WTI $52.36 -$1.21, Brent $55.10 -$1.32, Diff -$2.74 -11c, NG $2.74 +7c, UKNG 55.71p -4.29p

Oil price

With Friday’s fall the oil price was pretty much unchanged on the week with WTI gaining about a dollar over Brent whilst Henry Hub gas was also unchanged. The Baker Hughes rig count on Friday showed a rise overall by 13 units to 373 and was up 12 at 287. WTI above $50 does encourage some drilling onshore but not enough to offset the falls earlier in the year.

With most markets closed for Martin Luther King Day today trade is very light and ahead of the inauguration of Joe Biden on Wednesday, after which we should see the stimulus and further plans for the war on Covid. It is clear that the oil price has taken a breather as one might expect, as I said last week, trees do not grow up to the sky but the ‘vaccine trade’ is alive and well.

Genel Energy

Genel has announced that DNO has announced a Tawke update today, the announcement is below and we should get a proper read through of it with the Genel announcement tomorrow.

Gross operated production from the Tawke licence averaged 110,300 bopd in 2020, about evenly split between the Tawke and Peshkabir fields, the sixth consecutive year in which gross Tawke licence production has averaged over 100,000 bopd.

With higher oil prices and more visibility on Kurdistan export payments, up to eight new development wells will be drilled at the Tawke licence and multiple workovers on existing producing wells will be undertaken in the drive to maintain production above 100,000 bopd.

Between the middle of 2020 and the end of the year, a total of 2.4 bcf of Peshkabir field gas, which otherwise would have been flared, was piped and reinjected into the Tawke field for pressure maintenance, leading to an estimated 200,000 barrels of incremental oil recovery and 400,000 barrels of reduced field water production. Another 0.3 bcf of gas were reinjected into the Peshkabir field itself.

“With higher oil prices and more visibility on Kurdistan export payments, DNO will ramp up drilling of new development wells at the Tawke license to as many eight this year from only one in 2020 and conduct multiple workovers on existing producing wells in our drive to maintain production above 100,000 bopd,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman.

Union Jack Oil

Union Jack has announced that it has acquired a further 15% interest in the Biscathorpe project at PEDL 253 from Humber Oil & Gas, this gives them a 45% interest in the project. Biscathorpe has an oil bearing Dinantian Carbonate reservoir of 57 metres which has been confirmed by independent petrophysical analysis and oil samples from cuttings.

The Dinantian oil play has gross Mean STOIIP of 24.3 million barrels of oil (mmbo) with an upside of case of 36 mmbo with evidence for a thickened Westphalian sandstone interval is apparent. Gross Mean Prospective Resources associated with the Westphalian target total 3.95 mmbo with an upside case of 6.69 mmbo and economic modelling of the Westphalian target yields break-even full cycle economics estimated at US$18.07 per barrel and a gross NPV(10) valuation of £55.6 million.

The next stop is the planning application to be submitted during February 2021 for side-track drilling, testing and long-term production about which the outlook, whilst always uncertain looks positive. Finally the numbers, cash consideration of £500,000 to be paid on Oil and Gas Authority (OGA) approval and lodging of associated documents to allow licence interest transfer and, following receipt of various planning approvals, a contingent payment of £500,000.

Commenting, David Bramhill, Executive Chairman of Union Jack, said:

“We are pleased to have taken this opportunity to increase our interest to 45% in Biscathorpe, that Union Jack’s technical team believe represents a material and commercially viable hydrocarbon resource that remains un-tested.

“The collective extensive technical information analysed over the past months, combined with APT’s conclusions on the likely presence of good quality oil, have materially upgraded the resource potential and economic value of the project in our view, further supporting our opinion that PEDL253 remains one of the UK’s largest onshore un-appraised conventional hydrocarbon licences.”

And finally…

England stumbled somewhat against Sri Lanka and at one point chasing just 74 looked like it might be quite a task but with Bairstow having run out his captain who had scored 228 in the first innings he had many reasons to stay out in the centre and finish it off with promising newcomer Dan Lawrence.

The Prem had quite a lively time, with Liverpool and the Red Devils playing out a goalless draw at Anfield the Noisy Neighbours took the chance to go second after seeing off the Eagles 4-0. With the Foxes beating the Saints they took third place pushing Liverpool into 4th. Spurs are in 5th having beaten the Blades and with Chelski just edging the Cottagers, the Hammers beating Burnley, Leeds losing at home to the Seagulls was unexpected as was the Baggies turning over Wolves at Molineux.