The Oil Man: Hurricane, Savannah, EnQuest, Thalassa
21st November 2016 14:29
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WTI $45.69 +27c, Brent $46.86 +37c, Diff -$ 1.17 +10c, NG $2.84 +14c
Nine days to go until D-Day and, as Tommy Cooper would say, the steaks have never been higher. Mood-swing in the last few days has shifted back into a state of optimism; all parties now want a deal with Iran, and Iraq is being as accommodating as ever….
Russia is genuinely trying to help, I understand, and Libya and Nigeria remain special cases.
As for Saudi Arabia, which to be frank remains the key cog in the wheel, it clearly wants to be able to announce some sort of deal which would keep prices nicely above $50 through next spring.
Now why would that possibly be, I ask myself? Could it be in preparation for the Aramco flotation, by any chance? A $30 oil price - for that is what it would be "sans" an agreement - might banish that for the foreseeable future. Or am I being a touch too cynical?
I should just mention the rig count from Friday: general rigs were up 20 at 588 and oil were up 19 at 471, so if you took some in the recent placing, give yourself a pat on the back…
Hurricane Energy
announced on Friday that it had been awarded, in an out-of-round application, the P2308 licence, which is contiguous to, and extends north-east from, their existing Lancaster licence.
To say that this is a stroke of genius is like saying that the Mona Lisa is a nice picture; at a stroke, HUR may have picked up a possible 250 million barrels next door to the Lancaster discovery, from which it probably extends.
The clever bit is that, whilst checking the previous well drilled on the Halifax structure, HUR analysed the basement cuttings, which indicated the presence of oil, "thus mitigating the oil charge risk to Halifax".
A quick trip down the the Oil & Gas Authority and Bob really is your uncle, Halifax is all yours.
With the current well drilling on Lincoln, all being well the next well will be on Halifax, and the necessary option paperwork with Transocean has been completed; obviously HUR has already acquired the site survey over the prospective well location.
Should these two wells succeed, and demonstrate in the case of Halifax, that a "significant hydrocarbon closure" is present outside of structural closure, the Greater Lancaster Area will indeed be transformational. As Dr Trice suggests, tremendous news for the company and the UK's oil and gas industry.
Hurricane is now in an extraordinarily strong position, it is well funded and at present has been able to resist farming-out the prospects. The boot is now on the other foot, those discussions may be for another day.
The Lancaster EPS is moving ahead and initial contracts have been awarded, while the CPR, due next spring, may be an interesting read; by then much more may have changed.
The word "transformational" is overused, but not here. We have a new major UK continental shelf player with a potential world-class discovery on its hands - and the share price hardly changes. The words "gift", "horse" and "mouth" come to mind.
My target price has just gone into three figures; this cluster may hold a billion barrels, make no mistake, so at first workings it must be 100p plus. Lancaster, Lincoln and Halifax, top bombers…
Savannah Petroleum
Last week held its analysts' visit to Niger, where it talked all things Agadem, including cost savings and a possible additional export route to Nigeria.
On the subject of Nigeria, it has signed a memorandum of understanding with the New Nigerian Development Corporation and the Nigerian National Petroleum Coloration to jointly evaluate opportunities in the Nigerian section of the Central Rift System.
More when I have had an opportunity to catch up with management, which should be soon, I hope; Andrew seems to be doing the right things at the moment
EnQuest
announces this morning that first oil has been achieved at the Scolty/Crathes development and that the Kraken floating production, storage and offloading (FPSO) unit sailaway is due imminently.
These are both pieces of good news and along with the remedial action on the finances recently, albeit very tardy may be turning things round a bit.
The company have had to reduce production guidance which is a shame although they might have seen that coming…
Thalassa Holdings
has announced that wholly owned subsidiary WGPG is beating expectations and will exceed forecasts at revenue and profit basis.
The former goes up from £10.5 million to £13.9 million and the latter from £1.1 million to £1.6 million. The company says that the outlook is improving and it expects some sort of recovery next year.
And finally…
The top of the table got a bit squeaky at the weekend.
The Gooners went to the Theatre of Dreams expecting all the points and got out of jail with a last-minute draw; likewise it was goalless between the Saints and the HubCap Stealers, while the Noisy Neighbours only just won at the Eagles.
Chelski also struggled to beat the Boro one-nil and the Spurs picked the pockets of the Hammers with two late goals.
The rugby was interesting; the key contest, which was Ireland v. the All Blacks, was rather ruined by an incompetent ref who was clearly in the thrall of the men in black.
Citings this morning prove that he was out of his depth, but that is no help to the Irish, who should have been playing against 12 men.
Elsewhere, predictable wins for England (easily) and Wales and Scotland (only just).
Talking about poor decisions, the points win by Andre Ward against Kovalev also seemed totally wrong - on the canvas one minute, winning the next.
The cricket was what it was; batting second was always going to be a struggle in these conditions, which will be the same through the series. We are second-best, but the toss is now so crucial.
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