Sept 26 (Reuters) - France's Total has agreed to pay $1 million for an option to buy a 25 percent stake in an oil exploration block offshore Guyana, its first foray into an area close to where ExxonMobil made one of the largest discoveries of the last decade.
Eco Atlantic Oil & Gas, a small Canadian exploration company which earlier this year listed on London's junior AIM market, said on Tuesday Total now had the option to acquire the stake in the Orinduik Block for another $12.5 million following the analysis of recently collected 3D seismic data.
"In the event that the option is exercised by Total, the deal proceeds will recoup all our expenses on the expanded 3D program and fund us for drilling a minimum of two wells based on current well costs," said Gil Holzman, president and CEO of Eco Atlantic.
If Total proceeds with the deal, Eco Atlantic's interest in Orinduik will fall to 15 percent, while partner Tullow Oil maintains a 60 percent stake and the block's operatorship.
Tullow Oil declined to comment and Total was not immediately available for comment.
Eco Atlantic's London shares were up 9.5 percent at 1057 GMT and traded up to 19.5 pence, the highest in more than five months. Tullow's shares traded 2.1 percent higher, while Total was down 0.3 percent.
"It is of course positive to see a company such as Total show interest in this exploration license but the manner of the agreement, as an option, shows a certain degree of to-be-educated geological caution on the part of Total," said analysts at Jefferies.
The waters offshore Guyana and Suriname have been a hotbed for oil and gas exploration since ExxonMobil made its huge Liza discovery in 2015, part of the Stabroek Block where it estimates lay 2.25-2.75 billion barrels of oil.
Another challenge for the National Grid. That timescale doesn't seem too firm though. Perhaps they could extend the range by getting on board generators powered by the passengers pedalling. The picture looks like a few dubious battery devices stuck to a model aircraft wing. Maybe a few vibration issues to be ironed out first. Another attempt to jump on the free publicity bandwagon I suspect. Why should politicians get all of the headlines?
Dyson is also getting in on the act with an equal planning deficit and saying an electric car will be in production by 2020:
Brent and WTI have enjoyed 5 up weeks in a row and it was widely forecast that September was going to be good for oil down to a host of reasons that go beyond hurricane damage in USA. The Brent chart is now hitting major resistance. Some of the reasons for oil increasing are due to big Asian refineries coming on line that were off line in July and early August (mainly India but also China). Demand is likely to slip during October at the global level but is anticipated to rebound from Mid November.
Tullow usually drops 6p for every dollar fall in Brent. Equally it goes up 6p if Brent rises which explains the 191 to 197 ove this morning.. So unless there is additional news this is most likely to follow Brent. If USD gets stronger, Brent and WTI are also more likely to retreat. The chart evidence for Tullow hitting 240 is not substantiated by the Brent chart outlook imop.
"The bank said Tullow is gaining momentum as it re-starts the development of the TEN fields offshore Ghana and resolves the Jubilee turret issue.
"Combined with a firmer oil price these fields should underpin a year-end refinancing that allows management to redirect investors' attention towards its value creation (Guyana and Kenya) and harvesting (Ghana and Uganda) activities.""
Another reduction in the declared short positions today, now down to 8.6%. They are still showing that reluctance to adhere to the rules though. The new declarations today came from Capital Fund Management, Key Group and Millennium, all showing the effective date of last Friday so all one day late. The total is down from 8.96% yesterday to 8.6% today, so the steady reduction is continuing. Our favourite, Odey, is still shown as 1.48%, unchanged since 8th September.
tony, no problem with anyone selling, that's how we all hope to make a profit. It's just our timescales that may differ. I think that there's plenty of profit in TLW even for those who buy in the future at higher prices than today. The return of dividends alone will make a big difference when it happens. I've always said that my horizon is around 2020 and I'll be happy to look at the profit after a long period of accumulating regardless of the intervening volatility.
silo, I don't really see much sign of waning demand for fossil fuels. Governments are following fashion by putting dates plucked out of thin air for the ban on the production of internal combustion engines without any feasible way of achieving that aim. It makes more sense to think of energy demand, see this EIA forecast to 2040:
What is going to make up the difference if we eliminate fossil fuels? Nuclear is growing but unpopular and it takes a long while to build a nuclear power station. These articles illustrate some of the problems:
There is always the possibility of some new technology coming to the rescue but I think that those proposed fossil fuel restrictions are simply hot air from politician trying to encourage industry to find a solution. Politicians don't think beyond the next election, let alone 23 years ahead.
