Malcy’s Blog – Oil price, Genel Energy,President Energy, Atome & finally

WTI $78.81 -$2.05, Brent $80.54 -$1.45, Diff -$1.73 +60c, NG $5.72 +5c, UKNG 196.99 +3.89p

By Malcolm Graham-Wood

Oil price

The oil price will end the week down some four dollars but Opec+ couldnt have wished for a better backdrop to their discussions which have led to the 400/- b/d increase being rolled over. Initially the US inventory stats did it then the WHO who pronounced that cases of Covid 19 in Germany were a ‘worrying resurgence’ and had followed Russia as a 4th wave.

COP 26 continues and as Steve Sedgewick on CNBC this morning noted that anyone concerned with fossil fuels is not welcome at the conference which to a large degree is avoiding the truth.

Genel

Genel has announced that payments have been received from the Kurdistan Regional Government relating to oil sales during August 2021. Tawke $13.7m, Tawke override $8.2m, Taq Taq $1.9m, Sarta $2.2m, receivable recovery $3.9m making a total of $29.9m.

Following the receipt of the receivable recovery payment, Genel is now owed $128 million from the KRG for oil sales from November 2019 to February 2020 and the suspended override from March to December 2020.

President/Atome

ATOME Energy has announced the signing of a Memorandum of Understanding with ANDE, the national electric power company of Paraguay, for the supply of up to 250 megawatts of power for its production facility.

The facility will be uniquely situated at the future economic zone within the Technology Park of Itaipu, adjacent to the Itaipu Binacional dam jointly owned by Paraguay and Brazil, the second largest hydroelectric dam by output in the world.

The MOU is a precursor to a full form definitive Power Purchase Agreement, which is planned for next year in order to facilitate the commencement of production in late 2023 to early 2024.

The facility’s location, which is in cooperation with the Paraguayan arm of Itaipu and in close proximity to the power source, as well as being adjacent to the borders of Argentina and Brazil, is a significant commercial and logistical advantage, combined as it is with available land, water access and transport links.

ATOME places Paraguay as its primary focus of investment for hydrogen and ammonia in the Americas. The Company will concentrate on the development of its project in Paraguay without distraction and in an expeditious way.

ATOME will initially concentrate on servicing the domestic market and will promote the Paraguayan decarbonisation strategy set out by the Government of Paraguay, creating local employment and stimulating the economy.

ATOME, through its parent President Energy, has for 10 years been a leading investor in Paraguay with over US$100 million invested to date, with another US$20 million of investment projected to be made in 2022, outside ATOME’s project.

Alongside Peter Levine, who is well known in Paraguay, the Chairman of both President Energy and ATOME, as well as their largest shareholder, the companies also have as their second largest shareholder Trafigura, the worldwide commodity and logistics business which owns the Puma brand of fuel distribution and filling stations in Paraguay.

James Spalding, the former Paraguay General Director of Itaipu and now Head of ATOME Paraguay, commented as follows:

“We are very pleased with the signing of this MOU with the President of ANDE as it represents a new concrete step forward. With the framework in place, we can continue with ATOME’s plan to install a cutting-edge green hydrogen and ammonia production plant in cooperation with the Technological Park of Itaipu Binacional. On behalf of the ATOME team, I would like to reaffirm our commitment to make strong and swift progress to support Paraguay’s decarbonisation strategy and economic development, based on clean and renewable energy supplied by Itaipu.”

Felix Sosa, President of ANDE, stated as follows:

“Paraguay’s energy must be used as the main engine of the country’s economic and social development and for this it is necessary that the industrial sector is further developed. We look with great enthusiasm at the coming of international investments to Paraguay even more when they bet on innovative processes focused on sustainable development.”

I must admit that I am no expert on all this but it does look like Atome is up with the leaders in the current hydrogen revolution. There is no doubt that Peter Levine and other key shareholders are readying Atome for flotation and a well funded future. 

As for President it announces an update on its oil and gas operations, the spud of first new oil well in Puesto Guardian, Salta, Argentina and two new workovers of gas wells commenced in Rio Negro, Argentina. Workover of the Triche well now in progress in Louisiana and completion of the Paraguay farm-out is expected this month.

There is much happening at President and at Atome and President shareholders would do well to remind themselves of their interest in the former. It should be remembered that money raised when Atome floats, and we are reminded that that date is not far away, shareholders will get free shares in Atome. President has currently 85% of Atome and will be dividending 60% leaving 25% residual owned by President immediately prior to dilution of new money. 

Accordingly, with operational excitement in an undervalued President, itself scheduled to drill in Argentina,  progress in Louisiana and a long awaited farm-out of assets in Paraguay to come, shareholders have the potential to benefit from the imminent Atome dividend. Either way a substantial free value with potential upside if other hydrogen stocks are to go by. 

I just think that this may be the first independent producer of green hydrogen and ammonia to come to the UK market and that it has not yet been worked out by the market that there is an opportunity for an arbitrage and with the quality of President, great backing.  

And finally…

The Prem kicks off tonight with the Saints taking on Villa, tomorrow’s first game is another stormer as the Noisy Neighbours visit the Theatre of Dreams, will it be bye bye Ole? Elsewhere the Bees host the Canaries, Chelski entertain Burnley, the Eagles take on the Wolves and the Magpies and the Seagulls are the aviation derby. Sunday sees the Gooners hosting the Hornets, Spurs go to the Toffees, Leeds entertain the Foxes and The Hammers host Liverpool.

In Rugby, England host Tonga at Twickenham, Farrell tested positive today, Ireland face Japan and Wales host South Africa and on Sunday Scotland host Australia.

Racing is at Aintree and Wincanton

The T20 World Cup continues, today New Zealand beat Namibia and Scotland are batting v India right now.

And in F1 it’s the Mexican GP in Mexico City where Max is edging further ahead and allegedly the Red Bulls are better at atmosphere.

The opinions expressed here are those of the author

Malcolm Graham-Wood

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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 blog


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