WTI $48.52 +56c, Brent $57.33 +27c, Diff -$8.81 -29c, NG $2.94 -10c
Oil gradually recovers, production stats are showing that just like they overproduced in October pre-sanctions Opec+ had already started to trim even before the last meeting. Agencies differ slightly but Reuters go with a 460/- b/d cut and Bloomberg suggest 530/-, either way and with more coming off some inventory will be coming off the market as suggested by Genscape who called Cushing stocks down by 560/- b/d last week.
According to the BBC Africa today, last night the attempted Coup in Gabon was put down after Government troops took back the radio station and arrested the leader and killed two ‘rebels’. Apparently the coup was a surprise which took place when the President Ali Bongo was out of the country receiving medical attention.
Independent Oil & Gas
IOG has announced an SNS core project upgrade adding the significant Goddard discovery, awarded in the 30th round, to the project. The discovery has been assessed by ERC Equipoise at 108 BCF of 2C contingent resource of discovered gas. The discovery, which is expecting to receive FDP in 1H 2019, will be reclassified as reserves at that time according to the company.
So, with the pre-FID complete, next action will be the Harvey appraisal well where drilling is imminent and will put the project in readiness. After that all you need is the money to develop it, and again according to the company ‘financing plans are advancing’ and we can expect the FID in under twelve weeks from now, and with first gas 20 months after FID, the clock is ticking. Excitement levels are rising and with the expectation of the whole project delivering a 77% IRR and £668m of post tax NPV 10 on peak production of over 230 MMcf/d the economics surely do stack up. For those with the patience to have hung on for the ride, it may just be the actual beginning of this project.
I ran out of time yesterday but Zenith announced a debt restructuring having renegotiated $1.5m of unsecured convertible facility now not converting before 3/19 and at $1.05m. They have repaid the previous £230/- loan and entered into a new £1m convertible with warrants at 4.4p.
Operationally, C37 is now ready for deepening after an intensive work programme and that contract award is imminent and will be followed by C37 lookalikes also ready for deepening. The target production of 1/- b/d is still in place and with a new team and decent kit on site there is no reason it shouldnt be met.
KeyFacts Energy Industry Directory: Malcy's Blog