I think that is more likely that we will see the cleaner use of fossil fuels rather than a cessation of them. Either way it is not going to have a negative impact on the industry any time soon and it may well lead to an increased use of fossil fuels if they produce less energy as a result of changes in the way they are used.
I was looking at several RSI indicators. One was a 5 hour chart (14 day) with RSI hitting over 85 and that encouraged my moves. I suspect that Tullow may do something similar to Premier Oil in having most of its rally in a short space of time and then roll back for another future rally later on. Half my stake gained over 27p and I will resist being too greedy.
I have reinvested some of my position into Centamin and Hummingbird Resources. I will come back into Tullow if it retraces. Holders know that a number of us who sold know a lot about Tullow and are comfortable stepping in again a month or so from now. For holders to make more somebody somewhere has to sell.
Tony, which RSI are you watching? I have Wilder 20 day at 65.9 so not overbought, but exponential at 79.05 and simple at 74.4, so just into overbought territory. TLW is volatile but it has been at these levels in the past and the RSI has corrected without the price retracing too much, notably during the long run up from July 2003 to July 2012. Then it stayed within its trend channel but gave plenty of trading opportunities. Imho these are not normal times though and we should be looking for a trend reversal in the shorter term. If you look at the chart from the beginning of April to now TLW has made a dramatic upward jump up out of its trend channel this month
It is interesting to compare the TLW chart to the DJ World Oil & Gas Index. It illustrates why TLW is known as a leveraged play on oil. If oil is going to rise (as I believe it will) then TLW will provide that positive leverage on the way up. I think that the good news we are expecting over the next couple of years or so from Africa plus the other prospects that TLW has brewing bodes well for the future, as long as we see that long awaited recovery in the oil price.
On US production, this article is bullish but even more bullish in its forecast of oil demand so even if US production continues to be strong it might have less effect on the oil price but there is an added complication in the predicted changing pattern of demand for lighter oils.
Or Tony it trundles up to close that gap at 300 and then comes back down in a few years with the waining of fossil fuels. Guess proof is in the pud. Wait to see if Opec cuts working and less investment leads to tighter supply.
I got out at 197p, then bought my original half back at 191 ish area and then sold it all again at 196.22.
I have done really well here. I am banking the cash as Tullow is so overbought and it is hard to see this run with RSI in the 90's. We have so many gaps below this stock will retrace eventually. I can then reinvest again when that happens. Tullow is now a strong in the black stock for me. I just can not see this getting much higher on this run but they could be famous last words. The shale oil producers could soon be back on line.
I have it tl resistance. This is the 3rd touch of it on the daily chart (PrRT data). Tony, I'd have said give or take a few pence (6-7), you've done the right thing to lighten up. If the TL resistance is rejected, you can buy back lower should you choose to. If the TL resistance breaks you're moving further into profit.
I don't think anyone really can tell what's happening (not many at least), but I'm watching closely and considering halving my holding of another oily. Depends on whether oil price breaks out or not.
On the other hand Brent has risen on the threat. I wouldn't expect it to drop until the threat goes away. Will be interesting to see the result of the referendum today. I expect the Kurds will put independence over short term oil wealth. If it's a yes Turkey could well close the pipeline but then back down after a period of time because their own interests are too much tied up in it.
Have they closed the pipeline tornadotony or just threatened to? I really wish the Kurds luck. If anyone deserves independence it's them but it will be difficult. Everyone within 1000 miles wants to destroy them for the simple reason they are better people.
Sensitivity regarding the Kurds has resulted in turkey shutting down oil pipelines. We have a supply major issue as a result and hence the Brent price spike. May have sold my half to early at the 190p mark. I suspect it is a temporary issue as creative minds may deliver a peaceful long term outcome. Demonstrates the importance of having more than one pipeline pathway.
If this gaps at the open and Brent still goes up it could be hedge heaven for Tullow.
Why is crude rising when every car manufacture will be going electric and countries will be banning combustible engines...There is a new electric car that you can plug into the ground and absorb the earths magnetic field, when there is a full moon you can get a super charge......
