Oil price, Kistos, Falcon, Pantheon. And finally…
WTI $44.91 +$1.85, Brent $47.86 +$1.80, Diff -$2.95 -5c, NG $2.78 +6c
Oil continues its rise, Brent is up 68c at $48.54 this morning and seems to have shrugged off the indifferent API stats which showed a build in crude and gasoline but a further draw in distillates, let’s see what the EIA say before the US closes down for Thanksgiving and Black Friday.
Everything else is the same, upward pressures from the vaccines, the weak dollar, expectation of good news from Opec next week have been added to by political problems from Houthi rebels and outages in Nigeria after a pipeline incident in the Niger Delta.
Today sees the arrival on the Aim market of Kistos (AIM:KIST) and first day of dealings, as I write the shares are at a small 4p premium. Much is expected from Andrew Austin and his high powered team who are all currently non-executive until such time as a deal can be struck, it’s a lean operation at the moment with no pay, options or warrants for directors and no whizzy offices either.
The recent raise has brought a number of institutional investors to the list although some notable investors in RockRose are not able to invest whilst it is still a shell without any investments. So on that front, in a long chat with Kistos Chairman Andrew Austin yesterday I asked about when and in what area we might expect to see the company investing in.
As for where, I would expect more in gas than black oil and more of a focus on storage, infrastructure and energy transition that before with a focus on low carbon intensity and ESG to fit current investor requirements. As for when, and without giving away anything I would be surprised if Kistos wasn’t looking at stuff already and maybe a deal in Q1 2021 and completed in Q2 is not over ambitious with more in the pipeline.
With just over £30m raised and a pre-IPO subscription the market cap is just over £40m so with leveraging a deal size of maybe a bit short of £100m is a possibility. Including the Pre-IPO Andrew Austin today holds 33.54% of the company and the whole concert party of investors as detailed in the admission document have some 45.22% which to me just means quite a small free float.
I see no reason why this vehicle could not do ‘another RockRose’ as opportunities remain available and management is incentivised to deliver the goods. At around 100p the shares have secured good backing by industry professionals, previous shareholders including the retail army of fans. With more waiting on the side-lines when deals start to appear I see no reason that the shares shouldn’t motor again.
Falcon Oil & Gas (AIM:FOG)
News today from Falcon’s Kyalla 117 N2-1H ST2 well where an operational update, following successful fraccing showed some gas shows but ‘ a measurable gas breakthrough has yet to occur’. Speaking to CEO Phillip O’Quigley this morning in order to get an idea of the well difficulties he was keen to assure me that it was not an unusual build up of saline found in the top of the reservoir.
‘Operations are now being planned to re-enter the Well with coiled tubing and apply nitrogen lift techniques to lower pressures in the Well and assist with achieving and sustaining gas breakthrough that, if successful, will allow extended production testing to commence. This technique is not uncommon and was applied to the successful Amungee NW1-1H well in 2016’.
The work is being assessed right now and it may be possible to do before the weather closes in, in which case production could continue through March when the season reopens. If it is not possible then work will restart in April.
Pantheon Resources (AIM:PANR)
The exciting rebirth of Pantheon continues as they announce today that they have signed a rig contract to drill the Talitha # A well and expects drilling to commence in January 2021. Targeting ‘in the region of a billion barrels of recoverable oil’ is indeed a massive incentive and whilst no one has yet stepped up to farm-in to the prospect there is no lack of enthusiasm from the loyal shareholders…
Last night in the Champions League saw wins for Chelski and the Red Devils whilst tonight sees the Noisy Neighbours at Olympiakos whilst Liverpool host Atalanta.
It was very sad to see reports of the death of Christophe Dominici, legendary French rugby icon, truly enjoyable to watch his 5’6″ frame shape up to Martin Johnson who must have had a foot and a half on him. RIP