Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $63.14 -55c, Brent $72.83 -6c, Diff -$9.69, NG $3.28 +5c
The blog is coming to you from Cape Town this week as I report from Africa Oil Week, the most important conference for companies and investors across the continent. I will report from presentations made and hopefully interview some of the key players in town.
The Iran sanctions have commenced this morning but for oil bulls the best was in the travelling, not the arriving. With production increases across the international board, barring a major problem the market equilibrium remains as will this, lower price range.
Trinity Exploration & Production
Good news from Trinity this morning as they announce that it has submitted the first phase of its FDP for the TGAL Area located on the Galeota block offshore the East coast of Trinidad to the MEEI. This is the first phase of the potentially wider step-out development across the Galeota anticline thought to contain c700mmbbls.
The development will involve a low cost 10 well conductor supported platform and associated infrastructure. The importance of this should not be underestimated, it shows that TRIN has been working hard to bring Galeota in and is now fully up to speed with getting it under way. The development of these assets could support the medium term onshore and offshore production target of over 7,500 bopd. FID is planned for H1 2020 at which stage resources would be reclassified as 2P reserves, potentially resulting in a 40% uplift to current 2P reserves of 23.2 mmbbls. Accordingly investors really should see this as a ‘major milestone' as expressed by CEO Bruce Dingwall in the RNS today and look forward to FID in good time.
Sound has announced that TE-9 has now been drilled to the second casing point at MD of 2210m and that the casing has been set and cemented in the Triassic shales above the prognosed TAGI reservoir.
RBD has announced that it has paid £3m to buy a 37.08% stake in Rathlin Energy, a subsidiary of Connaught Oil & Gas. This is all about UK onshore licence PEDL 183 where the West Newton gas discovery is lurking. In Q1 2019 the company plan a drilling programme designed to test two high-impact targets with an estimated 72% COS and gross NPV (10) of $247m. There is also the chance, albeit only 24% of the Cadeby oil prospect nearby.
As usual RBD have come up with low cost entry into some most interesting prospects with good chances of success yet with plenty of potential upside. There are two seemingly modest conditions, firstly the previously agreed farm-out completes and secondly the parent company settles a £33.8m debt owed to it by Rathlin…..
Columbus Energy Resources
Columbus has been instructed that the Ayoluengo field has to be decommissioned which comes as quite a surprise to CERP as they thought they were going to be asked to re-tender the La Lora Concession. There are no problems with decommissioning costs as they are provided for in the accounts and ‘no material cash expenditure is expected to be made by the company'. Whilst the company is ‘considering its options' I would move on and forget about it, I hadn't heard that this was going to be its El Dorado…
And finally- Abridged
In the footy The Noisy Neighbours had a big win against the Saints whilst the Gooners and Liverpool drew 1-1. Spurs hung on to beat Wolves and the Red Devils got a last minute win at the Cherries.
At the Malaysian MotoGP Valentino Rossi showed that there is plenty of life in the old dog yet when he led for 16 laps before sliding off and handing the win top Marc Marquez. Alec Rins' Suzuki was 2nd and Zarco on the satellite Yamaha was 3rd.
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