WTI $73.62 +$1.23, Brent $76.05 +$1.31,Diff -$2.43 +8c,NG $4.06 +9c,UKNG (Sept) 105.92p+4.7p

Oil price

As the week and the month come to an end the predicted strength in the oil price continues aided by current dollar weakness which I try not to forecast…Slightly mixed news from the US as the Fed doesn’t panic on inflation and sees no taper time yet. Economic growth targets were indeed missed but the economy is now growing faster than pre-Covid and employment claims fell again.

Better news came from India where the lockdown is starting to ease and the economy is already showing signs of picking up.

Robinhood IPO a flop, whoulda thought it….!

Eco (Atlantic) Oil & Gas

Eco Atlantic has announced its results for the year ended 31 March 2021, alongside a corporate and operational update. As at 31 March 2021, the Company had working capital of US$13 million and no debt, in June 2021, the Company raised an additional US$4.9m in the form of a private placement.

As at 31 March 2021, the Company had total assets of US$17.0 million, total liabilities of $1 million and total equity of US$16.0 million. The Company has materially decreased its total non-exploration expenses for the year ended 31 March 2021, including general and administration expenses and compensation costs by 33%.  

In the Orinduik Block offshore Guyana, the bad news is already in the price, following partner drag, the nicest thing I could write, and the JV’s inability to force the operator to do anything means that drilling may be in 2022. 

On July 5, 2021, the Company announced that it received a detailed update from JHI regarding the Jabillo-1 well in the Canje Block, offshore Guyana, which reached its planned target depth and was evaluated, but did not show evidence of commercial hydrocarbons. JHI also updated that spudding of the committed Sapote 1 well on the Canje block is scheduled for mid-August 2021, with a drilling time of up to 60 days. This should give the company some decent potential in the short term. 

The Company, together with its strategic partner and substantial shareholder Africa Oil Corp., ‘continues to evaluate additional asset opportunities in both West Africa and South America with a focus on near-term high-impact exploration opportunities’.

On 30 November 2020, the Company successfully negotiated the reissuance of its four licences in Namibia’s Walvis Basin for 10 years, which received final Government confirmation on 5 February 2021.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented: 
“The past year has seen Eco make significant strides across a number of different aspects of its business. In terms of oil and gas exploration, we have made material progress in Namibia, through the successful negotiation and reissuance of our four licences in the Walvis Basin, and in Guyana we have completed a landmark transaction with JHI, ensuring near-term exposure to low risk, high impact drilling activity. We see the JHI Transaction as an important step for us, as we look to broaden our presence in Guyana, with the potential for increased future collaboration with the region’s existing players. We also remain very upbeat about recommencing drilling activity on the Orinduik Block and we look forward to updating our investors on the timing of this during Q3 2021. We were also very encouraged to learn about the Whiptail discovery made by ExxonMobil and partners on the Stabroek block yesterday adding to the estimated discovered recoverable resource of 9 billion barrels of oil equivalent and further highlighting the basin’s prospectivity. 

“We remain strongly committed to achieving exploration success at our high value assets in Namibia and Guyana, and we are very pleased to be able to demonstrate strong progress with regard to both over the past year.

“Our strategic investment into Solear Ltd. has added another attractive asset to the Company’s portfolio and shows our determination to deliver value for shareholders through prudent, selective use of our cash reserves. We are excited to update the market in the coming months on Solear’s progress, as we believe our investment into the business presents compelling, near-term opportunities and the potential to achieve ambitious long term strategic growth targets in an evolving energy market.

“Despite the ongoing macroeconomic backdrop, we remain very positive about what the future holds for Eco Atlantic. We have a resilient business model, a strong cash position and a number of significant near-term catalysts which we believe have the potential to create considerable value for shareholders. As ever, I look forward to keeping all of our stakeholders updated on our progress over the coming months.”

Eco has had its problems and I still struggle to believe that Tullow could cause quite so much trouble, proof that an operator can stop even the industry’s largest and most respected international companies in their tracks. 

In the meantime Eco has moved in a number of ways to try and offset this disappointment, one of which, the JHI transaction, brings the Sapote 1 well which should spud next month. Shareholders can at least be assured that it has exceptional management and backing from Africa Oil which mean that I am confident of success in the future.

Harbour Energy

I don’t normally write about directors shareholdings but this one is quite interesting. Harbour has announced that Phil Kirk, President and CEO Europe, has purchased 100,000 shares at a price of 327.757 p. As a result of this purchase of Ordinary Shares, Phil Kirk holds a direct interest in 13,217,698 Ordinary Shares, representing 1.43% of the Company’s issued share capital. 

I really like the look of Harbour but have yet to have had the opportunity to meet with the management, probably a wise call on their behalf. Until this happens it will be difficult to judge quite how good they are and what they plan to do with the portfolio. What I do like however is board members buying stock seemingly out of his own pocket.

KeyFacts Energy Industry Directory: Malcy's Blog