Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $66.89 +25c, Brent $75.94 -80c, Diff $9.05 -$1.05, NG $2.96 n/c
Once again prices were very mixed yesterday, even the differential is back into single figures after Brent fell and WTI strengthened. Another very strong day for the dollar didn't help but the terrorist attacks in Libya which closed both the Es Sider and Ras Lanuf ports, trimming 250/- b/d of crude should have helped on the upside.
The trouble is there are the usual gossip around next week's Opec conference with bears continually saying that 1.5m b/d will reappear immediately, what rubbish they spout sometimes. With Saudi Minister Khalid al-Falih not enjoying himself in Moscow after a 5-0 thrashing, he nevertheless said that the meeting would provide a ‘reasonable and moderate agreement' next week which sounds about right to me. Just to reiterate, the market is a bit short which can be sorted and all parties know that they can go back to the 11/16 production levels if any tightening is needed.
Sound has announced that the TE-9 well location has been finalised, the well will target the A1 prospect on the Tendrara-Lakbir permit. This is the first well in a three well programme and will look for the TAGI as its primary target and the underlying Paleozoic as a secondary target.
Echo has announced the acceleration of Fracción D drilling by replacing the Los Joaquines well with the CSo-111-1 well targeting the Tobifera gas play on an accelerated basis. Targeting total gross prospective resource of 18.8 bcf on a best case basis it will also hopefully confirm the existing contingent resources of 19.0 bcf. Success with this well would support an early decision for a gas development at Fracción D and according to the CEO ‘should greatly enhance understanding of Fracción D and enable optimal design of pipeline and production facility capabilities'.
The Los Joaquines well, which was de-risked by the ELM-1004 well will now be the first well in the second phase of exploration drilling. This early success for Echo is way ahead of my expectations, at the workover stage on FD, with so much more to go from the rest of the portfolio if this early stage gas development were to go ahead then the upside just got a whole lot better.
Jersey Oil & Gas
JOG announced earlier in the week that it had appointed Gary Toothill as Development Manager to be based in Aberdeen. With plenty of serious experience behind him he is a specialist in the delivery of upstream development projects and production optimisation and his appointment should be noted as a very important and relevant one.
Speaking at the Oil Capital Conference yesterday CEO Andrew Benitz confirmed that the rig which will be used to drill the Verbier appraisal is on the high seas and with other commitments is likely to be on site there at the end of the third quarter or beginning of the fourth, subject to other timings. JOG looks in an incredibly strong position at the moment and with both drilling and seismic operations scheduled has significant upside.
I wasn't going to mention SAVP today but I have just listened to the retail investors conference call at which CEO Andrew Knott gave a really good analysis of where the company is right now. In addition he fielded a number of most interesting questions and gave cracking answers. I hope it is on the website but if not my Core Finance interview with Andrew is on www.malcysblog.com and well worth a look. With two from Two in Niger and the Seven deal closer to closing the shares should be much higher.
World Cup news, I have already mentioned that Russia beat Saudi Arabia 5-0 yesterday, not surprising given the group Russia ordered. Today we have Egypt v Uruguay, Morocco v Iran and the tasy Portugal v Spain clash tonight. Seven games over the weekend gives us a chance to look at some of the favourites as France, Argentina, Germany and Brazil are all playing.
Tomorrow we have the second cricket ODI against Australia in Cardiff and both sides need to tidy up a bit.
The US Open golf which I forgot yesterday was as brutal as ever, only four players were below par and Poulter, Piercy, Henley and Johnson shared the lead at 1 under.
And it is the Le Mans 24 hour race this weekend with Fernando Alonso on pole in the almost unbeatable Toyota with Jensen starting in 7th spot driving for the Russians…
Plenty of great rugby though with Ireland hoping to get back last week's defeat against the Wallabies as will England against the Springboks. Wales are still in Argentina and for all you oil industry expats Scotland play the USA in Houston….
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