The Oil Man: Sound Energy, Hurricane Energy, Wentworth Resources
19th July 2017 10:13
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WTI $46.40 +38c, Brent $48.84 +42c, Diff -$2.44 +4c, NG $3.09 +7c
A fairly quiet day on the oil bourses yesterday. The same old supply stories but crude edged up when the KSA export figure for May came out at 6.92 million barrels per day. This was down 1 million and to be expected as during the summer a good deal of production is drawn into domestic power generation.
June and July are slightly more difficult to call. Early in the period Aramco kept its prices high to all customers but word is that at the moment prices have eased, which would indicate a slightly higher output; we shall see, at present signs are that the KSA are going to deal with the overproduction problem.
After the close the API inventory stats showed a modest build of 1.6 million barrels in crude, which was the wrong sign for the scribblers but products drew strongly. Tonight's EIA data should give us a better clue.
Sound Energy
has announced the progress on the TE-7 EWT, which demonstrates very strong pressure recovery that is still ongoing.
Pressure stabilisation is expected to take another six to eight months and estimated gas volumes in place, once the reservoir has reached full pressure stabilisation of 40 billion standard cubic feet as per the company's preliminary expectations.
This will enable the Company to confirm a field development concept with regular spacing of sub horizontal stimulated wells similar in design to TE-7.
Hurricane Energy
has confirmed that option over another $10 million (£7.67 million) of the convertible bond issue recently completed has been exercised as expected and the total is now $230 million.
With the money raised in the equity market this makes a strong contribution to the EPS for Lancaster, which is motoring along well.
Wentworth Resources
An operational update for this morning, which announces further payments from the TPDC of $1.2 million making $7.9 million so far this year.
This is pretty positive stuff and with receivables now at four months is on the right track.
Also on the right track is production, post the rainy season demand has increased to 45 million standard cubic feet per day in June and has picked up more with local maintenance work increasing demand on Mnazi Bay.
With FY guidance of 40-50 million standard cubic feet per day now maybe looking conservative things are slowly looking up for this company that should do well given time.
Independent Oil & Gas
has announced the FDP for the Blythe Hub, which contains the Blythe and Elgood fields both owned 100% by the company.
A new CPR for the Blythe Hub is expected soon which should provide up-to-date independently verified reserves and resources.
The company talk about it's great 'strategic value' to IOG along with the Vulcan Hub but this can only be translated into moular with "deferrals of a substantial proportion of contractor costs and prepayments from potential gas offtakers to help meet funding requirements".
In this market more developments are indeed being funded like this, but it is way less certain than raising money or getting a partner in which if I was a shareholder I would feel more comfortable with, despite that the project still has legs. I am meeting new management soon which might help but Messrs Routh and Young seemed to be doing OK to me…
And finally…
England's women won their semi-final against South Africa yesterday, which takes them to a final against India or Australia on Sunday. In the meantime, greater powers than the atrocious England selectors have ruled Gary Ballance out of the next test which should make room for a better player. Where is James Taylor when you need him most?
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.