WTI $52.14 -$1.19, Brent $58.29 -$1.52, Diff -$6.15 -33c, NG $1.83 -4c

Oil price

With today’s announcement that the first two confirmed cases of the Coronavirus have been confirmed in the UK the virus is now on our own doorstep. Having said that, the oil price is almost entirely dependent on the virus and its progress and whether or not there is an early Opec+ meeting in February and not March, or Shell put in a poor set of figures is to be honest neither here nor there.

Genel Energy

Genel has announced that payment has been received from the KRG for oil sales in September 2019, $4.3m from Taq Taq and $7m as an override payment from Tawke under the Receivable Settlement Agreement representing 4.5% of revenues. The company expects to receive regular payments as they had since September 2015, and to be fully up to date on all payments by the end of Q1, an expected normalisation of payments so good news.

Coro Energy

Coro are pulling out of the Bulu PSC offshore Indonesia after further delays following the extension of the long stop date and, after the recent success with the drillbit elsewhere mean that risks at Bulu are ‘significantly increased’ and other opportunities show greater potential returns. As a result of this, payment will not now be paid thus preserving Coro’s cash and also the remaining need for shares to be issued. The total cost to Coro for this will only be $250,000.

CEO James Menzies commented “As we look to build our portfolio, we recognise the importance of being highly selective in identifying the right projects to pursue whilst also managing our funds in the best interests of shareholders”. This appears to be good news for Coro as they shift their focus to a growing M&A market where in particular production deals look more attractive as proved by E&P companies buying production.

Savannah Petroleum

Excellent news for Savannah this morning as they announce that Accugas has entered into a new Interruptible Gas Sales Agreement (IGSA) with First Independent Power Ltd (FIPL) to provide gas to its Afam power plant. FIPL is an affiliate of the Sahara Group, a leading international energy and infrastructure company operating in over 42 countries.

Afam has a current power generation capacity of 180 MW and the IGSA envisages supply of gas produced by Uquo from Accugas to FIPL Afam with a maximum daily quantity of 35 mmscfd for an initial term of one year and a potential extension, should opportunities be mutually agreed. Indeed this is for Accugas its first new GSA in 5 years and partnering with the Sahara Group should be the beginning of a potentially major new partnership with possibilities for more contracts to be signed this year.