Oil price, Coro Energy, Empyrean, Reabold Resources - And finally...

Friday, 22nd November 2019 12:38 - by Malcy

WTI $58.58 +$1.57, Brent $63.97 +$1.57, Diff -$5.39 +10c, NG $2.57 +1c

Oil price

The oil market actually looks quite tight at the moment which is important given that we are less than two weeks away from the Opec + meeting. I mentioned the other day that pre-positioning was already happened and the most important piece of the puzzle was moved into place when President Putin declared that he would work with Opec to keep markets appropriately tight.

Other signs are littering the markets and whilst I never have much faith in the money managers that trade crude oil the numbers have been saying that for the last few weeks they have been increasing their long positions and run down the short book. Inventory stats have not been that good, the EIA numbers were only just in line with the whisper but not being as bad as the API number felt good.

Nothing is certain as we run up to Opec particularly as we have the Thanksgiving weekend in between and the Trade talks could do anything but at the moment the technicals look tight enough…FLW

Coro Energy/Empyrean Energy

Sometimes one thinks that the headlines have been written even before the news is actually out there but make no mistake today’s announcement from Coro and Empyrean is a very good statement indeed. The task of this well was to appraise the Mako gas field and to test the underlying exploration prospect. To get the second bit out of the way it took no time at all to find that low saturation and permeability meant that it is a tight reservoir with pretty tight residual gas.

Time to move on to the meat and drink of the appraisal where this was a highly successful well indeed. The well encountered a huge 24m of Intra-Muda sandstone section with good gas water contact that required a DST and in this case a cased hole technique as opposed to the open hole completion before. The success of the cased hole DST across a 2 metre zone provides an alternative option for completing future Mako production wells, and could well help bring down development costs.

So, this is a significant progress which should lead to early development of the Mako project. Coro CEO James Menzies said ‘we are delighted with the additional reserve that has been proved up in the Mako field and which enhances the commercial attractiveness of the project. Coro management estimate that the campaign has demonstrated a gross resource addition of at least 100 Bcf and look forward to further independent assessment of field resources’.

Tom Kelly, CEO of Empyrean said ‘ the appraisal drilling at Mako has been a tremendous success with a better quality reservoir, substantially thicker sands and a gas/water contact that is confirmed from logging to provide a five feet uplift in aerial tank size and ultimately potential recoverable resources has been demonstrated at Mako.’

This has been an excellent campaign from Coro and Empyrean, confirming Menzies’ belief in the Mako field. He said to me that this appraisal has been ‘brilliant and should be a belter’ and why not, a 100 BCF to eager and wealthy Singaporean gas buyers plenty enough to reward the Mako partners. From here the market can expect the independent assessment of resources expected to be available in Q1 2020 and after that a good line into profitable monetisation. The market has marked down both shares today which proves what I have been saying about their inability to know a good thing when they see one, take the advantage, buy at these knock down prices before the smart guys catch on…

Reabold Resources

Reabold has announced that it has invested £105,000 in the Corallian fund-raise, it being their pro-rata share. It has also announced that it has invested £240,000 in Danube Petroleum and retains the option to invest a further £1.7m at 120p per share. Both perfectly wise decisions given the current state of both investments.

And finally…

The first test has started in New Zealand and England scored 353 a touch less than might have been expected with Stokes getting 91. At the close New Zealand were 144-4 with Sam Curran taking the key wicket of Kane Williamson making up for his golden duck with the bat.

Footy wise obviously everyone will be watching the London Stadium where the newly self-title ‘Humble One’ takes his Spurs side to play West Ham. Elsewhere Liverpool visit nemesis team The Eagles whilst other key game is the Noisy Neighbours v Chelski, the Gooners host the Saints and the Foxes at the Seagulls. The Owls host the Red Devils on Sunday.

Finally there is some good chasing this weekend with albeit small fields. At Ascot Altior takes on Cyrname and there is a good card at Haydock led by the Betfair Chase.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.