WTI $58.36 +27c, Brent $64.90 +34c, Diff -$6.54 +7c, NG $2.60 -4c
Oil continued its rally yesterday, but not before a shaky start when Ineos announced that the Forties pipeline would be repaired by Christmas and restarted in full in January. The rally was brought on by a statement from President Putin and King Salman in which they reiterated their energy alliance.
This had been put into some doubt as talks of a plan to move away from production restraints had been aired. Given the weaker demand in the first half of the year nothing, but a second half consideration of this will keep the oil price at these levels.
My old friends at the American Automobile Association have forecast that 97 million road trips will take place this holiday season and, with gasoline coming down in price, the highway is your lobster Rodney.
Savannah Petroleum (SAVP) has finally announced that they have completed the book building operation and closed the placing, no small feat in the week before Christmas! They have raised $125 million by placing 266 million new shares at 35p with one warrant for every two shares applied for.
The raise is to fund the cash element of the acquisition of some of the assets of Seven Energy, the Niger drilling campaign and for general funding purposes. CEO Andrew Knott who, with his team, must have worked tirelessly on this deal for many months, said that this would be ‘a transformational acquisition for Savannah’ with which I would concur.
Expect much operational news flow from the company in the new year, including the upcoming Niger drilling in the near-term, which the market has been looking forward to, and, of course, the company will start paying a dividend in due course.
SDX (SDX) continues up until almost the final Advent window has been opened, today announcing that they have commenced operations on well ELQ-1 on the Gharb Centre permit in Morocco. This is the first of a two well commitment programme on the permit which is adjacent to the Sebou infrastructure. The well will take 15-20 days to complete and the company notes that the KSR-16 well is expected to be connected to infrastructure next week.
Rockrose Energy (RRE)announce today that they have completed the Egerton and Sojitz acquisitions, which will give them aggregate 2018 production of 5,250 boe/d. This year has been a good one for RockRose, with a number of good production deals being concluded and I wouldn’t be surprised if 2018 didn’t see Andrew Austen continue with more of the same.
A huge welter of sport coming up in the next few days, way too much to mention. Ironically, the best game of the period is probably tonight when the HubCap Stealers visit the Emirates to play the Gooners. Due to the fixtures being manipulated to avoid long journeys, not many really significant games appear to be scheduled.
Of course, prison cells permitting, the England cricket team should all show up on Boxing day to play the fourth test in the already lost Ashes series…
Best of all go to Kempton Park on Boxing day and the day after to watch a fantastic couple of days racing headed by the King George.
All that remains is to thank everybody for reading the blog over the year. There will be blogs next week, but only for important announcements one of which must be the Christmas Day first oil from Catcher… I would like to wish you all a very Happy Christmas and a peaceful and prosperous New Year.
Malcolm Graham-Wood is an independent oil industry expert and freelance contributor, not a direct employee of Interactive Investor.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. 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.