Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $66.18 -86c, Brent $75.91 -$1.43, Diff -$9.73 -57c, NG $3.19 -1c
Little changes just now, oil is fairly weak and crude inventory numbers are building although a warning should be that both gasoline and distillates are drawing more than forecast at the moment. The major oil producers have made it abundantly clear that there is crude oil in the system enough to cover Iran and maybe a bit more, I concur and barring unforeseen events prices are in the right range.
Savannah has put out a Seven Energy transaction update, a holding announcement given that it is the 31st of October which was previous guidance for the Implementation Agreement to be signed . They have said that following the announcement on the 20th of September regarding the gas for oil swap with Frontier and the buy-out of minority shareholders in Universal the company confirms that it is ‘seeking further amendments to the terms of the transaction' which the board considers to be ‘significantly enhancing to its competitive position in Nigeria'.
The company is clear that what is intended to be finalised is ‘in line and strategically consistent with their prior discussions around the value creation opportunities associated with the South East Gas business'. With a short wait for the final signatures this looks to be an exciting uplift to the Seven deal and will most definitely be worth waiting for, that wait is expected to be only a matter of days when the transaction will be finally completed.
Eco Atlantic Oil & Gas
The final approval from the Guyana President for the Eco farm-out to Total has now been given and the transaction has completed. Eco receive $12.5m and the focus now turns to the 2019 drilling programme for which Eco is fully funded.
Given the amount of time, money and hardware that Exxon are throwing at the Stabroek block next door the team at Eco Atlantic deserve significant credit. The model clearly works, the company are funded and have a 15% stake in the Orinduik block that will, not might, transform this company. Do the sums, 15% of what has already been intimated in the CPR dwarfs the company's £72m market cap, this is a gift horse, do not look it in the mouth….
Frontera has confirmed that they are still in discussions with a second industry major in addition to the MOU already signed with Baker Hughes. A wise call re the RNS as the market had rather presumed that the BH news prevented other negotiations continuing, not the case. As it stands things are rather looking up for Frontera in Georgia.
Serica has received OGA approval for the Columbus development FDP in the North Sea which should start producing in 2021. Peak production is expected to be 7,800 b/d and 2C contingent reserves are 13.4m boe, Serica has 50% and is operator so it adds c 7m boe for them. I am still hoping for a meeting with Mitch at some stage, right now I am still hoping to get on the mailing list of company or PR! Serica looks to be in a very strong position to develop its excellent portfolio and is worthy of its recent run.
The guilty Afren pair have been sentenced to 11 years between them at Her Majesty's pleasure, not quite as comfortable as the lodgings they had hoped to build with Afren's money…They are appealing – apparently…
This week's Voxmarkets Podcast link is below.
It's the Haribo Cup again and tonight the Gooners host Blackpool, Chelski welcome back favourite son Frank Lampard and the Hammers take on Spurs again.
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