Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $67.75 -2c, Brent $76.83 +33c, Diff -$9.08 +35c, NG $2.78 n/c
Oil had a poor week with WTI – $2.05, under-performing Brent -81c mainly to do with the perceived glut of products following the end of the driving season. The strong economic figures from the US at the end of the week will have pushed up demand for crude oil but also interest rate expectations and of course the greenback. Note now the Brent/WTI differential is over $9…..That has widened again this morning as WTI has rallied 59c and Brent 84c.
SAVP has announced that it has spudded its Zomo-1 well in the R3 portion of the R3/R4 PSC area in the Agadem Basin in South East Niger. This is the 5th well in the campaign and is targeting the same Eocene Sokor Alternances as its primary target.
CERP has announced that it has received an extension for its Cory Moruga Block until 2032. This will allow Steeldrum Oil, which is in the process of being acquired by Columbus, a chance to commence commercial sales from the Snowcap-1 well. It seems that the well will produce at around 100 BFPD with unknown water cut due to the length of time since it last flowed. Nevertheless, the shares at 4.55p are well off the 7.35p high from last October and I would expect some better performance in the future.
With Tom Kelly, CEO of Empyrean in the UK for their AGM I managed to pester enough to get a meeting with him and technical supremo Gas Bisht last week. I have a huge amount of respect for the Empyrean team built up over the years so it was a good opportunity to catch up on their progress in the three areas of current development.
Clearly the most exciting and potentially value add prospects is in China where the high quality 3D seismic acquisition has been completed on Block 29/11 and a number of low risk/high reward opportunities have been identified. This area is being prepared for a PSC contract which looks likely to be signed before the end of the year, meanwhile a CPR is being prepared by Gaffney Kline. Looking at the prospects on the map it is impossible not to get excited, with Jade virtually a step-out from the CNOOC oil discovery it seems like the first place to drill but this may be another spill point on the way to the much larger Topaz prospect making the decision deliciously difficult. Indeed, with it having such a big chance of success, a well which EME were planning to farm-out may come into the ‘we can drill this ourselves' category and plans might change. ( And I've not mentioned Pearl here..) There is little doubt that these three ‘cut and polished jewels' are going to provide an enormously exciting year for Empyrean and its shareholders as the company go to work on well planning, permitting and of course drilling.
I have spent longer on China here than I expected to but only as it looks to have so much potential, but at the Duyung PSC in Indonesia there are also signs of significant upside as so much work has been completed. With the POD already submitted to the Government, the PSC is expected to be converted into a Production permit in Q4 2018 and the low cost development of the Mako Gas Field can commence. Indeed with the upside on the prospect being much bigger than originally expected, partly due to such prospects as the Mako Deep where the Lower Gabus reservoir has been prognosed, there is upside here too.
Finally, in the Sacramento Basin the Dempsey well was drilled successfully and flowed gas from multiple zones and sale of the gas has commenced. As I have written a number of times the company have clearly had issues with reservoir quality and it has looked less good on the way up than it did on the way down but there are other opportunities in the basin. Indeed, as has been mentioned for some time the Alvares#1 well could come good but they will need to test the integrity of the casing if it were to become an economic prospect.
Getech has announced that there has been a temporary suspension of the ongoing 4th licensing round by the new Director General of the Sierra Leone Petroleum Directorate. Jonathan Copus, CEO of Getech says that the round has generated ‘significant' levels of interest. The country will now ‘expand dialogue' and enter into a period of consultation. It is not easy to judge what this means to be honest but I will report back after I have spoken to Mr Copus.
On Friday I published a link to a Core Finance interview that I had with Peter Levine, Chairman of President Energy. I have been told that viewers on some platforms were unable to watch it satisfactorily so I am publishing it again today if you were unable to watch it.
Also on Friday I spent some time chatting to Doc Holiday of Total Market Solutions in which he asked me about a long list of stocks I have been talking about lately. Some are in more detail than others but we covered: Hurricane, Coro, Trinity, Eco (Atlantic), Reabold Resources, Savannah Petroleum, Amerisur, AAOG, Bahamas Petroleum, Sound Energy and President.
England have had a good morning at The Oval, at lunch the score is 243-2 with Cook 103* and Root 92*.
Andrea Dovisiozo rode an almost perfect race to win the San Marino MotoGP. Ducati team mate Lorenzo slid out on the penultimate lap whilst squabbling with Marquez for 2nd.place and gifting Cal Crutchlow the final podium place. Valentino Rossi could only manage a distant 7th. in front of his home crowd which lost him his 2nd place in the Championship to Dovisiozo. Marquez, chasing his 5th MotoGP crown, now has a 67 point overall lead.
Oh, and the football is rubbish………………
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