WTI (July) $77.91 -$1.32, Brent (July) $81.86 -$1.74, Diff -$3.95 -42c.

USNG (July) $2.57 -9c, UKNG (July)* 84.0p, TTF (July) €34.8 +€0.85.

*Denotes June contract expiry.

Oil price

Always the same the night before the Opec mid summer Ministerial meeting although the fact that it has been made online makes one think the decision is already made. Word is that the 3.66m of cuts may be extended to next year and also that the voluntary cuts may be changed in some way.

The EIA inventory stats were a bit mixed, whilst there was a draw of 4.156m that was put down to a massive refinery run number of 94.3%, up a full 2.6% on last week so we can see why the crude was needed. It looks however that Memorial weekend driving figures were a bit uninspiring so gasoline stocks actually built by 2.022m barrels.

Saudi Arabia has announced that they are looking to place a bit of stock in Aramco, just the thick end of $12bn+ then…

Zephyr Energy

Zephyr has provided initial first quarter 2024 results related to hydrocarbon production from its non-operated asset portfolio in the Williston Basin, North Dakota, U.S.

·    Q1 production averaged 1,151 barrels of oil equivalent per day compared to production in the fourth quarter of 2023 of 1,053 boepd, representing an increase of nine per cent quarter on quarter.

 While production from the six wells operated by Slawson Exploration Company was temporarily shut-in over the winter months due to adverse weather conditions and infrastructure constraints, production from the wells resumed in late January 2024.

 The average daily production rate from the portfolio in March 2024 was 1,212 boepd reflecting the impact from the Slawson wells being online, albeit not at full capacity as the wells were partially curtailed due to lingering infrastructure constraints.

 Q1 production rates from the remainder of the portfolio were in line with management expectations. 

·    At 31 March 2024, 230 wells in Zephyr’s portfolio were available for production (versus 225 wells at the end of Q4).

·    Net working interests across the Zephyr portfolio now average 7.1 per cent per well (equivalent to 16.3 net wells).

·    During February 2024, ten wells in which Zephyr holds working interests and which are operated by Continental Resources (Harms Federal and Quale Federal) were placed in production. Early production data shows these wells performing ahead of management expectations, adding initial production rates, net to Zephyr, of circa 75 boepd.

·    The Company hedged 27,000 barrels of oil over Q1 at a weighted-average price of US$82.20 per barrel.  The Company will continue to evaluate its commodity price risk management strategy on a regular basis.

·    The Company has also hedged a total of 76,000 barrels of oil for the remainder of the year. 40,500 barrels are hedged at a price of US$80.91 and the remainder have been hedged by way of financial collars which enable the Company to lock-in a minimum price for these barrels. Of the 35,500 financial collars, 26,600 will give the Company a minimum price of US$74 per barrel of oil with the remaining 9,000 guaranteeing a floor price in US$69 per barrel of oil.

·    The Company will report sales and revenue results on a semi-annual basis to coincide with its financial reporting requirements.

No comment here I notice from the company, better that they are in the Paradox watching the bit spin…

This is regulation news but which many companies would like to have as a well funded portfolio of assets that has been astutely built up to ensure that the meat and potatoes of the company, that is the assault on the Paradox Basin is fully funded. 

At the Williston whilst some production was lost to bad weather it has more than made up for it with some new wells. No mention of the well, assume drilling ahead.

Reabold Resources

Reabold  announces its audited financial results for the year ended 31 December 2023 and the Annual Report is publicly available at www.reabold.com/investors/reports-presentations/.

Reporting period ended 31 December 2023 Highlights

Portfolio developments

·    Acquisition of a 26.1% interest in LNEnergy Limited (“LNEnergy”), built in stages throughout 2023 for a total consideration of £4.3m (£1.9 million of which was in cash and the balance in 1,297,297,298 new Reabold shares). LNEnergy’s primary asset is an exclusive option over a 90% interest in the Colle Santo gas field, a highly material gas resource with an estimated 65bcf of 2P reserves, with two production wells already drilled and a development-ready field, subject to approvals and permits. Financing and approvals are progressing well for the liquified natural gas (“LNG”) field development. 

