WTI $106.02 -$2.68, Brent $109.33 -$1.81, Diff -$3.31 +87c, NG $4.63 +10c, UKNG 280.0p -70.1p

Oil price

It was going to be a quiet report , oil down on the week and next stop discussions with Opec members about agreeing to drop the existing production increases to allow certain members to open up the spigots. But then on the wires came the word that the talks about the Iran nuclear situation had been ended and we are up a nifty 5 bucks again…

For those of a political nature this snippet from South America makes interesting reading,

The office of Chilean president-elect Gabriel Boric, who this Friday takes office as the successor of Sebastián Piñera, released the names of a list of special guests to the inauguration ceremony which includes well-known political leaders and social activists.

At the political level, is removed former Brazilian president, Socialist Dilma Rousseff, and ex Labor leader Jeremy Corbyn. Likewise former Bolivian vice-president Alvaro García Linera and ex-minister Manuel Castells, from the government of current Spanish president, Pedro Sanchez. Other names are left-wing Colombian presidential candidate Gustavo Petro, who is leading in the opinion polls, Bolivian Senate president Andronico Rodrigues from Peru, member of congress Sigrid Bazán and ex-presidential candidate, Veronika Mendoza.

The list of activists includes Estela de Carloto, president of Grandmothers of Plaza de Mayo, and songwriters-singers Victor Heredia and Pedro Aznar plus feminist Rita Segato.

Always good to be in such distinguished company…

Genel Energy

Genel has announced that all payments have now been received from the Kurdistan Regional Government (‘KRG’) relating to oil sales during November 2021.

Genel’s share of those payments is as follows:

 

(all figures $ million) Payment
Tawke 16.9
Tawke override 10.4
Taq Taq 2.0
Sarta 2.4
Receivable recovery 6.2
Total 37.9

 

Following the receipt of the receivable recovery payment, Genel is now owed $111 million from the KRG for oil sales from November 2019 to February 2020 and the suspended override from March to December 2020.

Nothing much to add here, payments in line with expectations.

Touchstone Energy

Touchstone has announced that the Government of Trinidad and Tobago has approved a five-year extension of the exploration and production licence for the Ortoire block. We have an 80 percent operating working interest in the Licence, with Heritage Petroleum Company Limited holding the remaining 20 percent working interest.

We were informed by the Trinidad and Tobago Ministry of Energy and Energy Industries that the GoTT approved a five-year extension of the exploration period of the Ortoire Licence to July 31, 2026. As part of the extension, Touchstone is required to drill three exploration wells to minimum depths of 6,000 true vertical feet prior to the end of the amended Licence term. The three exploration wells are in addition to the five previous wells drilled to date on the property. Similar to the previous minimum work program, we will be responsible for 100 percent of the drilling, completion and testing costs for the three additional exploration wells. Each party to the Licence remains responsible for its working interest costs associated with the development of commercial fields, including expenditures relating to facilities construction and development well drilling.

The Licence extension will permit us to continue exploration operations on acreage that have not already been deemed commercial, and no acreage was surrendered pursuant to the extension. The Licence amendment agreement is now required to be approved by the Office of the Attorney General and Ministry of Legal Affairs prior to execution by all parties.

Paul Baay, President and Chief Executive Officer, commented:

“The formal approval of Ortoire licence extension provides us with a unique opportunity to design and implement an expanded exploration program to fully evaluate our internally identified prospects on the acreage. The extension also allows us the ability to have a multi-faceted future drilling program, including development drilling at Cascadura, Royston and Coho as well as further exploration prospects on the licence. Touchstone has proven that Ortoire is a resource-rich property, and we are excited to explore further prospects to potentially feed into our current infrastructure currently in construction. We would like to thank the MEEI for its continued support, and we welcome a further opportunity to partner and grow onshore Trinidad oil and natural gas production.”

This is the latest piece of good news for Touchstone who are now set fair for a long period of exciting drilling on the Ortoire block and give an opportunity to develop a substantial hydrocarbon province. The shares in no way match anywhere near the potential at Ortoire and in my view the shares could in due course be several times higher than the current price. 

