Opinion

Oil Price, Genel Energy, Independent Oil & Gas, and Finally…


WTI $68.06 -$2.95, Brent $71.84 -$3.49, Diff -$3.78 -54c, NG $2.76 +1c

Oil Price

Yesterday prices fell sharply with the usual combination of factors, mainly on supply this time weighing down on crude oil. Maybe it was the blog ‘wot did it' as I read this morning that there are worries that the USA may start to release supplies from the SPR to keep a lid on prices as mentioned here yesterday…

It was probably more a combination of Chinese demand stats, small increases in production from Nigeria and Libya and words from Mr Mnuchin that really caused it. Whilst he did say that some special cases would be considered for waivers, I think what he actually said/meant was that the administration would temporarily help countries who needed to change their suppliers with a glance at India as a big customer of Iran.

Genel Energy

An update on the Tawke PSC this morning from Genel which states that there has been a 2/3 increase in production at the Peshkabir field to 25/- b/d following completion of the Peshkabir-4 well testing process. The well is producing at 10/- b/d through a 72/64″ choke with 790 psi wellhead pressure through capacity restrained test facilities. The well was drilled 4km west of the Peshkabir-3 well and 11 zones were tested which flowed between 1,500 and 7,000 per zone.

The next well, Peshkabir-5 has been drilled 7km west of Peshkabir-3 and has already successfully tested the westward extension of the field. It is undergoing trial testing and will be brought onstream in August making the operator DNO confident that it will ‘reach and surpass' their summer target of 30/- b/d of production. With wells P-6 and P-7 drilling ahead confidence is high that yet further gains in production will be made.

The company say that the field ‘continues to exceed expectations' in particular as the field is part of the Tawke PSC and accordingly will ‘bolster free cash flow' currently exceeding $10m per month. Yesterday Genel went into the Bucket list and this is a welcome early boost for investors, I am expecting significantly more to come.

Independent Oil & Gas

IOG has updated on the Thames pipeline integrity confirmation, analysis shows that 60km of the offshore sector  indicates that the pipeline condition is ‘as new'. The company are now completing this integrity test by inspecting the Bacton end of the line in the coming weeks.

As a result of these tests the company are now not going to do the intelligent pigging until first gas although given that the last test was ‘inconclusive' it will surely need to be done. I imagine that doing it all when the extra 7km has been added is where the cost savings lie given the nature of the process. Finally there has been a small delay in the FID which is now expected at the end of September. I am meeting with the team next week so will update more after that.

Reminder- Bucket list and London South East Investor Evening

Just in case you didn't see it yesterday, or that two blogs in one day went under the radar, here is the interim bucket list update.

The 2018 Interim Bucket list

And I am very much looking forward to seeing a number of you at tonight's LSE investor evening.

https://www.eventbrite.co.uk/e/oil-gas-investor-evening-with-malcolm-graham-wood-malcy-and-aim-listed-ceos-tickets-46763627268

And here is the interview I gave to LSE ahead of tonight's show.

London Sout East interview: Rockhopper tops Malcy's 2018 Interims Bucket List gains

And Finally...

I have been reminded that I didn't mention the England victory over India in the ODI at the weekend, very remiss of me as victories in white ball cricket are quite rare against India…

Ronaldo signs for Juve which should liven things up a bit, who will Real replace him with, Eden Hazard?


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