Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $69.61 +31c, Brent $74.54 +61c, Diff -$4.93 +30c, NG $2.78 n/c
Not much to add to yesterday's comments, the market was up after the Yemeni attack on the Saudi tankers which might have put the oil complex higher but it was remarkably chilled about it, even more shouting the odds from Tehran didn't add much.
Regular updates from PPC are very useful and serve to remind investors how well the company is doing in Argentina even if the share price is taking an age to respond to the good news. Today the update is on the Puesto Flores/Estancia Vieja concession which continues to deliver the goods as investment is increased. Current oil production is 2,000-2,100 b/d with the workover campaign continuing, planning for three development wells is under way and expected to start at the end of September. This programme is entirely funded by PPC resources and facilities and so far is under budget with no accidents.
Extended testing at the Estancia/Vieja field has been successful so far with EV-8 producing gas at the equivalent rate of 200 b/d whilst testing at EV-19 indicates nearer 250 boe/d. Data from the EV-13 well earlier in the year will also be used to assess capacity and field potential. The company plans to self-generate power here and with work already under way it could be up and running by early 2019 given the good flow rates achieved by the EV wells.
As I said at the top this is more good news from PPC with both the oil at PF providing significant cash flow and gas at EV providing more than enough power to make the field self sufficient in energy next year with the possibility of much more. The shares are worth way in excess of the current price which must still be reflecting Argentine worries which can now be discounted.
The worst kept secret in the oil industry as BP announce that they have paid $10.5bn for BHP's US onshore oil and gas assets. It gives them 190/- b/d of production and 4.6bn of discovered resources and it is earnings and cash flow accretive apparently.
BP has also announced an increase in the dividend by 2.5% which makes me very worried indeed. Are memories so short that people can't remember that only 2/3 years ago the divvi was a millstone around their neck and was nearly cut? The BP board must be massively confident about what they see on the oil price front, I just hope that they are right and haven't just rung the bell for the industry!
Plenty of action this weekend on the sporting front but last night saw Aberdeen and Burnley draw 1-1 in the Boropa Cup with Hibs winning 3-2 and Rangers 0-1, they still havent conceded a goal under Stevie G.
It's the King George at Ascot with Frankie sitting out a ban so misses the ride on Cracksman but it's a good race indeed.
After the most exciting Grand Prix of the season last week what will happen on Sunday in Hungary? The Ferrari's are faster but nothing is for sure this year…
And a potentially great bout as Whyte v Parker means that both fighters who lost to AJ prepare to rise up the rankings.
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