WTI $63.01 -$1.93, Brent $67.64 -$1.70, Diff -$4.63 +23c, NG $2.68 -5c
The chartists are giving it some this morning as they had been getting worried that all their resistance points for crude oil were being wiped out. They now see further falls back to $60 but hey, they’re chartists….
The shake out last night followed a typically dreary pre end of quarter trading spell, few wanting to put any risk-on trades over the long weekend so yesterday every bear that ever there was appeared to score some easy hits.
Various news stories helped the cause, the Saudis cut their prices to Asia, because they had to, Russia increased production but from 10.95 million barrels per day to 10.97 million barrels per day hardly moving the dial there…
Trade wars didn’t help with more backlash from China after the Donald had started a list of things he could do without and markets headed south pulling oil in their wake.
Ironically the rig count was actually a positive, rigs generally lost two at 993 but oil units were down seven to 797 if that butters your parsnips…
Savannah Petroleum (SAVP) has announced that the Bushaya-1 well in Niger has spudded.
It will evaluate the potential oil play in the Eocene Alternances as a primary target with the secondary target of a potential oil play in the Eocene-Oligocene Upper Sokor being considered to be upside.
The well will take 35-50 days and if successful will be suspended for future re-entry and further evaluation, possibly with a workover rig.
Drilling in Niger has been what the market has been waiting for, the acquisition of the Seven assets slightly held up the programme but with three back to back wells now underway exploration can begin at SAVP and it should be a most exciting play.
Good news from Wentworth (WRL) today as they announce that the TPDC has authorised payment of $3.1 million (£2.2 million) for gas sales from Mnazi Bay, payment is expected ‘shortly’.
Other good news is that the March Mnazi Bay gross production volumes are 83 million standard cubic feet per day, the highest ever.
WRL was very close to bucket list inclusion but I’m sure that will happen when the new management has settled in.
With a new CEO who will hopefully start sometime this quarter, and a new CFO whom I had a useful conversation with this morning being backed up by Geoff Bury who is still on board and of course Bob McBean the team is still very strong.
I only made a modest comment whilst on the move on Thursday but not everyone got my drift, maybe I had just seen the bits I thought the market would not like much. Since then I have spoken to Tony O’Reilly and he has put me straight on a few things….
So, his strategic bull points are easy to understand, he’s not raising any equity and the APEC led consortium including COSL whom I know a lot and JIC a little less, are paying for three firm wells plus sidetracks and testing even to potentially include the deeper Jurassic play.
Providence Resources (PVR) are not a development company and needed a partner to move forward and with a strong Chinese consortium able to take Barryroe to FID and beyond this will be a step change for the company.
A quick look at what I was concerned about, there will be no drilling until next year which seems tardy but I have been persuaded that firming up rig locations will be under way soon.
This ties in with the fact that this deal will not close until the end of the 3rd quarter which I understand, just.
No cash back still slightly surprises me but I suppose farm-outs just aint what they used to be and on that subject APEC will be loaning the money for the development to the partners which will be repaid from future production cashflow from Barryroe.
Operatorship is a slightly moot point as EXOLA stay as operator but with the rig and all the kit and the services coming from APEC I suspect that there will be strong representation from them at the partners meetings.
The bottom line is that after all these years Barryroe is now going to be developed and in a serious and well funded way.
Those of us who have been waiting for such a deal are older and greyer than when the hunt started but at least are mostly still here.
This should provide a good background for all the other things that PVR have planned for the area and we mustn’t forget quite how valuable that portfolio might become now that so many majors are in the postcode, indeed I suspect that now that the Chinese are in town they might be taking a look at other partnerships along with their new Irish friends.
PS The APEC consortium have a substantial bundle of warrants at 12p, they might like it so much that they buy the company…
In the Premiership little changed at the top, the Noisy Neighbours, the Red Devils, the HubCap Stealers and the Gooners all won, the big game at Stamford Bridge went 1-3 in favour of Spurs which I imagine has sealed Conte’s fate.
At the bottom the Baggies lost again and Pards has now moved on to one assumes another job, the rest are very much in the thick of a mighty battle.
The boxing may have been for the connoisseur but AJ did the job and will pick off further fights at his leisure, mandatories notwithstanding.
Baseball is back with a booming weekend of excitement, not covered anywhere by the BBC, even on the website..
Ian Poulter really is a showman, needing to win the Houston Open for that last Masters place on thursday he was 129th after the first day, pulled out the putter from Medina and holed a 27′ put on the last to get into a play-off which he then won. Who would bet against him at Augusta eh?
Malcolm Graham-Wood is an independent oil industry expert and freelance contributor, not a direct employee of Interactive Investor.
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