Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $67.77 -95c, Brent $76.50 -77c, Diff -$8.73 +18c, NG $2.77 -2c
The inventory stats from the EIA were delayed a day following Monday's Labor Day holiday and those who were surprised by the numbers should have remembered the mantra about it marking the end of the summer driving season. As telegraphed here, the refiners with their usual greed, shoved up utilisation rates to try and drive that last bit of gasoline capacity and unsurprisingly it has left them with more stock on their hands as the seasons change.
Crude oil drew by 4.3m barrels, higher than the forecast 2.38m but gasoline built by 1.8m and distillates by 3.1m both higher than market guesses and oil retreated by a little under a dollar, some of which has been recovered this morning. I am not concerned really, it's only a typically seasonal thing and the stats are showing that US drivers, not just for leisure, are still consuming plenty (22.137m b/d of products last time I looked).
Today's update from AMER is positive in a number of respects, the Pintadillo-1 well targeting the ‘N' sands anomaly has already reached 5/- feet and as it is the first in this area of Platanillo will drill through the N, M2, U and T sands to the economic basement and provide evaluation of the entire potential and add to the data base.
Production numbers in August were 4,927 b/d with a peak of 5,295 and it is good to see that the Plat-22 workover is complete and producing 415 b/d at a low pump rate that can be increased when long term well parameters are determined. The OBA export volume was 4,057 b/d with a peak of 5,562 b/d.
The Chiritza re-pumping station has been completed on budget and 6 weeks ahead of schedule and once PetroAmazonas have completed their bit will increase the throughput capacity to 9/- b/d after final commissioning. Finally, the company are now doing 2D seismic over the Coendu prospect in Put-12 and Put-9 which they hadn't planned to but circumstances on the ground have become more favourable and they are initiating all the processes for drilling.
Echo has announced that it has signed the contract for 3D seismic over a number of leads on the Tapi Aike, Fracción C and Fracción D assets onshore Argentina. There is a total of 1,960 km² to acquire and it starts in November of this year and should complete in Q2 2019. ‘Tapi Aike is the company's highest impact frontier scale exploration asset and with 2D seismic and 3 interpreted gas discoveries offering significant de-risked multi tcf opportunities'.
When drilling starts next year the company has '41 leads and total aggregated unrisked gas originally in place' and ‘in excess of 22 Tcf high case potential is estimated for the asset (over 9.0 Tcf mid case and over 2.5 Tcf low case)'. This completion of the contract process and being done significantly cheaper than originally expected is very good news for Echo as it glimpses the major league excitement of Tapi Aike, a huge prospect for next year.
With President Energy Chairman Peter Levine in town this week I took the opportunity to interview him on Core Finance TV. In the interview in which he leaves nothing out he talks about excellent progress on Puesto Flores and Estancia Vieja as well as the rest of the portfolio including Paraguay. Here is the link:
On Monday Coro Energy announced their first transformational deal in Indonesia with the acquisition of a 42.5% stake in the Bulu PSC in East Java. I managed to get CEO James Menzies into the studio where we talked about the deal, how Coro is developing and his plans for the future. Here is the link:
I've been out of the office since Monday visiting companies and taking in the Oil Capital conference and the interviews as above. I noticed that Reabold Resources had taken the advantage of the strong share price to raise £4.5m at 0.85p so this morning had a chat with Co-CEO Stephen Williams for a catch up.
The most noticeable thing about the raise, apart I suppose from the fact that it is at a premium to the last one, (a prerequisite for Williams and Oza) is that the pair's former employers, M&G have taken £3m of the pot. With the very tight pricing showing just how keen the market is on RBD and a couple of existing major shareholders also holding their positions it looks like it was a formality.
The success of the company is self fulfilling, as the asset base performs and the shares rise RBD is now of a size to encourage institutional shareholders to invest which itself means that the company has more in its warchest with which to buy more assets. Speaking to Steve it seems that there are still plenty of deals around which come onto their radar screen and ‘balances the asymmetric risk/reward play', indeed the early success of their Californian investment shows how quickly self-funding these deals can be. It has quickly had success, can become self funding and will prove, albeit with small numbers a very decent return on investment which can be up-sized very swiftly.
But back to the present, RBD holders can look forward to plenty of activity within the current portfolio as the Wick well is imminent and should be followed by the Colter well. With more success likely in California and the well in Romania of fairly high COS I can see the value of Reabold continuing to increase and reward shareholders.
The final test match of the summer against India started at The Oval this morning with Joe Root winning his 5th toss in a row and electing to bat first. This brought in Alastair Cook, playing his last test and receiving a guard of honour from the Indian side. 62-1 as I write…..
It is the awful ‘international break' in football only weeks after the season has started with another Mickey Mouse Cup to compete it…
Horse racing fans have a great opportunity with the remote control as stars of the turf such as Enable, Crystal Ocean and Harry Angel all on parade.
The NFL started last night with the Eagles beating the Falcons 18-12 and a full card coming up over the weekend.
And our rugby season has also started with the big match this weekend being Wasps v the Chiefs and the derby between Bath and Gloucester and the Saints v the Quins tonight.
This weekend the MotoGP moves to Misano in Italy where hopefully, after the cancellation fiasco at Silverstone, the Italians can show us how to run an International Grand Prix. It is Valentino Rossi's home track so he'll be looking to impress his fans but Championship leader Marquez won't make it easy for him and the continually improving Ducatis are still a threat.
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