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The Oil Man: Oil price, Sound Energy, SDX Energy, Savannah Petroleum
By Malcolm Graham-Wood | Tue, 25th April 2017 - 09:43
WTI $49.23 -39c, Brent $51.60 -36c, Diff -$2.37 +3c, NG $3.07 -4c
The oil price started OK Monday but drifted during the day, as I said yesterday it's a month to the OPEC/non-OPEC meeting and the market only has a limited amount of patience, a bit like a goldfish…Inventory stats will be key, as ever at this time of the year.
Sound (SOU) has announced that it has signed binding heads of terms with Schlumberger, which expands the relationship between the two companies into Meridja and the Tendrara relinquished areas of Eastern Morocco.
In exchange for a full carry on SOU's forthcoming Eastern Moroccan geophysical survey programme, estimated at £21 million and subject to completion of the acquisition of these assets from OGIF the deal will go ahead.
This means that the existing Field Management Agreement between the two companies will be extended to include these two areas of Meridja, and the area of Tendrara relinquished under the Morrocan Hydrocarbon code.
Schlumberger will be granted a 27.5% NPI in both areas and in return will contribute 'services in kind' to cover the agreed scope of the geophysical programme mentioned above.
This will include the acquisition and processing of approximately 2,600 kilometres of new 2D seismic and 24,000 square kilometres of Gravity Gradiometry, the seismic of which will cover the TAGI and Paleozoic across both Tendrara and Meridja areas.
Yet again Sound have managed to acquire and share really interesting acreage, securing a full carry on a key programme of work. With a supportive partner creating a key, strategic relationship, their options in the area are still multi-faceted.
A Morocco update today from SDX Energy (SDX), with so much exciting news from Egypt it is easy to forget that, particularly since the Circle Oil (COP) deal, SDX has significant exposure to exciting production and exploration in country.
The Lalla Mimounia Nord and Sud permits have been extended to March 2018 with drilling on two exploration wells planned for the second half of 2017.
At Sebou several extensions for production and exploration have been granted over the next eight years with a number of wells planned this year which, if successful, are close to pipeline infrastructure.
Overall these developments provide significant potential to increase both production and reserves with plenty of exploration upside. Things at SDX are still going from strength to strength.
I have picked up on a very interesting article in the Niger press which is extremely exciting for the country and, in our case, Savannah Petroleum (SAVP). Talking about the five major discoveries, and 'smaller ones of the order of 200 million barrels' in the second half of 2016 in the southern part of the Agadem block, the article suggests that CNPC will intensify their drilling.
The good news doesn't end there, talk of fast track exports of oil to the Kaduna refinery growing from a starting 5,000 barrels per day to 10,000 barrels per day, 'gradually' by truck means that prospects are bright.
In addition the Niger Oil Minister has spent time in Nigeria recently holding talks with his counterpart also discussing a new pipeline between the two countries. For Savannah, the pipeline options are either via Chad-Cameroon or to Kaduna in Nigeria and news that both of these routes are becoming more of a reality is extremely good news.
News from Savannah is coming thick and fast, a rig has been selected and work on the camp has begun, yesterday we heard that there will soon be a Capital Markets Day and a call for retail investors, as the article concludes 'a succession of good news' is due from Niger, as SAVP prepares to spin the drill bit at Agadem, exciting times indeed..
Primeline has announced that CFO Stuart Joyner is leaving 'to pursue other interests' which I hope means spending more time in the UK and looking after his asparagus harvest… Stuart is a great bloke and I'm sure that if he wants to he will pick off a very senior position in the sector and it will be good to have him back…
A bit brief, but Newcastle fans will be delirious this morning as they have secured promotion to the Premier League for next season. At least that means the bookies can install them as early favourites to go down and Rafa to be the first manager to get the sack... only joking!
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.