Opinion

Oil price, President Energy, Wentworth Resources, Premier Oil And finally…


 

Oil price

More drift yesterday as the Russians play a little politics, odd that…Oil Minister Novak held a meeting with Russian oil companies yesterday and the vibes from the meeting were in some quarters, oil is now $60 do we need to extend the agreement this month? Although they might be ‘unconvinced' about the need I feel that when we hear from the mechanic  and not the oily rag things might change.

The EIA inventory stats were not as bad as the API might have indicated, a build it was, of 1.9m barrels against a forecast of a draw of 1.8m but the market didnt seem too concerned.

President Energy

Things are moving fast in Argentina for PPC who release an update this morning on the Puesto Flores field. The company expects to receive over $3m net cash proceeds from Argentinian sales in November which is most impressive. The workover programme is fully funded and now increased to four wells with more expected next year. It is worth noting that the pay back of the $2.2m capex is expected to be in less than 12 months using the fairly conservative October oil price of $55. With the promise of high margin, profitable operations building for PPC the outlook is extremely positive.

Wentworth Resources

Following up from its recent positive announcements WRL announce that they are restructuring and cutting costs by moving the head office nearer to management and its African assets to London. It may also re-domicile to a European country if appropriate terms were possible. Regrettably MD Geoff Bury is unable to move for personal reasons so the company is engaged in a search for a new CEO.  These efficiencies and corporate cost savings make a lot of sense and as WRL turns the corner in both its African projects the company is set very fair going forward.

Premier Oil

Plus ça change at PMO as today's update reinforces production guidance of 75-80/- bopd with a ytd number of 76.6k. Catcher is on track for first oil in December, Christmas Day would be a nice gift for TD and the shareholders. The Huntingdon FPSO extension has been signed extending the life of the field and an agreement has been signed to sell Tuna gas to Vietnam.

In Mexico preliminary discussions indicate a four well appraisal programme will start in late 2018 offering mid term potential for the company. Operating costs are down in line with guidance and 2017 capex is likely to come out at $300-310m against guidance of $325m. No mention of Sea Lion but at north of $60 the words no and brainer come to mind…Whilst on current oil prices, while nothing can be taken for granted, Premier looks in pretty good nick with a good spread of assets in diversified areas and stages of development and could even start paying back a bit of debt next year.

And finally...

A bit quiet on the sporting front but at least life gets a bit easier for Sir Brad for a while…

England's cricketers are playing their last warm up match in Oz, not much help against largely journeymen on a slow pitch which will be nothing like the test tracks but most have helped themselves to runs this morning. Stoneman got 111, Cook 70 and Root and Malan both got 50's.


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