Posted by Malcolm Graham-Wood - Malcy's Blog
That was the week that was, even after the rally on Friday, both WTI and Brent were down the best part of three bucks on the week. As I said before, it was a momentum thing and the data showed that money managers did indeed follow the bear and took money off the table. Some people find it difficult to grasp that a few small influences can, at least for a while, change the nature of the direction, add a hedge fund shorting and away you go…..
Over the weekend the Saudis in particular have shown confidence that Russia will extend supply cuts and their Opec Governor has said that they are ‘close to an agreement'. They had better be as if for any reason it wasnt to rollover now then last week's fall will be as to a drop in the ocean…
The long-awaited HUR CPR has arrived but is little more than a damp squib in my view. Only for Lancaster, it expects recoverable volumes of 523mmbbls up from 207 and OOIP is 2.3bn barrels depending on recovery rates, to make life more confusing both rr's are calculated on a different basis. I would have thought that 25% was a decent working number and quite possibly a touch conservative but that is just how the company are approaching the whole EPS process, most commendably IMHO. After that and way before the RPS ten year EPS case, numbers will have been firmed up and most likely will be part of a full field development. Overall, with all the areas yet to be assessed, Hurricane is sitting on a likely 2bn barrels + and with plenty of work to keep them busy for the foreseeable future are still incredibly cheap.
The news just keeps on coming for SAVP as today sees the announcement of signed drilling contracts with the Great Wall Drilling Company for a three well programme and a further six options. All systems are go for SAVP now and with a Capital Markets Day on June 7th and a retail event to follow all we really need after that is a spud date. Andrew Knott and his team have prepared meticulously for this scenario and I am sure that the share price will rise appropriately…
Europa Oil & Gas
Another CPR, this time for EOG where ERC has found two new ‘significant' prospects in Lo 16/2 offshore Atlantic Ireland in the South Porcupine Basin. Called Edgeworth and Ervine they add gross mean un-risked prospective resources of 251 mmboe and 302 mmboe respectively. Put together all EOG's resource numbers and you get to 4.7bn boe and 1.5 TCF over all seven of the company's Irish Atlantic margin licences, hopefully partners are not far away, they are likely to be nearer after the Druid/Drombeg well later this summer livens up the market.
In its constant quest to be governance and regulation friendly, AMER has announced the second Non-Exec in the space of a few days. Enter Alex Snow, former rugby player, CEO of Lansdowne and latterly of Evolution and Investec, he brings much needed experience including that of a substantial institutional investor to the board.
Kosmos has announced this morning a ‘major' gas discovery in Senegal with its Yakaar-1 well in the Cayar Offshore Profond Block. With a 120m gross hydrocarbon column and 45m of net pay, the find is believed to add 15 TCF to the bag and the well results confirm the presence of thick, stacked, reservoir sands over a very large area with very good porosity and permeability.
Apart from the find itself, the find further verifies the status of the area, the West African coast is currently very hot as recent activity has shown. BP is trying to buy more of this via the T*mmis deal, Total are buying, FAR is buying in The Gambia and CNOOC has joined forces with them whilst other bargains are being rumoured almost every day. In the meantime the resignation of the Senegal Oil Minister has complicated matters and added further piquancy to an already spicy dish…
This weekend in the Prem nothing was decided except that Spurs are living on a prayer after losing to the happy Hammers at the London Stadium on Friday night. Tonight Chelski can consign Boro to the Championship leaving Hull City Tigers, the Swans and the Eagles in the shake up for the last relegation spot. With the HubCap Stealers only drawing, the Gooners took advantage to catch up by beating a weakened Red Devils side 2-0, Boropa Cup, you're having a laugh…
In an exciting MotoGP in Jerez, the Spaniards reigned supreme in all 3 classes. The British challenge fizzled out with John McPhee finishing a miserable weekend by crashing out in Moto3 which was won by Aron Canet in a close finish with Romano Fenati and Joan Mir. In the MotoGp, Cal Crutchlow had a superb practice lap to start on the front row but a gust of wind caught him out causing him to crash leaving the Factory Honda of Dani Pedrosa to win from his team mate Marc Marquez.The Spanish domination was completed in Moto2 with the younger Marquez brother Alex winning comfortably. Meanwhile in Moto2 the British rider Danny Kent walked out of his Kiefer Team before the race, after just 2 races, claiming “irreconcilable differences” ….As with all divorces there could be repercussions !
And in the first brace of the home One-Dayers England comfortably saw off Ireland on both occasions, I understand that Ireland are applying for Test status…..
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