The Oil Man: Hurricane Energy, Genel Energy, Victoria Oil, Aminex
WTI $56.81 -39c, Brent $63.49 -20c, Diff -$6.68 +19c, NG $3.17 +2c
As one might have expected the oil price has consolidated at these higher levels. The API stats were not as good as expected and last night's EIA inventories showed a build of 2.2 million barrels against expectations of a similar sized draw. Under these circumstances the modest fall was probably better than might have been expected.
A couple of announcements from Hurricane Energy (HUR) this morning, they are considering a change to a 'premium segment of a recognised exchange' which would be a more appropriate platform for growth, raise their global profile increase liquidity and 'provide a wider addressable universe for the shares'.
This makes perfect sense, the company has a market cap of nearly £600 million, has just raised over $500 million in debt and equity and has a substantial development programme over the next two years or more. With a revised CPR imminent, which will include Lincoln and Halifax, the company is poised to grow significantly, and I continue to believe that the shares are excellent value and my target price remains over 100p.
The other announcement is that non-executive Chairman Dr Robert Arnott has resigned with immediate effect and Dr David Jenkins will step in as interim Chairman until the post is filled. The listing and governance committee, which has been announced this morning, will include recommendations as to the size and composition of the board amongst other important factors for the future of the company.
Genel (GENL) has announced that they have struck a deal with the Moroccan Government regarding their Sidi Moussa offshore licensed acreage. Under the deal instead of one commitment well Genel with only have to carry out a 3D seismic campaign, which should re-risk the prospectivity of the licence. All perfectly sensible under the circumstances. Secondly, they have announced that the Peshkabir-3 well on the Tawke PSC is on extended production testing and has flowed in excess of 3/- b/d of oil on a 64/64″ choke.
Victoria Oil & Gas
In a Logbaba update yesterday Victoria Oil & Gas (VOG) announced that the La-108 well had reached total depth of 2,865 metres MD and encountered 84.5 metres of net pay in the Upper and Lower Logbaba formations.
This number exceeded pre-drill expectations and are significantly more than the La-107 well which had net sands of 58 metres and produced at 54 mmscf/d . Flow tests are planned ahead of this well producing by the end of November. The drilling campaign here is now finished, it has been a long haul with some 'interesting' moments, but has ended with success, next stop La-109.
This success will provide significant additional reserves for GDC to market into the gas hungry Douala region, where it should be remembered they are the sole supplier to power generator ENEO and other substantial industrial thermal clients.
As the company says, "this will enable the company to conclude longer term contracts with our Douala high-usage customers". Demand for gas in the Douala Basin exceeds 150 mmscf/d, with this additional supply and the extra potential from Bomono and Matanda, where significant capex is planned and will be financed by the recent successful raise prospects are very exciting.
I continue to believe that the value in VOG is still substantially underestimated by the market and its value has yet to be fully realised.
Very briefly I notice that Aminex (AEX) has signed up John Bell as a non-exec Director. This is very good news for both parties as he is an experienced and very talented oil man. Currently running Gulfsands Petroleum (GPX) and doing a good job there, JB will add a great deal to Aminex.
A huge night for Northern Ireland football as they play the first leg of their qualifying play-off game against Switzerland tonight.
Equally big is the task for the England women's cricket team who must win their Ashes test if they are to avoid conceding the series. As I write, batting first under the lights they are 177-3.
Malcolm Graham-Wood is an independent oil industry expert and freelance contributor, not a direct employee of Interactive Investor.
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.