The Oil Man: Pantheon, Xcite, Jersey, Genel
26th October 2016 13:18
WTI $49.96 -56c, Brent $50.79 -67c, Diff -$0.83 -11c, NG $2.77 -6c
Oil remains under some pressure as the faults start to develop in the OPEC agreement scheduled for 30 November. After Iran, Iraq now wants exemption from the agreement and that comes as it looks like their output was 4.45 million barrels per day (b/d) last month.
With the US having been invited to join the production cuts and so far having given no reply, it looks at the moment as though it is a Saudi/Russian agreement…
The American Petroleum Institute stats last night do not bode well for the Energy Information Administration tonight; stock build in crude was 4.8 million barrels, nearly three times analysts' guesses, and gasoline built as well, although distillates fell, as one might expect at this time of the year.
Jersey Oil & Gas
has announced that a site survey is underway on the Verbier prospect on block P.2170, which was recently farmed into by in preparation for drilling next year. Yesterday I interviewed Andrew Benitz, CEO of JOG in order to get behind what might be one of the most exciting stocks for 2017.
The Statoil deal was interesting from a number of points of view; they were incredibly keen to get it underway and completed the deal in record time, they are treating the prospect as one of their best in the portfolio and that is why the drill bit is planned for next summer.
Make no mistake, this farm-out will transform JOG's prospects from a standing start.
Pantheon Resources
Yesterday announced the successful drilling of the VOBM#3 well in Polk County, Texas. After the hullabaloo surrounding the last well, the announcement was timely and remarkably brief.
The well drilled to 14,500 feet and will now pursue vertical completion; the logs showed hydrocarbons in a "potentially significant reservoir" in the primary target being the Eagleford/Woodbine sandstone, as well as gas in the Austin Chalk.
Now it would be wrong to draw any material conclusions from this announcement, because you genuinely can't tell what you are going to get in terms of a flow rate until the test is done, but the omens are good enough.
The company has drilled the well on time and budget and will be able to do many more if necessary; this means that, should it be a success, the economics of wells like this will be "extraordinary". If it is a success, the company will finalise the gas processing facility and bring wells VOBM#1 and VOBM#3 onto production.
In the meantime, the well is being prepared to mobilise on the next Tyler County location. PANR creates tremendous arguments within the sector, which, until these wells are firmed up, will be difficult to be settled.
For the moment I am going to give the team the benefit of the doubt and stick with my 200p target price…
Xcite Energy
announced yesterday that the bondholders were "not satisfied" with the current plan and that it expects to appoint a liquidator "within the next 4-6 weeks".
The directors believe that "On the basis of advice received by the company and the directors, the directors believe that liquidation is unlikely to result in the return of any value to the company's existing shareholders".
Sundry
Today's operational update from is effectively another profits warning, as production and revenue fall as the decline at Taq Taq and Tawke continues. Whilst this is still bad news, the company is still loaded with cash and the area is slowly getting more attractive.
On that subject announced this morning that some of its August invoices from Shaikan had been paid, with plenty yet to come.
A number of results in the last 24 hours from the US, best of which was probably the number where earnings beat the whisper coming in at $1.24, against forecasts of around 97c. reported -15c against expectations of -45c, missed by one cent and by 14 cents.
has increased its stakes in two East Midlands licences, PEDL 334 and PEDL 306, having been assigned interests from Celtique at no cost.
And finally…
'Twas the Michael Mouse cup again last night and the HubCap Stealers beat Spurs two-one while the Gooners beat Reading.
Tonight, though the teams will be unrecognisable, the Chelski go to the London Stadium to take on the happy Hammers, the Maccams make the long haul down to the Saints and, of course, the Noisy Neighbours slip down the road to Old Trafford.
It's that time of year: yup, it's World Series time, where only one continent gets involved…
With the resurgence of Cleveland continuing and the Cubs back in for the first time for decades, last night the Indians saw off the cubs six-nil. Only six games to go now…
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.
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