The Oil Man: Thalassa, Gulfsands, SDX Energy
10th October 2016 13:02
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WTI $49.81 -63c, Brent $51.93 -58c, Diff -$2.12 +5c, NG $3.19 +14c
The oil price ended the week up, WTI by $1.57 and Brent $1.76, but the star of the show was natural gas, which rose 28 cents on the week, a 10% move that may not be the last.
The dollar rallied a bit which didn't help on Friday, but Hurricane Matthew, whilst avoiding the Gulf, put pressure on product prices. The rig count was modest, overall up by 2 at 524 and in oil up by 3 at 428.
This week sees the informal meeting of oil-producing states in Istanbul, which may blow some warm wind onto the market.
SDX Energy
is a most interesting stock that is yet to fully come to the notice of the marketplace; it should do so as, since it came to London, it has done nothing wrong and quite a lot right.
Primarily an Egypt play - and North Africa has significant attributes in many ways - SDX has two producing assets, plus exploration, which is where today's announcement comes in.
The company is updating the market on the initial findings of the interpretation of 300km² of 3D seismic recently completed on South Disouq in the Nile Delta.
The work "surpassed" pre-acquisition expectations as it showed very good oil potential in addition to the anticipated gas potential - indeed, no oil was expected - and was in the older horizons found in the western desert, which is a significant bonus.
The company is hoping to drill a fully carried well here right at the end of 2016 or very early next year, which should significantly add to the value of this concession.
Elsewhere, SDX has cash on the balance sheet and no debt, with its producing assets is cash flow positive and, being onshore, has costs of sub-$10 a barrel with netbacks in excess of $15.
Gas prices are strong in-country which is why the company has such high growth potential; definitely one for the watchlist.
Thalassa Holdings
The clue is in the name at and that is "holdings", as chairman Duncan Soukup has made clear in recent months by investing in a variety of companies such as Papua Mining, in which he announces an increased stake today.
Probably more interesting is the news that WGP Survey, a wholly owned subsidiary of the group, has made further sales of multi-client data acquired with the TGS-NOPEC geophysical company in 2014.
These will generate around $2 million (£1.6 million) of gross revenue, prior to allocating to the multi client partners.
Thalassa is a very interesting company and, whilst operating in a difficult environment, has a chairman with a desire to make money for shareholders whatever it takes.
I have a feeling that the shares are significantly undervalued and should be on a few radar screens, at least for the longer term.
Gulfsands Petroleum
Two new board announcements at this morning as Michael Kroupeev and Richard Milne join the board as non-executive directors. Now, Mr Kroupeev is perfectly understandable, as he owns 37.2% of the company - but why Mr Milne?
Well, of course, he is the former head of legal affairs at and who better to be on the board to represent the interests of PFC CEO Ayman Asfari if, as rumoured, he has a significant interest?
And finally…
The international break has seen all of the home countries in action with mainly positive results. England probably should have scored more than two against Malta, who strung nine men in front of the keeper to repel boarders.
Wales probably feel that a one-all against Georgia is a bit disappointing after their summer glory days, whilst Northern Ireland won against San Marion four-nil.
What has Lewis to do to catch up with Nico? In Japan this weekend he was left in a pool of water to start in, after which his starting program failed to work properly, apparently. Funny that Nico seems to have no such problems...
The cricket in Bangladesh has gone ahead with few problems; indeed nothing but admiration for the boys performing in such conditions. one-all with one to play in the one dayers, and I will probably miss the final as I am travelling later this week.
And Muzza has won the China Open and nudges Djoko for world number one; note that neither Rafa or Roger are now in the top four in the world. Jo Konta just failed in her final, but makes the world top 10 for the first time.
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