WTI (Mar) $63.29 -$1.85, Brent (Apr) $67.55 -$1.91, Diff -$4.26 -6c
USNG (Mar) $3.51 +4c, UKNG (Mar) 81.2p -0.4p, TTF (Mar) €34.56 -€0.13

Oil price

Oil is flat today after a week in which it ebbed and flowed depending on the news from the US/Iran talks, which have started in Oman today. Any misplaced comment, discarded notes or flouncing out could alter the oil market in a flash. 

Also worth noting is that TotalEnergies has announced that it has farmed in as operator to Block PEL 104 offshore Namibia, this post code continues to be highly desirable, and with a number of UK companies involved, it will prove most interesting. 

Borders & Southern Petroleum

I noted this week that two modestly bullish signals were mentioned in RNS announcements, firstly their largest shareholder, Alan Brimacombe increased his stake to 15.08276% (14.067%) and NED Will Holden bought 1.5m shares making 2.5m in total. 

In themselves they aren’t massively important, the amount held by Will Holden is still quite small beer but for Mr Brimacombe to add to an already substantial stake rings a few bells for me, a very confident signal if ever there was one.

Readers will know that B&S has a formidable stake in the Southern Falklands Basin where they own 3 production licences which includes 100% of the potentially huge Darwin gas condensate discovery and and they in total have an area of some 10/- square km. Within this there are a number of low risk, high impact prospects that will appeal to a number of industry interested parties.

What has changed for B&S is the recent activity up at Sea Lion, the famous Rockhopper discovery which following a landmark farm-in by Navitas has now taken FID and is fully funded to get up and running.

B&S are running a farm-out process which in the light of activity noted at Sea Lion has become a genuinely realistic, substantial project. When Harry Baker took over as CEO I went to see him, actually more importantly, his rocks people, who gave me a hugely impressive presentation on Darwin and the adjacent acreage which I strongly advise potential investors to look at on the website.

I think that Borders is looking a very interesting opportunity, it is not without risk as success is predicated on a farm-out of Darwin but should that happen then the upside will be substantial. I think that all the chips are in place for this happening, it is one of very few ‘big’ projects that I think would appeal to super majors and national companies alike. 

Shell noted yesterday that big barrels are needed for a industry that ain’t going away, even the IEA has capitulated and this week at a conference has confirmed that it has rowed away from its ludicrous forecasts over the last five years. Compared to the complications in Venezuela and other geographies the deep water prospects in the South Atlantic must look appealing, put simply there are just not many opportunities of this size around right now. 

Following the Sea Lion activity there are now fewer plays available in the area, the development there will not only open up that project but will make the Southern basin look increasingly attractive, Borders has the look of the cheapest house on the street in what is undoubtedly an upwardly mobile area.

After a massive early run after the new CEO arrived the shares have settled down somewhat, indeed they are down 5% on a month and 10% on six months but on a year they are still up just over 40%. This will be knocked into the proverbial cocked hat if the company were to announce a farm-out, admittedly this is no certainty but I think that the risk/reward is worth assessing.

I called up Harry Baker to bounce a few of my ideas off him but unusually for him he was remarkably guarded, to the point of reticence which only makes me think that something might be afoot and it’s not 12 inches…

The Bucket List is up for updating imminently, the likelihood of B&S making an appearance as a high beta play is looking increasingly possible, watch this space… 

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog