Oil price, Faroe, Hurricane, SDX Energy, Chariot, Xcite, And finally...
Date
6/19/2016 7:57:00 AM
(MENAFN- ProactiveInvestors - UK) Malcolm Graham-Wood, Thu
WTI $48.01 -48c, Brent $48.97 -86c, Diff -$0.96 -38c, NG $2.60 -1c
Oil price
With the Fed staying put on rates and reducing US growth rates again there was unlikely to be any positive impetus to knock on to the oil price. After the API inventory stats the night before all was predicted to be gloomy and so they were, crude drew only 933/- barrels against a forecast of something over 2m. The market had a frisson of excitement over the gasoline number where the draw was bigger than expected but that soon petered out and the market returned to drift downwards.
Faroe Petroleum
It''s been a while since Faroe brought a well in and today''s announcement from Brasse is welcome in that respect. The company announce an oil and gas discovery with 18m of gross gas bearing and 21m of oil bearing Jurassic reservoir analogous to the Brage field 13 km away. With good quality reservoir sandstones the company will now drill a sidetrack to confirm hydrocarbon contacts, still a strong favourite in the bucket list.
Hurricane Energy
I have written a fair bit on HUR lately all of which was covered in depth at the Capital Markets Day on Tuesday. Save it to say that the team explained in some detail the nature of the imminent drilling programme including taking a look at the Victory sandstone which I hadnt expected. The pilot well and the horizontal should provide enough data to take the programme to the next phase. The company detailed the EPS Development which should go to FID next year and planning for lift etc is very much under way. Of course at that stage there will be a further need for funding but the way they are going at present all options should remain open to them.
The meeting was well attended and those who stayed to the end got the most rewarding part of the presentation as Dr Trice explained the ''Conceptual Impact to Resource Range of demonstrating that the 2C ODT is within a continuous Oil Column'' thus making the potential of the discovery more substantial than even I had expected. This would of course mean that the EPS could be treated as the first stage of a significant field development with al that entails. The link below is the interview that I subsequently did with Dr Trice on TipTV, I think that it nicely encapsulates all of the above.
Tip TV CEO Interview: Hurricane Energy''s game changing potential
SDX Energy
SDX has announced that it has withdrawn from its offshore Cameroon concession which is not a core asset and they will no longer be investing in it. This to me sounds extremely sensible, after the recent well which showed possible promise, the operator requested a one year extension which was not only refused by the authorities but they even asked the company to enter into another exploration period requiring another well commitment, something the company was reluctant to agree to. SDX is a very interesting play and with its recent listing on Aim and an interesting Egyptian development and exploration portfolio should be very much on investors radar screens.
Chariot Energy
Chariot has also announced that it is withdrawing from a licence, in its case the C-19 licence in Mauritania. This would have been done with a heavier heart than above but with no less commercial and financial reasons. Chariot prides itself on its portfolio management and not having any more commitments than it can sensibly afford. After all the hard work on Mauritania it would have been better if they could have found a partner but without 3rd party corroboration of its potential have undoubtedly done the right thing.
It is not all bad news though, the company has also announced that it has converted the Mohammedia permits into exploration ones and these have potentially substantial upside. In addition the commitment here is the sole world wide one in the whole portfolio. Overall this is good news for Chariot, at these times companies must remain hard headed with regards to assets and their economic feasibility, there is no room for sentiment.
Xcite Energy
As I wrote the other day the company''s bonds are due to expire imminently and today the announce that they have received a summons to a bondholders meeting on 30th June. Unless something can be accommodated it looks like equity investors will be to a potentially large extent be wiped out, the long awaited farm-out is still nowhere to be seen.
And finally
It''s Ladies Day at Royal Ascot and the Irish are confident that they will this year lift the Gold Cup.
And a crucial day at Euro ''16 as England play Wales and Northern Ireland take on the Ukraine. Wales are more confident, a draw probably ensure safety, anything better and they win the group. France are through though and singing ''Nous avons Payet, Dimitri Payet'' as if they were HammersTo finish today it''s Poland v Germany always tasty that one
And it was sport really watching P Green in the soup yesterday at the House of Commons although he did reprimand one of the fairies for looking at him in a nasty way. He also sold out on the Vampire squids which means he isnt all bad especially as senior squid is trying to get out of testifying
Malcolm Graham-Wood