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Oil & Gas View – Oil prices ride high on attacks in the Middle East

Published: 09:31 16 May 2019 BST

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Diversified Gas & Oil (LON:DGOC): Operational Update

Egdon Resources (LON:EDR): Open Offer and Production Update

Empyrean Energy (LON:EME): Presence of Gas Clouds on Chinese Prospects

Energean Oil & Gas (LON:ENOG): Trading and Operational Update

Genel: AGM statement

Premier Oil (LON:PMO LN): Operational Update

Serinus Energy (LON:SENX): Q1 Results

Wentworth Resources (LON:WEN): Operational Update

 

Oil price:

Tensions remain high in the Middle East following the recent attacks on Saudi ships and facilities. Brent is trading round $72/barrel this morning.

 

Energy prices:           

Oil US$72.1/bbl vs US$71.0/bbl yesterday

Natural Gas US$2.604/mmbtu vs US$2.658/mmbtu yesterday

        

Company News

Diversified Gas & Oil (LON:DGOC): Operational Update

  • Onshore US assets performing well, production up to 90,000 boepd including newly acquired HG Energy II assets

  • Realised prices in line with expectations, opex and G&A remaining constant

  • Strong cash flow with EBITDA in Q1 approximately $63 million

 

Egdon Resources (LON:EDR): Open Offer and Production Update

  • Egdon yesterday afternoon announced an underwritten open offer to raise £2.2 million at a small (5%) dISCount to the share price

  • Petrichor, an existing 29.99% shareholder, has made an irrevocable commitment to take up c13 million shares to maintain its current percentage holding

  • It has also agreed to underwrite an additional 23.8 million shares, which could increase its holding to c38% of the new ISC of the enlarged company (the Takeover Panel has agreed to a waiver to stop Petrichor having to make a mandatory cash offer for the company)

  • The use of proceeds will be to progress the Gainsborough Trough shale-gas assets, to progress the Resolution gas discovery and for general working capital purposes

  • An operational update confirmed that production is currently running at 238 boepd, ahead of full year guidance

  • Looks like a sensibly timed raise to add to the company's small existing cash position, which should continue to progress the asset base, notwithstanding the ongoing issues/opposition to onshore shale gas development in the UK

 

Empyrean Energy (LON:EME): Presence of Gas Clouds on Chinese Prospects

  • Empyrean announces that analysis of 3D seismic on its Jade and Topaz exploration prospects confirms the presence of well-defined gas clouds, a positive sign to help identify hydrocarbon charge

  • In many other geographies, the presence of gas clouds has been an indicator of oil

  • Encouragingly, CNOOC allowed Empyrean access to its 3D data immediately west of Empyrean’s Block 29/11, which confirmed the presence of gas clouds in four CNOOC discoveries (CNOOC has a right to back in to 51% of Empyrean’s licence in the event of commercial exploration success)

  • Jade and Topaz prospects have P50 estimates of oil in place of c600 mmbbls, with a chance of success of around 30%, with plans to drill a well as early as Q1-2020

 

Energean Oil & Gas (LON:ENOG): Trading and Operational Update

  • Small production downgrade for Greek producing assets in 2019 (from 5,000 - 5,500 bopd to 4,300 to 4,800 bopd) although 2021 target of 10,000 bopd remains unchanged

  • Downgrade due to delays with previously announced extended reach well on Epsilon (a satellite to the Prinos field) and resultant decision to delay two planned producers on Prinos field from H2-2019 into 2020

  • Continued development of the company’s core asset, the Israeli Karish and Tanin fields with first gas still due in Q1-2021

  • Small reduction in 2019 capex due to delays on Epsilon, capex declines by $30-40 million to $740-770 million 

 

Genel: AGM statement

  • Positive statement, Kurdistan working interest production running slightly ahead of expectations at 37,600 bopd

  • Generating significant amounts of free cash flow, almost $50 million in first four months of 2019 and full year expectation well over $100 million

  • Highlights high level of returns and potential upside from Peshkabir oilfield

 

Premier Oil (LON:PMO): Operational Update

  • Oil and gas production running ahead of expectations, Premier increases guidance by c3% to 75 - 80,000 boepd

  • Net debt reducing due to increased free cash flow, company now expecting FY-2019 reduction in debt at upper end of $250 - 350 million range, would reduce overall net debt to around $2 billion

  • Operationally everything on track, successful appraisal wells on Zama discovery in Mexico, third appraisal well ongoing with a well result due next month

  • Positive update from Premier, still carrying material amounts of debt but balance sheet improving by the day

 

Serinus Energy (LON:SENX): Q1 Results

  • Largely neutral update from Serinus following previously announced first gas from Moftinu field in Romania last month and operational update earlier this week

  • Confirms that Moftinu-1003 well producing around 5 mmcfd (c830 boepd) with Moftinu-1007 also recently brought onstream

  • Moftinu-1004 well expected to be drilled later this year/early next to increase production further

  • Existing Tunisian production at 317 boepd in Q1, ongoing operations on track for first production from Chouech Es Saida field in Q3-2019

 

Wentworth Resources (LON:WEN): Operational Update

  • Production guidance for 2019 remains unchanged at 75 - 85 mmcfd gf gas despite production year to date averaging only 73 mmcfd from its Tanzanian assets

  • Company expects higher production in H2 as demand from two power stations forecast to run near to full capacity

  • Monthly payments continue to be received from the Tanzania Petroleum Development Company, allowing Wentworth to build on its small net cash position

  • An ongoing commitment by management on M&A opportunities, with the company confident it will complete a transaction in 2019

 

 

 

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