WTI $47.62 -90c, Brent $51.09 -71c, Diff -$3.47 +19c, NG $2.58 +4c

Oil price

I am writing this late in the day and have just erased all my early comments about the oil price. They included the Opec+ JMMC meeting, tension as Iran claims to be resuming its 20% uranium enrichment programme at Fordow and better news in the lifting of the Saudi blockade on Qatar.

But, as I write oil is up some $2 a barrel as the meeting appears to have ended with an agreement and that the Saudis will become swing producer in February, now who remembers that role? More tomorrow.

SDX Energy

A positive trading and operations update from SDX this morning in which they report that they are producing first gas from SD-12X six weeks early and are producing between 5-7 MMscf/d and could do 10-12 MMscf/d. Production from ‘all core assets either exceeded or was at the top end of guidance’.

SDX had cash of $9.6m at the year end with an EBRD credit facility of $2.5m and the company has agreed a new 5 year $10m facility. Drilling wise SDX plan to drill 9 wells this year, two in South Disouq, three in West Gharib and four in Morocco.

Mark Reid, CEO of SDX, commented:
“I am very pleased to be able to announce a strong end to 2020 and a promising start to 2021 with our SD-12X (Sobhi) well, where we have 100% entitlement interest, coming on stream six weeks ahead of schedule. Production from two of our three core assets beat 2020 guidance (being South Disouq and Morocco, where production is now back to pre-Covid close down levels) while our third core asset (West Gharib) came in at the top end of guidance.  Furthermore, as a result of our continued focus on capital discipline, I am pleased to report that our 2020 capex spend was approximately US$1million lower than our guidance of US$26million.

Our strong performance in 2020 means that we finished the year debt-free with c.US$9.6million of cash and US$2.5million of undrawn availability from our EBRD facility, which will increase to US$10million in the coming months after the standard conditions precedent in our new facility are satisfied.  When viewed in light of a year which was full of operational challenges and volatile commodity prices, I see our robust cash generation as a hallmark of our business and is testament to the commitment of the team at SDX. We have started 2021 in a very positive position with an exciting programme of nine wells to be drilled in the year and I expect us to build on the successes of 2020 by discovering more resource and continuing our resilient cash generation.”   

Petro Matad

Another Block XX exploitation licence update in which the application progressed following a meeting of the MRPC which approved the submission without alteration. It now goes to the auditors who will review the plan of development before going to MRPAM and MRPC for final approval.

Mike Buck, CEO of Petro Matad said:
“We appreciate the commitment from the Ministry to facilitate the holding of the MRPC reserves review meeting virtually during the lockdown and the participation and engagement of all the members of MRPC. We are very pleased that the Council supported and approved our submission.

 We now require the Plan of Development to be reviewed and approved and the Exploitation Area to be agreed to complete the documentation required for us to make the formal application to the Minister to grant the Exploitation Licence.

 Our preparations for both are complete and we are working to conclude the final stages of the approval process as soon as possible.”

United Oil & Gas

UOG has spudded the ASH-3 development well on the Abu Sennan licence which will take c. 60 days to drill and to test. This is the first well in the 2021 campaign and is fully funded from operating cash flow.

United’s Chief Executive Officer, Brian Larkin commented:
“We are delighted that the ASH-3 well has been spudded, and look forward to updating the market in due course, once the well has reached the target reservoirs. There is clearly great potential in the ASH Field, and if the outstanding success that was achieved in the ASH-2 well can be replicated here, it will be a fantastic result for the joint venture partners.

 “It is equally pleasing for the joint venture to be back drilling in Egypt again, after the deferral of the majority of the 2020 drilling programme due to the low oil price environment, and we look forward to the drilling of further wells as part of our 2021 campaign, including the ASD-1X exploration well, that will follow after completion of ASH-3.”

Getech

Getech has announced a new multi-year licence agreement for its Globe product whereby a multi-year agreement has been  signed with national energy company. This is an existing Globe customer but with an additional option to enable the client to upgrade by adding other Getech data modules and adds some £563,000 to the order book.

Jonathan Copus, Chief Executive Officer of Getech commented:
“Getech is committed to working in partnership with our customers so that our skills and technologies are closely aligned with their most pressing business needs. Through this approach Getech has demonstrated Globe’s value to this new customer, who has then made a multi-year commitment to Getech’s technology.

In 2021, investment in Globe will be focused on delivering new tools and content that strengthen the product’s core offering and promote its diversified use across the mining and geothermal sectors.”

In 2021, investment in Globe will be focused on delivering new tools and content that strengthen the product’s core offering and promote its diversified use across multiple sectors.

KeyFacts Energy Industry Directory: Malcy's Blog