Posted by Malcolm Graham-Wood - Malcy's Blog
Another up day for crude, whatever next? Well actually a down day probably as the API stats which came out after the closing bell were rather disappointing showing a build of 851/- barrels when the scribblers had forecast a draw of 2.6m barrels. Gasoline built too, by 1.4m barrels so today's EIA numbers will have to go some to keep the buyers back in town. Having said that the CFTC numbers I mentioned the other day show that there is a big short position built up and with the month, the quarter and the half ending on Friday who says that they might close out a few of those positions…? Also it seems that the data from Russia is quite encouraging, recent stats show that production is more than 300/- b/d down since Q4 2016.
Victoria Oil & Gas
A welcome drilling update from Logbaba which is very encouraging, drilling here is by its very nature slow and expensive but in more ways than one, groundbreaking. So far VOG has discovered net sands of 100m in La-108 and 35m in La-107 which has already ‘exceeded expectations' with more drilling to come that should increase net pay. For La-107 a 300m high pressure flowline has been built (which was under way on my recent visit to site) and will deliver to the gas processing plant. After various consultations, La-108 is ready to side-track and after work is completed at La-107 the rig will be skidded back there and both wells are expected to complete 3Q 2017. The key now is in getting all the gas ‘behind the pipe' and ready for production in the next quarter.
I know that I have been banging on about VOG and its potential market but this must not be underestimated, with demand in Douala alone of 150 mmscf/d the company is in a very strong position indeed. This drilling programme has indeed been long and expensive but it is incredibly rewarding. Assuming a new long term deal with ENEO, and the signing up with the plethora of industrial clients, some of which we met on the visit, the gas that will now be delivered from Logbaba will be truly value added. Combine that with potential future supplies from Bomono, which will also service the ever growing Douala and you have a true utility with a massive opportunity in Cameroon and beyond. The stock is way too cheap in my view.
News this morning that Providence have finally got the Stena IceMax on the move and is mobilising and will be at Druid/Drombeg on July 3rd will send shudders up the spine of all concerned. This well means so much, not just to PVR and all concerned there but as a frontier well of international significance. Everything now is pretty much in place and the knock-on effects will be felt across the industry should this be a success…
A trading statement and operational update from Tullow this morning which is a bit mixed. The good news is in the financials where debt is reduced post the rights issue and capex is down and the refinancing of the RBL expected later this year. Operationally, work at Jubilee continues and will do so for some time although TLW are insured for that…TEN production has been 50/- b/d and could be 80/- b/d but it too will have a short shutdown in the process. Work in Kenya continues with TLW and partners drilling four exploration wells and getting underway with the FEED work for the field development. With the exit from Uganda TLW is a smaller and cleaner beast although still suffering from operational difficulties, overall it is in good nick though and should start to reverse the recent bad performance albeit modestly.
Petrofac released a trading update yesterday that was upbeat, $13bn of backlog is good and as usual the engineering businesses were very good and IES poor. PFC is attempting to carry on as normal although the SFO enquiry must be a weight on their shoulders, others in the spotlight seem to be avoiding the glare…
Echo Energy announced yesterday that Will Holland joins as CFO. With international experience he will be a safe pair of hands and is another joiner from Sound Energy.
Ascent Resources announce that Pg-10 is going fine but that Pg-11A has been delayed whilst waiting on a coiled tubing unit, you can never find a coiled tubing unit when you want one. The delivery to INA has also been delayed this time due to the late delivery of a non specified part. All ok but just running late, Manana as they say in Slovenia.
Northern Petroleum or as they say in all the best Italian bars, Cabot Energy. Changing one's name is usually the last refuge of a scoundrel but in this case I think that Keith and his team are right to put recent history behind them, hang the expense, get new branding!
The long running changes at InfraStrata came to a head yesterday and the board was removed with Adrian Pocock and Peter Wale taking over as CEO and Chairman respectively. I met these guys a little while ago and they do have big plans for the company which may be cheaper than those currently available…
Yesterday I managed to persuade Peter Levine, Chairman and CEO of President Energy into the hot seat at TipTV for an interview, here is the link…
Also I went into IGTV and had a chat with Jeremy Naylor about the 2017 bucket list which as you know includes IAE-SOU-BLVN-VOG-FPM-AMER-HUR-PMO-JOG-SDX-PANR-RKH-FAR-AEX and we went through all of them, performance pretty mixed as you might expect. The link to this one is below…
Hard times for the England Under 21's last night in Poland as they lost their semi final with Germany, yes on penalties…
The Lions drew 31-31 with the Hurricanes and those who watched said that the only two outstanding players were in the second row with Laws and Henderson both making a case. What a shame that we seem to have about 5 brilliant locks all who could grace the side.
And the Muzzmeister is top seed at Wimbledon although recent form may not see him in the final against Djoko but then he's not actually on fire either…
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