WTI (Oct) $68.65 -32c, Brent (Nov) $71.61 -36c, Diff -$2.96 -4c
USNG (Oct) $2.31 -5c, UKNG (Oct) 84.75p -0.35p, TTF (Oct) €34.745 -€0.95

Oil price

Oil scraped a very modest gain last week but is better today, ironically as the data from China was poor across the board in retail sales, industrial production and real estate where prices fell. 

More importantly is that tomorrow and Wednesday the Fed meet and will announce a rate cut at the end of the meeting, it seems that 50 Bp’s is the favourite although some people feel that overdoing the cut would worry people about recession, my guess is that if they sugar the statement they will get away with it. 

Chariot

Chariot has announced preliminary results from the Anchois-3 well drilling campaign at the Anchois gas project in the Lixus Offshore licence, offshore Morocco (Energean 45%, Operator, Chariot 30%, ONHYM 25%).

• The Anchois-3 Main Hole ("Anchois-3ST"), has been safely and efficiently drilled to a total measured depth of 3,045m by the Stena Forth drillship in 349m of water.
• Further to the announcement of 11 September 2024, preliminary interpretation indicates:
  • Multiple good quality gas bearing reservoirs were found in the B sand appraisal interval as anticipated, but the associated gas pays are now interpreted to be lower than the pre-drill geological model
  • Other target reservoirs beneath the B sands were also encountered but were water wet. The appraisal target reservoirs of the C and M sand were drilled deeper than the gas bearing sands in the Anchois-2 well and into the water-leg at this down-dip location. The Anchois North Flank exploration prospect was found to have well-developed O sand reservoirs, with associated gas shows, but also water wet
• The Main Hole has now been plugged and abandoned, without flow testing, and the drillship is being  demobilised.
• Further detailed work by the partnership will be done to define the next steps for the project.

Adonis Pouroulis, CEO of Chariot, commented:
“The Anchois East drilling campaign has evaluated all of the pre-drill reservoir targets, however results have not delivered as anticipated or in line with the excellent results of the previously drilled Anchois-2 well. The primary exploration objectives were unsuccessful however, we did demonstrate the extension of gas bearing reservoirs in the main appraisal B sands albeit with thinner columns than estimated and data acquired from the other reservoirs will be useful for our understanding of the field. We will now work with our joint venture partners to determine the forward plan.”

This is clearly a disappointing result for Chariot, especially after the A-2 well that encouraged them to dream about how good it could be and also as the company had put in so much time, effort and capital into the project. The carry has helped but there is no substitute when so many things indicated a major find in such a favourable area, assuming the operator no longer stays in the licence there may be something for Chariot but it will be a smaller development.

But whatever happens here Chariot are not empty handed in their own portfolio, as I suggested last week they are building a strong power business and as that financing completes this will become a valuable asset in its own right. Also they are heading for Namibia where the biggest and best are placing their bets and where Chariot is well represented. Disheartened yes, who wouldn’t be but not without hope and excitement still in the portfolio for another day.

Union Jack Oil

Union Jack has announced that planning consent has been received from North Lincolnshire Council for the further development of the Wressle well site.

The approved works will include extending the existing site to accommodate the drilling of two new wells, construction of gas processing facilities and an underground gas pipeline to connect Wressle to the local gas distribution network.

The Wressle field is located in onshore licences PEDL180 and PEDL182, situated on the western margin of the Humber Basin, North Lincolnshire.

Union Jack holds a 40% interest in the Wressle development.

David Bramhill, Executive Chairman of Union Jack, commented:
“I am delighted that the joint venture partnership has received the planning consent to continue development of Wressle, which will increase oil production and monetise the associated gas from the field, resulting in zero routine flaring at site.

“This positive decision represents to Union Jack a significant domestic production growth opportunity at our robust and reliable flagship Wressle project and for the UK provides economic and environmental benefits compared to imports on which the UK is becoming increasingly reliant.

“I look forward to updating the market further as the Wressle partners progress the field development.”

This is very good news for UJO for whom Wressle has been a great asset in recent years and provided a great deal of revenue that makes further investment possible and should be remembered provides much needed oil and gas to the domestic market.

For UJO it also means that they can continue to develop their fantastic business in the USA and adds more value to what is a significantly undervalued share. 

Europa Oil & Gas

Europa has announced that planning consent has been received from North Lincolnshire Council for the further development of the Wressle well site. The approved works will include extending the existing site to accommodate the drilling of two new wells and construction of gas processing facilities and an underground gas pipeline to connect Wressle to the local gas distribution network. The Wressle field is located in onshore licences PEDL180 and PEDL182, situated in North Lincolnshire.

Will Holland, Chief Executive Officer of Europa, said:
“I am very pleased that we have now received the planning permission for the continued development of Wressle. The development programme at Wressle will increase the oil production and monetise the associated gas from the field, which will result in zero routine flaring at site. Domestic production accounts for less than 50% of demand in the UK, yet this provides economic and environmental benefits when compared to imports. 

The UK is increasingly reliant on imports as domestic production continues to decline and I believe that domestic production has a vital role to play in the UK as we progress towards the Net Zero 2050 target. I look forward to updating the market further as the Wressle partners continue to progress the field development.”

Much as above, this is important for Europa and will mean that they can build funds across the business for the future and also be part of the contribution to the UK domestic hydrocarbon economy.

KeyFacts Energy Industry Directory: Malcy's Blog