Oil price, Genel, Jadestone, Sound. And finally…

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WTI $46.78 +$1.26, Brent $50.25 +$1.39, Diff -$3.47 +13c, NG $2.55 +11c

Oil price

With Canada approving its first vaccine on Wednesday and the US FDA taking the Advisory Committee’s ruling for emergency use by 17-4  formal approval is expected to come as soon as today markets rallied again. Americans could be getting the jabs next week.

Investors are thinking about a vaccine-led boost to economic recovery and oil markets like the sound of that for demand. With stocks likely to draw through the first quarter markets will front run that news.

So, oil was up and Brent not only broke the magic $50 level but stayed above it for a number of sessions although it is teetering this morning. Nevertheless US oil stocks have had their best 3 week run since 1972…

Genel Energy

A good news day for Genel as they announce that they have received notice from the KRG that override payments, whereby Genel receives 4.5% of monthly Tawke gross field revenues, will resume with the January 2021 invoice, to be paid in February 2021. Assuming the prevailing oil price, this translates into over $5 million of additional cash proceeds on a monthly basis.

‘This is consistent with the communication received from the KRG as announced on 17 April, which stated that the override payments would be suspended for at least nine months, and also that in a scenario where the oil price recovers to c.$50/bbl, a review of the situation would take place immediately in respect of the outstanding receivable’.

In addition, the KRG has now also submitted a reconciliation model for repayment of the receivable relating to amounts owed for invoices for oil sales from November 2019 to February 2020 and the suspended override from March to December 2020. Genel are ‘working through the submission’ and hopefully further positive talks with the KRG will take place.

The market often underappreciates the impact of this override, and this helps to support the company’s exciting growth plans in 2021, with numerous drilling catalysts to come, and shareholders can yet again be confident that the corporate strategy is well on track.

Jadestone Energy

JSE has announced that it is to close its Lemang PSC acquisition ‘within the coming days’. The company states that all conditions required to complete its proposed acquisition of an operated 90% interest in the contract, onshore Indonesia, are now satisfied. This includes receipt of governmental approval of the assignment of the interest and of Jadestone’s appointment as operator, and other consents required under the Lemang PSC joint operating agreement.

Paul Blakeley, President and CEO commented:

“I am delighted to complete our acquisition of the Lemang PSC, and to re-establish our operating presence in Indonesia.   The asset adds balance and diversity to our portfolio and creates an opportunity to develop high-value gas for an energy-hungry region; a region which is otherwise increasingly dependent on coal to meet its growing energy needs. 

 “We will maintain a measured pace toward development spending, but look forward to resuming investment into a jurisdiction and basin we know well, through our team’s prior involvement in the South Sumatra region.”

Jadestone continue to beef up the operation with confidence for the future that I’m sure will be rewarding. When the oil price fell they were in a position to scale operations and investments back which was a wise move and with the signs of optimism in oil markets they are now returning to the market again which is good to see.

Sound Energy

Sound announced yesterday that with regard to its proposal to restructure the €28.8m 5% SSN’s the Adjourned Noteholder Meeting “met the required quorum of 25 per cent. of the aggregate principal amount of the outstanding Notes, the Proposal reached a simple majority however failed to receive the necessary majority in favour of three-quarters of the votes cast at such meeting, required to approve the Proposal by way of Extraordinary Resolution, consequently, the Proposal was therefore not approved”.

Whilst this is a disappointment for the company it is encouraging to note that the noteholders are engaging with the company and time is still on their side with 6 months to go and work is progressing.

And finally…

The final GP of the season in Abu Dhabi on Sunday sees the return of Lewis if only to restore some discipline into the shambolic pit stops…

Tomorrow night at the Wembley Arena Anthony Joshua takes on Kubrat Pulev. Joshua will risk his IBF, WBA and WBO world titles against 39-year-old Pulev and talk continues to intensify over a fight with WBC champion Fury in which all four heavyweight titles could be contested for the first time.

Racing tomorrow is at Cheltenham where the feature is the postponed Fitzdares Club Peterborough Chase, a great Club that…

And in the footy tonight sees the Hammers visiting Leeds whilst tomorrow the stand out fixture is the Manchester derby where the Noisy Neighbours visit the Theatre of Dreams, what reds team might show up? Also tomorrow is another derby, in the midlands Wolves host Villa, the Magpies entertain the Baggies and Chelski go to the Toffees.

Sunday sees the Blades at the Saints, Liverpool go to the Cottage, the Gooners host Burnley in a bottom of the table 6 pointer, Spurs go to the Eagles and the Foxes entertain the Seagulls.

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