Balance sheet and capital allocation

·      Cash of £5.4 million as at 31 December 2023; net assets of £42.2 million

·      Cash proceeds of £5.2 million received during the financial year for second tranche proceeds from the sale of Corallian

·      £263,000 returned to shareholders through share buybacks as part of the distribution of Corallian sale proceeds, with a further £75,000 returned post period end.

Post Period End Highlights

·     Final tranche cash proceeds of £4.4 million for the sale of Corallian, received from Shell in January 2024; Reabold net cash of £8.2 million as at 30 April 2024

·   At West Newton, a Gas Export Feasibility study completed by independent energy consultants, CNG Services Limited, concluded that as a precursor to the intended West Newton full field development, an initial single well development and gas export plan can accelerate production and cash flow whilst requiring limited capital expenditure, giving the joint venture the ability to drill future wells out of cash flow. See Review of Operations section for further details.

·  Execution of a non-binding Heads of Agreement between Gunvor International B.V. (“Gunvor”) and LNEnergy for the purchase of LNG by Gunvor from LNEnergy from the Colle Santo gas field. 

Nothing new in todays formal results announcement from Reabold who have the excitement of West Newton and LNEnergy yet to come.

Sound Energy

Sound has announced the mobilisation of the Star Valley Rig 101 to the Tendrara Production Concession to conduct planned work over operations on the gas wells TE-6 and TE-7 in preparation for long term gas production into the micro LNG plant currently under construction at site by Italfluid Geoenergy S.r.l..

In December 2023, the Company successfully completed the preparatory work over operations by installing production packers in both wells with a wireline unit. The currently planned work over operations will comprise pulling the existing completion tubing and running new corrosion resistant completion tubing utilising the Star Valley Rig 101 which is expected to arrive on site the first week of June 2024.  In addition, the existing TE-6 and TE-7 Christmas trees will be replaced with replacements containing the necessary corrosion resistant components.

Further announcements will be made, as appropriate, in due course

Good news here in this short announcement from Sound who are diligently and behind the scenes working away at Tendrara for the micro LNG plant which is currently under construction.


Petrofac today issues its financial results for the year ended 31 December 2023 and an update on progress with respect to its review of strategic and financial options. The Company is in discussions with the Financial Conduct Authority to seek a reinstatement of trading in its shares.


  • Strong order intake of US$7.1 billion, driving significant backlog growth to US$8.1 billion
  • Group business performance EBIT loss of US$(393) million
  • Full year cash outflow of US$223 million, with neutral cash flows in the second half
  • Year-end net debt of US$583 million and gross liquidity of US$201 million
 Year ended 31 December 2023Year ended 31 December 2022 (restated)(4)
US$mBusiness performance(1)Separately disclosed itemsReportedBusiness performance(1)Separately disclosed itemsReported
Net loss(3)(485)(20)(505)(294)(26)(320)


Tareq Kawash, Petrofac’s Group Chief Executive, commented:

“2023 was a challenging year for Petrofac. Our financial results reflect additional losses on the legacy contract portfolio, in particular the Thai Oil Clean Fuels contract where we are in negotiations to seek reimbursement of a proportion of the additional costs. In addition, the challenges in obtaining guarantees for our new EPC contracts, and the impact on liquidity, resulted in the business seeking to deliver a critical financial restructure, which is ongoing and has the full focus of the Board.

“However, 2023 was also one of the strongest years in the Group’s recent history with respect to new contract awards, demonstrating Petrofac’s capability, strong customer relationships, differentiated delivery model, and competitiveness.

“We are focused on the restructuring with the aim of materially strengthening the Group’s financial position and enabling Petrofac to deliver on its future opportunities. I am grateful to our employees and our stakeholders for their continued support as we work to deliver a positive future for Petrofac.”

The Jekyll and Hyde nature of Petrofac continues with a huge order book on the one side but the catastrophic nature of the finances on the other. The Company did not make the payment of the bond coupon due on 15 May 2024 ‘(for which the ad hoc group provided forbearance until 30 June 2024)’ and continues to rely on deferrals of contractual amortisation payments from its lending banks.

