WTI (Apr) $79.72 +$2.16, Brent (May) $84.03 +$2.11, Diff -$4.31 -5c
USNG (Apr) $1.66 -5c, UKNG (Apr) 61.64p -1.85p, TTF (Apr) €24.805 -€0.58

Oil price

The inventory stats from the EIA caused the primary increase in oil prices yesterday, whilst the crude draw was only 1.536m barrels it was higher than expected and after the API meant that it headed below the 5 year average. But with refinery runs of 86.8%, up 1.9% on the week the draw of 5.7m b’s in gasoline was the talking point in the announcement. With some shortage in products internationally including a leakage in the gasoline cracker at the huge Port Arthur refinery markets shivered.

Interestingly with the Ukraine hitting two Russian refineries with drones taking out product in an already tight market knocked on to crude oil. Finally, rumours abound that the IEA, notably the doves of the sector are thought to be about to eat some humble pie by saying that oil markets face supply deficits all this year on the back of Opec+ cuts and increases in global demand. You couldn’t make it up. (Well I could). 

Breaking news, the US inflation number, expected to be 0.3% on the month turns out to be 0.6%, a bit of a horror and the y/y is 1.6% vs a whisper of 1.2%.

Genel Energy

Genel today updates on oil reserves across its portfolio.

International petroleum consultants DeGolyer and MacNaughton, working on behalf of the operator DNO, assess that Tawke licence (Genel 25% working interest) gross year-end 2023 2P reserves stood at 326 MMbbls, compared to 327 MMbbls at year-end 2022, after adjusting for production of 17 MMbbls and an upward technical revision of 16 MMbbls. Genel continues to retain 11.7 MMbbls of these 2P Resources, associated with the Tawke field Enhanced Oil Recovery project, as 2C.

At Taq Taq (44% working interest, joint operator), gross 2P reserves stood at 23.4 MMbbls at year-end 2023 (23.9 MMbbls at end-2022), following production of 0.5 MMbbls.

Genel previously booked 2.8 MMbbls of net 2P reserves at Sarta (30% working interest, operator). The Sarta PSC terminated on 1 December 2023.

Genel have issued their updated P2 reserves, which fell from 92.2m barrels at the end of 2022 to 88,9m barrels at the end of last year. This takes into account 4.5m b’s of production and the stripping out of the Sarta reserves, showing that there is still upside at the Tawke PSC, which is generating cash even in the current local sales environment.

Genel therefore remains in a very strong position, well funded and still looking for opportunities to diversify the portfolio. 

United Oil & Gas

United has provided an update in relation to the announced placing.

Further to the “Posting of Circular and Notice of General Meeting” announcement on 28 February 2024, the general meeting of the Company (“GM”) will commence as scheduled on 15 March 2024, and promptly be adjourned until 11 am on 20 March 2024, at our registered office located at 38-43 Lincoln’s Inn Fields, London, WC2A (the “Adjourned Meeting”).

Consequently, the voting period will remain active until 11 am on 18 March 2024.

The adjournment has been called to enable the Company to engage with shareholders regarding their voting intentions, as it is crucial for the successful passage of resolutions. Methods of participation and voting at the Adjourned Meeting shall be the same as the ones set out in the Circular dated 27 February 2024.

Shareholders are urged to refer to the recommendations in the Chair’s letter in the circular which is set out in full below. It is explicitly stated that failure of the equity placing would cast significant uncertainty over the Company’s ability to continue as a going concern.

Recommendation

The Directors believe that the passing of the Resolutions is in the best interests of the Company and Shareholders, taken as a whole. Shareholders should note that, if the Company does not receive the proceeds of the Fundraising, the Company would have to seek alternative forms of finance and/or undertake other activities such as delaying or reducing capital expenditure. Failure to secure alternative forms of finance at all or on commercially acceptable terms, or undertaking other activities such as delaying or reducing capital expenditure, could have a material adverse effect on the Company’s business, financial condition, prospects, capital resources, cash flows, share price, liquidity, results and/or future operations. In particular, failure to conclude the Fundraising will compromise the Company’s ability to continue as a going concern. As a result, the Company may be unable to fulfil its long-term exploration and appraisal programme or meet its work commitments under existing licences. Failure to do so could result in the premature termination, suspension or withdrawal of the Group’s licences. Accordingly, the Directors unanimously recommend shareholders to vote in favour of the Resolutions, as they will do in respect of their ordinary shares in the Company, representing in aggregate 3.29 per cent (%) of the Existing Ordinary Shares in issue as at the date of this document.

 I’m just repeating the detail here so that shareholders see the change of date.

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