Oil price, Amerisur, IGas, Touchstone And finally…
WTI $61.04 -62c, Brent $70.23 -39c, Diff -$9.19 +23c, NG $2.62 n/c
Oil price
When I wrote yesterday that oil was recovering by around a dollar I wasn’t, obviously, briefed that the Chinese were going to come out fighting in the trade war, oil ended two bucks off the highs as markets imploded. The trade situation may have to wait until the G20 meeting on 28/29 June, before the President’s meet, ironically just after the Opec meeting scheduled for 25/26 of June.
At that meeting there will not only be an interesting call on quotas but some mutual backslapping, Russia it seems has hit their target and is now producing just 11.16m b/d, we always said it would take time to get there…The meeting should be pleasant, Q2 demand will have showed decent strength and Q3 might look ok, obviously those buffoons at the IMF will probably lower assorted GDP forecasts but either way it will be a busy week. I suggest that Royal Ascot may be a rather pleasing warm-up for the challenges the week later…
An AGM update from AMER this morning which one might have thought would result in slightly more than a measly 1.84% rise in the share price. Production is now 6,500 b/d above the top end of the 5-6/- b/d guidance with all areas of the portfolio delivering.
On the drilling front there is much activity, Plat-26 has spudded an infill well and completed workovers at Plat-2 and Plat-7 where both wells are producing U and T sands simultaneously. The next job here is to re-enter Plat-22 for a sidetrack to increase the productive potential of the well. Not content with all that, up at CPO-5 the Sol-1 exploration well spudded at the weekend and will be a fascinating look at that part of the acreage.
The first batch of third party crude has arrived and the target of 2/- b/d by 2H 2019 looks to be on track, another high margin revenue stream to add to the numbers is under way. Although the market has not yet taken all this news into account in my view the shares are way too cheap for a stock that exhibits such significant growth potential, either that or I am missing something…
Another AGM update as the season gets into full swing, how many updates can we put up with? IGas though today are on good form with net production of 2,398 b/d for the first four months of the year, ahead of guidance. With 14.6 mmboe of conventional 2P reserves at the end of 2018 IGas is sitting on an NPV10 of $220m at $70 Brent which would give around 140p a share and shows just how undervalued the company is. Considering that the Committee on Climate Change recently said that the UK would still need significant quantities of gas until 2050 and beyond there is plenty of scope for IGas and that should be helped by the analysis expected soon from the Springs Road data.
Talking of plentiful announcements if you add quarterly numbers to all the other statements put out by companies there are almost too many opportunities to react to. Today Touchstone has 1Q results but a more operational review is expected soon i’m told. That would explain why there is no comment from the CEO, again i’m promised more later.
The results show that production was good, up 37% 1Q/1Q and with much lower expenditure as the company didn’t drill any development wells in order to cut costs and prepare for the Ortoire well which is expected to spud in late June. In the period the company raised £3.8m at 12p and more recently have had some operational difficulties which affect most in the trade but watch out for 2Q production numbers is the warning. All this would be put in the shade should the company have success at Ortoire, very much worth keeping an eye on…
And finally…
England take on Pakistan in the third ODI, today at Bristol starting at 1300 hrs, the competition for the fast bowling places has never been so intense…
And tonight sees the second leg of the Championship play-offs when local rivalry will be at the fore as the Baggies host Villa in what will be a Midlands Cup Final, many fans of both these teams read the blog so no bias here….
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