It looks like the current restructuring process is very serious as the auditors have added a red flag to the shares and the bondholders will probably have a large say in the way that equity holders come out of it, after all the shares are suspended and they desperately want to ensure they are still at the table. 


The Group is seeking to implement a comprehensive financial restructure to materially strengthen its balance sheet, improve liquidity and secure bank guarantees to support current and future EPC contracts.

As announced on 29 April 2024, an ad hoc group of senior secured noteholders, holding approximately 41% of the outstanding notes, made a non-binding proposal to provide up to US$200 million of new funds and US$100 million of credit support to help secure performance guarantees. The proposal is dependent upon, amongst other things, the Company securing certain performance guarantees and is expected to include the conversion of a significant proportion of the Group’s existing debt into equity.

The Company is in discussions with a range of credit providers to obtain the performance guarantees required under the proposal from the ad hoc group, which would release over US$200 million of collateral and retentions and unlock progress payments on contracts in backlog. It is also in discussions with the ad hoc group and lending banks in relation to the proposed terms of the restructure. The successful implementation of the restructure would require approvals of shareholders and creditors and would need to be sanctioned by the Court.

The Company did not make the payment of the bond coupon due on 15 May 2024 (for which the ad hoc group provided forbearance until 30 June 2024) and continues to rely on deferrals of contractual amortisation payments from its lending banks. Managing these and other payment and contractual obligations is of critical importance to the Company’s ability to maintain sufficient liquidity in the short-term while it is working to implement the financial restructure.

The success and timing of the implementation of the financial restructure depends on reaching agreements with, and obtaining approvals from, third parties. Details of the judgements and assumptions made by the Directors in respect of the risks associated with the Group’s ability to maintain liquidity and implement the restructure can be found in the going concern statement in note 2.5 to the consolidated financial statements. As a consequence of these uncertainties, the Group’s auditors have disclaimed their audit opinion for the financial statements for the year ended 31 December 2023.

The Group continues to pursue non-core asset sales and the disposal process for the Group’s share in the PM304 Production Sharing Contract in Malaysia is progressing, with non-binding offers received. This process could be completed in Q3 2024.


During 2023, the Group continued to deliver well for its clients and secured significant new awards which drove strong growth in backlog. However, the Group’s financial performance in 2023 reflected the ongoing challenges in closing commercial settlements on legacy Engineering and Construction (E&C) contracts and accessing guarantees for new E&C contracts, as well as one-off write downs to protect cashflows.

Group revenue reduced marginally to US$2.5 billion (2022: US$2.6 billion), with reduced activity in E&C being largely offset by growth in Asset Solutions. Full year business performance EBIT loss was US$393 million (2022 restated(4): US$229 million), largely due to losses in E&C, partly offset by profitability in the rest of the business.


Engineering & Construction (E&C)

2023 was the strongest year for new awards in E&C in five years, with backlog more than tripling to US$6.1 billion (2022: US$1.6 billion). We secured US$5.5 billion of new order intake, split between hydrocarbon and renewable energy markets. Of the US$6.1 billion backlog at 31 December 2023, approximately half relates to energy transition contracts, including the first two offshore wind contracts under the TenneT Framework Agreement and the ADNOC carbon capture, utilisation and storage (CCUS) contract.

Operationally, we made further progress on the completion of legacy contracts and are expecting all but two of the legacy contracts to be completed(5) in 2024. The two contracts that will continue in execution beyond 2024 are the Thai Oil Clean Fuels project and the Orlen Refinery Upgrade project in Lithuania. Of the US$6.1 billion backlog, approximately 90% relates to new contracts secured in 2023.

With respect to the Thai Oil Clean Fuels project, good progress continues to be made on the construction stages. While the estimated costs to complete increased during the year, as outlined in the Group’s April trading update, discussions with the client and our partners are ongoing in relation to the reimbursement of a portion of these additional costs. In the absence of a resolution to these discussions, an incremental loss in the year of approximately US$190 million is included in the E&C EBIT loss.

Revenue during the year was US$0.9 billion (2022 restated(4): US$1.3 billion), reflecting the low opening backlog and the maturity of E&C’s legacy contract portfolio. E&C had a business performance EBIT loss of US$422 million (2022 restated(4): US$323 million) reflecting losses on the Thai Oil Clean Fuels project, one-off write-downs to protect cash flows of US$90 million and adverse operating leverage, due to the lower levels of activity.

