The Oil Man: BP, Hurricane, Aminex/Solo

WTI $51.90 +$1.00, Brent $55.21 +$1.19, Diff -$3.31 +19c, NG $3.41 -2c

A modest end to a tumultuous week, and oil prices have pretty much kept to the highs after the OPEC deal was announced.

With a strong dollar after the Fed meeting and a few pessimists doubting the group's ability to hold the deal together, that looks good enough to me for the time being.

My long-held year-end price of $60 for Brent looks, by hook or by crook, like it may not be far away - although I have been tempted to move it down often enough since May!

The rig count was up, as expected, and this week saw general rigs up 13 at 637 and oil units up 12 at 510; expect more on this front.

BP/Kosmos

BP has announced that it has farmed into Kosmos' acreage in Mauritania and Senegal. The spoils include the huge Tortue gas field and come at a price of $1 billion (£805 million) in exploration carry.

Kosmos gain from BP's deepwater exploration know-how and BP gain from Kosmos' exploration expertise.

BP has also announced that it has done a deal with Abu Dhabi National Oil Company for its ADCO onshore concession for $2.3 billion in BP shares; clearly BP is starting to open up the wallet a bit, if you add these to Mad Dog 2, which is now going ahead.

Hurricane

Yet again more success for Hurricane, as the good Dr Trice returns from the rig bearing gifts.

This time it is the well result from Lincoln, where an oil column of 660 metres plus has been found which is even bigger than Lancaster, hydrocarbons were found at total depth which is why they drilled deeper.

This is another "significant fractured basement" discovery, as the company put it and the key oil down to (ODT) at 520 metres total vertical distance (TVD) below structural closure - which is 168 metres TVD below the ODT in the old Arco well, which is important as it was on the flank.

The well was not tested, as expected, but I have a shrewd feeling that the API might be similar to that found at Lancaster, even though the Western transfer fault seal providing the barrier between the two was identified.

The first piece of good news to draw from this is that, to me, this has major implications for Warwick - and that isn't even on the list to be drilled yet, but total reserves are adding up all the time.

As a rough (and I think conservative) guide I am now using 500 million barrels for Lancaster, 400 million for Lincoln and will sit with 250 million for Halifax, which I think is the pre-drill estimate plus something for Warwick.

The rig is in the process of plugging and abandoning, and will go to Halifax this week with the intention of spudding at the weekend - much to the chagrin of Lady Trice, I imagine, as the CEO will be aboard...

If weather permits, the firm may well actually test this one; if that is successful then maybe the testing kit will be taken off and they may go deeper with wireline logging.

After the Halifax well, the hard work on the development starts - and, of course, the discussion about how to fund it will be at the fore.

Given that the number looks like being around $400 million, all options are being explored, but undoubtedly a significant portion will be debt. The remainder might be equity of a farm-in, or even a mixture, depending on the circumstances.

I understand that that there are new faces seen in the data room, but farming out the prospects is no certainty; indeed if I was an equity holder, having come so far, I would want to participate one way or another.

Being aboard the good ship Hurricane has been exciting and it looks as if there is plenty of news to come after Christmas. Expect the Halifax result, the final development plan, the EPS approval and sanction, as well as the competent person's report, of Lancaster to come in the first quarter. That's just for starters.

The show has only just begun; Dr Trice and his amazing fractured basements are here to stay...

Aminex/Solo

Also good news from Tanzania, where the Government has agreed an extension on the Nyuni Area to 27/10/19; Aminex also announces that drilling operations are underway and the Ntorya-2 well should spud "in the next few days".

All this comes as rumours of a funding by Solo is being considered - which isn't exactly needed, but probably wouldn't be turned away.

And finally…

The cricket is only now of interest, as the final test match turns into a war of nerves for England. Batting is obviously extremely easy, as India showed by declaring at 759-7 this morning after Nair got his 303.

The football at the weekend was fairly predictable: the Noisy Neighbours saw off the Gooners two-one but, with Spurs edging Burnley two-one and the HubCap Stealers at the Toffees tonight for the Giro derby expecting to win, little changed.

The Baggies lost two-nil to the Red Devils and the Hammers contrived an unlikely win against the Hull City Tigers.

And finally, shame - if ever any more was ever needed - on FIFA, as it fines the home countries £80,000 each for wearing poppies. Let's hope they enjoy spending the money.

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.