WTI $54.76 +$1.21, Brent $57.46 +$1.11, Diff -$2.70 -10c, NG $2.65 n/c, UKNG 47.49p -0.51

Oil price

Oil continues to rise on the back of stocks, either physical data or hearsay. On the data front the API stats showed a 4.3m barrel draw which was unexpected, the teenage scribblers on the strasa were going for a small build. It gets worse, or should I say better as the big draw of 1.9m b’s at Cushing was also ‘missed’ by the overpaid investment bankers, as they say…

On the hearsay front, chat coming out of the Opec+ JMMC meeting was that based on their projections, global stockpiles will be sub the 5 year average by June, something that I alluded to in yesterday’s blog.

Predator Oil & Gas

Predator announce that they welcome the Irish Government’s renewed commitment to honour existing licences issued by the State for oil and gas….and that all options for energy security in the future that utilise existing oil and gas infrastructure should be explored.

The company note that subsurface oil and gas reservoirs provide a potentially valuable asset for safe CO2 sequestration during the transition to green energy dominance, something that it shouldn’t have gone unnoticed that PRD are leaders in. 

Predator remains focussed on promoting CO2 sequestration projects ‘based on our extensive experienced gathered through interaction with government policy makers, regulators and the environmental management authority in Trinidad. Our practical operational experience and extensive data gathered to date during CO2 injection are valuable assets to assist policy makers in framing future legislation and regulation of CO2 sequestration from an environmental and investment perspective’.     

Paul Griffiths, CEO of Predator Oil & Gas Holdings Plc commented:
“With the natural transition to greener energy, it is incumbent on policy makers and regulators to be inclusive, in order to utilise  all the available expertise and practical knowledge to develop a workable policy for CO2 sequestration along the way to a sustainable energy future. To facilitate such developments Predator will work with regulators, where invited to do so, to promote enabling legislation that facilitates CO2 sequestration. We have pioneered a new era of CO2 injection in Trinidad and de-risked the potential for larger scale CO2 sequestration. Why not Ireland?”

President Energy

The company say that the treatment plant development has commenced and is on time and budget and at stage 1, which President has now fast tracked and is projected to be completed by the end of June and will lead to significant opex savings. As a result of this oil will be capable of being delivered by truck to refineries direct from the core Puesto Flores/Estancia Vieja fields without going through third-party pipelines, treatment and water disposal facilities.

On completion of the first stage, savings and value-added benefits are estimated for oil so delivered to be approximately US$4 per barrel representing a reduction of some 20% of opex and sales cost per barrel. Whilst Trafigura remains President’s largest offtaker, the completion of the first stage will also allow for the flexibility to supply certain quantities of oil to smaller more local refineries. The proximity to the fields of these mini refineries will result in lower transport costs.

The second stage of the project involving an updated pipeline delivery system is currently projected for the end of August. Discussions with the relevant third party currently treating President’s oil continue with regard to tie in facilities circumventing their plant thereby on completion of the second stage giving President optionality to deliver oil by truck or through its pipeline system.

As announced on 22 December 2020, the project has been funded by an Argentine peso denominated loan of US$5 million meaning that it is repayable in pesos in the total amount of that currency using the exchange rate applicable when the loan was taken out. Due to changes in the peso dollar exchange rate, the amount of the outstanding loan in dollar equivalent if it was repaid as at close of business yesterday shows a reduction of US$270,000 resulting in US$4.73 million dollar equivalent as the outstanding principal sum.

Interest paid/accrued to such date on the loan is approximately US$160,000 giving a positive differential of over US$100,000 since the loan was taken out in late December. Market consensus is that a similar progression in exchange rates will continue though this year.

Peter Levine, Chairman, commented:
“Every little helps. With concentration this year in Argentina on expanding production of gas in Rio Negro and oil in Salta it is very important that we get the best value out of our existing oil production in Rio Negro”.