The Oil Man: SDX Energy, Tullow/Magma Global

WTI $61.73 +29c, Brent $67.78 +16c, Diff -$6.05 -13c, NG $2.84 +4c

A modest up day yesterday, somewhat led by product prices in the US which is not surprising given the bad weather out there. As forecast, distillate stocks are running down as US power plants are using fuel oil where they can, with demand increased as a big nuclear plant on the east coast went down. Natural gas prices have however stayed remarkably low, supplies of gas are reasonably solid although should the cold snap last I suspect they would rise.

SDX Energy

Good news today from SDX Energy (SDX) who have announced that the KSR-16 well on the Sebou Permit in Morocco has completed and tested at a restricted average flow rate of conventional natural gas of 8.43 million standard cubic feet per day which is already on production into the sales line.

The rig is now completing its move to ONZ-7 and is expected to spud later this week. CEO Paul Welsh says that this well “exceeds expectations and is the highest flow rate of the three successful wells drilled to date”.

SDX now has three wells that exceed their daily commitment of 6 million standard cubic feet per day on a stand alone basis. The company are now actively working towards connecting new customers towards their existing infrastructure and are confident of delivering on their forecast gas sales of 10-11 million standard cubic feet per day this year.

With a very active pipeline of wells across both its geographies SDX remains extremely well placed to more than deliver on my and their own very high expectations and I am very much looking forward to an upcoming site visit.

Tullow/Magma Global

It is worth mentioning the fact that Tullow (TLW) has awarded Magma Global a 2.5 km flowline for its TEN project in Ghana. The 6″ spoolable carbon composite m-pipe® weighs under 100 tons compared with over 500 tons for the equivalent steel flexible pipe normally used in industry. This means that it can be deployed from an infield vessel of 4,800 tons rather than a specialist 14,000 ton specialist lay ship.

Magma Global is a private company but one that I have watched for some time as its key products appear to satisfy not only in significant cost savings but also provide an environmentally friendly and safer approach to pipeline technology. When I visited their plant in Portsmouth I was most impressed by the extremely high quality workforce and advanced technological approach to it.

And finally…

The FA Cup fourth round draw set up some fascinating games, not least the lowest club left in the draw, Yeovil getting a home tie against the Red Devils. Newport get to play Spurs and the HubCap Stealers get to play the Baggies. Chelski have to beat the Canaries before a potential tie against the Magpies.

Finally I would like to wish good luck to Andy and the contingent of Bristol City fans who are, as we speak, headed up to the Etihad where their Bristol City boys are playing the Noisy Neighbours in the Haribo cup semis, hardly full of confidence but just wait until they get them back to fortress Ashton Gate…(reminder, when the Hammers did the same they started leg two 0-7 down…!)

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.

Source.