WTI $80.52 +$1.17, Brent $83.65 +$1.26, Diff -$3.13 +9c, NG $5.35 -22c, UKNG 216.92p +3.9p

Oil price

Plus ca change, oil strengthened again yesterday and is up c. 25c this morning and whilst there is a natural ceiling when economies squeal, it is a little bit higher before Opec either rides to the rescue or those with additional capacity start to open them spigots. Indeed they are probably one and the same group to be honest just wearing different clothing.

In China there are still whispers about Evergrande who have apparently missed a third debt repayment, I suspect it is only when other property companies hit the skids that the domino effect starts.

And did you see that the South Pole had its coldest winter on record which goes back to 1957 at an average of -78F and was 4.5F lower that the 30 year average, just sayin…..


IOG yesterday provided a drilling update on the Southwark field, the third of its Phase 1 fields after Elgood and Blythe. Over recent days the Noble Hans Deul jack-up drilling rig mobilised to Southwark following completion of the Blythe production well. Early on Sunday 10 October, during routine jacking operations after arriving at the field, an issue was identified on one of the legs of the rig and the installation process was halted. No drilling or associated works were ongoing at the time. The rig went to full muster while the issue was assessed and all 66 people on board are safe and well. There was no damage to the rig hull or to the Southwark platform.

The rig is stable and connected to tow boats while the crew assesses its condition. The priority of IOG and its drilling contractors remains the safety of all relevant personnel, ensuring the rig’s ongoing integrity and the safe and efficient continuation of the Phase 1 drilling campaign at the earliest feasible time.

Noble Corporation, the rig owner, has initiated an investigation into the cause of the issue. It is initially expected that the rig will be transported to port to undertake any necessary assessments before drilling can be safely resumed. The Company will release further relevant information as it becomes available.

As per the recent Blythe drilling update, the Company continues to expect First Gas from both the Blythe and Elgood fields in Q4 2021 once the final subsea and onshore installations are complete.

Andrew Hockey, CEO of IOG, commented: 

“Needless to say, we will be taking all necessary actions to minimise the interruption to safe and efficient development drilling at Southwark caused by this unexpected issue identified by the Noble Hans Deul rig during jacking operations. Most importantly, there has been no harm to any personnel or any IOG assets. In the meantime, this has no bearing on the timing of Phase 1 First Gas from the Blythe and Elgood fields which remains on schedule to occur during Q4 2021.”

Despite this aggravating operational problem which is not down to IOG, it is pretty much business as usual at the Blythe and Elgood fields and assuming that Noble can fix the issue then it will be back to work at Southwark pretty soon. In the meantime the most comforting fact is that First gas is still expected Q4 2021….

President Energy

An update from President this morning, at the Puesto Guardian Concession, Salta Province, Argentina
The Company anticipates that drilling of the first well of three firm, two contingent well program will
commence towards the end of October 2021 with two wells projected to be drilled by the end of the
year and the third to be completed in January 2022.
Mobilisation is in progress with loads travelling from Neuquén to Puesto Guardian, Salta Province, a
distance of 1,950km. The same distance will have to be travelled by other services required for drilling
which reflects the significant overland logistical exercise including dealing with the various provincial
authorities and permissions needed en route.

The results of the re-processing of seismic over the Pozo Escondido field at Puesto Guardian will be
available in good time to allow the final investment decision to be made in relation to two contingent
wells before the end of year; if positive, and subject to the success of prior drilled wells, these would be
drilled from February 2022 onwards.
At the Triche well, Louisiana President has now been able to swab this well back on stream without workover rig intervention albeit on a temporary and reduced basis pending a full workover of the Triche well. Whilst the initial production level on opening up the well of only some 30 barrels of oil per day from Triche is substantially lower
than the level which is projected once the workover takes place, it nevertheless is helpful in providing some income pending availability of an adequately sized barge to carry the already reserved workover rig which is still projected in the near future .

With regard to the Paraguay Farm Out good progress has been made as to the satisfaction of the last remaining condition to the farm-out agreement. Although later than originally envisaged, it is now expected that this condition will be satisfied by the end of October with closing of the farm-out in November. Projected commencement of
drilling the high impact exploration well is slated for H1 2022.
Looking at Atome, good progress is being made on the ground in both the countries referred to in past announcements where Atome’s first projects are located. The Nomad, brokers and reporting accountants have all been appointed and are working with the executive team towards a flotation of Atome on the AIM market of
the London Stock Exchange before the end of this year under the ticker “ATOM”.

Further to the passing of the Special Resolution at the recent Annual General Meeting of the Company,
it is anticipated that the High Court will on 16 November 2021 consider the proposed capital reduction
by way of the cancellation of the Company’s share premium account. If approved, it is anticipated that
the capital reduction will be effective shortly after this date.

As previously announced, in the event that the flotation of Atome proceeds, and subject to confirmatory
tax advice, the Directors intend, if the timing is right, to distribute by way of a special dividend (or other
distribution) a significant part of President’s holding in Atome to President’s shareholders immediately
prior to Atome joining the market. Major shareholders in President have informally indicated their
support for this move and willingness to hold shares in Atome. A record date for entitlement to any such
distribution will be communicated nearer the time when there is greater certainty.

The Directors continue to believe that such a distribution will be of significant added value to President’s
shareholders and, given the number of shareholders in President, it will as a consequence result in
Atome having a wide investor base comprising institutions and private investors from its start as an AIM
listed company. This should provide liquidity, a beneficial feature for the after-market, as well as a
platform for any placing that maybe carried out by Atome at the time of admission to AIM.

Peter Levine, Chairman, commented

“This announcement reflects the breadth and depth of President’s activities without even taking into
account our core operationally profitable production assets in the Neuquén Basin, Argentina throwing
off free cash from operations. It is all too easy to gloss over the amount of work by our teams involved
in each of these separate workstreams which are taking place simultaneously in geographically diverse
“As to Atome, our green hydrogen and ammonia business, we look forward as soon as commercially
prudent to providing more specific information on all activities which are both extensive and progressing.
“We at President believe that hydrogen will inevitably be one of the cheapest sources of renewable
energy for many applications which electric batteries are constrained in addressing, such as heavy
goods transport, heavy industries and marine/shipping. In fact, given the technical challenges of these
hard to abate sectors, we believe that hitting net zero targets without hydrogen will be very challenging
as well as enormously costly.
“Currently some 95% of all hydrogen in the world is made through fossil fuels, principally natural gas.
Given the expected price increases impacting the competitiveness of this so-called grey or blue
hydrogen, we consider that green hydrogen will become increasingly commercially attractive and hence
in higher demand globally both on price and for its zero emissions profile. This reinforces the rationale
for President’s focus on Atome.
“Additionally, we expect that Atome’s focus of producing hydrogen from readily available existing green
power sources should make Atome very competitive in this exciting fast-growing new sector.
“Whilst all of our workstreams have their challenges and as such for not want of trying, targets and
times can slip, shareholders can be assured that the whole of President is fully focused and motivated
to bring these activities home for the Group.”

And finally…

Getting to the business end of the World up qualis and yesterday Wales won 0-1 in Estonia and have every chance of making the top two in that group. Tonight Scotland who are now also well placed to qualify and are in the Faroes Islands tonight which should bring home the points. England host Hungary and will have to win two from three games to win the group.