Independent oil industry analyst Malcolm Graham-Wood has seen it all. Here, he gives interactive investor his opinion on the sector’s top stories.
WTI $62.34 +$1.15, Brent $66.21 +$1.09, Diff -$3.87 -6c, NG $2.69 +1c
With a good day on Friday, the crude price ended up on the week, which not everyone expected, but all three forecasting bodies upped demand expectations, giving scope for a tighter market than might have been originally assumed.
Most commentators are still fixated on US production and, whilst it should not be ignored, it is not the elephant in the room that some consider it to be. It will be interesting to see how WTI behaves after expiry of the April contract tomorrow and, of course, after the weekly inventory stats in which the product markets will be as important as anything at the moment.
Finally, the rig count on Friday showed an increase of 6 overall to 990 units with oil up 4 at 800 units.
Columbus Energy Resources
Columbus Energy Resources (CERP) has announced today that it has re-negotiated the BOLT transaction which had been an unwanted millstone around its neck for some time. Under the restructuring CERP gets 100% and operational control of 8,700 acres of the South Western peninsula including a number of mapped multiple prospects potentially in place.
Also included is the Bonasse oilfield, which is currently producing at a very low level and will be reactivated in order to maximise production. The SWP is said to have 20-400 million barrels of oil in place, which gives the company significant upside should they achieve exploration or even redevelopment success in the area.
This includes commencing a well reactivation programme in Q2 2018 on the Bonasse field, alongside undertaking further analysis of the good quality 3D seismic and other data, all of which are fully funded under existing plans and include any payments under the renegotiated BOLT transaction.
Changes to the overriding royalty rates that have been agreed, including their timing and cap on such rates, mean that any success in the area should benefit all stakeholders. Indeed, with the company planning a reactivation programme in Q2 of this year in the Bonasse field as above, and further analysis of the 3D seismic and other data to be followed by the first well potentially being drilled in 1H 2019 prospects look very good.
The renegotiation of this tiresome contract has been consuming management time for too long now and, at long last, a deal has been struck that benefits pretty well all stakeholders, certainly CERP investors and Petrotrin which must be a good thing.
As has been seen by results from Range (RRL) and Trinity (TRIN) recently, along with a good operational update from Touchstone last week and now this, the outlook in Trinidad is very bright as I discovered in my recent visit. I expect other companies to follow suit and take analysts and shareholders out there after which I suspect they will be as impressed as I have been.
The FA Cup QF’s saw the Red Devils, Spurs, Chelski and the Saints go through and the semi-final line up is The Red Devils v Spurs and Chelski v The Saints both matches to be played at Wembley which makes it a home tie for Spurs.
The Six Nations rugby finished on Saturday as Ireland deservedly won the Grand Slam after another poor performance from England which left them 4th in the table. Wales edged France 14-13 and Scotland needed a last-minute pen from Greig Laidlaw to beat Wooden Spooners Italy.
In Qatar, the MotoGP season started where it left off with Andrea Dovizioso’s Ducati just holding off World Champion Marc Marquez’s Honda for the win. Age doesn’t seem to be slowing down Valentino Rossi who has lost none of his sparkle and finished 3rd on the factory Yamaha, whilst a tremendous ride from Britain’s Cal Crutchlow on the satellite LCR Honda earned him 4th place. The next race is Argentina.
Malcolm Graham-Wood is an independent oil industry expert and freelance contributor, not a direct employee of Interactive Investor.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company’s or index name highlighted in the article.