Malcy’s Blog – Oil price, Predator, Echo, Helium 1, Reabold, Trinity & finally

WTI $71.64 +60c, Brent $73.51 +43c, Diff -$1.87 -17c, NG $3.21 -4c, UKNG 74.0p +3.01p

By Malcolm Graham-Wood

Oil price

Oil dug in last week and was resilient as the Fed meeting led to them starting to acknowledge the inflation threat but whilst they still don’t see rate rises until 2023 that is already one year before previous thoughts. This gives worries about the potential strength of the dollar but not something to really lose sleep over.

Also there was a lot of Iran talk around, firstly the 6th round of talks ended as delegates returned home to talk to their Governments and to ‘take stock of the significant progress’ having been made. Also people wanted to watch the results of the Presidential election unfold but unfortunately it was not conclusive as although hardliner Ebrahim Raisi won with a 62% landslide it was on a very low turnout resulting in a far from ringing mandate to govern.

The Baker Hughes rig count saw overall units rising by 9 to 470 and in oil it was up by 8 to 373 which was a bigger rise than most recent weeks but still won’t worry anyone expecting increases in US production.  So oil was up by 73 cents in WTI and 82c in Brent last week and as I write is up a mere 22 cents thus holding pretty reasonable levels and to me looks like the bulls are still in charge.

Predator Oil & Gas

Predator has announced that the MOU-1 well was spudded at 0100 hours on Sunday 20th June 2021 with drilling ahead in progress to the first planned 133/8” casing point. The well is forecast to take up to 20 days to drill and to run wireline logs.

MOU-1 has been given a “tight hole” status and therefore, unless circumstances  dictate otherwise, there will be no more information released until wireline logs have been evaluated.

Paul Griffiths, CEO of Predator Oil & Gas Holdings Plc commented:

“We are delighted to have completed the rig mobilisation, rigging up and spudding of the MOU-1 well safely and in complete alignment with the pre-drill schedule. This is an exciting well for the Company and its shareholders and represents the culmination of work over the last 18 months, during the COVID crisis,  to create the opportunity to drill in Guercif at this time. We are very appreciative of the many people within the Company and especially those contracted to the Company who have worked together as a team to execute the initiation of the drilling programme. We are also grateful for the unwavering support given to us by our partner ONHYM to help facilitate the commencement of operations. Pictures from the MOU-1 well site can be found at www.predatoroilandgas.com “

This is indeed an exciting time for Predator as well as ONHYM and Morocco and PRD has done  a great job in getting the rig to spud date. Whilst this well is potentially the single most important catalyst to creating near-term shareholder value, to paraphrase CEO Paul Griffiths, it is only part of a multi continental portfolio all of which could create significant return for shareholders.

Echo Energy

Echo has provided an operational update regarding its Santa Cruz Sur assets, onshore Argentina, for Q2 2021 until 14 June 2021, it has confirmed that following fabrication, installation of the pipeline infrastructure required to bring back online the liquids production previously shut in April 2020 is now complete.

It is expected that the first tranche of production to be brought back online will be from ten wells in the Campo Molino and Chorillos oils fields. This work to bring the initial production back online is expected to take around 15 days. When these wells were last online, the combined gross production was approximately 138 bopd gross, 96 bopd net to Echo.

This first tranche of restored production will increase the number of active producing oil wells at Santa Cruz Sur to 18. Subsequent tranches of production when brought back online should increase this active oil well stock to around 35. The programme of work to bring online the subsequent tranches of wells will be optimised both to maximise cost efficiencies and accelerate production increases.

Increasing liquids production represents delivery upon the Company’s strategy to leverage the marked upswing in global commodity prices. It is expected that the additional liquids production will contribute to a material cashflow increase. The Company is additionally pleased to confirm that since 1 May 2021 gas production has been sold under the previously announced new gas sales agreements, with the significantly increased winter pricing. Gas volumes not sold under long term contracts are sold to the spot market.

In May 2021, the company sold a total of 18 MMscf to the spot market at an average price of $US 5 per mmbtu representing a 151% in prices compared to the March 2021 average spot price. Daily operations in the field at Santa Cruz Sur continue with the delivery of produced gas to customers as expected. Production over the period from 1 January 2021 to 14 June 2021 reached an aggregate of 278,600 boe net to Echo, which included 33,910 bbls of oil and condensate and 1470 mmscf of gas.

