Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $59.93 -26c, Brent $70.12 -6c, Diff -$10.19 +20c, NG $3.79 +7c
The rally that started yesterday morning failed to take any hold and oil prices ended down on the day and today has started weak again. There is little doubt that the December 6th meeting is going to be crucial as the 500/- b/d reduction from the KSA will not be enough even if another half a million barrels are found. Opec+ know what they have to do, fighting it out for market share doesn't work as they found out before, it is time to revisit 11/16.
Another excellent update from President this morning as we have another update from Argentina. The PFO 1001 well is completed and tested and is flowing from the deeper, secondary target at over 200 b/d, ahead of expectations for the whole well. The company will return to the primary target at a later date, this discovery will undoubtedly increase proven oil reserves.
Meanwhile the PFE 1001 well is at TD on time and budget and has exhibited oil and gas shows in mud logs in all three target formations which is highly encouraging. The new concessions are expected to complete in early December, oil prices in country and currencies are stable, giving netbacks of $40 at Puesto Flores. With year end target production rate of ‘in excess of 3,000 b/d' giving commensurate increase in free cash flow and financial strength President is performing very well indeed.
Hurricane has announced that the Aoka Mizu, on passage to Lancaster, has stopped at Algeciras in Spain for planned personnel changes and bunkering. The stop will include a repair to an auxiliary system ‘associated with power generation' before heading to Rotterdam. Commissioning activities will continue en route so that as little downtime as possible is likely on arrival.
Oil shares are under some pressure at the moment which is unsurprising given recent oil price weakness, but back at nearly 40p, Hurricane which is a company that will truly make a difference, is significantly undervalued as we approach first oil in the not too distant future.
Reabold Resources/Upland Resources/United Oil & Gas
It has been a longer wait than planned but it looks like action is about to commence with the drill bit for the companies above. Wick has received OPRED approval and is expected to spud in December for RBD and UPL after which the Colter well is expected to follow on. This is an exciting time for all concerned but for Reabold, with a number of irons currently in the fire, looks to be what we have all been waiting for.
Providence has announced that FEL 3/04, which contains the Dunquin South carbonate exploration prospect and the adjacent Dunquin North build-up and hydrocarbon column has been given partner budget approval. This is really only procedural in terms of an announcement but important for shareholders to know that this high impact exploration prospect is being prepared for drilling.
Velocys - Changing the Guard...
Velocys has announced that the CEO and COO have been removed from office and a new CEO and a CFO have been recruited internally. There have been so many changes at Velocys over the years that it comes as no surprise to see this, stand by for the ‘strategic review' and assessment of the company's activities ‘going forward'. The shares have fallen from 32.45p to the current 5.42p this year where it now has a market cap of c £20m and looks to be underfunded at present as it is in the process of ‘introducing strategic investors' for both its projects. The announcement also states that the company is looking for two new non-executive directors to provide support, funny that, they did have one of the wisest NED's on the team before losing him which might be described as being ‘ a misfortune'.
Here is the link to yesterday's VoxMarkets podcast.
A quiet morning but I'm sure everyone is looking forward to seeing Harry Redknapp in the jungle on Sunday..
And interestingly in golf's Race to Dubai, virtually the last tournament for the season has thrown up the bromance brothers of Molinari and Fleetwood but, as in the Ryder Cup I would suspect that Francesco will take the $1.25m bonus…
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