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Commentary: Oil price, Rose, Range, Wentworth, Zenith, Jadestone, Savannah

11/01/2019

WTI $52.59 +23c, Brent $61.68 +24c, Diff -$9.09 +1c, NG $2.97 -1c

Oil price

The market willed the oil price to stay in positive territory last night, I was watching the news-feed as commentators begged for the magic nine up days in a row. Unexpectedly, crude remains firm this morning adding another 50 cents so WTI is over $53 and Brent $62. Comments about fewer rate rises helped markets and eased dollar bulls but there is no word from the trade talks which closed on Wednesday night.

Rose Petroleum

Rose has announced that it has acquired the acquisition of additional acreage in the Paradox Basin in Utah, USA. With their JV partner in the December lease sale they acquired a 75% WI in an additional 1.920 gross acres of land adjoining their Gunnison Valley unit. The cost was only $30,000 ($0.03 pb) for 2C contingent resources net to Rose of 1.2 mmboe and which is covered by existing 3D seismic and this completes the target acquisition programme.

Range Resources

Range has announced the appointment of Dr Mu (Robin) Luo as a Non-Executive director of the company. Dr Luo is a highly experienced oil and gas ‘veteran’ currently Principal Development Geophysicist on the Ichthys LNG project in Australia. As an Australian resident he ticks the ASX box and the shares have resumed trading this morning.

Wentworth Resources

An operational update from Wentworth this morning where all appears to be going very well at Mnazi Bay in Tanzania. Gas demand grew in the 4th quarter from both power stations and industrial customers so the quarter showed gross production of 87.3 MMscf/d with December recording 92.5 MMscf/d. The year was 83.2 MMscf/d easily beating guidance of 65-75 and this year has been set at 75-85 MMscf/d.

Arrears have been ‘steadily reducing’ in 2018 and now stand at only three months with payments received for November and December, the company expects to be debt free in twelve months time. At the year end the company had debt of $8.3m not including the overdraft facility and cash of $11.8m.

Local demand near Mnazi Bay is clearly large and growing  and the company should be able to continue to do well, all the time managing the technical aspects of the field and the assorted clients to sell to. With the departure from the Tembo licence in Mozambique this only serves to accelerate the M&A ‘mandate’ that Eskil Jersing has arrived with and the market eagerly awaits his stepping up to the plate.

Zenith Energy

Zenith has announced the issue of €3.12m of unsecured corporate notes at par with a coupon of 8% on the Vienna  Exchange. The company say that it expects to issue further tranches of the notes in 1Q 2019 as part of their ‘non-equity dilutive’ funding programme.

Jadestone Energy

Jadestone confirmed that production at Montara restarted today with both the oil and gas systems. Production will be ramped up and having had longer than they thought, have completed full maintenance the like of which it hadn’t seen for a long time so the company should have a long run of maintenance-free production.

Savannah Petroleum

Yesterday SAVP had a full conference call briefing in which CEO Andrew Knott explained where the Seven Energy process had got to and what the plans were for Niger. With a number of announcements towards the end of last year he took a number of questions and covered a lot of ground. The full new presentation is now on the website.

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