Getech

Getech has announced that H2 Green Limited, has signed a Memorandum of Understanding with the Highland Council incorporated under the Local Government of Scotland. H2 Green is a wholly-owned subsidiary of Getech, focused on developing and operating green hydrogen hub infrastructure.

The Highland Council and H2 Green have agreed a vision to create a regional network of green hydrogen hubs across the Scottish Highlands. This infrastructure will accelerate the decarbonisation of the Highlands council area, the largest administrative unit in the United Kingdom covering almost a third of Scotland.

Pursuant to the MoU:

·    H2 Green and the Highland Council will produce a regional plan to:

o  develop a network of green hydrogen hubs – placing hydrogen production, storage and delivery infrastructure at optimal locations across the Scottish Highlands;

o  establish commercial agreements for green hydrogen offtake, underpinned by transport decarbonisation initiatives in the Highlands; and

o  establish commercial agreements for consumption of by-products of hydrogen generation, including oxygen and zero-emission heat.

·    The Highland Council will contribute £100,000 to the cost of this initial work.

·    The Parties have already commenced negotiations on the terms of a Joint Venture Agreement under which the proposed Highlands decarbonisation plan will be delivered. To facilitate this negotiation, the Highland Council has granted H2 Green six (6) months of exclusivity.

Getech’s Chief Executive Office, Dr Jonathan Copus, commented:

“The signing of the MoU is a significant milestone for our plan to establish a world-class regional hydrogen network in the Highlands. At the core of this network is our first planned hydrogen hub with SGN Commercial Services located in Inverness, which will service large-volume customers. In line with these goals, we have already announced agreements with Eversholt Rail to accelerate the wide-scale deployment of their hydrogen-powered trains on the Far North and West Highland Lines of Scotland.

These activities combined with the Highland Council initiative are set to establish the Highlands as the leading UK-centre for decarbonisation and innovation; they will also support job creation, deliver energy security and provide a sustainable path for the region’s net zero transition.”

Leader of the Highland Council, Councillor Margaret Davidson, said:

The Highland Council and H2 Green have an agreed vision to create a regional network of hydrogen hubs across the Highlands. We view H2 Green as a dynamic and delivery-focused partner positioned to deliver this vision for the Council. The planned work has the potential to establish the Highlands as a leading innovation centre for the decarbonisation of commercial transport. We see this as an important opportunity to attract external investment into the region, providing additional jobs and supply chain developments that will accelerate the net zero transition.”

Marcus Hunt, Director of Commercial Services and Investments at SGN, said:

“SGN is fully committed to supporting decarbonisation and the development of the Hydrogen economy and this is an exciting development on that journey with H2 Green and the Highland Council, helping to bring zero carbon fuel and wider economic benefits associated with the H2 economy to the Highlands region.”

This looks like a very interesting partnership that should it work will be very good news for Getech, the Highlands and SGN. Time will tell but this is a joined up plan to deliver net zero to the highlands and deserves to succeed for all concerned. 

Empyrean Energy

Empyrean has provided the following update on preparations to drill the Jade prospect at its 100% owned Block 29/11 permit, offshore China:

HIGHLIGHTS

·      Empyrean has secured the China Oilfield Services Limited owned NH9 drill rig for drilling the Jade well

·      NH9 is currently being used to drill a well for China National Offshore Oil Company 

·      COSL will drill the Jade well immediately following completion of operations at the current CNOOC well

·      Empyrean anticipates that NH9 will become available by the end of March if the current well does not encounter testable hydrocarbons or approximately 2 weeks later if a testing program is required

·      Following a safety inspection, there would be approximately 2 days mobilisation to the Jade well location from the current CNOOC well location

·      At this stage Jade will spud early April or mid April depending on results of the current CNOOC well

Empyrean is the operator of Block 29/11 in China and has 100% working interest during the exploration phase. In the event of a commercial discovery, its partner, China National Offshore Oil Company, may assume a 51% participating interest in the development and production phase.

