Posted by Malcolm Graham-Wood - Malcy's Blog
The oil price rallied yesterday on no particular reason, Opec production was up a little but mainly due to Nigeria and Libya who are outside the agreement. The API stats which come out after the close were poor showing a build of 2.8m barrels of crude and prices have dropped modestly this morning. All will depend on the EIA tonight, if they confirm a build prices will undoubtedly retreat.
Potentially very good news from Sound this morning as the first news from Badile is good. The well has reached its primary reservoir target and found ‘significant gas shows' at 4,375m which is most encouraging. They have suspended drilling ahead of running the 7″ liner after which they will proceed to the rest of the reservoir. The company are correctly warning investors not to get carried away (some chance) until the full results are known. Having said that, if this was to come in then the last few years would have been worthwhile, a long time ago I remember having 50p a share in for Badile, i'm not going to change that now although it will need tweaking depending on the results.
RKH has announced news on Sea Lion and in Egypt this morning, overall potentially good on both fronts. At Sea Lion the FEED has made substantial progress and work has de-risked the development. A number of oilfield service companies have expressed interest in potentially providing funding which is helpful and all being well the project might be sanctioned in 2018. At Abu Sennan the Al-Jahraa SE-2X well was dry in the primary target but has been sidetracked and the company is optimistic about finding oil and putting this on as a producer. Expect news from the Al Jahraa-9 development well in August which could provide more positive news from the area. On positive news RKH has received a $5m payment from the receivables file making $6.4m so far, a very acceptable return in the circumstances and the cash sum in the balance sheet is now $63m. I am not expecting any news on Ombrina Mare for a while so nothing on that front.
News is also flowing thick and fast from PPC, investors who have forgotten about this share might like to revisit, Peter Levine is a man on a mission at the moment. Today's update is from Puesto Guardian where workovers have been progressing with the first two wells producing at higher than expected rates of 100-150 bopd whilst the third is suspended with more work needed on the casing. I am assuming that following that a workover will be completed here too. Indeed with Dos Puntitas being converted to a water disposal well options are all on and the company seem very relaxed with its target of 1,200 bopd by the end of September.
An old friend, Enteq Upstream has results today and due to cost cutting and generally careful progress the losses are reduced. The company say that they have retained a ‘sustainable business in difficult market conditions' and have looked after the cash, they still have $15.3m for sunnier days. Another one to keep an eye on…
Bahamas Petroleum have raised £2.6m through a placing at 0.002p a share which might be more when the directors come out of purdah. 70% of the money is to maintain the licences and the company remain confident about a farm-out in due course. I havent abandoned BPC and have requested a meeting, let's see how that goes.
France v England last night was 3-2 but extraordinarily flattering to England who were very poor against 10 men for half the match. With only a year to go until the world cup things are looking worse than expected…
The semi finals of the cricket are upon us and England take on Pakistan today having finally ditched out of form Jason Roy for Jonny Bairstow.
And i'm away for a couple of days but not totally out of contact should anything happen, in the meantime the US Open starts tomorrow and I notice that the rough has been shortened even more to make life easier for them…
Finally, with apologies I have a lot of emails stacking up and will not be able to reply to all of them. I can if possible but am not able to give individual portfolio advice, I simply dont have the time but answer questions where I can.
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