WTI $63.13 -33c, Brent $66.77 -17c, Diff -$3.64 +16c, NG $2.68 +2c, UKNG 52p +1p
Oil is unchanged this morning but was up last week, WTI by $3.81 and Brent $3.82, some 6.4% and 6.1% respectively. This was because, as noted at the time all the economic data from the US and pretty much from China was overwhelmingly positive. In the US the vaccine programme is kicking in very strongly as it has in the UK and as and when other Governments around the world pull their fingers out and cut the dogma and get the jabs in the better it will be.
The Baker Hughes rig count showed a rise of 7 overall to 439 units and up 7 also in oil to 344, not really very high given WTI at $63.13.
A Lancaster production update this morning from HUR who have stuck to a minimal statement and no comment from the CEO. For 1Q 2021 production was 11,200 bopd (4Q 2020 12,700) and down due to reduced production from the P6 well, natural decline and a well intervention. Both wells are currently producing.
Not much one can add, there is much news to come from HUR, particularly on the financial discussions front but for the time being all is quiet.
Coro has announced its final results for the year ended 31 December 2020 but for some reason there are no figures at all in the statement, at least none that I have found and following the trend no CEO comment either. I have yet to meet the new CEO but I know he is not totally reticent and like me he probably thinks historic financials are pretty much a waste of time.
In the meantime they have re-announced audited resource upgrade in May 2020 for the Mako gas field, Duyung PSC – 79% increase in 2C (contingent) recoverable resources to 495 Bcf (gross, full field) and that with the increased Mako resource estimates accepted by Indonesian regulator, the updated Plan of Development is being prepared by the Operator.
The company initiated a revised South East Asian strategy in September 2020 to include renewables and other low-carbon energy sources and related technologies which support the energy transition and to expand the clean energy portfolio with acquisition of 20.3% interest in ion Ventures in November 2020, a developer of clean, flexible energy assets including energy storage.
What has happened and is to me a seriously good move is the acquisition of a portfolio of early stage, operated renewable energy projects in South East Asia through the acquisition of Global Energy Partnership Limited in March 2021. Simultaneously, the Board and executive team was strengthened with appointment of CEO with highly relevant experience and regional knowledge and they raised net proceeds of $5.3m (GBP3.9m) in March 2021 through share placing and open offer to fund transition energy strategy in South East Asia.
An operational and commercial update after the first quarter this morning, this comes on top of recent announcements that signalled new gas contracts which came with forecasts of 50% revenue increases.
Daily operations in the field at Santa Cruz Sur continue with the delivery of produced gas to customers as expected and without interruption. Production over the period from 1 January 2021 to 31 March 2021 reached an aggregate of 152,673 boe net to Echo, which included 17,814 bbls of oil and condensate and 809 mmscf of gas.
‘As a result of a series of optimisation activities being implemented in the field around the current production, average net daily liquids production in March 2021 increased to 230 bbls/d, a 24% increase over production in February 2021’.
The Company has confirmed that the materials required for the infrastructure upgrades of 23 km of pipeline, announced on 24 February 2021, are now being fabricated by the supplier in Buenos Aires following contract execution and the installation schedule remains in line with that announcement.
On a commercial basis ‘domestic energy demand in Argentina has continued to improve through 2021 to date and the Company has recently sold a significant domestic cargo of 8,812 bbls of oil net to Echo, at the Punta Loyola terminal, with a price linked to the Brent benchmark subject to typical local discount. Following this sale, net oil stock at the Punta Loyola terminal (excluding inventory in field tanks) is currently 4,237 bbls’.
Following the Company’s announcement of 24 March 2021, relating to new gas sales contracts for 2021-2022, the Company has now agreed summer and winter pricing for its annual industrial clients, with the contracted winter premium providing substantially increased cashflow in the near term for future operations and production enhancement work programmes. For the committed production over the key southern winter period (May to September), the Company will sell natural gas at an average price of $3.52 per mmbtu, which compares to $1.35 per mmbtu for industrial clients the previous year.
