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Malcy's blog

"I attended the IOG presentation to private investors on Wednesday evening and it was most impressive. Having got to first production at Phase 1 in such a timeframe, especially given the bumps in the road is laudable. With its first cheque in the bank IOG can now move forward with its portfolio of assets in the Southern North Sea and it has many plans including short term wells to be drilled.

The company talked about hedging where the plan is only to do what is strictly needed and to pay down debt so that one day in the future a dividend or buy-back can be considered. With that exciting portfolio to get stuck into, the outlook for IOG looks good especially if you take into account that it is now a key supplier of low carbon domestic gas in a market which will be a huge net buyer for years to come. "

Well 49/21c-A2 at Southwark on licence P1915 was suspended in January. The well status has now changed from suspended back to drilling again.

https://itportal.ogauthority.co.uk/edufox5live/fox/edu/

Expect a market update on Southwark drilling.

On my way to to the event. I will update after presentation about the current status of Southwark drilling.

Not really interested in the front month or the day ahead price. The prices for this autumn and winter are still unmoved at 245p which seems a reasonable reflection of the risk that storage isn’t filled sufficiently. Also gives the opportunity to hedge a part of future production based on the 245p.

It would be insider dealing if LOG received information about Blythe so that’s not the reason for selling. However must be in dialogue with the board, and can ask questions, perhaps know by the reply that there will be an annoying delay to production, but not know yet the details. We will have to wait and see. IMO

Anything studies that are safety related require an approval of the processes before implementing and then an inspection before resumption of production. Or am I reading this wrongly?

This is exactly what the RNS said

"On further inspection, additional process and safety studies and procurement of materials are required before implementing the solution."

Any ideas what kind of process and safety studies please?

Ignore the post

This is exactly what the RNS said

"On further inspection, additional process and safety studies and procurement of materials are required before implementing the solution."

Any ideas what kind of process and safety studies please?

Russia to halt gas supplies from tomorrow!

https://twitter.com/sstapczynski/status/1509525316645310469?s=10&t=BsFzSf2yswuyzwKW3NVTKA

Crunch time for gas supplies and a Rouble payment decision is tomorrow

https://www.reuters.com/business/energy/germany-declares-early-warning-potential-gas-supply-disruptions-2022-03-30/

Gas price going to be higher for longer.

There's a disagreement between the Kremlin and Germany, as well as other "unfriendly" countries, about payment for gas being made in Roubles. Germany refuses to pay in Roubles and Gazprom says it can't supply Germany for free.

UK NBP April 2022 contract now 287p

https://twitter.com/javierblas/status/1509067381305397254?s=10&t=QTaFV485KHGKbxSSJ5e_gw

finnCap: "IOG is expecting to provide an initial view on flow rates on Blythe and Elgood once stable production has been established from both fields. No guidance has been provided, but a view should normally be sufficient. This is clearly a key datapoint for our forecasts and the market. We assume 2022 gross annual average gas production for Blythe and Elgood of 30 mmcfd and 20 mmcfd, respectively. As a reminder, the Blythe well tested at a maximum rate of 45.5 mmcfd and Elgood at 57.8 mmcfd, although the later was surface constrained."

House broker finnCap modelled the annual average rates for Blythe and Elwood as 30,000 and 20,00o respectively. Comparing the current performances of 40,000 and 50,000 respectively, these rates will blow the models out the water. Note Elwood in particular has a sustained rate in excess of 50,000.

New research note written by Director of research, Jonathan Wright at finnCap using yesterday's figures:

"Our 2022 revenue and EBITDA forecasts are unchanged, but the lower 2023 production forecast reduces revenue by 4% and EBITDA by 5%. We still expect IOG to be net cash by the end of this year and end 2023 with ~£90m of net cash, providing significant funds not only for Phase 2 of Saturn Banks but also IOG’s future hub ambitions. Despite the reduction in reserve estimates, our risked NAV and price target remain unchanged at 66p/sh, with lower net debt levels and a higher tax loss shield offsetting the impact. "

That's just alleviated any worries from yesterday.

Certainly sellers around this week but for what reason? As a start it may be worth looking at Nigeria as the cause.

The reliability of the Nigerian power supply is getting worse rather than better. Article with a mention of Calabar as requiring maintenance.

https://www.vanguardngr.com/2022/03/why-national-grid-collapsed-apgc/

At least Accugas gets paid regardless and it need not affect the re-financing.

Boris is hinting at tax incentives for NS gas development. IMO

Boris is hinting at tax incentives for NS gas development IMO