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Let’s see where oil opens...fingers crossed it’s not too bad.
Grippa, not sure I’d describe it as mammoth. And yes, we’ve done better than some, and it this would be double if Solan has produced as promised. That said, I recall a time when I bought PMO and Faroe on the same week for something like 65p. They got bought out a fair while ago at 160p. They bought UK producing assets . Look at Serica and Rockrose. Picked up UK producing assets, massive increase in value for shareholders. We have the tax losses, once Zama is sold we should make M&A a priority.
Brazil is sort of the odd one out in the portfolio atm. Pretty crap place to find oil from a fiscals perspective. Only really starts to make sense when you move into the giant fields with the exceptional presalt reservoirs. Last geo I spoke to at PMO said they were happy to get a partner is on ground floor terms (no carry or payment of any kind, just pay their own equity slice), so the fact no one has comes in doesn’t fill me with hope. Personally, I think if we’re lucky enough to make a decent size discovery there it should be monetised with the proceeds hopefully going into a UK producing asset purchase. Same with Alaska if that comes in.
Beerbull, likes yours the stories I hear about TLW are really not good. Already wondering why I bought a small slice at 137p.
Also helping debt reduction could be proceeds from the sale of Premier’s 25% non-operating stake in the Zama field off Mexico.
Premier has extended the bid deadline to December after getting “significant interest" in the asset.
It started the sales process this summer after raising resource estimates for the field in June.
“We literally can’t get people through the data room quickly enough,” said Durrant.
“You can’t necessarily translate the number of people visiting data rooms into a success until you open the envelopes. We’ll see.”
Jefferies analysts value Premier’s stake in Zama at $413 million.
Analysts at Benrenbeg said: “This was a solid operational update from Premier Oil, with production averaging at the higher end of guidance, capex is undershooting and most importantly, Premier is recording strong interest in its stake in the Zama discovery offshore Mexico that it is looking to monetise.
“This deal remains a key catalyst for Premier, in our view; it will help to strengthen its balance sheet and, together with strong (free cash flow) generation in 2020, fully address concerns about its debt.”
Premier said its production is expected to come in at the top end of guidance of 75,000 to 80,000 barrels of oil equivalent per day for this year, driven by Catcher.
Group output in the 10 months to October averaged 79,400 boepd.
Premier's UK assets contributed an average of 55,300 boepd to that total in the three months to the end of October, driven by 34,500 boepd from Catcher net to Premier’s 50% operating interest.
Production uptime at Catcher, which has been close to 95%, has been “remarkable”, Durrant said. The project started up in 2017.
The two Catcher Area satellite developments, Catcher North and Laverda, were formally approved in September.
First oil from those two fields is targeted for early 2021 and, together with an infill well on the Varadero field, will extend plateau oil production.
https://www.upstreamonline.com/finance/premier-upbeat-on-debt-reduction-tactic-success/2-1-708435
UK-listed Premier Oil is hopeful that its net debt levels will return to a “stable” level of $1.5 billion next year, according to chief executive Tony Durrant.
Premier said last week that net debt reduced by $300 million to $2.03 billion at the end of October due to free cash flow underpinned by good production levels, especially at the Catcher field off the UK.
Durrant told Upstream that, assuming there is free cash flow next year and a decision is taken to sell its stake in the Zama field off Mexico, debt levels should return to target levels within the next 12 months.
Premier continues to forecast a year-end debt to earnings before interest depreciation and amortisation (Ebitda) ratio of 2.3 times.
“We have talked about $1.5 billion as being the ‘stable’ level, if you like. Ebitda is forecast to stay at about $1 billion so, if we have $1.5 billion (debt), we would have a ratio of 1.5. [That] is very financeable in the debt capital markets,” Durrant said.
“So, that is our long-term guidance. If we are at $2 billion at year-end and we have free cash flow next year and on the assumption that we will take the decision to sell Zama, we should be heading towards $1.5 billion (net debt) next year.”
Little surprised at this analyst quote:
Analyst David Round at BMO Capital Markets said: “Kraken is performing, but that was really the minimum for EnQuest and the downtime at Thistle and Heather is working to offset some of the good news.
