Opinion

Oil Price, Savannah Petroleum, Sound Energy, Providence, Aminex, and Finally…


WTI $74.11 +26c, Brent $78.86 +79c, Diff -$4.75 +53c, NG $2.79 -4c

Oil Price

Yesterday wasnt so bad for oil bulls, the Norway strike meant some shortage appearing and after the close the API stats showed a 6.8m draw in crude and  1.6m  in gasoline even if distillates did build by 2m barrels. Also the Iranian NOC conceded that they might lose ‘up to 500/- b/d' due to sanctions, in your dreams matey…

This morning is a very different matter with Brent in particular easier ($1.61 as I write) mainly due to an indication from one of the Libyan NOC's that production and exports are about to resume. And with trade wars sharpening up as Mr Trump arrives in Europe to see NATO, the UK and the Mr Putin politics isn't getting any more relaxed.

Savannah Petroleum

Yet more good news from Savannah who have announced that  Kunama-1 is an oil discovery. This is the third consecutive discovery in the R3 portion of the R3/R4 area in the Agadem Rift Basin in S E Niger. Preliminary results indicate a total estimated 9m of net oil bearing sandstones in the E1 and E5 reservoir units within the primary Eocene Sokor Alternances objective.

Reservoir properties as indicated by wireline logs, show good quality, light oil, equivalent to that found at Amdigh-1 and consistent with offset wells along trend and the depth/API trend observed across the basin. The drilling of this well was incredibly efficient, only 14 days to TD against an estimated 22 and the whole well was completed in 23 days against an estimate of 30-35 days which clearly has a knock-on effect on budgets. Clearly delighted with this campaign so far, the company has elected to exercise the first of six individual options with Great Wall and the rig will move to drill Eridal-1 also in R3 of R3/R4 PSC only 6km from Amdigh.

These discoveries will now almost certainly mean that the company can seriously consider an early production system that can be put in place quite quickly as the three wells should underpin a commercial development in a short space of time.

This is not the only piece of good news for SAVP this week as yesterday the Group MD of NNPC detailed the seven critical projects, 5 by them and 2 by NPDC one of which includes ‘full utilisation of the Uquo Gas Plant to deliver 200 mmscfd through its Utapate gas in OML 13'. This is aimed at bridging the supply shortage in the domestic market and will be achieved by expanding the Uquo gas processing facilities owned by Accugas, currently being taken over by SAVP and AIIM as part of the Seven Energy deal. Under the Seven agreement SAVP are carried by AIIM for any expansion costs which would make Uquo of strategic value as a local infrastructure hub.

The market are clearly waiting for Seven to close but investors should be aware that the tide is turning very strongly in Savannah's favour and the shares should be significantly higher.

Sound Energy

Sound has announced that J.J. Traynor, its CFO has joined the Board of the company, a continued beefing up of the team in recent months and with much work ahead of it in Morocco.

Providence Resources

The site survey for the Newgrange exploration well has been completed with ‘exciting' new data now available. All this is to be shared with potential farminees who are being approached at present. Sealed pock marks are present at the site which could be seepage indicating a petroleum system or of course a risk to the seal.Overall I get the impression that the new data is much better than expected.

Aminex - Stop Press...

Just going to press but as I write the long awaited deal from Aminex has been announced, more to follow after I've spoken to Jay. It seems that they have indeed signed a farm-out of Ruvuma to Zubair Group which will accelerate the development of the project whilst reducing costs to Aex. They will receive $5m in cash plus carry costs of $35m in respect of their remaining 25% interest. The new company will drill one new well and 200km² of 3D seismic which has never been done before. A fast track EPS should provide a minimum gross production rate of 40 MMcf/d. Finally, it is worth noting that the Zubair Corporation has existing businesses in Tanzania and enjoys a good relationship and has an excellent reputation, this will almost certainly lead to a flourishing development of Ruvuma in which Aex will maintain a stake.

More to follow but a great deal for Aminex as expected.

Link

Here is the link to this week's Voxmarkets Podcast only slightly out of date with reference to SAVP!

VOX Markets podcast: Malcy on Echo Energy, Savannah Petroleum, Rockhopper, Premier Oil and Amersur Resources

And Finally...

There is only one thing on sports fans minds today and that is England v Croatia in the World Cup Semi final tonight….They have been an inspirational group from coach downwards and it is for once good to be proud of such a squad…


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