Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $53.86 -77c, Brent $62.60 -88c, Diff -$8.74 -11c, NG $4.24 -21c
With the US closed for Thanksgiving volumes were low, less than half the usual and as expected, volatility was high. The stories about Saudi production are doing the rounds, each time the number goes up a little like all good tall stories. Today is no change, a markdown on low volume which nothing can be done about.
Amerisur has signed a farm-out with Occidental Andina (OA) across Putumayo-9, Terecay, Tacacho and Mecaya blocks in the Putumayo region in Southern Colombia. OA earns a 50% stake in each for funding exploration and appraisal in the 2019-2021 years which is 85% of the 2D seismic and 100% of the planned drilling programme. In addition OA will pay a ‘commercial tariff' for dedicated capacity to transport crude through the OBA.
There are a number of real advantages for AMER in this deal but primarily it accelerates their programme using someone elses money. Of these blocks I think that only PUT-9 is already in progress and would have been drilled this year if not for local issues which have pushed it into next year. With AMER not yet prioritising Terecay and Tacacho, preferring to spend capital on more likely near term production, this acceleration of two promising blocks is very helpful. With seismic now likely next year and drilling in 2020 a partner has brought the potential for significant added value to AMER's portfolio and the addition of a highly experienced team in country from OA is another bonus.
Although there is nothing specific to add for OBA throughput from this deal,there is no doubt that the company are, as per recent announcements, at long last looking to add value by carrying third party crude and charging a tariff for it. This will not only add income but will be added to the valuation of AMER by creating an annuity income and as per infrastructure funds a solid valuation to add significantly to market cap.
Overall this has been a good week for Amerisur, a highly respected oil industry partner has given a high valuation on a large part of its portfolio, the potential of the 600m+ barrels in Terecay and Tacacho are brought nearer and they have added to their cash pile whilst being carried on these blocks, what's not to like?
Reabold has updated from California where it is planning another well at the Monroe Swell field, drilling an existing well bore to target an untapped part of the field and to extend it. The well should be on the move after the Thanksgiving weekend and on site ready to drill in 7-10 days. After that the rig is to move to the West Brentwood field and will drill the Ginochio-2 well.
RockRose announced yesterday that it had a 95.2% take up of its tender offer for its shares at a cost of £16.37m. Following this transaction Chairman Andrew Austin will own 28.3% of the issued share capital of the company.
Good news from Infrastrata yesterday as it announced that the FEED work had been completed at the Islandmagee storage facility ahead of time and on budget. So, INFA has a blue chip trader on board, has completed the FEED which leads the way to finding a funder and selection of an EPC contractor. After many years of promise it looks like INFA might well be about to deliver the goods.
Here is the link to the Podcast from Monday, it's been that sort of week…
On Tuesday Nick ‘Moose' Batsford interviewed me for Core Finance ahead of the Opec+ meeting and we talked about the oil price.
And a packed weekend of sport with the culmination of the F1 season in Abu Dhabi but a dead rubber really.
Lots of good rugby to end the autumn internationals with England facing the Wallabies at Twickenham, the Pumas at Murrayfield, Wales taking on the Springboks and Ireland having a breather against the USA.
In the footy the big game is the London derby between Spurs and Chelski, elsewhere Liverpool are at the Hornets, the Cherries entertain the Gooners, the Eagles are at Old Trafford and of course Claudio Ranieri's debut for the Cottagers against the Saints.
With the Betfair Chase at Haydock and some cracking races there and at Ascot jumps fans will also have a good day out tomorrow.
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