WTI (Aug) $75.75 +92c, Brent (Sep) $80.11 +71c, Diff -$4.36 -21c
USNG (Aug) $2.63 -11c, UKNG (Aug) 67.0p -3.4p, TTF (Aug) €26.64 -€1.51

Oil price

The oil price remains solid and following the STEO the second half of the year seems to be set reasonably fair. Data from China is a bit mixed but the market liked the big increase in oil imports.

In the States the CPI figures fell and were lower than the whisper which certainly heated markets who are hoping that the July Fed meeting will raise rates for the last time. The EIA stats didn’t help much a modest build was expected but not the +5.946m that they got along with n/c in gasoline but a big build in distillates.

Hunting

Hunting announces that it has entered into a collaboration agreement with CRA-Tubulars BV to develop mutual energy transition market opportunities in North America.

The agreement provides Hunting with access to CRA’s novel Titanium Composite Tubing  technology and will utilise the Group’s Oil Country Tubular Goods connection technology to target Carbon Capture, Utilisation and Storage and traditional corrosion resistant OCTG applications.

About CRA and Titanium Composite Tubing technology
CRA’s highly experienced team have developed a novel tubular technology for the upstream oil and gas industry and is believed to be an enabling technology to accelerate carbon dioxide (“CO2“) sequestration projects around the globe.

With its lightweight and superior anti-corrosion performance, TCT is a game changer technology for production and injection wells in highly corrosive environments. Customers can anticipate a host of benefits from this collaboration, specifically in the North American CCUS industry.

• CRA’s TCT technology offers superior corrosion resistance, handling the challenges of carbon dioxide corrosion and hydrogen sulphide. Unlike typical metallic corrosion-resistant alloys, TCT is made from aerospace grade Carbon Fibre and Titanium, which outperforms in cryogenic low-temperature environments found in CO2 injection wells, avoiding embrittlement and cracking issues.
• With a design built to last the entire lifespan of the well, TCT de-risks downhole tubing integrity challenges, associated with the level of water and other contaminants that remain in the CO2 injection stream after the filtering process or migrate into the well from the reservoir, resulting in substantial Capex and Opex cost savings for CCUS operators.

TCT technology is being assessed by a number of leading Operators and in 2022 was recognised in the Shell Game-Changer program. TCT technology is also covered by a number of patents held by CRA.

Agreement with Hunting
Hunting has signed a collaboration agreement with CRA, which extends for an initial five-year period and provides exclusive TCT marketing, distribution and manufacturing rights in the North America region for application to the oil and gas and CCUS markets.

CRA will provide its TCT technology to Hunting including the option of utilising their titanium grade hydraulic premium concentric threaded connectors. Under the agreement, Hunting also offers end users the option of deploying this novel composite tubing solution with conventional OCTG premium connection technology, including the Company’s proprietary SEAL-LOCK™ family of connections. The Company will pursue commercial development and project trials of TCT, leveraging Hunting’s strong presence in the OCTG supply chain, where the Company is the leading independent supplier of OCTG connection technology.

Commenting on the collaboration agreement, Jim Johnson, Chief Executive of Hunting, said:
“CRA’s technology has the potential to disrupt the CCUS industry. Combining Hunting’s expertise in OCTG, titanium alloy products and connection technology with this novel engineered tubular solution, has the potential to solve the corrosion and cryogenic temperature issues that challenge CO2 storage well design construction. We are excited by the prospects of this collaboration, as Hunting increases its presence in this important and fast growing market.”

Joost DeBakker, Chief Executive Officer of CRA-Tubulars, added:
“This collaboration is an exciting milestone for both CRA-Tubulars and Hunting. Together, we will deliver unmatched value to our customers through innovative solutions and exceptional service. Our combined strengths will drive industry advancement and set new benchmarks for excellence.”

Sean O’Shea, Hunting’s Director of Energy Transition, further added:
“We are thrilled to partner with CRA-Tubulars to create a powerful synergy in the market. By aligning our marketing efforts, we will be better positioned to serve our customers, drive innovation, and contribute to the growth of the CCUS industry. This collaboration is a testament to our shared commitment to delivering excellence.”

This is Hunting doing what it does best, in markets where it has significant presence and a deep knowledge of the best industry players it has consistently worked with those with are breaking the mould and likely to be the best partners. 

Over many years of following Hunting I have seen this type of move that justifies its management style and ability to see what is coming through in these sophisticated markets and bring them in. This can be via partnerships or even acquisitions if that pathway starts to look the most appropriate.

Rockhopper Exploration

Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key interests in the North Falkland Basin, provides the following update on its International Centre for Settlement of Investment Disputes arbitration with the Republic of Italy.

As announced on 24 August 2022, the arbitration panel unanimously held that Italy had breached its obligations under the Energy Charter Treaty entitling Rockhopper to compensation of €190 million plus interest at EURIBOR + 4%, compounded annually from 29 January 2016 until time of payment (except the four-month period immediately following the date of the Award).

On 28 October 2022, Italy submitted an application to the ICSID seeking to annul the Award under Article 52 of the ICSID Convention. Italy also requested a provisional stay of the enforcement of the Award pursuant to Article 52(5) of the ICSID Convention. The provisional stay prevented Rockhopper from taking legal action to enforce the Award in any jurisdiction. 

Following a hearing on 6 March 2023, the ad hoc committee convened by ICSID to rule on the annulment issued the following orders with regard to the provisional stay of enforcement:

1: that Italy and Rockhopper shall confer – in good faith and using their best efforts to cooperate and find an effective arrangement – for the mitigation of the risk of non-recoupment using a first-class international bank outside the European Union (or as Italy and Rockhopper otherwise agree) to be put into place in anticipation of the termination of the provisional stay of enforcement of the Award.  This is to mitigate the perceived risk that, in the event the Award is annulled, Italy may not be able to recover Italian assets seized or frozen by Rockhopper (before the ad hoc Committee issues its decision on annulment) in court enforcement proceedings.

2: that Rockhopper shall, within 30 days of the date of the decision, apprise the Committee of arrangements agreed with Italy for the mitigation of the risk of non-recoupment or that negotiations have failed and, in the latter event, propose concrete arrangements in accordance with the decision for the mitigation of the risk of non-recoupment. Italy may then briefly comment on Rockhopper’s proposal within 10 days, constructively highlighting any areas of disagreement between the Parties.

In line with the preceding orders and following failure to agree arrangements with Italy, Rockhopper submitted its proposed arrangements (the “Escrow Arrangements”) to mitigate the risk of non-recoupment on the 24 May 2023. On the 5 June 2023 Italy submitted its comments on the Escrow Arrangements.

On the 12 June 2023, the Committee informed the Parties that, subject to allowing an additional opportunity for the Parties to comment, it intended, subject to Rockhopper implementing the Escrow Arrangements, to lift the Stay of Enforcement.

On the 11 July 2023, and having received additional comments from the Parties the Committee issued the following orders with regard to the provisional stay of enforcement:

1: That the provisional stay of enforcement shall terminate 5 business days following the provision by Rockhopper to Italy of documentation that escrow arrangements in the form proposed have been established, provided that Italy does not within those 5 business days submit a reasoned written objection in these annulment proceedings that the escrow arrangements established are not in accordance with the proposed arrangements.

2: Reserves its right to revisit its decision at any time; and

3: Reserves its decision on costs

The decision to lift the provisional stay of enforcement is unrelated to the merits of Italy’s annulment request. A final hearing in relation to Italy’s request to annul the Award is scheduled to take place in Q1 2024.  Guidance given by Rockhopper in the Company’s 31 October 2022 announcement that the entire annulment process is likely to take 18-24 months from that date remains in place. Rockhopper is currently paying all legal costs associated with the annulment.

Sam Moody, Chief Executive of Rockhopper Exploration, commented: 
“We welcome the approach adopted by the ad hoc Committee and believe this outcome will allow us to commence enforcement with no risk to Italy of non-recoupment pending the outcome of the annulment.”

This looks like good news for Rockhopper as the Italian Government resort to every trick to avoid paying up. But if this goes as indicated here RKH will get their moolah but not until next year. 

I have a meeting with RKH booked in so may add to this after that.

Predator Oil & Gas

Predator has announced an update for the MOU-4 well.

NuTech wireline log analysis and reservoir characterisation of the MOU-4 well has highlighted the following intervals to be likely gas sands that will form the primary objectives in a rigless testing programme.

• 519 to 713 metres TVD MD, including the M1 sands.
• 50 metres of likely gas sands.
• 778 to 879 metres TVD MD, including the Moulouya fan and Lower Fan.
• 12 metres of likely gas sands.
• 1139 to 1143 metres TVD MD, including the top of the Jurassic carbonates.
• 2 metres of likely gas reservoir with average porosity 19.9% (maximum 20.6%) and average gas saturation 56% (maximum 73%).

As previously announced the culmination of the Jurassic carbonate target lies 2.6 kilometres to the southeast of the MOU-4 well location and significantly higher than at the MOU-4 well location. Therefore a positive rigless testing result in this zone would help to de-risk the larger Jurassic structural closure in respect of reservoir development and migration of gas. These were two of the most significant pre-drill exploration risks.

Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings Plc commented:
“The MOU-4 NuTech petrophysical analysis has has highlighted a number of intervals to be likely gas sands, including some shallow sands that were not previously considered to be potential drilling targets.

The recognition by NuTech of likely good quality thin gas reservoirs at the top of the Jurassic carbonate is particularly significant in the context of the large Jurassic structural closure that MOU-4 was purposely located at the edge of, so as to successfully penetrate the primary pre-drill target which was the Moulouya Fan.

Rigless testing of the Jurassic interval will be an important step in evaluating the significant Jurassic potential within our core area of interest.”

Probably released due to pressure on social media and with the shares falling as so called experts thought that the MOU-4 well wasn’t as good as initially thought it is good to see the company getting out chapter and verse on the result.

There are people who might expect to see flow rates etc from this data which is not only unrealistic but not physically possible at the moment. This data has already given more in terms of potential than ever thought pre-drilling and will be established with further evaluation. 

