Malcy’s Blog – Oil price, Eco, Falcon, IGas & finally ‘special’

WTI $55.21 -$1.84, Brent $60.91 -$1.53, Diff -$5.70 +31c, NG $2.51 -6c

By Malcolm Graham-Wood

Oil price

With the trade talks seesawing and the Russian Oil Minister already playing the pre-Opec positioning games oil has come back a bit, made worse after hours with a 6m stock build from the API. This morning’s weakness has already been turned around as news from Opec was considered better…

Eco (Atlantic) Oil & Gas- If we build it they will come…

As readers know I don’t invest in any shares I write about but if I did I would be all over Eco Atlantic at the moment as the results comment was positive and the stories coming from Hess and Exxon nearby do not share the views of Tullow in its recent profit warning. Industry gossip is tending to say that, yes the oil is heavier but that there is so much of it that its not so much recovery as economics.

Sure, more work is needed but the last time I looked the permeability was excellent and it also has excellent porosity making the recovery perfectly possible and a half decent recovery factor in my view makes this project deliverable. Add to that the fact that Eco is fully funded for whatever 2020 might throw at it, and that will be a combination of exploration and appraisal of any one of a whole bunch of fantastic prospects. This one is going to run and run, it is no time for investors to do so.

Falcon Oil & Gas

Falcon has announced that the Kyalla 117 N2-1 appraisal well in the Beetaloo sub-basin has completed to TD. Early data shows continuation of of the Kyalla Fm between Beetaloo W-1 and the Amungee NW-1H wells. Elevated gas show with relatively high C¹,C² and C³ components were observed across the carbonaceous shales. Further testing will take place then horizontal drilling followed by fraccing and production testing.

IGas Energy

IGas has announced this morning that it has paid off its secured bond and drawn down from the $25m BMO RBL which itself reduces the overall cost of debt to the tune of $1m on an annualised basis and gives the company future flexibility. Net debt is unaffected by this and remains at £5.3m and the announcement has given the company the chance to confirm that production remains at the top of recent guidance and that free cash flow for this year is expected to be c.£15m. Despite recent action on fraccing it should be remembered that IGas has a very highly valued conventional business which is grossly underestimated at these levels.

And finally…

The ‘Special One’ goes to Tottenham, was I dreaming? If not I can give him Paul Pogba’s number ready for the weekend fixture against the Hammers

By Malcolm Graham-Wood

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