WTI $60.64 -86c, Brent $63.69 -73c, Diff -$3.05 -$1.58, NG $2.78 +1c, UKNG 41.19p +0.99p

Oil price

Little has changed, markets rallied after the bond yield drifted and the US stimulus package passed the House and now goes to the Senate where democrats have already given some ground. Reuters confirmed the Saudi production cut has appeared in their February data but of course some of the more junior players in the market took the opportunity to have a little panic ahead of the Opec+ meeting on Thursday.

That meeting is scheduled to address production levels from April onwards and will obviously have to look at quotas assuming that the 1m b/d from the KSA will be reappearing but the will is still there to manage the short term and to make bigger gains in the 2nd half. Actually, whisper is quietly but a smidgeon of price weakness at the moment may not be such a bad thing…

Chariot Oil & Gas

Yet more good news from Chariot this morning as they announce that along with partner ONHYM they have signed an MOU with the Moroccan Ministry of Industry to support the Anchois Gas Development. The MOU states that the Ministry will ‘support the Development to enhance job creation, regional integration through the development of strategic infrastructure and the promotion of clean and competitive energy for consumption by the Moroccan industrial sector’.

This reflects the Ministry’s active promotion of the use of natural gas extracted in Morocco to help the Kingdom of Morocco meet its key national strategy of industrial development, the decarbonisation of its economy, diversification of the energy mix and the reduction of its dependence on imported fuels. It should be noted that energy demand has doubled in-country in the last 20 years and the same is predicted in the next two decades. The Parties will forthwith progress discussions with the view to signing further agreements with the Ministry or other Moroccan authorities to implement the Anchois Gas Development.

Mr Moulay Hafid Elalamy, Minister of Industry, Trade and Green and Digital Economy, commented:
“We continue to support the development of domestic gas prospects to accompany the fast-growing industrial sector in Morocco and contribute to its global competitiveness by providing a cheap, clean and reliable source of energy.”

Mrs Amina Benkhadra, General Director Office National des Hydrocarbures et des Mines, commented:
“We are pleased to have signed this MOU with the Ministry of Industry and Chariot in line with ONHYM’s Mission and Strategy where we look to attract investment from the private sector to accelerate the development of resources in Morocco. We look forward to working further with our partner Chariot and assisting them with the advancement of the Lixus Offshore Licence.”

Adonis Pouroulis, Acting CEO, commented:
“I am delighted to announce this MOU with the Ministry of Industry in Morocco. The Kingdom of Morocco is firmly focused on decarbonising its economy and diversifying its power sources and the development of the Anchois gas project will enable them to achieve this. Anchois has very strong ESG credentials and, once developed, it also has the potential to deliver considerable value for all stakeholders for decades to come.

The signing of this MOU is a significant step in our efforts to access the Moroccan gas markets. With the Kingdom of Morocco’s support we intend to build on the positive conversations we are already having with entities involved in the Moroccan gas market, giving us greater confidence that we will sign the necessary agreements to expedite the development of this value accretive gas project, for the benefit of the Kingdom and Chariot’s investors.”

The signing of this MOU is extremely significant to Chariot, it adds to the de-risking by the company which has already happened financially, from an engineering perspective and now from a market perspective. Morocco certainly rates right at the top of countries looking to attract explorers and the fiscal policy is as helpful as anywhere globally.

We are reminded by the management that there is much to come in the way of newsflow in upcoming months. From Anchois we can expect news on partnering as well as news from the commercial and operational areas as well of course from the drill bit.

Finally the ‘new’ management team at Chariot are not standing still, they have big plans away from Anchois and we know that they are looking at meaningful new ventures which will be acretive and probably draw on the company’s strength in Africa. These plans are real and I suspect we will see something quite soon that will be scaleable and offer substantial returns. Chariot shares despite having had a great run since last autumn have taken a breather, expect significant upside from here as this news seeps through.

Hurricane Energy

An update on stakeholder engagement and the Lancaster activity programme  which The Company has previously announced that it is engaging with its stakeholders on a proposed development plan and associated funding for the Lancaster field. The Company confirms that these stakeholders include an ad hoc group of convertible noteholders. Discussions on the Company’s forward work programme, strategy, financing and balance sheet recapitalisation are ongoing.

On 18 December 2020, Hurricane outlined contemplated next steps in the Lancaster development programme, which included a second production well in 2021 by side-tracking from the existing 205/21a-7z well into the central area of the field. This proposed side-track is more complex in nature than previous wells on Lancaster due to the incorporation of an intelligent completion and the challenges of delivering the well trajectory from the side-track location. As a result, the Company has concluded that it will not be possible to drill this well during the 2021 summer weather window without unacceptable operational and cost risk.

While no firm decisions have been made, the Company is now considering various options including drilling the side-track in 2022 following further planning activity during 2021, drilling the side-track together with the previously contemplated water injection well as a combined programme in 2022 or drilling the side-track in 2022 and the water injection well in 2023.

All options for potential further development activity are subject to factors which are or may be outside the Company’s control which include field performance, prevailing oil prices and support from relevant stakeholders and counterparties.

This is a short, sharp statement that leaves anyone in any doubt that for the new management of Hurricane and its shareholders recovery if any is made will be one long haul. Whilst there is no comment on current trading the oil price will be keeping the company going until that programme in 2022 at the earliest now and there will be results before long. That doesnt give any hope to those of us saw such significant upside when the company had a team that knew how to make the rocks work, right now all hopes rest on the side-track, they have just been pushed back by at least a year.

KeyFacts Energy Industry Directory: Malcy's Blog