The Oil Man: Oil price, Range, Providence, President
29th September 2016 12:56
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WTI $47.05 +$2.38, Brent $48.69 +$2.72, Diff -$1.64 +34c, NG $2.95 -4c
So, with a small puff of white smoke the OPEC contingent have packed their tents and headed to the 30 November meeting with a potential deal up their sleeves. The market reacted well; any deal was unexpected and this, whilst not being worth the paper it isn't written on, satisfies the marketing department in Vienna.
The basic fact appears to be a reduction in production from the current 33.24 million barrels per day (b/d) to 32.5 million b/d, which magically pushes the balance into draw territory, especially as, having taken the lead, the Saudis manage to get the Russians on board.
They are, as I said, taking it back to the full conference, at which we are reliably informed other key non-OPEC producers will be invited to cooperate - "reaching out", as it is being called.
But details are thin on the ground; will there be quotas or will the likes of Algeria, Libya, Iran and Nigeria be allowed to produce at will? If so, it looks very much like the Kingdom of Saudi Arabia is back to being the swing producer again.
Whatever the situation, it cleverly gives the world another two months, maybe more, where the oil price risk may now be on the upside…
And, as if we needed any more reason to get the green pen out, the Energy Information Administration (EIA) has produced a set of inventory figures that yet again fool the teenage scribblers on the Strasse.
Looking for a build of anything up to three million barrels of crude, the EIA announced a draw of 1.88 million barrels, which had the price moving up before news from Algeria started to come out.
The product news wasn't so clever, with gasoline stocks building by 2 million barrels and distillates also higher than one might normally see, even at this time of the year.
Range Resources
Its been a busy time recently, as updates the market on a number of things, although at least it is positive news coming through.
After Tuesday's waterflood update, we now have a CPR from Trinidad which is pretty positive. 1P reserves are up to 17.3 million barrels of oil equivalent (mmboe) whilst 2P increase by 11% to 24.4 mmboe.
As I said recently, the company is sticking to the knitting, working hard on the waterflood projects and hoping to deliver the goods; long-suffering shareholders of Range are probably finding the change rather cathartic…
Providence Resources
is another company where shareholders are probably considering themselves fortunate to be owning something that has actual value after the recent shenanigans, in particular the Transocean court case.
The darkest hour was just before the raise and now, 70 million bucks better off and with the bluest of blue-chip share registers to boast of, the management are pursuing Druid, which may be the company's soothsayer next year.
Today, in a long and detailed conference call, the strategy was outlined; suffice it to say that, when you don't actually need the money, the buyers are apparently queuing up to have a gander at Barryroe (and others in the data room) and drilling costs are falling like stones.
Tendering for the Druid work continues; as mentioned before the well will now cost around $35 million plus another $15 million if they go deeper and TOR said in his speech that this may have cost as much as $225 million in the old days.
The well is scheduled for June 2017 so there is no hurry but I get the feeling that "New Providence", as it should be called, will have plenty to say in the meantime…
President Energy
Another operational update from , which has had a little grief in drilling their DP 1002 S/T well in the Puesto Guardian (PG) concession in Argentina.
Now that the cementing "issues" have been overcome, drilling has "proceeded satisfactorily" and hydrocarbon gas readings have been seen through the mud logs.
All being well the well should complete before long. The PG concession is producing around 500 b/d at the moment and, with some new kit due on site shortly, should increase field production by around 20%.
I am looking forward to catching up with Peter Levine shortly, as I hear there is much to hear on the business plan going forward.
Sundry
News yesterday from that the planner for the Misson Springs site in North Nottinghamshire has recommended that Notts County Council grant planning consent for this development site, with two wells, at their next meeting on 5 October. Again, hoping to have a long-promised update with Steve Bowler before long.
remains unloved and at a year's low of 4.25p, despite what looks like a highly successful result on their Amungee NW-1H well, where the frac job appears to be going well, with flow rates of 1 million cubic feet per day.
The newly elected government has called for a moratorium on fraccing, which hopefully will only be a delay in proceedings. There is significant value waiting to be unlocked in Falcon, but even they can't tell when or if that might happen.
And finally…
It sounds like that there was quite a crowd at Celtic Park last night, proving that they can be an extra man as Celtic managed to earn a three-all draw with the noisy Neighbours in the Champions League.
Elsewhere the Gooners also won, making the next round look relatively safe, and tonight all the usual suspects line up in the Boropa Cup.
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.