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The Oil Man: Sound Energy, Echo, Zenith, Frontera
By Malcolm Graham-Wood | Fri, 6th October 2017 - 11:46
WTI $50.79 +81c, Brent $57.00 +$1.20, Diff -$6.21 +39c, NG $2.92 -2c
It's been an interesting week in the oil markets. Brent should end it virtually unchanged, with WTI off by a dollar or so. Interestingly, WTI is now seeing buyers from far and wide, partly as the discount now makes it cheap enough to take to India, China and the Pacific rim.
The EIA announced that last week the USA achieved its record ever week of exports with over 2 million barrels per day sold, including its first ever shipment to India which docked this week.
Elsewhere, history was also made as the Saudi King Salman made the first ever state visit to Moscow to meet Vladimir Putin.
The tone was very cordial and the leaders offered further cooperation and a possible extension of the quotas. A number of deals were signed between the countries to seal the deal, as it were.
I joined Sound (SOU) and Coro on their river cruise yesterday evening, which featured a very detailed and glamourous presentation by pretty much the entire management team. CEO James Parsons discussed the company's strategy, including the recently announced drilling programme in Eastern Morocco.
Exploration director Brian Mitchenor explained the targets and repeatedly brought up the magic 31 TCF number to bear in mind. Recently appointed CFO, JJ Traynor, was introduced and spoke as he gets his feet under the table at Sound.
Also speaking was Sara Edmonson who is going to be the CEO of Coro, which will be the company that will put together the Italian assets of Sound, Saffron and Po Valley. It is clear that although these assets are quite substantial there is going to be room for expansion, probably across Europe and this may be the start of another exciting E&P company.
As I said, the entire team of management and senior executives were aboard to chat to the 375 investors who were also there. Indeed it was good to chat, albeit briefly, with Marco Fumagalli whose Continental Investment Partners are cornerstone investors in Sound and Greenberry plc who perform the same function at Echo, possibly Coro as well?
I also attended the Echo (ECHO) presentation yesterday where almost all the executive board were able to put across the new company's Latin American strategy.
Clearly so far the only action has been in Bolivia, but there is obviously much going on behind the scenes and I would expect news before long about other potential action in the continent.
Exploration VP Julian Bessa gave a really good presentation on the technical situation in Bolivia which made the geology virtually understandable to us amateurs in the audience. It looks to me as if all the right things are happening at Echo especially if one bears in mind that it hasn't been going long. Watch this space...
Zenith (ZEN) has successfully perforated a new unexploited production zone in well C-21 in the Jafarli field in Azerbaijan. This is producing 15 barrels of oil per day and, whilst that seems modest, there are other pay zones to go after.
The addition of a pump should also boost production. I am hoping to visit Zenith's operations soon so may be able to add some more comments in due course.
Whilst I was away I noticed that Frontera (FRR) raised £3.5 million at 58p - an albeit rather hefty 18% discount. £2.5 million was raised on PrimaryBid and CEO Zaza Mamulaishvili put in £1 million of his own money.
Funds will be used on the Taribani drilling operations, which, despite having been seemingly going on for a long time, show exciting prospectivity.
I recently wrote on FRR having met Zaza for the first time and suggested that a raise was important to kick on with the exciting potential in the company. I am also hoping to visit Georgia before long and will report back after that.
It seems like a long time ago but Monday's Podcast covered a number of stocks with recent news.
The MLB postseason has begun and the Yankees and Diamondbacks both won their wild-card games. The Twins and Rockies crash out but credit goes to both of the losers. The Twins lost 103 games last year and no team has ever made the playoffs the following season after losing that amount of games the previous year.
The Yankees then lost the first game of their series against the Indians and they will have to face Corey Kluber tonight after he was rested for game one in favour of Trevor Bauer, who pitched six innings of a shutout last night. Ominous signs for the Yankees and the Indians look like the team to beat in the AL.
The winner of that series will face either the Astros or Red Sox in the ALCS. The Astros took a one game lead last night and they play again tonight in Houston before heading to Boston on Sunday.
The NL games also start tonight as the Nationals host the Cubs and the Dodgers face the Diamondbacks.
It's international break time which means dire football from the overpaid little darlings and England were certainly appalling last night, I am told. Sneaking a 95th minute winner means they have qualified for Russia 2018 but if the manager plays some of the players he put on show last night I feel another Iceland coming on.
Scotland might still join England in Russia, another late own goal kept their chances alive and all they have to do now is win in Slovenia on Sunday to get a play-off place.
And Argentina may not be in Russia. Outside the top six in their group they must win their final match in Ecuador and as we all know that's not an easy place to go.
It's the Japanese GP this weekend and Vettel was fastest in the dry and in the wet Lewis was. Dry weather is predicted for the race, though.
In boxing there is an Anthony Crolla v Ricky Burns bout with not much love lost there. A Manchester crowd will probably cheer on 'Million dollar Crolla'.
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.