Opinion

Oil price, Amerisur, Jersey Oil & Gas, Thalassa, Echo Energy. And finally…


Oil price

A bit of a tumble for crude yesterday which was mainly down to the EIA inventory stats. Whilst crude drew 1m barrels which was close enough to the whisper, it was the gasoline numbers which showed a build of 1.5m barrels that put the cat amongst the pigeons, a draw of 1.9m b's was forecast. With a rise of 1.9% to 92.9% refinery rates were indeed high but no more than can be expected given that we are only about a month away from the start of the driving season. Interestingly, distillates drew by 2m barrels showing that the product markets are in a bit of a quandary.

Amerisur Resources

The good news from AMER just keeps on coming and today's announcement is no exception. The well on Platanillo-22 has flow tested at 613 bopd ‘materially' in excess of the pre-drill estimates of 300-400 b/d. (it was also slightly better crude at 31.5º API than the main Platanillo field) The crude is already on production and is being trucked the short distance to the OBA pipeline. It gets better, it seems that PAD 2N is a separate closure to the PAD 3N and the greater Platanillo field and the oil/water contact is deeper than the main field.

Accordingly, the PAD 2N recoverable reserves are now calculated at 7.82mmbo up from 1.4m and with the rig now mobilising to drill Platanillo-21 from PAD 2N more good news might be around the corner. The shares are up 7% on the news but at 22.5p are still significantly undervalued.

Jersey Oil & Gas

Results today from JOG and like all results they are history and more so as it is a company with all in front of it. New news since the period end is that mean prospective recoverable resources are at 162 mmboe up from 118m and the COS is up to 29%. With the various carries, the company is fully funded for the drilling programme and it is still out there looking to buy some production. The shares which are in the bucket list, have been strong this year as the market prices in the chance of a success at Verbier, with the ‘lucky' Transocean Spitsbergen on their  side, the next few months promise to be an interesting ride.

Thalassa Holdings

After yesterday's  announcement I picked up the phone this morning to Duncan Soukup to try and catch up on what exactly is going on. Always a refreshingly honest and intelligent view on the oil market is forthcoming and today was no exception. There are discussions ongoing about a potential sale of either WGP Group or ARL although I get the feeling that DS wouldnt shed a tear if nothing were to come of it. The company has a terrific record at the moment with activity in most key areas of the North Sea which gives predictable cash flow and of course ARL has potential across a much broader bunch of sectors than just oil  and gas. Always an interesting ride, whatever happens to THAL you know that it is in good hands.

Echo Energy

I attended the EE strategy launch on Tuesday but most of the presentation had been in the announcement that I wrote about then. Briefly, the aim is for EE to become a mid-Cap Latin American exploration company focusing on a regional gas strategy in certain key markets. Initially the suggestion  regarding countries appears to centre on Bolivia, Brazil and Colombia but nowhere has been ruled out as many potential deals are clearly being evaluated.

The question on everybody's lips was whether, with its similar management and cornerstone investor, Echo is going to be another Sound? There is no doubt that as they describe it ‘the DNA is cloned from Sound Energy' with its technical focus, and gas based agenda similarities will be clear. Greg Coleman stays on as CEO from IRG and he has experience in the region as do other members of the board coming over from SOU as non-execs. Chairman James Parsons has spent a long time in Brazil and Stephen Whyte has long time regional experience with Galp, BG and Shell. Also on the board is Marco Fumagalli who is the Founding Partner of Continental Partners who cornerstoned Sound and is performing the same task here. Expect more directorial and operational appointments as the company looks to open its first regional office, probably in Bolivia.

And finally…

The Lions touring side for the summer has been announced and as one might expect contains plenty of surprises. To look at it one could hardly guess that Wales came 5th out of 6 in the 6 Nations Championship this spring, only above Italy who were to be frank, only making up the numbers. Former Wales coach Gatland has certainly looked after his own…

No luck for Barca last night who couldnt score in either leg and went out to a highly organised Juve whilst Monaco also progressed and look likely to score all the time. Tonight the Red Devils host Anderlecht in the Boropa Cup, maybe the only way in the CL next year…


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