Empyrean has been in discussions with COSL and CNOOC to establish rig availability and a ‘rig slot’ to drill the Jade well now that the well site survey is complete over the Jade well location. CNOOC has the NH9 well under contract with COSL for approximately the next 12 months. CNOOC has created a slot for Empyrean to drill the Jade well in it’s schedule, immediately following the well currently being drilled using NH9. The rig is anticipated to become available late March or mid April depending on whether the current well encounters testable hydrocarbons.

CNOOC EnerTech Drilling and Production Co has been contracted to provide comprehensive pre-drilling, drilling and testing services to Empyrean for the Jade well. CNOOC EnerTech has a wealth of global experience, but more importantly has vast local hands-on experience managing the drilling of wells within the Pearl River Mouth Basin where the Block 29/11 permit sits. The Empyrean/ CNOOC EnerTech team will be present both onshore, and offshore on the rig, during the drilling of Jade. Offshore, the team will consist of a hand picked drilling supervisor, well site geologist, mud logger and an electric logging expert.

Following the recently completed well site survey over the Jade drilling location, Empyrean is expecting to receive the final survey report within the next few days. It is then anticipated that the final permit to drill Jade will be applied for and received within approximately 1 week.

Empyrean and the CNOOC EnerTech team are taking every precaution to plan for a safe drilling campaign at Jade. The COSL owned NH9 rig and its drilling team are ‘drill fit’ and at this stage it is envisaged that the NH9 rig will be mobilised straight to the Jade well location from its current position without the need to go back to port.

From the spud date, now anticipated to be early April to mid-April, the Jade well is anticipated to take approximately 26 days to drill to Total Depth on a trouble free basis. There are no overly challenging drilling zones anticipated with the Jade well design and program. If the Jade well intercepts a hydrocarbon zone, as anticipated, then testing is planned to take approximately a further 2 weeks.

Further, more accurate, anticipated rig  mobilisation and a spud date will be announced along with further drilling details in due course.

Empyrean CEO, Tom Kelly, stated:

“After nearly 6 years of early stage exploration, including modern 3D seismic and rigorous geological studies we are finally ready to drill the exciting Jade well. We are literally weeks away from testing the 225-395 mmbbl light oil target at Jade. In terms of impact – and by that I mean the potential impact a discovery, within the 225-395 mmbbl range, would have in the success case upon our current market capitalisation – Jade is one of the most exciting wells to be drilled globally in 2022. The challenges that have been overcome in order to get to this stage and be ready to drill are many and this achievement is a credit to Empyrean’s small team and a great reflection of the excellent teamwork, expertise, professionalism and cooperation carried out between the Company, its partner CNOOC, and its technical service providers CNOOC EnerTech and COSL. We are particularly appreciative of CNOOC facilitating a rig slot for Empyrean to drill Jade using the NH9 rig. Every effort and precaution is being taken to drill the Jade well safely. We now need to let the drill bit do the talking! We look forward to providing our shareholders with further updates as we get even closer to spudding the exciting Jade well.”

It really is exciting that EME is finally about to drill the Jade prospect, like Tom Kelly I have followed with interest this project every step of the way so have at least time invested in it. I am not going to comment much today, Tom has agreed a long chat next week and I will aim to follow up that discussion with a more detailed comment. 

And finally…

A big weekend for sport, the cricket continues in Antigua where it is incredibly boring even for people like me wh

o like watch test cricket. England’s bowlers are ineffective on a flat track but the Woakes over Broad or Anderson experiment has failed miserably.

In the Prem it is skewed away from Saturday which people hate, tomorrow sees the Seagulls hosting Liverpool, Burnley go to the Bees in a relegation fight and Spurs visit the Theatre of Dreams. Sunday sees Chelsea sans Abramovich taking  on the Magpies con the Saudis, the Toffees host the Wolves, in another relegation battle the Canaries go to Leeds, the Saints entertain the Hornets, Villa are in a claret and blue derby at the Hammers and the Foxes go to the Gooners.

Back to the 6 Nations where a Friday match sees Wales hosting France, tomorrow Scotland are in Rome and England face Ireland at Headquarters.

Not much racing ahead of Cheltenham next week but the Imperial Cup card at Sandown is quite good.