Malcy’s Blog – Oil price, Cairn, Petro Matad, Cluff, Providence/Lansdowne, Kosmos – And finally

WTI $55.66 +$1.71, Brent $61.89 +$1.39, Diff -$6.23 -32c, NG $2.12 -8c

By Malcolm Graham-Wood


Oil price

Friday saw a decent bounce in the oil price but that was before the intervention by President Trump who late on Friday up-scaled the tariff war and China imposed further imposed countermeasures on particularly US grain. The Yuan fell, adding to the problem and oil has fallen this morning as a result of these and other sundry GDP related worries.

The rig count fell, overall by 4 to 942 and by 6 in oil to 770 whilst Reuters reported that Opec output was at 29.42m b/d, an 8 year low.

Cairn Energy

Cairn has announced that its Godalen well in the Norwegian Sea (40% WI) near the Norne field is dry. There was no sign of the Rogn formation in the primary target and in the secondary target, of the 118m found in the Melke formation 40m was sandstone with ‘moderate’ reservoir quality.

Petro Matad

Rather mixed news from MATD this morning, first they announce the spud of the Red Deer-1 exploration well in the Asgat Sag Basin on Block XX in eastern Mongolia targeting a prospect with 48 MMbo of mean prospective resources. The well will take around 35 days and if successful the company have a call-off testing contract in place should it be warranted.

Of more worrying news, the company has announced that the Heron-1 well has been put on standby at first casing point as the provincial Government has challenged  Petro Matad’s legal right to use the land without tripartite agreement from two central Governments and the Province. The company say that they have been working within the permitting regulations and this has never been an issue before, in the meantime the rig is on standby whilst the situation is resolved. Let’s hope that this is resolved swiftly as even at a low level by industry standards of $12,000 per day these are costs the company can do without. I’m not expecting to hear from Mike Buck but if I do….

Cluff Natural Resources

Cluff has announced that Shell, as the operator has commenced a 3D seismic survey over the Pensacola Prospect on licence P2252 in the Southern North Sea. Obviously good news but as is the case with seismic although it takes only two weeks to run the results will not be known until early Q3 2020…

Providence Resources/Lansdowne 

With still no sign of the money from China, Providence and Lansdowne have little choice but to extend the backstop deadline again, here we all are assuming APEC have the moulah…

As for Providence, the previously announced strategic review is now being implemented with savage cost-cutting including getting rid of the technical director and his staff, support staff and downsizing the office to serviced facilities. Three NED’s are going and some advisors fees are going to go but probably not until a possible fundraiser has been arranged if no money comes in viz ‘alternative financing arrangements’. BTW this alternative financing needs to be in place by the end of this month…

This ‘re-engineering process’ is to reduce the annual cost of the business by 65% from $5.3m to $1.9m and is for a world in which PVR has farmed-out the majority of its portfolio leaving little need for technical staff etc without the burden of being an operator. A nervous few days for PVR but Barryroe has only ever been walking a tightrope, now is no different.

Kosmos Energy

A mainly good set of 2Q results from Kosmos whom I saw recently and who are full of excitement for the upcoming months. The results looked good enough, comparable NI of $22m, $0.05 p.s. with reduced debt and an increase in production. The company are looking to exceed guidance for Free Cash Flow and more importantly has an active 2H including 5 exploration wells in Mauritania, Equatorial Guinea and in the GoM.

The farm-out/ sell down in Mauritania and Senegal is going according to plan with a number of potential high-quality candidates on the horizon. As forecast following the Tullow statement the partners have experienced mechanical issues resulting in the EN-14 well not being completed and the next two wells deferred, this will result in Kosmos making 4 cargoes, not 5 this year. Accordingly, production guidance is now at the lower end of the range. Kosmos has much to look forward to in upcoming months with the drill bit and with a following wind, a number of key wells will deliver for them.

And finally…

England is struggling to hold on to the 1st test after a dire spell of bowling yesterday, having picked one crock and an off-spinner who aims for the head Ed Smith has to pull his finger out for Lords.

Another very exciting GP in Hungary as Lewis nips past Max after a tactical act of genius left him with better rubber, four weeks off now…

And the Championship got underway with some most interesting results, this league is going to be much more exciting than the Prem this year…And the Noisy Neighbours won the Community thingy on pens…


By Malcolm Graham-Wood

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