WTI $52.05 n/c, Brent $57.87 +55c, Diff -5.82 +55c, NG $1.94 +10c
By Malcolm Graham-Wood
With Nymex shut yesterday for Presidents Day WTI did not trade but Brent rallied somewhat after the runes from Opec+ seemed in favour of the 600,000 b/d cut recommended by the technical committee. As far as Covid-19 nothing much changes except the couple sending videos each day from the cruise ship in Japan are now in hospital.
A 2019 year-end reserves and operational update from PTAL this morning and the good news just keeps on coming. The data, from Netherland Sewell, shows a 20% increase in 1P reserves to 21.5 mmbbls, a 21% increase in 2P reserves to 47.7 mmbbls and an 8% increase in 3P to 84.8 mmbbls. This is particularly creditable given the 1.5m barrels produced last year giving reserve additions of 240% for 1P, 553% in 2P and 407% in 3P.
The NPV 10 is $434m ($20.19/ barrel) for 1P, $1.1bn for 2P and $1.96bn for 3P with all in costs representing $12.04, $5.32 and $4.06 respectively. Drilling has commenced at the Bretana 6H well which is planned to be the longest lateral to date at 1,100 metres with an estimated drill time of 60 days. After that the company will drill a second water disposal well followed by three more horizontal oil wells which bode well for shareholders. Current production is around 10,000 b/d which has been fluctuating during the commissioning of the CPF which is now nearing completion.
From a standing start as far as I was concerned, PetroTal had a fantastic year in 2019 and with the high-quality management and exceptional portfolio in front of them I see no reason to doubt my 80p target price or its position in the Bucket list which is approaching its review.
Echo has announced that its CLMx-1 well is a non-commercial gas discovery following completion of testing on the lower secondary target and the primary target.
The secondary Anita target, following perforation flowed at surface an estimated rate of up to 0.57 MMscf/d with an estimated average rate of 0.35 MMscf/d. The Anita target also yielded condensate with an API gravity of 50 degrees of 7.5-18 bbls/d in line with expectations. The primary target flowed up to 0.28 MMscf/d with no condensate.
The shallower Magallenes 60 (M60) interval is now under consideration with the objective including the M-40 interval as they may exceed the commercial threshold although the company stress that there can be no assurance that further testing and/or commerciality will follow.
Whilst the initial news is disappointing there has been discovery of a working petroleum system with flow of gas and condensate. The data recovered should be able to be used by the company to identify future drilling locations and the second Tapi Aike exploration well will spud in H2 2020. In the meantime, the testing at CLix-1001 is expected to commence 2H February.
Last night, confirming that points are taken more easily from the top clubs the Red Devils came away from Stamford Bridge with a 0-2 win.
Liverpool are in action tonight at Athletico Madrid and after last nights’ results in the Prem have already qualified for next year…
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