This is what I wrote after the recent announcement, I haven’t changed my mind so to save my time i’m just going to repeat it.

These are very big numbers indeed and prove that those with confidence in PRD who have tripled the share price since the turn of the year may well have been vindicated. Whilst there is still plenty of evaluation to be done the rigless testing which is about to start could be highly rewarding for Predator. 

Predator is in the Bucket List as it screams out the constituents of a successful exploration campaign, not to mention the massive enthusiasm of founder Paul Griffiths. Nothing is a given with a huge amount of work to be done but just think what could happen if a wealthy partner arrived on board… 

Trinity Exploration & Production

Trinity has announced that the Jacobin well is currently being sidetracked, with drilling currently in progress.  Trinity is also pleased to announce that the Lower Cruse section drilled so far demonstrates the presence of multiple oil-bearing sandstone reservoirs.

Highlights

• The Jacobin well was drilled to 9,325 ft at which depth unexpected wellbore conditions prevented further progress, necessitating a sidetrack. This is being effected immediately and the well will continue to drill ahead to the planned depth of approximately 10,000 ft, which is expected to be achieved in two weeks.
• During the drilling programme, the well penetrated over 2,000 ft into the Lower Cruse.
• Preliminary evaluation, using a combination of Measurement While Drilling (MWD) data (inclusive of MWD gamma ray) and together with analysis of well bore cuttings, point to at least three well developed, oil-bearing sand intervals in the Lower Cruse.
• Further data will be collected from the sidetrack currently being drilled, including a full logging suite.
• Further to the announcement on 26 June 2023 when Trinity announced the Jacobin well has successfully intersected the Forest and Upper Cruse secondary targets, further analysis has confirmed that the total net hydrocarbon pay across these targets is 228ft.
• The next update on Jacobin is expected to be announced once the sidetrack has been completed and the full suite of data acquisition has been completed, which will provide a definitive view on all sands encountered.

Jeremy Bridglalsingh, Chief Executive Officer of Trinity, commented:
“There is still work to do in order to achieve the total planned depth, with encouraging initial signs thus far. In order to gain a more definitive view we have to successfully complete the sidetrack of the well, and then undertake a data acquisition programme, inclusive of logging, that will provide us with the technical data we need to assess the well’s potential. We look forward to updating shareholders when we have completed logging and related interpretation.”

Nothing much here but an admittance that well problems have led to a sidetrack and also the good news that the well has successfully intersected the Forest and Upper Cruse secondary targets which should make the team happy. With the shares at rock bottom this well needs to come in.

Gran Tierra Energy

Gran Tierra has announced an operational update. All dollar amounts are in United States dollars, and production amounts are on an average working interest before royalties basis unless otherwise indicated. Per barrel  and bbl of oil per day  amounts are based on WI sales before royalties.

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented:
“We are very pleased with the results from our development drilling campaign during the first half of 2023, which has been a key factor in our ongoing ramp up of production and further demonstrates the quality of our assets and our ability to execute on our strategy. By completing the majority of our development program during the first half of 2023, Gran Tierra is positioned to realize higher oil production for the rest of the year, and with most of our development capital behind us, this should allow us to maximize cash flow in the second half of 2023. The Company is well positioned to optimize value and grow production from our assets through continued enhanced oil recovery activities.”

Having met recently with Gran Tierra I’m happy that these production numbers are being consistently being delivered and will continue to be so throughout this year. The shares are yet to recover partly from the ridiculous consolidation but I’m confident that investors will be rewarded significantly.

Operations Update:

• Production
  • During second quarter 2023, Gran Tierra’s total average production was approximately 33,800 BOPD, which is at the high end of the Company’s 2023 previously disclosed average annual production guidance range. Gran Tierra’s total Company current average production2 for third quarter 2023 to date is approximately 34,800 BOPD.
  • During second quarter 2023, Acordionero’s production averaged approximately 18,000 BOPD, another strong quarter of performance due to the successful 2023 drilling program and ongoing prudent management of the enhanced oil recovery waterflood scheme.
• Development
  • During the first half of 2023, the Company drilled a total of 21 wells:
    • Acordionero: 10 wells were drilled; 6 are on production, 4 are on water injection
    • Costayaco and Moqueta: Gran Tierra has completed its drilling campaign at Costayaco and Moqueta which consisted of 7 wells (4 production and 3 water injection) and 4 wells (4 production), respectively. The CYC-54 well is the most northern well drilled in the Costayaco field and the success of the well has resulted in the identification of multiple additional drilling opportunities to target un-swept portions of oil. A summary of the recent 48-hour production test from the CYC-54 well on electric submersible pump is as follows:

*scf = standard cubic feet

Second Quarter 2023 Financial Results: Gran Tierra will release second quarter financial results post-market on August 1, 2023, followed by a conference call the following day. Additional details, including how to participate in the conference call, will be press released during the week of July 24, 2023.

1 Gran Tierra’s total 2023 year-to-date average production is for the period of January 1, 2023, to July 11, 2023.
2 Gran Tierra’s total current average production is for the period of July 1, 2023, to July 11, 2023.