Today's Oil & Gas Update - Mosman Oil & Gas; Eco (Atlantic) Oil & Gas: Premier Oil and more...

Energy Prices          Brent Oil US$55.9/bbl vs US$55.6/bbl yesterday WTI Oil US$52.8/bbl vs US$52.5/bbl yesterday Natural Gas US$2.68/mmbtu vs US$2.53/mmbtu yesterday


Oil & Gas Daily Flow

Non-Independent Research; Marketing & Sales Commentary - MiFID II exempt information – see disclaimer below



Market Update: Tuesday 26 January 2021

Mosman Oil & Gas*, BUY, (AIM:MSMN): Initiation of Coverage

Global Petroleum (AIM:GBP): Significant upgrade in Prospective Resources, offshore Namibia

Eco (Atlantic) Oil & Gas*, STRONG BUY, (AIM:ECO): Eco diversifies into European renewables

SDX Energy (AIM:SDX): Slight curtailment in production guidance, comfortable liquidity position

Premier Oil (LSE:PMO): Successful farm out of the Tuna PSC, Indonesia


Energy Prices         

Brent Oil US$55.9/bbl vs US$55.6/bbl yesterday

WTI Oil US$52.8/bbl vs US$52.5/bbl yesterday

Natural Gas US$2.68/mmbtu vs US$2.53/mmbtu yesterday


Oil Price News 

US shale activity has ramped up in line with the oil price recovery with the number of drilled but uncompleted wells (DUCs) that accumulated at the height of the pandemic has already subsided to pre-Covid-19 levels

After swelling to a multi-year high of 6,548 wells in June 2020, the number of such wells in the country’s major oil regions slimmed down to around 5,700 wells by the end of December 2020

The inventory of live DUCs, which excludes tentatively abandoned wells drilled a long time ago, also declined by around 800 wells in the same period, from 4,353 in June to 3,528 in December

The current level of horizontal oil ‘live’ DUC count is comparable to the level seen in early 2020, just before the market downturn started

Given the recent recovery in oil prices, the industry is enjoying the flexibility of further accelerating fracking activity beyond current levels in the first half of the year.

Such an acceleration could be delivered, as can be implied from the ratio of the current ‘live’ DUC inventory to the run rate of fracking, which is still in the six-to-eight-month range, compared to the normal level of about three months seen in 2018-2019

Currently 626 started frac operations in North America for December 2020 and we expect the month’s fact-based coverage to be almost complete


Gas Price News

Soaring natural gas prices in European markets could be seen as a boon for Russian giant Gazprom to increase its gas exports towards the Old Continent

But instead, somewhat surprising, Gazprom is adopting the exact opposite strategy, drastically reducing its physical deliveries of natural gas to the EU

Since the end of December 2020, Gazprom gas volumes transiting through Ukraine have fallen by a third to 130mcbm/d

Hence, spot prices at the Central European Gas Hub (CEGH) in Austria - where Russian gas is traded after flowing through Ukraine and Slovakia - have surged during the past weeks, hitting a record  US$6.80/mmbtu)

The spot liquefied natural gas (LNG) prices in north Asia jumped to record highs last week, while the key price marker in Europe, the Dutch Title Transfer Facility (TTF), rallied to the highest in more than two years

The natural gas markets at the start of 2021 look completely different from the beginning of last year, when milder weather and the pandemic hit to demand had dragged natural gas prices down to historic lows

This winter season, a rebound in Asian natural gas demand, supply issues at major LNG exporters, logistics issues at the Panama Channel, soaring tanker rates, and last but not least, the cold snap from Madrid to Tokyo, are pushing gas prices higher


Company News

Mosman Oil & Gas*, BUY, (AIM:MSMN): Initiation of Coverage

Share price: 0.18p, Market Cap: £5m


Bucking the trend of many of its peers, Mosman has enjoyed a year of operational development in 2020.

Against a challenging market backdrop, the Company successfully transitioned into a low cost, high margin producer, exiting the year with a transformed production profile.

Recent positive news flow has seen Mosman’s share price rally over 30% YTD alone, however we believe there remains considerable running room in the stock for investors.

We therefore initiate coverage with a BUY rating, setting a 0.42p/share risked target price.

