Oil price, PetroTal, Union Jack/Reabold. And finally…
Malcys Blog
Malcy's Blog - 3 min Read
14:49, 18th August 2020

WTI $42.89 +88c, Brent $45.37 +57c, Diff -$2.48 -31c, NG $2.24 -2c

Oil price

Oil plods quietly upwards, yesterday there was a small product pipeline outage in the US which tightened that market as the pipeline continued but at reduced flow rates.

Today is the Opec Technical Committee ahead of the JMMC meeting tomorrow and with that in mind the cartel has stated that compliance is around 97% at present. On that basis we shouldnt expect fireworks tomorrow but the fact remains that oil is at a high last seen on the 6th March…

PetroTal Corp (PTAL)

2Q financial and operating results from PTAL today, during the quarter the 6H well came onstream on time and under budget with average production of 4,329 bopd in April. In May the Government issued a directive for COVID-19 prevention that shutdown the pipeline operations as well as the Bretana field taking 11,500 bopd of sales off the market.

As a result of this the company initiated significant cost reductions at operating and transport level but also the G&A, inclusive of an average 20% compensation reduction for management and directors. Also, and in the light of global market uncertainty, postponed the drilling of a second water disposal well, delayed completion of CPF-2 facilities, and postponed drilling of the BN 95-7H horizontal well.

As a result revenue and cash flows fell as but so did operating and transport costs. Cash at the quarter end was a healthy $20.4m as on June 18, 2020 as the Company completed an equity issue, raising gross proceeds of approximately $18 million.  The Company intends to use the net proceeds for the ongoing development of the Bretana oilfield and for general corporate purposes. The company still has a liability to Petroperu which is reducing as Brent recovers.

Finally, since the end of the quarter, as previously announced the Bretana field was shut-in due to COVID related unrest outside the field and it will stay shut-in whilst the inquiry is complete. The company expects that it will be able to recommence field production by the end of August.

PetroTal remains a stock in the sector which despite recent production problems has such significant potential that investors should keep it on the radar as one of the best managed companies in the sector.

Union Jack Oil (UJO) / Reabold Resources (RBD)

Rathlin Energy, as operator, has provided an update on the activities at the West Newton B site this morning. Yesterday the conductor rig and associated equipment was mobilised to the site and will commence drilling operations ‘shortly’.

The rig will provide a stable base for the main drilling rig during drilling operations after which it will be de-mobilised. At this stage the main rig will be brought on site and mobilisation will take ‘one to two weeks’ to rig up and prepare for a 2,000m well which is expected to take 6-10 weeks. This B-1  well is intended to appraise the Kirkham Abbey formation and test the Cadeby formation where there is significant upside potential.

These are exciting times for the West Newton partners as the significance of the upside is yet to be manifested in the share price of either quoted vehicle. Any success here would vindicate trust and patience shown by both Union Jack and Reabold as well as provide a huge possible return on investments.

And finally…

For Celtic tonight sees the start of their Champions League campaign, at home to KR Reykjavik.

For Quique Setien, manager of Barcelona and according to one insider ‘the Spanish David Moyes’ the 8-2 defeat last Friday was indeed his last game in charge of the club as the gave him the ‘El Bow’ today. Ronald Koeman is favourite to succeed him.

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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