Oil price, Eco Atlantic, Gulf Keystone, IGas, Petro Matad -And finally…
Malcys Blog
Malcy's Blog -2 min read
10:43, 5th July 2019

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WTI $57.34 n/c, Brent $63.30 -52c, Diff -$5.96 -52c, NG $2.29 n/c

Oil price

With the US market shut yesterday there was no trade in WTI or at Henry Hub but Brent eased 52c in thin trading around the world. WTI has given up that difference first thing this morning but I’m not expecting fireworks today even after those in Washington yesterday. The only point of note was that British forces seized an Iranian tanker off  Gibraltar said to be bound for Syria.

Eco (Atlantic) Oil & Gas LtdFOLLOW

Eco Atlantic has announced that drilling operations have commenced offshore Guyana with the spudding of the well on the Jethro-Lobe prospect on the Orinduik Block. The well is estimated to take around 40 days to drill.

Gulf Keystone PetroleumFOLLOW

GKP has announced that a dividend of 5.68p is being paid today as per previous announcements. It is 1/3 of the total with the other 2/3rds being paid after the interim results.

IGas EnergyFOLLOW

Short of time yesterday but noticed that IGas announced that it would be drilling on its UK licence PEDL 235 in the Weald Basin. It will be targeting 300 mmbbls of oil in place within the Portland and Kimmeridge sandstones. The plan is to drill two exploration/appraisal wells which are fully funded from the company’s existing resources.

The process needs approval from Surrey County Council and also IGas will be doing their usual extensive local consultations  which are historically very thorough and effective which means that the case will be put across in an effective and sympathetic manner. I think this is very good news for IGas shareholders, they are likely to be adding delivery of high value barrels to their conventional portfolio and become another ‘Gatwick Gusher’ play…

Petro MatadFOLLOW

I was very fortunate to catch up with Mike Buck, CEO of Petro Matad earlier this week before he is off to Mongolia for another exciting drilling campaign. MATD is the leading explorer in Mongolia where Petrochina operates 95% of production, much of which is in decline. Interestingly, at present all crude is trucked to China and all refined product demand is imported from Russia…But, Mongolia is building its own refinery using a soft loan from India which is scheduled for start-up in October 2021 although that may be optimistic. So, with Petro Matad being the only real ‘local’ player opportunities are good and relationships with the Government are improving all the time.

It is fair to say that the 2019 exploration programme is concentrating on Block XX but Blocks IV and V haven’t been forgotten, indeed these two blocks are expected to have their exploration licences extended imminently. The key well, the Heron well is expected to be spudded around mid July, carries a 75% COS and should be producing results in the second half of August. MATD has an agreement with Petrochina for use of a local testing unit which could be on site within a couple of weeks or so if needed.

After the Heron well the rig moves to the smaller, Gazelle prospect probably in early September with its results probably at the end of that month. Meanwhile, using another rig, the plan is to spud the well on the Red Deer prospect in the Asgat Basin at the end of July. A number of people ask about blocks IV and V and why it is possible that the exciting Velociraptor well in the Raptor trend in Block V may not be drilled this year. As indicated above these blocks are likely to have received their extensions by then whilst the exploration licence on Block XX  expires next June and the company has to ensure that it has an exploitation licence in place come July 2020. If that means spending its money ensuring that it can be held by production effectively then it will be well worth it.

If successful at Heron, one can expect a long term production test which apart from hopefully keeping the licence will start to bring valuable cash into the company. Oil will likely be trucked the 25 km to the Tolson Uul CPF in unison with Petrochina with whom pretty good relations are being kept. This will probably mean that there won’t be lengthy and expensive unitisation discussions and that cash flow can be used for further drilling.

Petro Matad is in an interesting place right now, disappointment over last season’s drilling campaign are behind it and it has every chance of being a producer in-country this summer. It is fully funded for this programme which has appraisal at Heron 1, high potential at Gazelle 1 and a higher risk but sizeable structure at Red Deer 1.  It is clear and sensible that Block XX gets priority in the event of success for the reasons shown above and shareholders have every right to be optimistic about this summer’s programme.

And finally…

In today’s round up, Australia’s favourite son Nick Kyrgios plays up again at Wimbledon, this time just abusing the Umpire, hitting balls at his opponent, serving underarm and generally gobbing off like a spoilt teenager…Meanwhile Muzza remains in two doubles events and getting most of the publicity.

In the cricket Pakistan have just started their improbable fight to get ahead of the Kiwis, they are batting first and have to score 380 odd and bowl the Bangas out for 50…Australia lost Shaun Marsh yesterday with an arm broken in training whilst Afghan captain Gulbadin, having single handedly lost the game against Pakistan, yesterday ducked a catch in the outfield against the Windies…

At Sandown tomorrow it is Eclipse Day, always a great card and race and this year sees Enable take on Magical…

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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