WTI $107.82 +$2.58, Brent $113.45 +$3.22, Diff -$5.63 -36c, NG $5.61 27c, UKNG 274.75p -5.25p
After yesterday’s rise ahead of the Opec+ meeting today has seen oil move sharply easier. This is because it has become apparent that Sleepy Joe has decided to have another go at releasing oil from the US SPR. This time however the amount is going to be much more than before and with 1 million b/d suggested over up to 18 months which would indeed release up to 180m barrels of oil.
Normally I would say that selling out of the SPR has limited success rates but this is indeed a much bigger lump and shows some intent. However it cannot work on its own and will need to be in conjunction with other moves if the EIA’s conjecture of loss of supply from Russia of 3m b/d + is to be believed. Finally any draw from stocks will have to be rebuilt in due course and that will at some stage keep a floor under the price when that happens.
The other problem he has is that his relationships in the Middle East are at best confused, the Iran talks indicate that he is prepared to bring Iran back into the fold for their 1m daily pieces of silver. Picture the situation in Riyadh when MbS finds out that the sponsor of the Houthi rebels who have been bombing them and allies in the UAE have taken sides with Tehran. The long and friendly relationship between the US and most of the Gulf will come to an end and along with it any chance of oil from the region.
On that subject Opec+ have met and increased production by some 400/- b/d + as expected, the way it is going that ain’t going to change until the fall.
EIA inventory numbers showed a draw of 3.45m barrels of crude whilst gasoline was a build of 785/- b’s and distillates added 1.4m b/s. By the end of the day traders and markets will rule off their books as the month and the quarter come to an end. Window dressing as it is called will then ensure that investment banks and the like do not have highly exposed positions to go into spring with.
Chariot has provided an update on the post-well analysis of the successful Anchois-2 gas appraisal and exploration well, completed in January 2022, on the Anchois gas project within the Lixus licence, offshore Morocco. Chariot has a 75% interest and operatorship of Lixus in partnership with the Office National des Hydrocarbures et des Mines which holds a 25% interest.
· Net gas pay estimates for Anchois-2 well, based on further interpretation of the well data, have been upgraded to approximately 150m from the previously announced preliminary analysis of greater than 100m, compared to the 55m in the original Anchois-1 discovery well.
· Excellent quality dry gas confirmed, with greater than 96% methane, in all seven discovered gas reservoirs, without detrimental impurities such as H2S or CO2, supporting minimal gas processing required in the development.
· Highly consistent gas composition potentially allows all gas produced from the different reservoirs to be processed through a single gas processing facility, enabling a simple development.
· Further analysis is ongoing on the well data to understand the positive implications on gas resources, and scale and economics of the development.
Adonis Pouroulis, Acting CEO of Chariot, commented:
“I am delighted to announce this very positive update on the analysis of the well data obtained from our successful gas drilling campaign on the Anchois project, offshore Morocco, including a significant increase in net gas pay to approximately 150m. This increase combined with the confirmation of excellent quality dry gas consistently across all the discovered gas reservoirs is extremely encouraging, as it will help enable a simple and standard development.
Our ambition is to bring the Anchois gas development online quickly, to fuel Morocco’s economic growth, but also to deliver near-term cash flows to our shareholders. We will continue to work on an accelerated field development plan, for the benefit of all stakeholders.”
You don’t need me to tell you that this is an exceptional result from Chariot, every which way the news couldn’t be much better and the Anchois gas project goes from strength to strength. With better than expected volumes of better quality gas confirmed, even the treatment of the gas will be minimal and development relatively simple.
It is also good to hear CEO Adonis Pouroulis saying that he wants to bring this development on quickly which will not only satisfy local demand but repay Chariot shareholders. Indeed with current European gas prices and no sign of any demand waning I’m sure that the Moroccan authorities will create perfect conditions for a speedy move to first gas.
As I write the shares are up some 16% at 16.15p which is fine but in no way recognises the potential value being created at Chariot at the moment. I would go so far to say that the Anchois development on its own can be valued at a minimum of three times the current share price. If you add on the transitional power business which assists mining companies in Africa transition to renewable energy sources for their operations, then as already mentioned here before now the upside is a matter of a multiple the current share price.
Predator Oil & Gas
Further to the Company’s announcement released on 17 March 2022 (the “Placing Announcement”) that it has conditionally placed 11,500,000 new ordinary shares of no par value in the Company at a placing price of 9 pence each to raise £1.035 million before expenses, it is now expected that the Second Admission will become effective and that dealings in the Second Tranche Shares are expected to commence at 8.00am on 1 April 2022.
Speaks for itself, Predator now in good nick ahead of campaigns.