WTI $56.46 n/c, Brent $66.76 +14c, Diff -$10.30 +14c, NG $4.27 +23c

Oil price

Not much more to add really, after the crashing falls earlier in the week the modest rally at the end still left WTI down $3.73 on the week and Brent down $3.42. Markets are poor and with a strong dollar providing headwinds as well as the three agencies increasing Non-Opec supply forecasts, the December 6th meeting assumes ever greater relevance.

Ineos

The Sunday Times had a story that Ineos were in talks with Conoco Philips over a potential $3bn deal to buy the latter’s UKCS asset which are on the market. The article suggested that Jim Ratcliffe’s company has put down a deposit in return for three months’ exclusivity. unsurprisingly the article also suggests that Neptune and Chrysaor are standing by in case the talks fall through.

Sound Energy

Sound has announced results from its TE-9 well in Eastern Morocco, the first of a three well programme to explore ‘non-related’ play concepts in the Tendrara area. The well penetrated both the TAGI primary target and the Paleozoic secondary target.  Interpretation of the wireline logs has not established the presence of producible gas and the well will be p&a’d without testing. However, the core of the secondary Paleozoic seismic target remains untested as TE-9 appears to be on the downdip limit of the large Paleozoic closure.

Sound will now take the rig directly to the TE-10 site which is ready for it and the well will target a large TAGI structural-stratigraphic play with a mid-case of 2.6 Tcf GOIP. As these wells are not correlated the result on TE-9 should not be considered as any sort of indication as to what TE-10 might find. Unsurprisingly the share price has been hit this morning but I suspect that certainly at the off, it was overdone. The company confirmed today that it was still preparing for the FID for its TE-5 discovery as planned with the FEED ‘conducted and paid for by the Enagas Consortium’ scheduled to complete around the end of this year. It is also worth noting that Sound has cash balances as at 14 November of more than $30m.