Malcy’s Blog – Oil price, Aminex, Scirocco, Zephyr & finally

WTI $49.64 +61c, Brent $42.46 +73c, Diff -$1.82 +12c, NG $3.01 -2c

By Malcolm Graham-Wood

Oil price

Oil will not be changed much on the week, it is up a fraction this morning as the US jobless numbers filter through and also positive comments about a possible stimulus deal and vaccine data has encouraged markets. Perhaps more importantly Russian President Putin stepped into the Opec situation saying that he would extend cuts if required although there was no need to change the current deal ‘for now’.

It is interesting that natural gas prices have increased in the US and over here as reported by Serica recently. Apart from all the usual reasons I have propounded for this in recent months the EIA have just announced that they expect an increase of 1.1 Bcf/d in the 20-21 winter, an increase of 5.3%. Admittedly this is  based on US meteorologists forecast of winter temperatures and after last year’s mild-ish winter.

Finally in last night’s Presidential debate Joe Biden confirmed that it is his intention to close down the US oil industry particularly by stopping giving the domestic oil industry any more Federal subsidies. Add this to leases and pipelines being stopped, banning fraccing and obviously allowing Iran and Venezuela to return to the export markets and it is clearly an anti-oil platform. That seems to have been lost by the media in this campaign…

Aminex

Aminex has announced completion of the Ruvuma farm-out and has transferred 50% and operatorship of the project to APT. AEX has also repaid all debt and the security provided has been discharged. Aminex now has a fully carried 25% stake including potentially significant volumes of production.

As previously announced, the Farm-Out includes a full carry for a minimum work programme including the drilling and testing of the Chikumbi-1 well, the acquisition of 3D seismic over a minimum of 200 km2 within the Ntorya area, and further production wells and infrastructure as required to propel the project to its estimated P50 production level of approximately 140 MMcf/d.

The full carry for Aminex’s share of costs up to US$35 million in respect of its 25% interest implies a potential expenditure during the carry period of up to US$105 million for the aggregate 75% working interest held by Aminex and APT.  APT is expected to call an operating committee to present its programme and it is expected that they will formally present their programme and schedule for the drilling of the Chikumbi-1 well and the 3D seismic acquisition programme.

Robert Ambrose, Chief Executive of Aminex commented:

“We are delighted to finally Complete the Farm-Out and hand over operatorship of the Ruvuma PSA to APT. Aminex and Ndovu stand ready to provide all reasonable assistance to APT to help them in this regard and beyond. We are also extremely grateful to ARA Petroleum for its support over the past 12 months and look forward to the work programme progressing.”

Scirocco Energy

SCIR has ‘noted’ the announcement from Aminex which states that APT, as the new operator of the Ruvuma PSA, intends to call an Operating Committee Meeting (OCM) shortly, where it is expected that they will formally present their programme and schedule for the drilling of the Chikumbi-1 well and the 3D seismic acquisition programme.

Commenting on the update, Tom Reynolds, CEO of Scirocco, said

“This is a great milestone for all the parties involved in Ruvuma as it paves the way for the project to move forward.  We welcome APT, as new operator of the Ruvuma PSA, and look forward to hearing their plans at the OCM and working side by side with our partners as we agree next steps.  This update has a direct impact on Scirocco’s sales process and we can now engage with interested parties with clarity on the structure of the JV and certainty on the near term momentum for this world class asset.”

For Scirocco this is a game changing announcement, having had such a significant asset locked up for so long has been the equivalent of having its hands tied behind its back. Expect dynamic action from the company in coming months as it assesses opportunities, timings and future strategy.

Zephyr Energy

Yesterday Zephyr announced that the State 16-2 well first tranche of DOE funding had been received, some $600,000 being 30% of the total. That’s the beauty of dealing with the Government…

The company also announced that a drilling manager has been appointed, Bruce Houtchens has a great history in the Paradox Basin having worked for Fidelity E&P and he ‘brings a wealth of Paradox experience’ to the company.

Colin Harrington, Zephyr’s Chief Executive, said

“I am delighted with the progress made to ensure a successful and timely spud of the State 16-2 well.

“In particular, I’m very pleased to welcome Bruce to our project team – I’m not aware of anyone who’s drilled more successful horizontal Paradox Basin wells over the last decade.  I know he is excited to continue to deliver safe and successful wells within this basin, and to continue the process of overseeing systematic well cost reductions to improve future project profitability.

“Bruce’s direct drilling experience in the Paradox Basin will be absolutely invaluable as we move forward with our own drilling activity – activity which we believe will also benefit from our excellent 3D seismic coverage and site selection of a top-ranked location in our portfolio.

Expect plenty of activity from Zephyr in the coming weeks and months and I don’t expect the price to stay at 0.7p for very long…

And finally…

It is arguably a bigger rugby weekend than any other sport, the 6 Nations returns to finish off with Ireland v Italy tomorrow and also the Chiefs v Wasps for the Premiership title. There are two friendlies as France play Wales and England play the Babas.

F1 is back with the Portuguese GP, unsurprisingly the Mercs are fastest in practice.

And jump racing returns albeit with mostly small fields as trainers think that the going is too hard, try telling that to Stradivarius….

In the footy, tonight Prem leaders host Leeds looking for a continued shut-out but others are snapping at their heels after only 5 matches, 4 for some…Tomorrow the Hammers are entertaining the Noisy Neighbours, the Eagles go to the Cottage, Chelski go to the Theatre of Dreams and Liverpool host the Blades. Sunday sees the Saints v the Toffees, Wolves host the Magpies and the Gooners entertain the Foxes.

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(The opinions expressed here are those of the author, a columnist for Share Talk.)

Malcolm Graham-Wood

Source Link https://www.malcysblog.com/2020/10/oil-price-aminex-scirocco-zephyr-and-finally/

Website Link www.malcysblog.com

Disclaimer: Malcy’s Blog is provided for general information about the international oil and gas industry and the companies that operate within it. It does not constitute investment advice and Malcy does not buy or sell shares, warrants or bonds in any company written about within the blog. Information is taken from publicly available sources and any comment is that of the author who does not take any third party comment in the publication.


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