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Proactive weekly oil & gas highlights: Shell, BP, Diversified Gas & Oil, Chariot Oil & Gas, Mosman Oil and Gas …

There was a steady stream of news from London's oilers again this week, albeit with the big caps in the spotlight

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BP posted a third quarter loss of US$0.45bn with the performance again affected by lower crude prices and weak refining margins

This week was mostly about the big cap oilers as both Royal Dutch Shell PLC (LON:RDSB) and BP PLC (LON:BP) issued their third-quarter results.

First out were BP’s on Tuesday, with the FTSE 100-listed firm posting a tiny profit in its latest quarter as chief executive Bernard Looney said its main priority is to execute on its new strategy.

The oil major, which is in the process of a transition away from fossil fuels, reported a replacement cost net profit of US$0.1bn in the three months to end September 2020 compared to an underlying US$6.7bn loss in the previous quarter.

The new strategy has seen BP's dividend reduced to 5.25 cents per share per quarter while over the next ten years the company intends to increase low carbon investments 10-fold through a US$5bn a year investment into renewables, bioenergy and early positions in hydrogen and carbon capture.

In the latest quarter, stripping out one-off benefits of disposals and tax, BP saw a loss of US$0.45bn with the performance again affected by lower crude prices and weak refining margins.

It was Shell’s turn on Thursday, but in contrast, BP’s FTSE 100-listed peer increased its quarterly dividend just six months after announcing its first cut since the second world war.

That cut reduced the payout by 65%, while Thursday’s increase was a more modest 4% but Ben Van Buerden, the oil titan's chief executive, committed to raising the dividend by at least that amount every year going forward.

Shell’s third-quarter results to end September 2020 showed a return to profit of US$489mln, from losses in the previous three months, but were a 92% decline from the previous year.

Shell increased the quarterly dividend to 16.65 US cents but indicated the immediate target is to reduce net debt to US$65 bn from US$73.5bn at the end of September.

As part of that debt reduction programme, Shell said its fourteen refining sites will be reduced to six integrated chemical parks, with a switch in focus to performance chemicals and recycled feedstocks.

On the next tier down, Diversified Gas & Oil PLC (LON:DGOC) also reported its third-quarter numbers on Thursday, with the FTSE 250 firm saying the outlook for natural gas “is looking increasingly positive” after it put in a solid performance.

The group’s third-quarter adjusted underlying earnings (EBITDA) rose to US$75mln from US$68mln in the preceding quarter and US$64mln in the same quarter of 2019.

The US-based owner and operator of natural gas, natural gas liquids and oil wells and midstream assets declared a third-quarter dividend of 4.0 cents a share, up from the 3.75 cents paid in the second quarter. The dividend is now 15% higher than it was before the coronavirus pandemic – a trend at odds with many publicly-listed companies.

Among this week’s small-cap oiler news, Chariot Oil & Gas Limited (LON:CHAR) soared higher on Thursday following news it has received approaches from two parties interested in debt-financing the development of the Anchois gas discovery, offshore Morocco.

The Africa Finance Corporation, a pan-African financial institution, has thrown its hat into the ring, saying it would be interested in financing the development of the Anchois discovery and future discoveries within the Lixus offshore licence.

Chariot said it had also received a non-binding expression of interest for the provision of reserves-based lending for the development of the Anchois discovery from an unnamed multinational investment bank.

Both expressions of interest take into account the estimated capital expenditure required to bring the development online, which is expected to be somewhere between US$300mln and US$500mln.

On Monday, Mosman Oil and Gas Limited (LON:MSMN) said it has executed contracts to acquire an additional 80.83% working interest of the Cinnabar Lease in East Texas for a cash consideration of US$62,500, increasing Mosman's working interest to 97%.

The Cinnabar Lease is a 348.83 acre lease 'Held By Production', which forms part of the Challenger Project in which Mosman has a 16.17% working interest. The Challenger Project is located in East Texas, between Mosman's Stanley and the Champion Projects where drilling has just been completed at the Falcon-1 well.

The group said the acquisition will enable Mosman to continue to build the company's production base in Texas. In parallel, the immediate priorities are to bring the Falcon-1 well on production, to proceed with the workover at Duff and to plan and prepare for drilling the Galaxie well.

On the same day, Canadian Overseas Petroleum Limited (LON:COPL) revealed that the settlement date for the agreement between its 50%-owned joint venture Shorecan and Essar Mauritius over the OPL 226 prospect has been extended until January 29, 2021.

Completion of the agreement is subject to the Nigerian National Petroleum Corporation (NNPC) granting an extension of the exploration period for the OPL 226 licence beyond September 30, 2020. Application for an extension was submitted in early June but coronavirus (COVID-19) restrictions on travel and meetings have delayed the process, COPL said in a statement.

And Quadrise Fuels International PLC (LON:QFI) said on Monday that it has now completed a pilot trial of its alternative diesel fuel, MSAR, at an international chemical group customer’s plant in Morocco.

Coronavirus (COVID-19) restrictions in Morocco have been eased, which has allowed access to the plant, it noted.

Detailed plans are now being discussed for an industrial-scale MSAR trial at another of the client’s sites that will start in early 2021 ahead of commercial-scale phase 2 trials. This new industrial-scale trial is intended to demonstrate the wider potential of MSAR, Quadrise added.

On Thursday, Touchstone Exploration Inc (LON:TXP, TSE:TXP) revealed that it had spudded its Cascadura Deep-1 ahead of schedule at the Ortoire onshore exploration block in Trinidad and Tobago on October 27, 2020.

The oil and gas firm said it is currently drilling the surface hole to a planned casing depth of 900 feet with the bottom hole location anticipated to be 1,300 feet to the south-east. The well is targeting three distinct Herrera thrust sheets and is designed for a total depth of 10,600 feet.

Meanwhile, Touchstone said a formal amendment for a nine-month extension of the exploration phase of the Ortoire exploration and production licence is expected shortly, while it is also in advanced negotiations with the National Gas Company of Trinidad and Tobago (NGC) regarding a natural gas sales agreement.

The same day, Genel Energy PLC (LON:GEN) noted that DNO ASA, as operator of the Tawke PSC in Kurdistan, in which Genel 25% working interest, had said production at the licence increased to 113,700 barrels of oil per day (bopd) in the third quarter, reversing declines resulting from a reduction in activity triggered by the instability caused in the wake of the coronavirus (COVID-19) pandemic.

Genel said this production performance was delivered with a one-third reduction in 2020 spend versus original budget, which led to fewer drilled wells and instead the launch of a well intervention campaign at Tawke and Peshkabir, with both fields outperforming expectations.

The group noted that operator DNO expects to exit the year with Tawke licence production at third-quarter levels.

Genel Energy also announced details of payments that had been received from the Kurdistan Regional Government for oil sales during September 2020.

It said the Taq Taq partners have received a gross payment of $4.0mln, with Genel's net share of the payment being $2.2mln, while the Tawke partners have received a gross payment of $30.2mln, with Genel's net share of the payment being $7.4mln.

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