The Oil Man: Oil price, Pantheon Resources, Aminex
25th April 2016 11:24
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WTI $43.73 +55c, Brent $45.11 +58c, Diff $1.38 +3c, NG $2.14 +7c
The oil price finished up at the end of the week; the rig count, showing a fall of 9 units to 431 and 8 in oil to 343, helped, as did the Commodity Futures Trading Commission numbers, which indicated a big rise of 33 million barrels in net speculative length in WTI.
The week's rise was two dollars, almost exactly, for both crudes and the momentum is still upwards, even if the fundamentals still look decidedly dodgy.
Gasoline demand and product stocks will be important to watch in the inventory stats as the driving season looms and refinery utilisation changes.
The final piece in the bullish jigsaw is that I have now heard from a number of sources that China has been a buyer of oil in recent weeks.
Pantheon Resources
An update from this morning as the company is not letting the grass grow underneath its feet at the moment.
The firm has signed a rig contract with for a three-well back-to-back programme using the same rig as it did before.
There will be two horizontal wells on the VOBM#1 discovery in Polk County, followed by another horizontal well on the VOS#1 in Tyler County. This third well will be the real test; a step-out well 5 miles west of the discovery is an appraisal but, if it comes in, will be transformational for the company.
The weather in Texas has been truly awful, with one day last week recording 27 inches of rain, but the company is expected to spud in mid May. It is also interesting to note that it has done more seismic work and the prospects apparently seem even more visible than before.
Elsewhere, they update on both previous wells; VOS#1 in Tyler County is about to be fracced, the weather has delayed this but it will now go ahead in conjunction with the drilling programme.
The frac should "materially improve" on the rates achieved last time; this could easily be three to five times the lower rate of 750 barrels of oil equivalent per day and the company is confident of success here, by the sounds of it.
At VOBM#1 in Polk County, negotiations have reached their final stages, so expect to see production and sales this quarter.
Overall, this is further good news from Pantheon; an oversubscribed raise has left them fully funded for this campaign, which is going ahead with "materially lower costs" than might have been expected.
The gas price has picked up nicely, so they will get better prices for that and the liquids off-take after successful negotiations with operators for any further wells into the bargain. I am sticking with my target price of 200p, but this could easily be conservative if the wells deliver as I think they will.
Finally I am pleased to report that PANR Chairman John Walmsley is recovering "marvellously" after a four-way heart bypass earlier this month.
Sundry
Finals today from which are of little interest, all the excitement is in the here and now. Since the year end the gas has started flowing at Kiliwani North, which means revenues and, of course, books reserves.
It has been a long wait for management and shareholders alike, but when I spoke to Jay last week he was excited about the future - but shared my view that the stock is significantly undervalued.
And finally…
With the Foxes beating the Swans four-nil yesterday, Spurs yet again need a Monday night win to stay in the race when they host the Baggies at the Lane tonight.
The Gooners were held nil-nil by the Maccams, which lifts them out of the relegation places for the time being. A point at Anfield, after being two-nil down, was good for the Magpies - but will it be good enough?
The FA Cup final will be between the Red Devils and the Eagles after they despatched the Toffees and the Hornets respectively.
In the rugby, Sarries won and the Tigers lost, which means a cracking final between Sarries and Racing, complete with Dan Carter…
Anthony Joshua has announced that his next fight will be against unbeaten Dominic Breazeale on 25 June.
And, once again, I would like to thank everyone who donated to the Anthony Nolan Trust, for which Holly was running yesterday. The team has raised something over £12,000 in memory of Torsie Haugli, which is wonderful. So many thanks to generous blog readers - and they all completed the race fit and well!
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.