*SP Angel acts as Nominated Advisor and Broker to Mosman Oil & Gas


Global Petroleum (LON:GBP): Significant upgrade in Prospective Resources, offshore Namibia

Share Price: 1.8p, Market Cap: £7m

Global has updated its estimate of Prospective Resources for PEL0094 (Block 2011A), offshore Namibia, following interpretation of the 2D seismic data which the Company recently licensed (Global 78% WI and Operator).

The additional Prospective Resources, which are in the east of PEL0094, consist of seven new leads with a total unrisked gross Prospective Resources (Best Estimate) of 2,048MMbbls.

As previously reported in July 2020, the pre-existing prospects - Marula and Welwitschia Deep - contain a total of 881MMbbls, making a new total on the licence of 2,929MMbbls unrisked gross Prospective Resources (Best Estimate).

Regarding the Prospective Resources attributable to Global, the total unrisked net Prospective Resources (Best Estimate) now total 2,284MMbbls compared with the previous number of 687MMbbls net to Global for Marula and Welwitschia Deep alone.

This means that the total unrisked net Prospective Resources (Best Estimate) – both gross and net – are over three times as large, due to the new leads identified.

On a risked basis, Prospective Resources have approximately doubled.

Our take:  A healthy upgrade in the prospective resource figures reported today and will serve to pique the interest of potential industry partners in our view. The technical work undertaken in late 2020 continues to reinforce Global’s confidence that the source rock is present and generating oil in PEL0094 and has further vindicated the Company’s view that the acreage is highly prospective. The identification of Prospective Resources on such a scale in the new leads is obviously a great boost to the overall prospectivity and attractiveness of the Licence. The Company is preparing to farm-out part of the project ahead of exploring the potentially transformational resource potential of the block. Despite a challenging market backdrop, exploration in Namibia is now back in fashion following the recent confirmation of a working petroleum system offshore and the region’s underexplored status. This has understandably led to a land grab from many of the world’s leading explorers and the next 18 months will see up to five exploration wells drilled on behalf of Exxon, Total, Maurel et Prom and Shell, which will be monitored closely by sector investors in our view. Noteworthy explorers such as Global, Eco (Atlantic)*, Tower Resources**, and Chariot have a key presence in the region highlighting the broad spectrum of companies with active geological datasets. The recent wildcat discoveries in South Africa and the entry into Namibia by ExxonMobil, Total, Qatar Petroleum and Shell over the last few years underline the key prospectivity and validation of the region in our view.

*SP Angel acts a research provider for Eco (Atlantic) Oil & Gas

**SP Angel acts as Nominated Advisor and Broker to Tower Resources


Eco (Atlantic) Oil & Gas*, STRONG BUY, (AIM:ECO): Eco diversifies into European renewables

Share Price: 26p, Market Cap: £47m


In an interesting update, Eco has formed a new company (Eco Atlantic Renewables) with Nepcoe Capital a renewable energy developer and investment company, to source, acquire and develop an exclusive pipeline of potential high yield solar projects. 

Eco will now own 70% of Eco Atlantic Renewables with the remaining 30% owned by Nepcoe.

Eco Atlantic Renewables has been formed to source, acquire, and develop exclusive renewable energy projects and to create value through low cost, high yield, solar power development.

Eco Atlantic Renewables has been established to capture opportunities in the shifting energy market and subsequent attractive economics driving global solar photovoltaic (PV) energy demand growth.

Eco Atlantic is providing a shareholder loan of up to US$6m for its 70% stake in Eco Atlantic Renewables. 

It is anticipated that the loan will be repaid in full upon a monetisation of the solar PV assets, from future third party investment into Eco Atlantic Renewables or from future project cash flows. 

Eco will maintain its majority interest following repayment of the loan.

Through the joint venture with Nepcoe, Eco Atlantic Renewables has secured exclusivity to a potential pipeline of more than 2 Gigawatts of prospective PV projects, mainly in Southern Europe's high solar hours' sunbelt.First acquisition of a fully licensed and permitted ready-to-build project for an aggregate consideration of c.€1.1m paid by Eco Atlantic Renewables using funds available from the loan completed on 25 January 2021. 

The acquired 10.57 MW Kozani project in Greece has a secured feed in tariff and management estimates an internal rate of return (“IRR”), once built, of c.9% unlevered and c.13% levered.

