Posted by Malcolm Graham-Wood - Malcy's Blog
Watching from afar it looked like that all sorts of panic was around in the oil market during and after the Opec meeting but prices are only off less than a dollar from when I left and that includes Brent expiring. From what I could read the meeting was a success but the marché suffered from a bout of travelling and arriving syndrome. What would have been a good settlement by extending the deal until March was deemed to be inadequate as the were no further cuts. Add to that Libya pumping hard, maybe at 800/- b/d and the US still rising the bears had a good day or two but who might win longer term? With global demand rising by more than the US can grow it's shale production it seems that stocks will draw solidly in the second half of this year.
My old friends at the AAA have also indicated that this Memorial Day weekend was a very big one for driving miles, you have to go back to 2005 for a better one so keep an eye out for the inventory numbers across the board.
Confirmation this morning of Lamprell's JV with Aramco, Bahri and Hyundai to set up a maritime yard for the construction, maintenance and repair of offshore drilling rigs and vessels. Lamps will invest $140m for a 20% stake of the capital with the facility scheduled to be partly opened by 2019 and fully open by 2022. With a minimum of 20 jackups and 52+ vessels this should create significant opportunities for Lamprell, not just for the JV but through potentially significant work for Saudi through the UAE yard when pre-qualifying status is gained.
SDX has announced the flow test results from the SD-1X South Disouq well, with 82 ft of net pay with 25% porosity the well was indeed a beauty. It flowed at a stabilised rate of 25.8 MMscf/d through a 48/64″ choke, restricted by land facilities, which was significantly above pre-drill estimates of 10-15 and had no water or sand which bodes well for production. A degree of sensitivity was used as locals were observing Ramadan so flare and noise was kept to a minimum and condensate samples were also taken. The company has come away with a lot of data to work on and must be delighted that this has gone so well with much more to come. Away from Egypt work is moving fast in Morocco and keeping Paul Welch and his team busy, and very happy.
John Wardle and his team in Colombia have been very busy whilst I have been away and I was quite surprised that the shares havent already gone significantly higher. The Platanillo-21 update showed a 36′ net oil column in the V sands and a 17′ one in the T sands whilst further potential is being evaluated.
The Mariposa-1 update was even more exciting, as this could be a real monster on the CPO-5 block as indicated recently. A flow rate of 4,601 b/d of 40.8° API crude on a restricted choke is exceptional and the well will be shut-in pre a long term test. This size of discovery should add significantly to the company's long term production targets and make what might have seemed a daunting prospect all of a sudden genuinely realistic. I am increasingly confident about upcoming newsflow having seen such good news in recent weeks.
Echo has announced that lender Greenberry has completed its sales process and has a total loan of €20m making a combined £26m of cash. The company has been highly active in assessing a number of attractive projects in South America and investors can expect to hear news before long about its strategy.
In other news around in my absence I noted that IGas have completed their Section 106 agreements for both Springs Road and Tucker Lane which bodes well for upcoming activity in the portfolio.
Faroe has announced the spudding of the Brasse appraisal well, this will be important in assessing the extent of the field and potentially increasing the size of the development.
Europa Oil & Gas is raising £2.1m through a placing at 6p and an Open Offer for a further £1.5m which should go a long way to financing the seismic work on the Irish Atlantic margin which is potentially huge but very expensive…
Petrofac has gone off big time while I have been away and with the COO suspended and having resigned from the board something looks very wrong. Having said that the company has set up a committee to engage with the SFO in its enquiry but it looks like a bit more than a little local difficulty…
And Touchstone Exploration has been in town, coming to the Aim market and raising $2.552m via private placing at 7.25p. Touchstone is another Trinidad play to add to the growing band of opportunities in the area.
As revealed here some months ago Arsene Wenger has been given another two years in charge of the Gunners, something that won't please all the fans but probably will delight the rest of the League…
Again while I was away, the Red Devils beat Ajax and collected their third trophy of the season but more importantly a Champions League spot which won't this year include the Gunners who will be playing on Thursday nights…
Huddersfield will join the Premiership and be a joy to visit, may be worth a flutter on total points, may do well…
The America's Cup team GB ended their awful starting run by beating Sweden, qualifying should be possible but the setup looks pretty flaky just now.
And of course I was indeed in Monaco for a few days watching the Grand Prix where Lewis had a shocker as they couldnt set up the car and Ferrari did the dirty on Raikkonen bringing him in early to give Vettel the advantage.
And I was going to have a word about BA who were truly atrocious yesterday and who should get rid of both Walsh and Cruz but its hardly worth the bother…talk about blowing the brand…
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