The Oil Man: Aminex, Ophir, Empyrean, Columbus
10th July 2017 13:46
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WTI $44.23 -$1.29, Brent $46.71 -$1.40, Diff -$2.48 -11c, NG $2.86 -2c
The oil price ran up until Independence Day and then gave up the ghost as comments from Russia, Libyan and Nigerian production and a return to rising rig counts put paid to the rally. Having said that, there are enough straws in the wind to suggest that the bears aren't having it all their own way.
The inventory figures looked good pretty much any way you looked at them and another week or two like this and word will get around, particularly in product prices. This is mainly because US weekly oil demand is breaking all records.
Last week's number of over 22 million barrels per day is the highest since these records began in 1990. If this continues through the driving season and the economy there and elsewhere in the world picks up, as per recent forecasts, it at least won't be the demand side of the equation that causes further oil price weakness.
Aminex
has announced that it has appointed io, an oil and gas consulting company, to carry out a gas commerciality study to give the company options as to what to do with what is a significant discovery. The Ntorya-2 well announced earlier in the year produced 17 million cubic feet per day and the Ntorya appraisal area has Pmean GIIP of 466 billion cubic feet.
Clearly, it is in the best interests of the company to move towards early cash generation and appropriate monetisation of this discovery, and being bigger than expected brings with it greater requirements as to distribution. It is likely that longer term gas will be sold into the Natural Gas Pipeline and all options for sale are being considered.
The company is in the process of preparing to apply for a 25-year development licence which, in negotiation with the Tanzanian government, should lead to serious benefit both to the national and local economies and shareholders of AEX.
Ophir Energy
announced on Friday that it is further reducing costs and, accordingly, has unceremoniously despatched the excellent and 'top-performing executive' Bill Higgs from his position as COO. Whilst I know that oil companies are nowadays constantly monitoring their cost bases, which is to be admired, I have previously been concerned about the need for OPHR to return to the pot and I fail to see how this can be a wise move.
It leaves OPHR with only two executive directors to cover exploration, production and the Fortuna development in Equatorial Guinea as well as activities in West Africa, Tanzania, Indonesia, Malaysia, Myanmar, Thailand and Mexico. Something has to give if you can do all this without an experienced COO, as Higgs is not being replaced.
Empyrean Energy
It's a pretty good thing that I put that call in to Tom Kelly as things at are hotting up with considerable speed and, whilst I thought that I may have missed the boat stock price-wise, I have a feeling that this is just the start of another adventure.
Today it announced that Sacgasco as operator has contracted a rig to drill Dempsey 1-15, which is onshore California and has a target of 1 TCF+ in seven stacked target reservoirs. The well is close the the gas metering infrastructure owned by the JV so any success could pay back in very short order, one to keep an eye on.
Columbus Energy
An operational update from the new management team at , whom I have met and am extremely impressed by. Current production is only 327 barrels of oil per day (bopd), which has been hit by Tropical Storm Bret, but will by now be back up to 380-420 bopd.
The new team, CEO Leo Koot and CFO Gordon Stein along with an experienced Trinidad MD, are identifying the best ways to increase production and raise cash flow from existing resources.
Initiatives announced today should raise production by implementing a multi-interval approach to the Goudron Field water-injection starting this quarter. The short-term goal is to become cashflow positive by the fourth quarter of this year and to grow strongly in future, the team is assembled, watch this space.
Sundry
has announced that five directors have purchased shares in the company following the recent closed period ending.
has announced that it has started a 3D seismic operation offshore Ireland and, whilst this is a long-term positive only, it does show that there is considerable interest in this post code from many international companies.
And finally...
After last week I thought I should mention the Lions first after they drew on Saturday, squaring the series 1-1. For many there should have been extra time but I think that before the series that we might just have taken the draw...
England didn't bat very well in their second innings, but South Africa melted under the super spin of Moeen Ali who took 10 wickets in the match, not bad for a part timer even on a friendly pitch.
At Sandown Park the Coral Eclipse stakes was won by Ulysses who just held off Barney Roy in a very close finish.
The Grand Prix was won by Valterri Bottas who is now catching up with Lewis who was punished five places on the grid for a new gearbox. Considering you only get a 10-second penalty for deliberately driving into someone, are their priorities right?
Today is 'Mad Monday' at Wimbledon when all 32 of the singles players left will play. Both men's and women's are wide open. Today will reveal a lot.
And what a surprise, no not that Wayne is heading back to Scouseland but that he has owned up to 13 years of sleeping in Toffee's pyjamas. I rest my case...
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.