Subject to the availability of follow on project finance, Eco Atlantic Renewables is targeting the development and construction of c.100 MW of operating grid connected projects, in addition to securing the rights for an additional c.800 MW currently in development, in its first full year of operation.

Eco Atlantic Renewables will have Executive Board oversight by Eco Atlantic and is planned to be independent in terms of operating management, governance, and future equity and customary project debt finance funding needs.As part of the wider financing strategy for Eco Atlantic Renewables, Eco Atlantic will assess the potential for its shareholders to participate directly in the growth of Eco Atlantic Renewables.

Eco Atlantic will maintain its focus on oil and gas exploration as it continues to see considerable upside in its prospective hydrocarbon assets, offshore Guyana and Namibia, and is committed to explore and deliver value from these exploration assets as soon as possible, and once the Orinduik Block Offshore Guyana partners (Tullow Oil and Total) finalise drilling targets selection in Q2 2021.

Our take: Investment into renewables, alongside its principal oil and gas exploration business, will see Eco becoming a diversified, growth-oriented energy company in our view. The creation of Eco Atlantic Renewables demonstrates the responsiveness of Eco’s management to the ongoing sector transition and will clearly tick most boxes for ESG investors. Nevertheless, we note that further maturation of the Company’s significant plays in Guyana and Namibia remain the core of the business, and the Company has retained adequate near-term financing in both regions.  

*SP Angel acts a research provider for Eco (Atlantic) Oil & Gas


SDX Energy (AIM:SDX): Slight curtailment in production guidance, comfortable liquidity position

Share price: 17.7p, Market Cap: £36m

SDX has updated this market with guidance for 2021.

Management has guided FY 2021 production of 5,620 – 5,920boepd, which is between is 1–6% lower than 2020 production, excluding the assets divested in 2020 due to expected production downtime from the planned Central Processing Facility (CPF) maintenance deferred from 2020, together with compression installation and well workovers.

This is partially offset by the incremental contribution of 100% of the working interest production from the recently connected SD-12X well.

At West Gharib, development drilling is expected to slow natural decline and in Morocco production volumes are expected to increase as recovery from the 2020 COVID-19 close downs continues.

Specifically, at South Disouq, production guidance for 2021 reflects planned 2-3% CPF downtime due to planned maintenance, the installation of an inlet compressor and several well workovers, none of which occurred in 2020.

Where possible, these activities will be synchronised to minimise their impact.

The Company’s share of gross production will increase due to its 100% working interest in the SD-12X well, which started up ahead of schedule in December 2020.  

At West Gharib, production is expected to decline naturally during H1’21 until the planned three to four well campaign commences.

Thereafter, the production decline is expected to be arrested, with further development wells planned for 2022 and 2023 with a view to growing production to approximately 3,000 bbl/d.

Production guidance is 8-12% higher than 2020 output in Morocco and reflects a sustained return to normal levels of consumption across the customer base, following COVID shutdowns which impacted 2020 production, together with a full year’s contribution from an existing customer’s second factory, which came online in December 2020. 

2021 capex guidance has been set in the range of US$25.0 – 26.5m, and predominantly relates to one exploration and one development well in South Disouq together with workovers and the installation of an inlet compressor.

Up to five new wells and workovers are planned in Morocco and up to four new wells and facilities upgrades at West Gharib. 

Our take: Despite a small curtailment to ensure operational efficiencies in Egypt, SDX enters 2021 with a stable production profile in our view. Operating cashflows, and its existing US$10m cash position provides sufficient headroom to carry out an active drilling campaign of nine to eleven wells targeting exploration and development opportunities in Egypt and Morocco, including the potentially transformational gross 139Bcf Hanut-1X well in South Disouq in Egypt and the testing of the Company’s newly discovered Top Nappe play in Morocco.


Premier Oil (LON:PMO): Successful farm out of the Tuna PSC, Indonesia

Share price: 18.5p, Market Cap: £172m

Premier has confirmed that the Company has completed the farm down of its interest in the Tuna PSC, offshore Indonesia to Zarubezhneft, following receipt of Indonesian government approval. 

Under the farm down agreement, Zarubezhneft will carry Premier for its share of a two well campaign to appraise the Tuna discoveries, scheduled to commence in the second quarter of this year. 

