Oil price, JOG, Amerisur, Providence and Lansdowne, VOG – And finally…
WTI $55.63 +33c, Brent $62.47 +54c, Diff -$6.84 +21c, NG $2.25 -4c
Oil price
Crude oil had a bad week, until 9.30 on Friday night that was, having lost $4.58 (WTI) and $4.25 (Brent) during weekly trading the news came through that the Iranians had seized a British flagged tanker by military force. What remains of the navy was paddling away as fast as possible nearby but was no match for the speedboats and helicopters of the Revolutionary Guard. As I suggested last week, a few trigger happy militia are going to make this into something bigger and this is probably just the start. Oil is up well over a dollar a barrel this morning.
Adding to the problems the Libyan NOC has closed the El Sharara field this morning after weekend activities and that takes 290/- b/d off the market. With the Fed likely to lower rates at their meeting on Thursday there may be a slight following wind for the next few days from sundry directions.
A very significant announcement from JOG this morning with regard to the 31st Supplementary Offshore (Buchan Area) Licensing Round Awards. JOG has been awarded 100% WI and operatorship of three blocks including the Buchan oil field and the J2 oil discovery and is contiguous with existing JOG interest in P2170 that contains the Verbier discovery.
The Greater Buchan Area (GBA) including Verbier is expected to contain more than 100 MMboe of discovered mean recoverable resources and in excess of 300 MMboe of identified mean prospective resources. Work will now commence on an FDP and, subject to funding, first oil is envisaged in 2024, JOG is fully funded to submit an FDP.
Also of potential significant interest is that JOG and Equinor have signed a three month agreement giving the latter the option over a 50% equity interest in the Buchan blocks. Should this happen and if JOG were to remain operator then this would be a ground breaking transaction and be proof of the exceptional relationship the two companies have developed.
Unsurprisingly CEO Andrew Benitz is very pleased and describes the deal as a ‘transformational event’ which it surely is. Not only does this give JOG a huge amount of leverage by opening up the area east of Verbier as well as the J2 discovery north of Buchan it adds exploration blocks as well. Indeed, the talk of a major new hub in the GBA which I speculated about a long time ago is now becoming a reality. Benitz says that this is ‘the most significant event for JOG since its inception and the team are excited to be able to start work immediately’.
Following its disclosure on Friday that an unnamed party had showed an interest in its assets and the ensuing strategic review it turns out this morning that the predator is Maurel & Prom. They have made a ‘possible offer’ of 17p a share made up of 12.5p in cash and 4.5p worth of M&P shares. The Amerisur board said that the offer ‘materially undervalued the Company and was not at a level, nor in a form, that merited further consideration’.
The company will continue the strategic review intended to maximise value for shareholders which I take to mean seeing if any of the other players in Colombia such as ONGC, Geopark and sundry P/E operators such as Tony Hayward and Carlisle are interested in parts of the portfolio. It would be nice to think that a derisory offer such as that made by M&P will also be despatched in a similar manner.
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Both Provvies and Lansdowne have been on tenterhooks in recent days as the money from Chinese investor in Barryroe has failed to turn up at the bank. Now those with long memories know that this asset has what can only be described as a troubled history so would never rule out the brides father not turning up with the dowry on the big day.
I did speak to an expert in such matters at the weekend and whilst nothing is ever certain with such investors he felt that however troubling the delay might be it is more likely to be a dilatory bank clerk somewhere in the system than a desire to walk away from the project. Obviously PVR and LOGP are taking the same view as they have again given another backstop extension, this time until July 26th. Unsurprisingly Tony O’Reilly, normally so loquacious has not returned my email…
The social media world has been very excited about VOG in the last few days after an article by respected journalist Jamie Nimmo suggested that the company has signed a huge deal with Turkey’s biggest power company, AKSA Energy. The deal to supply as much as ’25 million cubic feet a day’ to a new AKSA power station in Cameroon would indeed transform VOG and according to the article is ‘only subject to Government sign off’.
As usual the VOG share price has not thought this worthy of consideration but I do think that should this be true it will make a significant change, one which to be honest should already be reflected in the price for greater operational performance this year so far. All the investigations I have made make me believe that this story is correct and I would expect all being well an announcement imminently.
Link
On Friday I sat down with Doc Holiday of Total Market Solutions for one of our increasingly regular chats which I enjoy a good deal. We talked about the following companies, AMER, PPC, ECO, MATD, RBD, UJO, IGas, EDR, CORO, AAOG, BLOE, HUR, TRIN and RRE. Here is the link..
Total Market Solutions interview: Malcy Talks Oil & Gas XII
And finally…
So revenge for the CWC then as the Kiwis will go home with a trophy after all, they beat the Aussies in the final of the netball…England came 4th.
Adam Peaty has broken the world record, again, after clocking below 57 seconds for the 100m breaststroke…
Gareth Bale has been put on the transfer list by Zinedine Zidane who said “We hope he leaves soon. It would be best for everyone. We are working on his transfer to a new team. “I have nothing personal against him, but there comes a time where things are done because they must be done.” Brutal or what?
Shane Lowry won the Open Golf Championship amid scenes like the Ryder Cup….
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