The Oil Man: President Energy, SDX Energy
2nd June 2017 16:02
WTI $48.36 +4c, Brent $50.23 -13c, Diff -$1.87 -17c, NG $3.01 -6c
The oil price rallied hard yesterday on the back of the inventory stats but had lost most of it by the end of the day and again this morning after the US leaving the Paris accord led to thoughts of even more drilling. However those EIA stats were pretty impressive if easy to call for those reading the blog.
The draw of 6.4 million barrels was higher than the analysts guess of 2.7 million after a combination of factors swept across the energy mix.
Crude imports fell by 1 million barrels per day while exports rose by 700,000 barrels per day to a record 1.303 million barrels per day which speak for themselves, while the product numbers were pretty predictable.
Refiners knew that the start of the driving season on the Memorial Day holiday weekend would stimulate demand, as reported here on Wednesday with the AAA saying that demand was at a 12 year high, accordingly refinery utilisation also broke records at 17.51 million barrels per day.
This in turn led to a draw in gasoline stocks of 2.9 million barrels and another record being broken as 9.822 million barrels per day of gasoline was consumed.
President Energy
As always historic results are just that, and in case 2016 was a year to forget with the DP-1002 S/T well being fouled up by the service companies and leading to an impairment charge of $10.9 million (£8.5 million) although the company is still pursuing claims against them.
Production last year was 506 barrels per day but is already at 1,100 barrels per day heading fast towards the September target of 1,200 barrels per day which it should cruise through.
2P reserves in Puesto Guardian are up 10% at 19.9 million barrels of oil equivalent which bodes well for President's future. Cash of $17.6 million, net being $8.5 million, leaves the company in a strong financial position when added to significantly increased cash flow and admin costs down 30%.
Paraguay will, as expected, be put up for farm-out, the US acreage does the necessary whilst the Aussie stuff has been relinquished.
Overall, PPC is looking very interesting; it has a low geological risk portfolio in a hugely recovering economy in Argentina and with plenty of potential targets into the bargain.
Peter Levine is determined to get PPC back to its former glories which, in case you had forgotten, is just short of 50p. Who would bet against it happening?
SDX Energy
continues to bring news to the market, yesterday was an operations update from Morocco.
The company have been awarded an onshore exploration permit on the Gharb Centre for eight years.
The cost of this is 200km² of 2D and 3D seismic and two exploration wells. With some seismic on the area already, which has established multiple horizons throughout the Miocene-aged strata similar to the company's production in adjacent licences, expect action in the second half of 2017 as pre-drilling activity is underway with the tendering process for kit and services indicating a Q3/4 start-up.
SDX remains a key bucket list stock with activity across the portfolio and management determined to continue to take advantage of potential transactions as well.
And finally…
It is another massive weekend of sport with action taking place across the globe in many different sports.
In Bermuda the America's Cup continues, I watched the GB race against France last night and can honestly say that the Shermans need not worry on our behalf unless things improve dramatically…
The Golden State Warriors lead the Cleveland Cavaliers 1-0 in the NBA Finals after winning the first game 113-91. The Cavs will hope to level things up on Sunday before they head back to Cleveland for two games.
It is the Italian MotoGP on Sunday. Whilst the footballers go for a well earned break, the real men go to the Isle of Man TT. This year the tiny British Norton Factory aim for a top five result (albeit ridden by two Aussies) against the might of the Japanese Factory Teams. Guy Martin returns as the sole Factory Honda rider after his teammate, 23 times winner, John McGuinness was sidelined following a crash in Ireland. The Superbike race is on Saturday.
A cracking card at Epsom today for The Oaks and of course for the Derby tomorrow. If anyone in the sector feels lucky then the only bet for tomorrow's Blue Riband is of course… Permian!
In the cricket England started well yesterday beating a continually improving Bangas team, in this competition losing is almost terminal so in what are both tough groups this was key. As I write the crunch match between the Aussies and the Kiwis is rained off, it is in Birmingham though…
And those footballers who are on holiday will be in the Champions League Final tomorrow night…
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.
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