Asset Solutions

Asset Solutions had another successful year for backlog growth, delivering a strong order intake of US$1.6 billion, with a closing backlog of US$2.0 billion at 31 December 2023 (2022: US$1.8 billion), none of which have performance guarantee requirements pending.

Revenue during 2023 grew 25% compared with the previous year at US$1.4 billion (2022: US$1.2 billion), primarily driven by growth in Asset Operations. Full year business performance EBIT was US$2 million (2022: US$60 million), reflecting the previously guided loss on an Engineering, Procurement, Construction and Commissioning contract of approximately US$18 million and a one-off bad debt provision of approximately US$11 million for a client going into administration.

Integrated Energy Services (IES)

Net production during 2023 was maintained at 1,260 thousand barrels of oil equivalent (kboe) (2022: 1,261 kboe). IES achieved an emissions reduction of 15% and an emissions intensity reduction of 14% during 2023. Revenue for the year was US$121 million (2022: US$137 million), reflecting the lower realised oil price net of hedging. Business performance EBITDA was US$90 million (2022: US$109 million) with business performance EBIT of US$34 million (2022: US$58 million), principally reflecting the lower revenue.


Free cash outflow for the year of US$223 million (2022: US$188 million) primarily reflected the operating outflows and higher interest payments in the year attributable to the increase in the Group’s average net debt levels. The liquidity conservation measures taken by management and unwinding of historic working capital of approximately US$180 million, offset by collateral requirements for guarantees, resulted in broadly neutral free cash flow in the second half.

Net debt, excluding net finance leases, was US$583 million at 31 December 2023 (2022: US$349 million), reflecting the free cash outflow in the year. The Group had US$201 million of gross liquidity(7) available at 31 December 2023 (2022: US$506 million).

Net debt, excluding net finance leases, was approximately US$570 million at 30 April 2024, with gross liquidity(8) of approximately US$215 million at the same date.


The Group’s backlog(6) more than doubled to US$8.1 billion at 31 December 2023 (2022: US$3.4 billion), reflecting the exceptional order intake in both E&C and Asset Solutions. Overall, Group order intake for the year was US$7.1 billion (2022: US$1.9 billion), representing a book-to-bill of 2.8x.

 31 December 202331 December 2022
 US$ billionUS$ billion
Engineering & Construction6.11.6
Asset Solutions2.01.8
Group backlog8.13.4



The outlook for the business is predicated on the Group maintaining sufficient liquidity and successfully implementing a financial restructuring which strengthens the Group’s balance sheet, improves liquidity and provides access to guarantees on normal commercial terms. Further details, including with respect to the significant risks associated with achieving this, can be found in the going concern assessment in note 2.5 to the financial statements.

Notwithstanding these challenges, we entered 2024 with an order backlog of US$8.1 billion, 90% won in 2023 and largely comprising contracts in our core markets, and a Group pipeline of US$60 billion scheduled for award in the next 18-months. Within this, E&C’s addressable pipeline is US$48 billion, of which 58% is in our core MENA markets and 18% in energy transition sectors. Asset Solutions’ addressable pipeline is US$12 billion, of which 70% is in target geographies outside the UK & Europe.

Operating activity in E&C in 2024 is expected to be higher than in 2023, but still sub-scale, as the portfolio transitions from legacy to new contracts. With continued backlog growth expected, supported by the strong pipeline of opportunities and further contracts under the TenneT Framework Agreement, the cumulative impact of these new contracts is expected to provide continued revenue growth in the medium-term. Margin in the E&C business is expected to improve as new contracts reach margin recognition thresholds and onerous contracts are completed, with the impact of growing revenues improving the business operating leverage.

In Asset Solutions, the business is expected to maintain or grow its activity levels in the medium term, driven by its focus on Asset Operations and Wells & Decommissioning service lines, including further expansion into new geographies. Margin expansion is expected to be underpinned by the higher margin prospects in these new geographies. These ambitions are supported by the brought forward backlog of US$2.0 billion and approximately US$0.5 billion of contracts awarded in 2024 to date.

