WTI (May) $85.15 +$1.44, Brent (June) $88.92 +$1.50, Diff -$3.77 +6c.

USNG (May) $1.86 +2c, UKNG (May) 63.65p -4.35p, TTF (May) €25.575 -€1.125.

Oil price

Oil continues to power forward as Opec meet and in the Middle East tensions rise. The strength has meant that the White House has ceased its plans to refill the SPR at least for the time being. Elsewhere Mexico’s cutting of 400/- b/d mystified analysts whilst production shortfalls elsewhere continued.

After hours the API inventories showed a crude draw of 2.286m barrels, above the whisper of 2m bbls.

Deltic Energy

Deltic has announced that it has received the required regulatory and partner consents in respect of the farm-out of a 25% interest in Licence P2437, containing the Selene Prospect, to Dana Petroleum (E&P) Limited which was announced on 7 February 2024.  The farm-out has therefore completed.

This transaction, in combination with the existing Shell UK Ltd carry, results in Deltic retaining a 25% non-operated interest in Licence P2437 and having no exposure to 2024 drilling and testing costs up to a cost cap of USD$49M (gross), which is in excess of current success case well cost estimates provided by the Operator.

Following the announcement of the rig contract for the Valaris 123 on 5 February 2024, the Selene well remains on track, with operations expected to commence in July 2024.

Graham Swindells, Chief Executive of Deltic Energy, commented:    

“We are delighted to announce completion of the farm-out of Licence P2437 and formally welcome Dana to the joint venture. Well planning remains on schedule and we are looking forward to commencing Selene well operations with Shell and Dana in the summer. Our attention is now firmly focussed on drawing the Pensacola farm-out process to a successful conclusion and we look forward to updating the market in due course.”

Very good news from Deltic this morning as they confirm that the farm-out of licence P2437 has completed as expected leaving them with a 25% non-operated interest in the Selene Prospect with Dana and Shell as partners.

The announcement also confirms that the group are looking forward to ‘commencing well operations this summer’ which is perhaps the best news out today.  

With that and the ongoing work on the farm-out process of Pensacola on the go this is looking like a very interesting few months for Deltic and the shares go into the summer very attractively priced. 

SDX Energy

SDX has announced that it has commenced drilling the Beni Malek-2 well (BMK-2) in the Rharb Basin, Morocco, approximately 1.5km from the BMK-1 discovery well. The BMK-2 well will be drilled to a planned depth of approximately 1,470 metres and is targeting three stacked reservoirs in the Guebbas formation, which have been identified using 3D seismic.

This well follows the success of the KSR-21 well drilled in September 2023 and is part of an ongoing drilling campaign in Morocco. If BMK-2 is a success, the well will be completed and tied-in for production as quickly as possible, to supplement existing production and, in particular, provide to CITIC Dicastal, which is the Company’s largest offtaker and has an immediate and increasing demand for SDX’s gas.

In Morocco, the Company is the sole independent gas producer and has ambitions to be a major gas producer and works closely with its partner, Office National des Hydrocarbures et des Mines (“ONHYM”) on all aspects of development and production. The gas from SDX’s wells is sold to multiple offtakers in the Kenitra industrial area.

SDX continue in its Moroccan campaign and will likely have identified another opportunity to tie in more production, overall its long term strategy will continue to unfold. 

And finally…

Last night in the Prem the Magpies drew 1-1 with the Toffees, Forest beat the Cottagers who are poor on the road 3-1, the Cherries triumphed 1-0 over the Eagles and Burnley and Wolves and the Hammers and Spurs both drew 1-1.