WTI $37.66 +85c, Brent $39.71 +74c, Diff -$2.05 -11c, NG $3.06 -18c

Oil price

Another up day for oil as the market heard rumours that within Opec+ key players the KSA and Russia have been talking about not just extending the state of play but increasing cuts.

The election result is still not confirmed as I write and markets are uncertain, oil is taking a lead from the Opec+ and has risen a dollar this morning.

IOG

IOG has announced a corporate and operational update this morning in which the company confirm that Phase 1 development is on schedule for First gas in Q3 2021. Operationally things seem to be going well, in particular the Blythe and Elgood pipelay campaign is ‘ongoing’ and expected to complete later this month.

With yesterday’s announcement that the rig contract has been signed for the initial five wells, plus an option to extend by two visibility in the process is rubber stamped. The same goes for the platform fabrication as well as the Thames Reception refurbishment works which are also well underway and the 3D seismic reprocessing is nearing completion.

IOG say that the JV is ‘continuing to function effectively’ and that in-house teams have been ‘significantly strengthened’ so far this year.

Andrew Hockey, CEO of IOG, commented:
“I am proud of our extensive progress on many fronts since we completed the farm-out to our partner CalEnergy Resources and took FID this time last year. Whilst recognising the challenges of Covid-19, I am equally excited about the year ahead with the transition to production and cash flow from Q3 2021. With a greatly strengthened team working hard to deliver Phase 1 while progressing plans for our pre-development asset portfolio, we are laying the foundations to deliver sustained value to shareholders.

The ongoing technical re-evaluation of the full IOG portfolio by our in-house subsurface team – who have extensive SNS experience – will underpin our wider growth ambitions, enabling further value creation via incremental investments, additional licensing and other potential nearby redevelopments and acquisitions.”

IOG continues to deliver the goods as it progresses its low carbon gas policy and shareholders will be encouraged that the first gas date has again been confirmed. Management are clearly, with its growing team, showing that before long the Core Project will be delivered as promised. It should be borne in mind that there is also potentially plenty of upside through developing other existing discoveries in the area, organic growth and as demonstrated by the Deltic move, the chance of inorganic growth should that be complementary to the existing business. I am interviewing CEO Andrew Hockey tomorrow which should be compelling viewing for shareholders and potential investors alike.

KeyFacts Energy Industry Directory: Malcy's Blog