Martin Hull, Chief Executive Officer of Echo Energy, commented:

“As we have moved into mid 2021, Echo has continued to deliver on its promises, with the pipeline infrastructure delivered to  schedule. We are now moving into a phase of increasing liquids production enabling Echo to benefit from the upswing in global oil prices and the improved macro-outlook as demonstrated by our increased frequency of oil sales. Against this global backdrop, domestic spot market gas prices have also risen markedly, and we have  been able to take advantage of this improving domestic situation. With improved economic tailwinds and new infrastructure installed in the field, we will have additional capacity to commission incremental enhancement projects within the portfolio. The increasing cashflows are expected to enable further production investments to be funded from operations. These preparations to take advantage of identified material organic growth options demonstrate Echo’s commitment to and confidence in its growth strategy in the Santa Cruz Sur assetsOur clear focus remains on creating value for our shareholders and we continue to progress opportunities to do that across the portfolio connected by our enhanced infrastructure.

Echo continually keep delivering good operating news from Argentina and this is no exception. The recent share price fall has been a disappointment after such a good run up earlier in the year. This should make  revenues look a whole lot better and lead to higher investment in the fields, so good news for Echo.

Helium One Group

Helium One has announced the presence of  helium enriched gas in drilling mud (a “Gas Show”) in the Lake Bed Formation while drilling Tai-1 well at the Rukwa Project (100%) in Tanzania. Helium shows identified in shallow strata from 70.5 metres led to Micro-Gas Chromatograph showing He concentrations up to 22,084ppm (2.2%) He in gas recovered from drilling mud.

Drilling operations will continue to the base of Lake Bed Formation, anticipated to be at 400 metres, before wireline logging can provide additional information. The management had indicated in a recent interview with me that the company would announce any Helium shows and that gas recovered from drilling mud is positive but as of yet still early days.

David Minchin, Chief Executive Officer, commented:

“We are very excited to have identified the presence of helium in drilling mud from very shallow depth.  Drilling will now continue to the base of the Lake Bed Formation at which point we will run wireline tools to obtain more detailed formation evaluation.

“Although concentrations of 2.2% He are encouraging indicators of free gas, it is important to note that a helium show is not evidence of commerciality and further evaluation is required by wireline logging to confirm any potential pay zones.  It is also important to note that gas concentrations encountered in mud logging are qualitative rather than quantitative and in-situ grade may be higher or lower than what is measured.

“With over 1000 metres still to drill at Tai-1 these are early days in our exploration drilling.  Early helium shows give us a great deal of optimism for the remaining programme and we look forward to providing further updates as the project develops.”

Reabold Resources

Reabold has had an 18-month extension granted for Ex-10 Parta Exploration License for the current
exploration phase. The extension enables ADX to source alternate funding on behalf of Danube Petroleum
Limited to acquire a 100 km2 3D seismic program that was deferred following a default by a previous partner.

The Ex-10 Parta Exploration License surrounds the Iecea Mare production license in Romania which contains the suspended Iecea Mica-1 (IMIC-1) gas well drilled in late 2019 and the planned 3D seismic work program is designed to target appraisal opportunities within the Iecea Mare Production license as well as both exploration and appraisal targets in the large Parta exploration license.

Trinity Exploration & Production

A capital reorganisation from Trinity this morning featuring a 10 for 1 consolidation and with new shares replacing deferred stock which has been cancelled.

And finally…

What a weekend for sport, something for everyone in there. Friday night saw England play Scotland at Wembley which ended in a 0-0 draw. Since that game Scotland’s man of the match, Billy Gilmour has tested positive for Covid so misses tomorrow’s game, fortunately no English midfielders got close enough to him to breach social distancing and require a test themselves….

Meantime Wales, who are looking good reached the last 16 but yet don’t know who they will play.

The rugby semis showed off the attacking nature of the game as Harlequins came from 0-28 down to win 43-36 after extra time and will play the Chiefs in the final.

In the French GP Max caught Lewis on the penultimate lap but it was more of a tactical race, unusually Mercedes messed up reacting to the undercut and should have brought Lewis in the second time Max pitted.

And Jon Rahm won the US Open which is great after his recent Covid problems and he is a joy to have on the circuit. (And hopefully in the Ryder Cup team…)

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

Malcolm Graham-Wood

Source Link https://www.malcysblog.com/2021/06/oil-price-predator-echo-helium-1-reabold-trinity-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 blog


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