“EnQuest will have a chance to promote its portfolio at today’s capital markets day but the shares already trade at a premium to peers and we continue to see more compelling upside and catalysts elsewhere in the sector.”
My 138p buy order got oh so very close today but hey-ho, wasn’t to be. Even if oil tanked I don’t think TLW could go much lower than 110-120p for too long - Total would snap them up. After they take over Anadarko’s part of Jubilee and TEN the synergies will expand even further given their partnerships elsewhere. Plus the French are always after an extra slice of Africa.
Tuggy, I’m no expert on this, but I ‘THINK’ there might be a slight difference between not liking Boris Johnson and wanting a political and social system identical to Venezuela's. But I could be wrong.
BP’s just bought out our partner’s 40% share of our Andaman 2 license in Indonesia:
https://www.upstreamonline.com/exploration/bp-revealed-as-potential-buyer-for-indonesian-stake/2-1-708926
Most of that ‘new’ Iran discovery isn’t new at all, it’s previously announced discoveries. Plus that’s the in place number, not recoverables as I understand it, which will be considerably lower. Can’t see it making the slightest impact on oil prices for the next few years, if ever.
Trademeup, I suppose you haven’t heard of the Zaedyus discovery Tullow made back in 2011? A new Jubilee in South America! A whole lot of Tullow employees made money insider trading on that discovery. 4 appraisal wells later it turned out to be massively underwhelming and uncommercial. Not to say Guyana is the same (although personally I don’t think small, heavy oil can compete against multi billion barrel light oil) but just pointing out that it’s not just small companies like Desire that can get things very wrong and overstate initial findings. Tullow would have known day 1 that these new finds were heavy, a little naughty not to tell the market. Also slightly more than a little naughty to come out with the production estimates that they did, when more respected partner companies were advising materially lower rates. Borderline knowingly misleading, I wonder if any large shareholder will do anything to test that.
My buy order here at slightly below 140p never triggered, but with oil up looks like those who bought low last week may do well this week. Good trading.
DBNO do you think anyone on any of the boards you post on actually care about your trades?
How you and Mrd have any money left I’ll never understand.
Guidance of 75-80k should be easily reached and reaffirmed tomorrow. Can’t see a TLW like situation - they’re pretty reckless with production forecasts. OGA website does show a fairly considerable drop in Catcher production in August (down to slightly less than 60k from July’s 70k odd) but we know from MOL results that must have been temporary as they announced good performance from the asset in Q3.
Speaking to people pretty familiar with the subject this morning, I don’t think Tullow are heading in the right direction to turn the ship around. Investors should have taken more heed of partners who advised considerably lower production from Ghana this year who are much better respected in the industry. Hope for you guys buying in this morning that it bounces, but I personally still think it’s several hundred million overvalued.
Let’s hope PMO’s update tomorrow is the opposite of Tullow’s today!
Krakenoil, take look at the Oxy Q3 results presentation. Post Anadarko acquisition they’re the biggest US shale player bar none and they’re slashing 2020 spend to restore their balance sheet. I’ve pretty much been a perma-bull on US shale since I started posted here contrary to most posters and for now I’ve been right. I think now though that some of the 2020 forecasts are overzealous, I still think production will grow but not at the rate we saw this year. Hoping the rig count drops continue, another 20-30 before xmas would be great.
Perhaps this news was behind RKH's slight bump yesterday? Shows confidence that FID may finally be coming.
General Drilling / Rig information : Ocean Endeavour for Sea Lion
The Ocean Endeavour SS has reportedly been selected by Premier (LoI) for the upcoming phase 1 devt programme at the Sea Lion field in PL 032, North Falklands Basin. Peak 85,000 bo/d expected over the 20-year lifespan for which up to 29 wells could be required if all goes ahead; 1st drilling in 2021. Premier (op, looking to farm-down), partner Rockhopper carried for USD 337 MM in Phase 1.
Take a look at the rig here: http://www.diamondoffshore.com/assets/Documents/Ocean%20Endeavor_DO.pdf
Oiluser, the traditional relationship between rig count and production has certainly been broken. But that doesn’t mean that continued drops won’t end up dampening production growth for next year. I’m hoping the rig drops continue.
Oil rigs down 17 this week for those who are interested.