Malcy’s Blog – Oil price, Premier Oil, Reabold Resources & finally

WTI $39.82 +55c, Brent $42.03 +76c, Diff -$2.21 +21c, NG $1.67 -8c

By Malcolm Graham-Wood

Oil price

Oil is better again after positive inventory stats from both the API and the EIA in the last 24 hours with Brent expiry taken in good stead. The EIA stamped the API with a 7.2m barrel fall and refinery capacity rose again by 0.9% and whilst product numbers were a bit mixed, gasoline added with distillates drawing overall gas demand remained solid.

With US markets shut tomorrow for the Independence Day holiday, positions are likely to be flat and risk-off, whilst the extent of the amount of travelling and gasoline consumption will be important as will the virus numbers for the immediate future.

Premier Oil

An update from Premier in which it says that creditors have approved the Andrew Area and Shearwater assets under amended terms. The BP acquisitions remain conditional on the finalisation of the sale and purchase agreement, the refinancing of Premier’s existing credit facilities, equity funding and customary other approvals, including shareholder approval.

The Company also has support from a subset of creditors on the terms of the “Stable Platform Agreement” to waive the Company’s financial covenants through to 30 September 2020 and will be put to the creditor group for their formal approval by 8 July 2020. Under its current financing arrangements, Premier is required to provide a covenant compliance certificate to its lenders within 90 days of 30 June.

Finally, it seems that the acquisition of a further 25% of Tolmount from Dana Petroleum is now not going ahead. Whilst I initially found this slightly odd, as I have always been a huge fan of the Tolmount project, I can understand that right now it has less strategic appeal that the Andrew and Shearwater acquisitions, needs some ongoing capex and of course would up the size of the upcoming equity deal. Given the natural fit of Tolmount the opportunity there isn’t likely to go away any time soon so best get the other deals closed now.

Reabold Resources

A Romania update from Reabold which to be frank, I wasn’t expecting as it looks a little early to be calling the rates etc. Whilst gas hasn’t flowed to surface yet it is likely to need acidisation as relatively commonplace in the area and I expect much more news from this well in coming weeks.

And finally…

Last night was another big night in the Prem, the Hammers scored a last minute winner against Chelski, the Gooners put 4 on the Canaries, the Cherries also leaked 4 at home to the Magpies and the Toffees had a great 2-1 win over the Foxes.

Tonight Spurs go to the Blades and Liverpool go to the Noisy Neighbours and will get a guard of honour, maybe they should do one for next year as well…

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 publication.

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