Oil price, IGas, Bowleven, Falcon Oil & Gas, And finally...

WTI $42.87 +$1.12, Brent $46.12 +$1.29, Diff $3.25 +17c, NG $2.20 -1c
Oil price
Volatility remains the watchword even before the events that I have been talking about although the jockeying for position ahead of the Opec meeting is always worth watching. Yesterdays chatter was all about a deal that might have been done between Saudi Arabia and Iran, not normally comfortable bedfellows. Apparently as part of the Saudi ‘market stability’ policy they have cut a deal to absorb the slack when sanctions are lifted next year, i’ll believe that when I see it…
Of course the other part of the volatility is geopolitical and it doesnt get much more serious than a NATO member country shooting down a Russian jet then firing at the ejecting pilots. This is the watchword at the moment and despite the huge overhang of oil stocks the spikes may be worth watching, even trading. On trading of course we know that the hedgies have a huge overhanging short of crude oil, well they do know everything dont they…?
Finally the API inventory stats were worse than expected but not a catastrophe, at +2.6m barrels they were higher than the whisper which was 1.1m barrels and we shall look at stocks again after tonight’s EIA numbers.
IGas Energy
Interims from IGas this morning and all seems to be continuing as planned despite the financials being obviously hit by the oil price. Government support is strong as shale is given national priority status and planning should be getting easier and quicker but one feels it will still be slower than hoped for. Having said that a number of projects are under way and in the period the company did a farm-out with INEOS worth £30m, received 6 new licences in the 14th onshore round with hopefully more to come in the 2nd tranche later this year. I will add more after I have spoken to Steve Bowler, but at the moment progress is, if a little slower than wished for, at least tangible.
Bowleven
The company has announced that the Moambe well has achieved maximum stabilised flow rates of 7.3 mmscfd and is now in an extended test period. The plan is for it to produce at 4-5 mmscfd in the long haul. Now it’s time for the Zingana extended well test where plans are progressing and this will mean that the company can progress with gas sales discussions. I havent spoken to Kevin lately, I remember that last year it was after the Brindex dinner which is tomorrow night so I hope to have a catch up before long.
Falcon Oil & Gas
Results this morning from Falcon but financials are irrelevant at the moment as it is the operational situation which is so key to the company. The three wells drilled so far in the Beetaloo Basin in Australia have been significantly better than expectations coming in with high levels of gas saturation leading to an acceleration of the work programme and the first horizontal well this year. With high quality partners in Origin and Sasol, the future for the Beetaloo is most encouraging and as one of the better sector performers it may be wise to keep Falcon under serious scrutiny.

And finally…
Last night the Gooners did what they had to and can still qualify for the next stage of the Champions League if they wallop Olympiakos next time. Chelski won easily in Tel Aviv as expected and are through. Tonight the Red Devils host PSV where a win would make the Theatre of Dreamsjust that and the Noisy Neighbours go to Juve.
And the pressure mounts on Lord Coe as it turns out that he ‘reached out’ to Celine Diack when Eugene USA won the 2021 World Championships without a bidding process. The BBC are suggesting that Eugene is ‘closely associated’ with Nike for whom Lord Coe works…
And the Golden State Warriors go from strength to strength , beating the LA Lakers last night to extend their winning streak to 16 making it the best and perfect start to the basketball season ever.

Malcolm Graham-Wood