Oil price

Having started reasonably well yesterday oil drifted off as a few punters locked in gains although I have to say that there were few events that should dictate that. Maybe the thoughts that China was going to intervene in the energy markets were believed by more people than me and the inventory data wasnt conclusive enough.

This morning crude has rallied and Brent is sitting tight at $85 which seems just where the market would like it right now.

San Leon

An update on investment in the Oza Field, Nigeria from San Leon yesterday, they noted the announcement made by Decklar Resources Inc. in Canada before confirming their position in regard to the development.

San Leon has entered into a conditional subscription agreement with Decklar Petroleum Limited, the local subsidiary of Decklar Resources, which entitles San Leon to purchase US$7,500,000 of 10% unsecured subordinated loan notes of Decklar Petroleum and 15% of the enlarged share capital of Decklar Petroleum.

In addition, Decklar Petroleum and San Leon have entered into an option agreement which, at San Leon’s sole discretion, entitles San Leon to purchase an additional US$7,500,000 of loan notes and further Decklar Petroleum shares representing an additional 15% of the enlarged share capital of Decklar Petroleum.  Further details of these conditional investment agreements can be found in San Leon’s announcement of 1 September 2020.  This transaction is still awaiting final conditions precedents to complete.

Decklar announced the commencement of completion operations for the Oza-1 well re-entry.

"As previously announced, the Oza-1 well re-entry has been successfully flow-tested in the three target zones (L2.2, L2.4, and L2.6). The final well completion design and procurement has been concluded, with all completion equipment now having arrived on location at the Oza-1 well. Completion operations on the well have commenced, which include running 2 7/8″ tubing, production packers, sliding sleeves and gas lift equipment, with all activities anticipated to conclude within 7 to 10 days. The well will be initially configured for production from the L2.6 zone, which tested at rates up to 2,463 bopd as previously announced.

All early production facilities have been installed and function tested including a 5,000 bopd three phase separator, crude oil storage tanks and export pumps.” 

FAR

FAR appears to be getting back on its feet again after the trials and tribulations of the last couple of years. This week they announced their Q3 report in which they confirm completion of Senegal RSSD sale to Woodside and sale proceeds of US$126 million received as well as that drilling of Bambo-1 well, offshore The Gambia, expected to commence 13 November and of course the capital return to shareholders of A$0.80 per share completed, cash at end quarter US$64.7M.

Operational and logistics planning for the drilling of the Bambo-1 well in offshore Block A2 are well advanced and the IceMax drillship is scheduled to be in Las Palmas in late October to complete preparations and loading before mobilising to The Gambia. FAR has been advised that the spud date for the Bambo-1 well is planned for 13 November, 2021.

The well is designed to drill into a series of vertically stacked targets (Figure 2) with a combined estimated recoverable, prospective resource of 1,118 mmbbls (arithmetic sum of the Best Estimates, unrisked, 100% basis with 559 mmbbls net to FAR).

Long standing shareholders will be those who have believed in Far from the start, for me I am of the view that their technical team that effectively found the Senegal discovery was exceptional and that circumstances, some of their own making admittedly overtook them. The next quarter will be most interesting.

KeyFacts Energy Industry Directory: Malcy's Blog