Opinion

Oil price, Amerisur, Genel, Plexus, Links And finally…


 

Oil price

Onward and sedately upwards, the oil market takes note of the near 400/- b/d closed in from Kurdistan although not panicking as surely some agreement will be put in place. Chatter that the Opec/Non-Opec agreement might be extended through the whole of 2018 also supported prices but quite when that will actually decided is uncertain, maybe best kept for when they need a ‘good news moment' as Alastair Campbell might have said…

Finally the EIA inventory data was also modestly supportive, crude oil drew 5.7m barrels against expectations of 3.9m but with refinery rates falling by 4.7% the product market was mixed. This is the time of year for refinery downtime for pre-winter maintenance made more complicated this year by the hurricanes.

It was 30 years ago today that the crash wiped 508 points off the Dow, the previous few days had seen carnage in London following the great storm and the financial meltdown continued that week, surely it couldn't happen again…

Amerisur Resources

An operational update this morning from AMER where much is going on at the moment. Platanillo-25 is complete, it was drilled south-west of Pad 2N and found 10′ of U sand maybe slightly less than expected owing to shale content but a sidetrack will now aim nearer Plat-21 for imminent production. Finding 3′ of N Sand was encouraging and should bode well for the drilling of the N Sand anomaly where the target is a substantial 18.8 MMboe. Next up is the Plat-27 well, it will be drilled before the 23 well as the 25 data is assessed and will be north of Plat-22.

Finally as will always be the case here there are a number of general housekeeping items to tidy up wells and increment longer term production at Platanillo. Concluding the work at CPO-5 is almost complete and I expect the LTT to be under way by the end of this month.

All this means that most importantly the 7/- b/d target for year end production is still on track and with such a substantial drilling programme rolling out over the next 14 months there is still significant upside on offer.

Genel Energy

An update from GENL today with 3Q production at 33,810 and 9m of 36,030 with Tawke going very well especially following success at Peshkabir. Taq Taq remains a different story and despite more drilling appears to be in the doldrums. The RSA appears to be working well albeit at an early stage, for the long term it is by far the better option and backs up my more positive recent stance on the company. Financially the positive free cash flow means that debt is being reduced to $138m and cash reserves are $268m. Elsewhere the KRI gas assets are still in farm-out negotiations and the updated CPR for Miran and Bina Bawi is expected shortly.

Plexus Holdings - Validation times-come on!

Plexus has sold its niche jack-up business to TechnipFMC for £15m rising to a potential £42.5m. This in one fell swoop validates the POS technology built up over so many years. The company will now be a specialist IP business and with a significant market outwith the jack-up area should still be a decent company. Over the next three years POS will be left with the earn-out, work in Russia and the CIS, all applications in such areas as production, in fact anything outside exploration which is still huge.

This deal is genuinely all about IP and how one of the leading service company giants has finally acknowledged that POS has made itself the market leader in this technology. Held back by the 2015 market shake up this looks at first glance to be a good deal for POS and of course they have a substantial collaboration agreement in areas such as new technology for decommissioning etc. Although it may not be all shareholders idea of perfection, to me it looks fair enough, at last it is not just Plexus and their clients who are saying that they are the best in class.

121 Oil and Gas Investment Conference

I know that there are a lot of conferences around the world but the 121 event in London looks like an interesting new concept. I have no involvement other than being a panelist and moderator on the first day but it is worth taking a look at the format.

It takes place on 30th and 31st October in London connecting institutional funds, analysts and sophisticated investors with exploration and production companies for two days of CEO presentations, investor led panels, networking sessions and 1-to-1 meetings.  The conference themes draw on the opportunities and trends shaping investment in the upstream businesses, with over 25 E&P companies from AIM, ASX, TSX and some private companies participating.  The key institutions and private equity funds will be speaking in the conference about their strategies and the more bullish outlook for oil and gas as the year closes out.

Sophisticated investors can attend the two day conference for free by registering for a pass here: Investor registration for 121 Oil and Gas

Link

I recently did a couple of interviews for Interactive Investor about general oil industry stuff, they are below.

Interactive Investor interview: Industry insight: $60-plus oil

Interactive Investor interview: Industry insight: $60-plus oilInteractive Investor interview: Can small-cap oil shares continue to rally?

And finally...

The Yankees have won their three home games against the Astros to take a 3-2 lead in the ALCS. They now go back to Houston to finish the series. The Cubs managed to stay alive last night after they edged past the Dodgers to win their first game of the series and make it 3-1. One more game in Chicago before they go back to LA.

In the Champions League the Red Devils won at Benfica, Chelski got a 3-3 draw with Roma whilst Celtic lost 3-0 at Bayern Munich. For them it is to ensure they get that Boropa Cup spot by being third in the group of death.

Talking of the Boropa Cup, tonight the Gooners are at Crvena Zvezda, easy for you to say whilst the Toffees host Lyon.


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