In IES, the production sharing contract (PSC) for Block PM304 in Malaysia expires in September 2026, and we are no longer pursuing an extension. As disclosed on 29 April 2024, non-binding offers have been received for the Group’s share in the PSC, and the disposal could be completed in Q3 2024. Offers are broadly in line with the value of anticipated cashflows (subject to oil price and oil premium assumptions) over the remaining term of the PSC.


As a consequence of having published its results, the Company is in discussions with the Financial Conduct Authority to seek a reinstatement of trading in its shares and will provide an update on timing shortly.


Our full year results presentation will be held at 8:30 am today and will be webcast live via:



Click on, or paste the following link into your web browser, to view our Segmental performance and Financial review for the year ended 31 December 2023



Click on, or paste the following link into your web browser, to view the Group financial statements of Petrofac Limited for the year ended 31 December 2023


The linked documents are extracts from the Group’s Annual Report and Accounts for the year ended 31 December 2023. Page number references refer to the full Annual Report when available.


  1. Business performance before separately disclosed items. This measurement is shown by Petrofac as a means of measuring underlying business performance (see note 4 to the consolidated financial statements).
  2. Incremental loss is compared to the position announced on 29 April 2024.
  3. Attributable to Petrofac Limited shareholders.
  4. The prior year numbers are restated as detailed in note 2.9 to the consolidated financial statements
  5. Completed and substantially completed contracts: contracts where (i) a Provisional Acceptance Certificate (PAC) has been issued by the client, or (ii) transfer of care and custody (TCC) to the client has taken place, or (iii) PAC or TCC are imminent, and no substantive work remains to be performed by Petrofac.
  6. Backlog consists of: the estimated revenue attributable to the uncompleted portion of Engineering & Construction division projects; and, for the Asset Solutions division, the estimated revenue attributable to the lesser of the remaining term of the contract and five years.
  7. Gross liquidity of US$201 million on 31 December 2023 consisted of gross cash with no undrawn committed facilities. Gross cash included US$12 million held in certain countries whose exchange controls significantly restrict or delay the remittance of these amounts to foreign jurisdictions. It also included US$71 million in joint operation bank accounts which are generally available to meet the working capital requirements of those joint operations, but which can only be made available to the Group for its general corporate use with the agreement of the joint operation partners.
  8. Gross liquidity of US$220 million on 30 April 2024 consisted of gross cash with no undrawn committed facilities. Gross cash included US$10 million held in certain countries whose exchange controls significantly restrict or delay the remittance of these amounts to foreign jurisdictions. It also included US$69 million in joint operation bank accounts which are generally available to meet the working capital requirements of those joint operations, but which can only be made available to the Group for its general corporate use with the agreement of the joint operation partners.

Prospex Energy

Prospex has provided an update from the Selva Malvezzi production concession in Italy following the announcements made at the AGM of Po Valley Energy Limited on 29 May 2024.

Po Valley Operations Pty Limited, a wholly owned subsidiary of PVE is the operator of the Selva Malvezzi Production Concession, and has a 63% working interest, while Prospex has the remaining 37% working interest.

Q1/Q2 2024 Highlights

·    The Podere Maiar-1 well at Selva (“PM-1”) has continued to perform consistently during Q1/Q2 2024, reaching gross cumulative production of 20.61 MMscm (7.63 MMscm net to Prospex) and generating revenue of €2.6 million for Prospex by 26 May 2024.

·    Average daily gross production from PM-1 remains steady at a rate of 78,000 to 80,000 scm per day.

·    Gas sold at a premium to the Title Transfer Facility (“TTF”) gas price generates more than £6,100 per day in free cash flow (net to Prospex).

·    Lifting of the inherent hydrocarbon exploration and extraction restrictions on the Plan for the Sustainable Energy Transition of Eligible Areas (“PiTESAI”) has led to increased access for activities on the Selva Malvezzi Concession.

·    East Selva may now be drilled from an optimum location, no longer requiring a highly deviated well thereby reducing risk and cost.

·    Improved regulatory environment and geopolitical landscape in Italy is leading to a reform of the permitting process and schedules now resulting in the application to permit four wells on the concession targeting increased future revenues.

