Opinion

Oil price, Victoria Oil & Gas/Bowleven, Independent Resources, Union Jack, And finally…

Posted by Malcolm Graham-Wood - Malcy's Blog

06-Mar-2017


Oil price

The oil price remains range bound, last week both WTI and Brent were down by less than a dollar after Opec adhesion, Russia nonconforming,  money managers topping up and poor inventory stats took their turn to influence the market. There is no reason why much will change for a while,if anything it may be product stocks and prices that react as we come into Spring and refinery maintenance ends.

Victoria Oil & Gas/Bowleven

Bowleven has farmed-out most of its stake in the Bomono PSC to VOG, where its gas is currently shut-in, but under the agreement will go into the VOG pipeline with some modest expenditure to connect it to the existing infrastructure. For Bowleven it solves a number of problems, primarily monetising an asset previously holding back growth but by retaining 20% and a modest royalty will keep some of the upside and simplifies the structure. The deal is dependent on a number of criteria not least the failing of the COC resolutions at the meeting next week, shareholders who were thinking of giving the board a bloody nose may now reconsider such actions. Apart from that it is good, approvals should be a formality and production in the last quarter of this year is a realistic thought.

For VOG though I feel that this a much better deal, obviously the fact that it diversifies supply for its pipeline and sales business is good but the way that it does it makes even more sense. Once the Bomono gas is treated it will go via pipeline to the Bonaberi side of the river and serve customers there, whilst the other Douala customers will receive gas from the Logbaba field as they do at present. With significant gas demand in country and at extremely rewarding prices VOG is set to move to another period of growth. It gets better, BLVN has spent a good deal of time and money creating a huge data pack in the area and there are prospect inventories in both the Tertiary and deeper Cretaceous reservoir intervals. With 2,327 km² there is massive exploration upside and that is just assuming that the shallow wells are drilled to start with, there are many more leads to be looked into after the low hanging fruit has been taken. In conclusion, this deal is better news for VOG shareholders than has so far been given credit for, it gives almost immediate monetisation, whilst securing a long term value for shareholders at a stroke and for a modest outlay, there is a lot of upside in the share from here.

Independent Resources

All change at IRG today as there is a reshaping of the board, a new cornerstone investor and a change of name, Echo Energy will be the new monika. It feels very much like Sound two, as James Parsons comes in as Non-Exec Chairman and Stephen White and Marco Fumagalli are also proposed non-execs. Greg Coleman stays as CEO but Owain Franks will be leaving the company. The new cornerstone investor is Greenberry, an associate of Continental and they will end up with 29.9% at a price of 0.065p a share and existing shareholders will be able to participate in the Open Offer at the same price.

The plan is that IRG is an initial platform from which the company will grow ‘very significantly' indeed',coming soon is a new strategy and with that ‘our first growth transaction'. With James Parsons suggesting that this strategy will ‘quickly establish the company as a successful mid cap player' I dont think that the sights have been set low, the 6th of March may well turn out to be fireworks day for IRG…..

Union Jack

A man of his word Mr Bramhill so no surprise to see that with part of the money from last week's raise he has bought a little more of Wressle. He has bought another 3.33% of PEDL 180 and 182 from Celtique for £600,000 which takes the company to 15%. Worth keeping an eye on if you believe that the Wressle problems will be short-lived.

And finally…

Tony Bellew managed to do the impossible and beat David Haye at the weekend in what was a most exciting fight.

In the Prem there were wins for Spurs, the Noisy Neighbours and the HubCap Stealers who beat the Gooners who seem to be in some disarray. At the bottom things are equally as exciting, with wins for the Foxes, the Swans and the Eagles so good for animals unless you area  black cat. The Hammers host Chelski tonight which might be hard going…

And in the West Indies, England won the second one-dayer thus taking the series 2-0.



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Malcy's BlogVictoria Oil & GasBowLevenIndependent Oil and GasUnion Jack Oil

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