Opinion

Oil price, Faroe Petroleum, Premier Oil, Chariot, Empyrean Energy And finally…


Oil price

Hurricane Harvey has wreaked havoc in Texas over the weekend, production was halted both offshore and at onshore shale operations but the flooding has probably impacted the refineries more. On Friday the crude price rallied as production fears were highest and the rig count showed a drop with the likelihood of more cuts to come. However yesterday crude fell and product markets rose significantly as Shell, Exxon and Motiva amongst others closed refining capacity, with Harvey still around and headed back into the GoM and then possibly back onshore, it may get worse before it gets better. With refining capacity down by as much as 3m b/d and exports halted it may be an ironic side effect that local crude builds (depending on how long onshore shale production is shut in for)  and gasoline and distillates will get shorter. Whatever the makeup, inventories will be harder to read in the next few weeks. Finally a number of pipelines have been closed in for both crude and product so distribution problems will add to the mix.

Faroe Petroleum 

Faroe has announced that the Goanna well has commenced operations, 39/9-22 S is an exploration well in the North Norwegian North Sea targeting a structural and stratigraphic prospect of Upper Jurassic Munin formation sandstones. FPM are fully carried on this well which is a huge bonus as is the cluster of huge fields in the nearby Tampen area.

Premier Oil

Premier has announced that the BW Catcher FPSO has sailed away from Singapore and should be in the North Sea in around 45 days. Assuming that Prems can avoid the problems others have encountered whilst commissioning similar operations first oil and significant ramp up is expected by the end of the year.

Chariot Oil & Gas

Chariot has announced this morning that, having had no luck in securing a farm-in partner for its Namibian Southern blocks it is walking away from this project. It remains interested in that the remaining partners have left them with an option over 10% of ground floor equity but that is a poor return after so much hard work. This is a difficult one to call, CHAR followers of old will be going mad about relinquishing what used to be a jewel in the company's portfolio but management has of late been pragmatic given the change in industry attitudes to technical risk. Clearly they havent got the wherewithal to continue to operate on so many fronts and will concentrate firepower on the Central blocks as well as in Morocco and Brazil. I continue to believe that the run up in the spring was too early and whilst Larry and the team are doing a great job there is still quite a wait before positive news is tangible.

Empyrean Energy  

We are being drip fed information from Dempsey, today's news is that there are significant gas shows across multiple zones in the well which adds to last week's positive announcements. Whilst one cannot judge it until the deeper prospects have been tested I remain extremely positive as I am sure that this well is already a decent commercial discovery with a proper amount of upside. It looks like Tom Kelly has done it again, if so the shares are way too cheap.

Voxmarkets Podcast

Last week I did my usual podcast but my incompetence meant that it has only just gone up on the website… So below is a link to my chat on Gulfsands, Victoria Oil & Gas, Jersey Oil and Gas and Empyrean Energy.

VOX Markets podcast: Malcy on Gulfsands Petroleum, Victoria Oil & Gas, Jersey Oil & Gas and Empyrean Energy

And finally…

Well what a weekend of sport that was….Difficult to know where to start but here goes.

F1 was back and a really exciting race, after the safety car it looked very much like Vettel was going to pass Lewis but he held on, Monza next week, a ‘home race' for the Tifosi…

The British MotoGP produced a cracking race when Andrea Dovizioso defied the odds to win his 4th Grand Prix this year. Rossi led for most of the race before being picked off by Dovisioso and Vinales to finish third. Pole position Marc Marquez had also been challenging when he suffered a rare engine failure, his first since joining Honda in 2013, costing him and Honda the Championship lead. Consistent Cal Crutchlow was again the first Honda home in 4th and Scott Redding rode well to 8th position. In Moto3 John McPhee could only manage 13th, pushing him down to 6th in the World Championship.

The test match is full of twists and turns, after a lousy start England came good in their second innings after the Windies had dominated with the bat but failed to catch catches..Rarely today's final day could still produce all three results…

In the Prem all sorts of fun happened, for those fans who like to pay to go and watch Mike Dean he repaid their faith by totally dominating proceedings and showing what a ‘poor' ref he really is, its not about you mate. He played Dean time so the Cherries lost to the Noisy Neighbours and then got the red card out for good measure, what a joke. Elsewhere the Red Devils stay at the top after beating the Foxes and Chelski beat the Toffees at the Bridge. At Anfield the HubCap Stealers beat the abject Gooners 4-0, it might have been 8, remember what I said last season about keeping Wenger being great for the rest of us…..Finally Spurs were again held at fortress Wembley, by Burnley.

And of course for all of us who stayed up or got up to watch the action in Vegas the result was totally predictable, McGregor hardly got close despite offering false hope by winning the early rounds, as expected Mayweather won exactly when he chose to and even ‘allegedly' had $400,000 or more on himself to win at the correct time.

Finally for long term readers they will know that today is an anniversary of sorts, 38 years ago today I started life in the oil sector by joining the legendary WoodMack up in Edinburgh, it was a fine place to start and is still market leader in its field.


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