Martin Hull, Chief Executive Officer of Echo Energy, commented:
“Advancing into 2021, Echo has been set on optimising its existing production portfolio and low-risk development upside across the Santa Cruz Sur asset base. The benefits of these earlier efforts are now being seen. Additionally, I am pleased to report that Echo continues to benefit from increasingly strong local energy demand and pricing, which has led us to obtaining premium seasonal pricing to current prevailing spot market prices, and more than double the price of the previous winter period. Against this improving domestic energy price backdrop, we have also executed a significant domestic oil cargo sale which marks an important milestone linked to the improved economic outlook.
Furthermore, we are pleased with the progress we are making on our production optimisation activities across Santa Cruz Sur. Liquids production has recently increased in advance of the upgrades to the 23 km pipeline infrastructure which are progressing at pace. These upgrades will not only unlock previously shut-in liquids production but will also provide additional capacity with which to open up future incremental enhancement projects that have already been identified.”
This exceptionally positive report from Echo reinforces the current newsflow that I referred to, it also shows that the company is reaping the reward of earlier investment and good local energy markets. The shares have slightly more than tripled from the December lows as the market has come to appreciate the operational improvement I think that there is more to come.
Trinity Exploration & Production
An operational update for 1Q 2021 where production averaged 3,107 bopd (4Q 2020 3,202 bopd).
‘As a result of the continued strong operating performance, the Group’s unaudited cash balances remained robust at US$20.0 million as at 31 March 2021 (US$20.2 million (unaudited) as at 31 December 2020) despite increased investment in growth initiatives occurring in Q1 2021’.
No new drilling took place in Q1 2021 but 1 recompletion (“RCPs”) (Q4 2020: 4) and 22 workovers (Q4 2020: 31) were completed during the period, with swabbing continuing across the Onshore and West Coast assets. Continued deployment of Supervisory, Control and Data Acquisition (“SCADA”) platforms with acceleration of roll-out to be implemented in Q2 2021 following the arrival of 23 additional units in March 2021.
Production volumes for the remainder of 2021 ‘will depend on oil price and general market conditions supporting the economic and technical (based on onshore seismic interpretation) case for the resumption of new drilling activity’. However the company offer guidance of average production for 2021 expected to be 2,900 – 3,100 bopd (before the potential drilling of new wells and/or acquisitions) (2020: 3,226 bopd).
Bruce Dingwall, CBE, Executive Chairman of Trinity, commented: “In addition to our strong core production operations, where our performance has bucked the trend, we have a number of exciting opportunities to develop and radically enhance our portfolio. We are strongly positioned to grow on a number of fronts over the next 6-12 months, from initiatives both within the current business and from new projects that could be brought into the portfolio. We remain highly focused on scaling our business and generating increased returns.”
First day of dealings for Advance Energy today following the raise of GBP21.8m at 2.6p. It comes as the company completes the acquisition of a 50% equity interest in Carnarvon Petroleum Timor the owner of a 100% WI in the Buffalo PSC offshore Timor-Leste.
I have met with a number of directors of Advance and have been most impressed with their initial deal and their exciting plans. Shades of a junior Jadestone yes but they have plenty to do to emulate them but it is a sincere form of flattery to Paul Blakeley and team…
Let’s take it from the top as today has been announced the founding of the European Super League. This is a disgrace and a shame on the money grabbing owners of all 6 UK clubs, and worth noting that the big 2 German clubs are not giving the idea house room, maybe as the real fans own 50%.
And into the bargain ahead of the Haribo Cup Final Spurs have sacked Jose Mourhino….
This last weekend the Toffees drew 2-2 with Spurs, Wolves beat the Blades 1-0, the Magpies beat the Hammers 3-2, the Red Devils beat Burnley 3-1 and the Gooners got a 97th minute equaliser against the Cottagers.
In the FA Cup Chelski beat the Noisy Neighbours 1-0 and the Foxes beat the Saints by the same score.