Posted by Malcolm Graham-Wood - Malcy's Blog
The edging up of the oil price on friday meant that the week ended up +$1.61 for WTI and +$1.74 for Brent. The best was yet to come as at a meeting in Beijing it seems that the Saudi and Russian Oil Ministers have ‘seen the need to prolong the current deal through the first quarter 2018'. As I write both crudes are over a dollar up at $49.04 for WTI and $52.05 for Brent. Now, little confirmation on the detail of the agreement has yet been announced but if this is a genuine agreement then I would expect the price to rise more as these two heavyweights will carry the rest of the group with them. Having said that, the usual large dose of cynicism will undoubtedly exist and proof of the pudding will be demanded by the market.
A trading, operational and refinancing update this morning ahead of wednesday's AGM, the period covers the first four months of the year. The good operational performance continues with production of 82.6 koepd,up 44% on this time last year although guidance remains at 75/- for this year excluding Catcher and until the summer maintenance plan is fully known. Solan remains a basket case but Catcher is on time and will deliver first oil this year, indeed with good results from the wells drilled already there is some thought being given to increasing the FPSO capacity.
Operating costs are $13.7/boe which is 11% below budget and well below FY guidance. Capex guidance for this year is down from $390m to $350m partly due to Solan whilst the FEED contracts for Tolmount have been awarded ahead of sanction early next year. Sea Lion is expected to be sanctioned in 2018 which remains a disappointment but it is-just- still on the agenda and might move faster with a farm-out. The company, or at least its engineers, are excited about the high risk/high reward Zama project in Mexico and that well is expected to be drilled this month. The refinancing implementation is underway, net debt is $2.8bn after ‘marginally positive cash flow' in the period. I have to say that I still think that things are going fairly well for Prems and with a chance that the oil price might help them out, the good most definitely outweighs the bad and with projects such as Tolmount and Sea Lion to follow Catcher the future is indeed rosy…
Echo has announced this morning that it has signed its first institutional funding with an enlarged loan on the same terms as announced before. Greenberry has agreed to subscribe for €20m with the right to purchase another €5m on the same terms with the warrants as previously announced. With a potential £26m of cash after the equity raise later this month, the company is well set to deliver on its aim of acquiring assets in South America as part of its Latin American gas strategy.
Ophir has announced that the Ayame-1X well offshore the Cote D'Ivoire is dry as although oil was encountered it was not in commercial quantities. At a recent meeting with the company there was optimism for this well but it really was always a wildcat and life goes on.
In the Premiership the top five all won at the weekend, (Man United must be tired of going to a stadium that is being closed down at the end of the season), so it looks like the Gooners are hoping that the Noisy Neighbours will slip up in at least one of their two remaining games and let them qualify for next year's Champions League, those teams are the Baggies and the Hornets, ho hum…
Lewis steamed past Sebastian Vettel to win the Spanish GP so closing the points gap, this is going to be fun, Monaco up next in two weeks time where anything could happen.
Sarries won the European Champions Cup and head for the Premiership semi-finals on saturday with much to prove…
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