Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $72.12 +55c, Brent $81.72 +38c, Diff -$9.60 -17c, NG $3.06 +4c
I can add little this morning, even the month and quarter end mean that trade will likely be low and the prices above will be the markers. With a rate rise in the US keeping the greenback strong it has been a solid performance from a commodity that doesnt like such strength. Opec+ sees an adequately supplied market and with a weather eye on a less positive start to 2019 doesnt want to overstock the market a view with which I concur.
Three announcements out from SAVP this morning, of which the Niger EPS update is the most interesting. The commitment to the EPS is confirmed and the testing of the Amdigh-1 well will take place in December. Following that it is expected that first oil of around 1kb/d will flow in Q1 ramping up to 5kb/d by the year end from a recoverable resource base of 52 mmbbls. With 120 mapped exploration targets on SAVP's acreage there continues to be significant upside and the company says their exploration activities will continue so I expect to see ongoing newsflow here. Crucially the capex for this project is way lower than first expectations with net capex to first oil of less than $5m and the net external financing requirement 60% lower than the original concept. Finally in Niger, the energy Ministry has confirmed that the pre-feasibility study for the second export pipeline to the Benin coast has been completed and that it is expected to be exporting in 2021 – providing more optionality on the monetisation of Savannah's discoveries (with the domestic EPS already confirmed it now looks like the export solutions – Benin and Nigeria – will be available from 2021 as well).
Elsewhere the company has announced a new $50m debt facility with a Geneva based oil trading firm which will facilitate general requirements and provide flexibility in its capital programme. SAVP has announced results today which are immaterial but confirm that the drilling programme in Niger continues with the Zomo-1 well drilling ahead and must be due in the next few days, my call of course. The recent news of the addition to the Seven Energy deal is also extremely important and discussed by CEO Andrew Knott in my recent interview on Core Finance which the link is repeated below in case you didnt catch it. The SAVP share price has this morning at long last started to acknowledge the potential for all these actions although there is a lot further to go yet.
Core Finance CEO interview: Andrew Knott of Savannah Petroleum
If the first well this year was important for Chariot then Prospect S offshore Namibia is, if not the last chance saloon then mighty close to it. Add in that half the worldwide industry has taken positions in the Walvis basin around and about it and the next 40 days or so will be watched with incredible interest…
Getech has announced interims, for most companies irrelevant but with management into a significant change process worth watching. Sales are up 39% to £4.3m, and H1 revenues are £2.9m giving a post-tax loss of £280/-. The company say that they have a ‘robust sales pipeline' and have been investing in products and ‘refocusing' around data, software and information delivery, worth keeping an eye on.
The Ryder Cup is underway and will provide some serious action over the next three days. The US are favourites but have poor form on away territory, let battle commence.
In F1 it is the Russian GP and after some sub-par results Ferrari need to pull something out as the season draws to a close.
In the Prem the stand out match is Chelski v Liverpool where a repeat of the midweek fixture is only turned around venue wise. After scoring 8 on Wednesday the Hammers will fancy their chances against the hapless Red Devils whilst target practice for the Noisy Neighbours this week are the Seagulls. The Gooners host the Hornets and Spurs visit the Terriers.
And George Groves v Callum Smith is the big boxing bout at the weekend, its on tonight and you won't get there now as its in Jeddah……
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