WTI $40.88 -8c, Brent $42.93 -23c, Diff -$2.05 -15c, NG $2.77 n/c

Oil price

Oil is modestly weak at the moment, down another 30 odd cents today but even on the week. On Thursday the weakness caused by the comments from the Opec Technical Committee that the cheats were still 2.33m b/d in the red offset the inventory stats, the Opec JMMC committee meets again today. Also negative were the US jobless claims and the worldwide virus numbers also continued to rise.

Those inventory stats, which to be honest can be taken with a slight pinch of salt because of hurricane Delta, showed a crude draw of some 3.8m barrels mostly in the Gulf as expected. Product-wise gasoline was down 1.6m barrels and distillates a huge 7.2m b’s reflecting increased seasonal demand from the autumn harvest and upcoming winter heating requirements.

Added, Baker Hughes rig count saw an increase of 13 overall to 282 units and oil was up 12 to 205 units.

Zephyr Energy

I recently wrote about Zephyr and its progress with regards to drilling a well in the Paradox Basin, today they announced how they would fund their corner. A placing to raise £2.25m in London which was well oversubscribed at 0.55p and included new and institutional investors as well as retail participants.

The funding fully finances the company’s maximum obligations for the State 16-2 dual use well in the Paradox Basin which is expected to spud before the end of the year. As previously announced Zephyr will be free to use the well bore for further drilling operations afterwards.

Colin Harrington, Chief Executive of Zephyr, said: “The Board believes that the spudding of the 16-2 well will be the catalyst to finally unlock the significant potential of the Company’s Paradox asset – a belief evidenced by the participation of best-in-class research and grant partners, by the dedication and commitment of Zephyr’s management team, and by the Board’s significant participation in this Placing. While the current management team has only been involved in the Paradox project since the middle of last year, we appreciate that many shareholders have waited a long time for this key moment, and we thank them for their patience to date.

The net proceeds from the Placing, when combined with the US$2m non-dilutive grant funding previously announced, leaves the Company well-funded to pursue both the proposed Paradox drilling project and other strategic ventures.  In addition to funding the State 16-2 dual-use vertical well, part of the Placing proceeds may be used for future lateral drilling on the Paradox project and/or the funding of potential acquisitions which meet our stringent investment criteria, at a time when there are significant opportunities arising in the Rocky Mountain region of the U.S. upstream oil and gas markets”.

It is worth noting that Origin Creek Energy has invested significantly again in this raise as has Jon Fitzpatrick and this looks to be another ace in his investment pack as I feel that there will likely be significant upside now that all the company’s ducks are in a row. I strongly believe that this management is first class, has skin in the game and so far has delivered the probability of the Paradox Basin being opened up, so far so good for ex Rose investors and those new investors on the block.

Total Market Solutions

I spoke to Doc Holiday of Total Market Solutions at the end of last week, with so much to talk about it has been divided into two parts. In part 1 I talk about BPC (2m 02s), RBD and UJO (7.40), PVR and LOGP (9.50), PPC (14.50),  CHAR (17.05), PRD (18.39), SDX (20.28), SOU (20.50), DGOC and GENL (23.00), SLE (23.15). Part 2 tomorrow.

Total Market Solutions interview: Malcy Talks Oil & Gas XXIII

KeyFacts Energy Industry Directory: Malcy's Blog