In addition, Premier and Zarubezhneft have also secured Indonesian government approval for a one-year extension to the exploration period of the Tuna PSC to March 2022.

Premier remains operator of the Tuna PSC, with the Company and Zarubezhneft each having a 50% interest in the licence.

Our take: Ahead of integration of the merger with Chrysoar, a projected minimisation of the Company’s capex will come as welcome news for the new board in our view. Whilst not necessarily a household name, Zarubezhneft does have strong operational experience and is a Russian state-controlled oil company based in Moscow that specialises in exploration, development and operation of oil and gas fields outside Russian territory. Tuna represents a material field, with a discovery announced in 2014 and an estimated oil resource of 100MMbbls recoverable.

Research – Oil & Gas

Sam Wahab - 0203 470 0473 / 0784 385 5037




Richard Parlons – 020 3470 0472

Abigail Wayne – 020 3470 0534

Rob Rees – 020 3470 0535 

Grant Barker – 020 3470 0471  


SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London



+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.


Sources of commodity prices


Oil Brent, WTI


Natural Gas




Disclaimer   Non-Independent Research

This note has been issued by SP Angel Corporate Finance LLP ("SP Angel") in order to promote its investment services and is a marketing communication for the purposes of the European Markets in Financial Instruments Directive (MiFID) and FCA's Rules. It has not been prepared in accordance with the legal requirements designed to promote the independence or objectivity of investment research and is not subject to any prohibition on dealing ahead of its dissemination.

SP Angel considers this note to be an acceptable minor non-monetary benefit as defined by the FCA which may be received without charge.  In summary, this is because the content is either considered to be commissioned by SP Angel's clients as part our advisory services to them or is short-term market commentary.  Commissioned research may from time to time include thematic and macro pieces.  For further information on this and other important disclosures please the Legal and Regulatory Notices section of our website Legal and Regulatory Notices 

While prepared in good faith and based upon sources believed to be reliable SP Angel does not make any guarantee, representation or warranty, (either express or implied), as to the factual accuracy, completeness, or sufficiency of information contained herein.

The value of investments referenced herein may go up or down and past performance is not necessarily a guide to future performance. Where investment is made in currencies other than the base currency of the investment, movements in exchange rates will have an effect on the value, either favourable or unfavourable. Securities issued in emerging markets are typically subject to greater volatility and risk of loss.

The investments discussed in this note may not be suitable for all investors and the note does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. Investors must make their own investment decisions based upon their own financial objectives, resources and appetite for risk. 

This note is confidential and is being supplied to you solely for your information. It may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose. If this note has been sent to you by a party other than SPA the original contents may have been altered or comments may have been added.  SP Angel is not responsible for any such amendments.

Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. Opinions and estimates included in this note are subject to change without notice. This information is for the sole use of Eligible Counterparties and Professional Customers and is not intended for Retail Clients, as defined by the rules of the Financial Conduct Authority ("FCA").

Publication of this note does not imply future production of notes covering the same issuer(s) or subject matter.

SP Angel, its partners, officers and or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SPA has put in place a number of measures to avoid or manage conflicts of interest with regard to the preparation and distribution of research. These include (i) physical, virtual and procedural information barriers (ii) a prohibition on personal account dealing by analysts and (iii) measures to ensure that recipients and persons wishing to access the research receive/are able to access the research at the same time.

SP Angel Corporate Finance LLP is a company registered in England and Wales with company number OC317049 and whose registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SP Angel Corporate Finance LLP is authorised and regulated by the Financial Conduct Authority whose address is 12 Endeavour Square, London E20 1JN.


Recommendations are based on a 12-month time horizon as follows:


Buy - Expected return >15%

Hold - Expected return range -15% to +15%

Sell - Expected return < 15%

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...


Anglo Pacific Group makes a transformational move by acquiring stream on the...

Anglo Pacific Group (TSE: APY- LSE: APF) CEO Julian Treger joined Steve Darling from Proactive with news the company has just announced the biggest deal the company has ever done, acquiring a stream on Vale’s Voisey’s Bay Nickel and Cobalt project in Newfoundland and Labrador for 205...

1 day, 23 hours ago

15 min read