Malcy’s Blog – Oil price, Rockhopper, Predator, Reabold & finally

Abm August 22, 2019

WTI $55.68 -45c, Brent $60.30 +27c, Diff -$4.62 +72c, NG $2.17 -5c

Oil price

The oil price diverged slightly yesterday with Brent making a bit of a comeback after a period of underperformance. Whilst the EIA inventory stats were better than expected in crude oil especially at Cushing, the products stocks were ok in gas but poor in distillates.

All eyes on Jackson Hole today where we will find out quite how much panic is setting in over the US economy.

Rockhopper Exploration

Rockhopper has announced a Sea Lion update this morning with the post FEED optimisation process having ‘substantially de-risked from a technical cost and schedule perspective’. Phase 1 resources have increased from 220 to 250 million barrels (gross) with associated capex to first oil of $1.8bn, also gross.

Contracts for supply and service are nearing final agreement in preparation for execution at Project sanction. Along with this, as previously announced the PIM has been submitted to secure senior debt funding pre FID and CEO Sam Moody says that ‘significant progress has been made across key areas’. All in all we really are getting to the important and exciting time for Sea Lion which must look like a stand out asset in current oil industry projects and with Premier now a confirmed seller of Zama, focus very much seems to be turning to Sea Lion as the next big growth project.

Predator Oil & Gas

Predator has announced good news from Trinidad this morning with a CO2 EOR update which indicates that the operator (Columbus) has successfully completed workover operations to survey downhole the AT-5X well in preparation for CO2 injection and enhanced oil production. The preferred Predator downhole completion design was determined as being ‘operationally viable’ with a key interval of reservoir section successfully isolated from deeper reservoirs with the setting of a Cast Iron Bridge Plug. Next stop the AT-4 well for further operations of a similar nature.

This work has ‘substantially de-risked this unique project’ and at this stage looks very interesting for Predator and as I wrote a few days ago along with exciting progress in Morocco and also in Ireland makes this company a definite for the watch list.

Reabold Resources

RBD has increased its stake in Rathlin Energy, the operator of the West Newton field where testing is currently underway. As with another recent transaction, Reabold has invested £1m as an advanced subscription agreement which will be priced at either a 20% discount to the next funding or at 0.8427p being the price of the last fundraise. This looks like a typically very wise move by RBD and I still consider that West Newton has the scope to be a meaningful asset for the company and potentially transformational for the company going forward.

And finally…

Today the third Ashes test starts at Headingly and with Steve Smith still out with concussion the ground may have been levelled as now both teams are without their ‘best’ player.