Mark Routh, Prospex’s CEO, commented:

“In the first half of this year we have seen a significant change in the regulatory environment in Italy.  The annulment of the areas which were restricted for hydrocarbon exploration and extraction activities (the “PiTESAI”) has resulted in a reform of the permitting process and the related environmental impact assessments.  Another benefit of the relaxation of the ‘PiTESAI’ restricted areas is that the East Selva prospect may now be drilled from an optimum location no longer requiring a highly deviated well, meaning lower cost and lower risk.

“We will continue to support the operator as it advances activities to facilitate the development drilling programmes at Selva Malvezzi with the target of converting the contingent resources at Selva North and Selva South and the prospective resources at East Selva and Riccardina into proved, developed and producing reserves in the near term.”

Encouraging news from Prospex today, news from Italy is that the regulatory environment has seen a significant change’ recently and to be honest that is a really important factor and takes a really important negative out of the picture.

Selva Malvezzi Production Concession

Gross gas production from the Selva field (PM-1 gas well) in the Selva Malvezzi Production Concession reached a cumulative 9.8 million standard cubic metres (“MMscm”) (3.6 MMscm net to Prospex) by 31 December 2023, generating revenue of €1.3 million for Prospex in 2023.  By 26 May 2024 this has increased to a cumulative 20.61 MMscm (7.63 MMscm net), generating revenue of €2.6 million for Prospex.  After a period of testing and commissioning, the PM-1 well is now consistently producing gas at a steady rate of 78,000 to 80,000 scm per day (gross).

The TTF gas price to which the gas sales agreement with BP Gas Marketing is linked, has risen because of external factors.  The Joint Venture sells the gas at a premium to the quoted TTF price and is currently generating over £6,100 per day in free cash flow (net to Prospex).

There has been a significant shift in the political and regulatory landscape in Italy.  In the first quarter of 2024 the Italian government’s Energy Decree, designed to encourage Italy’s energy security, was introduced.  This included measures to strengthen the security of natural gas supply which is highly encouraging for the domestic gas production sector.  The Ministry of Ecological Transition was renamed to the Ministry of Environment and Energy Security in October 2022.  This has all resulted in one of the most favourable government and regulatory environments in Italy ever seen, as the country aims to reduce its reliance on Russian natural gas and imports.

Also in the first quarter of 2024, the Regional Administrative Court of Rome annulled the PiTESAI.  The former PiTESAI, restricted hydrocarbon exploration and extraction activities in Italy and its repeal is anticipated to improve further drilling opportunities at Selva Malvezzi.  Whilst this annulment created a period of uncertainty in the first half of 2024, the new conditions have created possibilities to fast-track the approvals for all of the discoveries and prospects in Selva Malvezzi, which could ultimately bring more wells into production more quickly than originally envisaged.  PVO’s team in Italy is working closely with the Ministry in Rome to understand and assess these new opportunities for the concession.

These developments have caused the operator to reassess the optimal outcome for the Joint Venture in the next few years by capitalising on the window of opportunity created by the current Italian geopolitical environment and higher gas prices.

As a result, instead of seeking Ministry approval under the former PiTESAI to drill the smaller Selva North and South fields from a common pad following a limited 2D seismic campaign, the operator is now actively pursuing more ambitious plans to submit applications to drill the larger East Selva and Riccardina prospects as well as Selva North and Selva South.  In addition, the East Selva prospect may now be drilled from an optimum location no longer requiring a highly deviated well.  The Ministerial Authorities have advised to file all Environmental Impact Assessments on the concession at the same time, so applying now to drill all four wells is expected to avoid delays.

By including the permit applications to drill the East Selva and Riccardina prospects at the same time as Selva North and South, the end result should ultimately be increased cashflow from the concession.

And finally…

A big weekend again as Epsom sees The Oaks this afternoon and The Derby tomorrow.

Last night England beat Pakistan at The Oval in the last warm up match before the World Cup which starts on Sunday. To be held across venues in the West Indies and the USA, the opening match is the USA v Canada followed by the WIndies v Papua New Guinea.

The Champions League final is tomorrow but its a small cup nowadays…