the Ibn Yunus-2 development well to accelerate production from our existing discovered reserve base. Immediately following this, the Hanut prospect will target 139bcf of the 233bcf of newly identified resource and in 2022, two further wells will target another 40 bcf. In line with our ongoing focus on shareholder value creation, we continue to assess the optimum allocation of capital, whether that be investment into organic or inorganic growth projects, or returning capital to shareholders. Our final decision on this will always be taken with the best interests of shareholders in mind.
A bit quiet but the ludicrous Nations Cup concluded last night, Wales were the stars and won promotion by beating Finland, Scotland lost to Israel, Northern Ireland drew in Romania and England beat Iceland 4-0 but also failed to qualify.