The Oil Man: Victoria Oil, Jersey Oil, Aminex, Cabot

WTI $52.14 +26c, Brent $57.90 -54c, Diff -$5.76 -80c, NG $2.97 +6c

At last the price divergence between WTI and Brent is starting to narrow as we head towards the month and quarter-end along with Brent expiry. This was mainly to do with the EIA inventory stats yesterday, they showed a draw of 1.85 million barrels against expectations of a 3.4 million build.

We are still dealing with post-hurricane effects, though, and gasoline stocks rose on bigger-than-expected run rates at the returning refineries. On the horizon, one should watch for further trouble in Nigeria as new militant groups have been formed ahead of the 2018 Presidential elections. If they took out production then Brent would be the obvious beneficiary…

Victoria Oil & Gas

As we swing into the end of September and deadline dates for reporting results appear a flurry of reports arrive.

As is usually the case these historic reports are important but also irrelevant, with so much news having come out since the end of June it is that which investors are concentrating on.

So, especially with Victoria Oil & Gas (VOG) given recent announcements I have said pretty much all I can say at the moment.

Production from Logbaba is rising and post the La-107 news should rise more in coming weeks. La-108 is being sidetracked and we wait news from there with interest.

CEO Ahmet Dik confirms that “the company’s long term ambition is to produce 100 million standard cubic feet per day and with Douala alone showing long term demand for 150 million standard cubic feet per day VOG is uniquely placed to be the dominant producer in the country”.

For this reason and for the potential for Bomono (announced today that discussions are continuing and the option termination date has been extended to 31/12/17) and in Matanda, where initial seismic work is most positive, I view VOG’s prospects to be up there with any company I cover and today’s share price fall can only be described as an opportunity…

Jersey Oil and Gas

As above, the interims from Jersey Oil and Gas (JOG) are meaningless. The company has been carried in the so far unsuccessful Verbier well, but the partners are awaiting news of the sidetrack, which I expect any minute now.

JOG has assembled a high quality team of industry experts and deserve credit for the work they have done in such a short time. The plans to extend the portfolio with exploration and production assets is still going strong and, whatever Verbier delivers, there will be more news from JOG before long. I am visiting the company next week and will report further after that.

Aminex

This year has been good for Aminex (AEX) and, with gas production of 15 million cubic feet per day expected to rise after further exploration success at Ntorya, the outlook is also very positive.

Resource estimates for the Ntorya field are now 1.3 TCF and development plans have been submitted along with application for a development licence. The company has paid down its debt, has net cash of $6.91 million (£5.17 million) and highly supportive shareholders and so the outlook looks pretty good to me.

Cabot Energy

The turnaround at Cabot (CAB) continues and validates the management’s decision to concentrate on the workover programme in Canada. Production is 600-800 barrels per day (Cabot 75%) and will increase by another 200-250 barrels by the end of October, thus meeting the 800-1000 barrels per day year end target.

The management at Cabot have done well as this very inexpensive added value in Canada looks like being the gift that keeps on giving.

And finally…

At the Oval yesterday England pulled off a last gasp Duckworth Lewis victory in the pouring rain. With rain approaching fast it was a battle of tactics and, from a very strong position, the Windies rather gave it away.

To score 350-odd for five having been 33-3, with Gayle back in the hutch, was very impressive, but ultimately it was tactics wot done it. As for Stokesy, words cannot convey the stupidity of it all.

Last night, all three British teams went through in the Champions League in good order, tonight in the Boropa Cup the Gooners are sending the junior team to Belarus apparently, whilst the Toffees host Apollon Limassol.

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.