According to Jefferies this is still worth 155gbx. Apparently Ghana winning its case, after years of uncertainty, will have no bearing on Tullow Oil revenue as it's set to increase output to 80000 bpd from 50,000, has stabilised the region for the fields already excavated, and opened up possiblilities of further finds. Where do they find these clowns?
sage, stop losses are usually automatic. When the price drops the stops trigger and that helps to push the price down further triggering more stops etc. etc. "They" don't have to search for the stop losses, just "encourage" the price down until they start triggering and then take advantage of the consequences in the market. You also have to remember that the share price isn't decided just by supply and demand, it is also set by liquidity in the order book.
As to how "they" do it, it's becoming a cottage industry. For example:
Check the practices of layering, spoofing and front running. Some traders place their offices as close to the market as possible in order to reduce the cable length and give themselves millisecond advantages.
An interesting topic and one the PI needs to know about if he is to recognise the pitfalls. "The Russian" Igor Oystacher used it in the commodity markets, including crude. I wonder who might be using it as a weapon now?
sage, dyor. With 17 years under your belt on this bb I'd have thought that you would already know.
Traders with good access to the order book and plenty of other people's money at their disposal can manipulate liquidity and thus the price, there's no doubt about that and some cases have been prosecuted but less than the tip of the tip of the iceberg imho. High speed automated trading makes it even easier. They don't even have to trade, the placement of orders and their deletion before they trigger is enough. Many investors will set a stop loss at up to around 10% below their buying price. That is a tempting target for the traders keen to close a short or increase a long position at the best price they can.
Short term shenanigans aside things are looking good with Brent back above $57.
Hub, still enough short interests employing traders to limit their damage though. Let's hope that the TEN news and the strengthening oil price is the beginning of better times for TLW and the oil industry in general.
Some short sellers saw the writing and have already got out, imho the risk taking gamblers and laggards are still hanging in. They will come back when the news dies down and will start hunting stop losses again. When they do finally give up things will really turn around and TLW's "leverage" will start to work in the other direction. Until then there will still be plenty of opportunities for trading PI's to ride the volatility and for long term holders to pick up some bargains. Unexpected good news will have the potential to shift the price up though and I expect that oil "glut" to recede more rapidly now. Increases in the oil price will be leveraged by the reduction in the ability of the US to control the supply side of the market because of the hurricane damage. Long term horizon still around 2020-2021 imho.
Took 50% off so no longer overweight on the position. Since the drop from my first buy around 730p years ago, I have remained in the black through buying and selling Tullow after the last sell. If it decides to close the two gaps underneath, I can rebuy what I sold. Otherwise letting the other half run which is at a level of funds I am far more comfortable with.
Shares in Tullow Oil are expected to gush on Monday following an international ruling that will allow the London-listed company to resume new drilling on a $5bn (£3.7bn) project in west Africa.
The International Tribunal for the Law of the Sea yesterday ruled that the company's Ten field sits entirely within Ghanaian waters.
Tullow was blocked from exploring its Ten development off the coast of Ghana two years ago following a maritime boundary dispute between Ghana and the Ivory Coast.
The ruling made in Hamburg this weekend does not allow the Ivory Coast to appeal the decision.
Tullow looks forward to continuing to work constructively with the governments of both Ghana and Côte dIvoire following the conclusion of this process. While the Ten fields have performed well during the period of the drilling moratorium, we can now restart work on the additional drilling planned as part of the Ten fields plan of development and take the fields towards their full potential," said Paul McDade, chief executive of Tullow.
Tullow expects to increase output from around 50,000 barrels per day (bpd) to 80,000 bpd by the end of next year.
Great news,this will make Tullow's foundation very strong.............In a strange way there may be a downside now that this dispute is out of the way. Tullow will become more of a takeover target and with low oil prices unsustainable, a true value may not be achieved........... The UN/USA agreement with Iran is beginning is coming under pressure with the missiles that were fired over the weekend...I wonder will henry be posting his scare tactics at 7:30 Monday morning????
Hobby, no negatives here. You're lucky to have an accountant who works on Saturday. (S)he may be OK at adding up but I wouldn't trust his advice for investment. All that is west of TEN is Cote d'Ivoire territory. TLW is a service provider to the governments and has been careful to stay neutral so as not to sour any opportunities that may crop in Cote d'I, where it has previous and current interests.
The negative aspects of this case have been grossly overstated by the baddies for the last three years. Good to get it wrapped up positively.
That brings to mind the question as to why the judgement was announced on a Saturday, particularly as the protagonists are countries not companies. It must be because the ITLOS judges are on time and a half for weekend work!
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