WTI $73.37 -$1.79, Brent $74.53 -$2.63, Diff -$1.16 -84c, NG $3.64 -6c, UKNG 81.5p -13.08p

Oil price

The rumour merchants on Opec stability were out in force yesterday as so-called experts were quick to talk of an Opec+ break-up. Their concerns, which tended to go from No deal = no new oil yesterday to No deal = a free for all today. But the Saudis didn’t take a 2m b/d hit at the bottom to let the cartel splinter just when they were in the pound seats.

As far as I can see the monthly meetings will still take place, there might even be one in August…I think that this deal will run until next April as planned and then depending on the market a new quota or baseline system will be put in place. For the time being then I remain of the view that oil will stay firm.

It is retail gasoline day today and a gallon of Exxon’s finest will rush you $3.122 which is up 3.1c w/w, 8.7c m/m and a good 94.5c up on this time last year. Opec’s problems are only of interest to US motorists when gas prices runaway which is just starting to happen but probably not for long if the above call is right…

Petro Matad

Mongolia’s Minister of Mining and Heavy Industry has approved the award of the Block XX Exploitation Licence to Petro Matad. Under the Mongolian Petroleum Law and the Block XX Production Sharing Contract, the Exploitation Licence runs for 25 years  with the option to extend for two periods of five years each.

As  expected the approved Plan of Development will concentrate initially on the proven reserves area around Heron 1, expanding in phases to target the estimated 194 million barrels of total in place resource potential. The agreed Exploitation Area totals 218km2 which includes the entire extension into Block XX of the proven and producing Toson Uul Basin.

The Company will now resume discussions with potential farm-in partners and review funding options to complete the next stage of activity which by the nature of the area will mean that the Company is now focused on preparing for a very active programme in 2022 including the start-up of oil production from the Heron discovery using spare capacity in adjacent infrastructure.

Mike Buck, CEO of Petro Matad, said:
“Securing the Block XX Exploitation Licence has been a lengthy process but Petro Matad very much appreciates the patient and professional way in which the government has dealt with the matter. We are delighted and honoured to have been awarded what is only the third such licence ever granted in Mongolia. The pandemic has been difficult for Petro Matad as it has for everybody and although the Company still has some important preparations to complete, we are looking forward to an extremely active 2022 with the primary goal of generating revenue from early production at Heron as soon as possible.

Petro Matad shares have been running in advance of this ruling which is understandable, providing that they can get partnered up and some moulah on board they now have a potentially huge area in Block XX to get their teeth into. With Covid and detailed negotiations with the Government keeping management busy I really hope that before long Mike Buck dusts off his passport and heads East when we can have a chat.

Hurricane Energy

Hurricane has announced the completion of operations to plug and abandon the 205/26b-14 (“Lincoln-14”) well on the P1368 (South) licence in the Greater Warwick Area (“GWA”), which Hurricane operates on behalf of the GWA joint venture (Hurricane 50%, Spirit Energy Resources Limited 50%).

The operation was completed within both schedule and budget and the Stena Don semi-submersible rig contracted to undertake the work has now been released. The Company previously announced that the GWA joint venture had a regulatory obligation to plug and abandon the Lincoln-14 well by 31 October 2021, and this obligation has now been fulfilled.

Block Energy-Scirocco statement

After I wrote the piece yesterday on the Block 303 resolution I understand that there was some discussion on message boards that someone other than GP Jersey had something to do with the situation and that Scirocco was to some extent involved. So I missed this statement by Scirocco issued later which clarifies things in no uncertain manner.

‘Scirocco provides the response to erroneous speculation on investor forums regarding its intentions with regard to corporate activity in the oil and gas sector generally and with Block Energy PLC (“Block Energy”) in particular.

The Board of Scirocco wishes to categorically state that it has never had, nor currently has any intention to engage in corporate discussions with Block Energy. Scirocco has clearly stated a strategic intention to focus on the sustainable energy and circular economy and will therefore not consider new investments in Oil and Gas assets or businesses. As such any speculation that SCIR is considering any form of corporate engagement with Block Energy is completely false.

Furthermore, the Board confirms that none of its Directors are looking to join the Board of Block Energy and any speculation to the contrary on the forums is also completely erroneous.

Scirocco’s non-Executive Chairman Alastair Ferguson and non-Executive Director Jon Fitzpatrick do have independent material shareholdings in Block Energy, alongside numerous other personal investments, however they are independent of one another, and those holdings represent the extent of their involvement in that company’.

That seems to sort things out for once and for all, I dont read the message boards myself but if I did I would probably be asking why an independent NED would resign on the same day as the 303 was served but that’s only my way of thinking. This will be some campaign methinks…

Coro Energy

Coro has noted the press release issued today by ion Ventures Holdings Limited, in which the Company holds a 20.3% interest.

ion Ventures has today announced a new partnership with GLIL Infrastructure Fund LLP in relation to ion Ventures’ portfolio of grid scale energy storage projects in the UK. Pursuant to the partnership, GLIL has committed up to £150m of capital to a newly incorporated vehicle, Flexion Energy Holdings UK Ltd, with ion Ventures transferring its existing portfolio of UK grid scale energy storage projects into Flexion, as well as all of its future business associated with the development of UK grid scale energy storage assets.

GLIL has committed to provide capital to Flexion to develop, build, own and manage energy storage assets in the UK, with a target of 300 MW of operational assets after two years extending to 1 GW within five years.  GLIL is an infrastructure investment fund with £2.5bn funds under management, backed by Local Pensions Partnership and Northern LGPS.

In connection with its capital commitment, GLIL will acquire an initial interest in Flexion of 95%, with ion Ventures holding a 5% interest in Flexion on a fully carried basis. Subject to the delivery of certain project milestones, ion will have the opportunity to increase its fully carried interest in Flexion to a maximum of 7.5%. ion will also receive up-front cash consideration of £0.1m from Flexion and has been engaged by Flexion to provide ongoing development, operational and asset management services.

Mark Hood, CEO of Coro Energy plc, commented:
“We are delighted to note this new partnership between ion and GLIL, which validates Coro’s initial ion acquisition and likely underpins a significant uplift in the value of that investment. The highly accretive transaction sees a material commitment by GLIL to ion’s UK energy storage portfolio, whilst securing a fully carried interest in the portfolio for ion, and therefore Coro.  We are excited in particular by ion Ventures’ potential for further growth in South East Asia, in relation to which we retain a right of first refusal to invest in ion’s South East Asian projects. We will continue to update shareholders in the coming months as we look to build on this success.”

This looks to be a very interesting deal indeed, in fact it has the makings of a great investment by Coro who are riding on the tails of the GLIL infrastructure fund whilst fully carried yet still waiting for growth in South East Asia. The fact that the shares have not risen on the news is somewhat of a mystery to me.

Getech

This was out yesterday and it missed the cut for the blog, but it is worth taking a look at if you have considered Getech.

H2 Green, a wholly owned subsidiary of Getech, has announced the signature of an MoU with Eversholt Rail to develop hydrogen supply solutions for the UK railway. Eversholt is a leading UK rail rolling stock company, with over 25 years of experience in the rail industry. Its rolling stock portfolio currently comprises over 3,200 passenger and freight vehicles.

H2 Green and Eversholt will work together to determine the production and refuelling infrastructure required to support wide-scale deployment of hydrogen-powered trains. The focus is to provide low-cost and reliable green hydrogen, particularly for trains on routes where electrification is not technically or economically viable.

The Parties believe the MoU will be a catalyst that enables the rapid deployment of hydrogen rolling stock for the UK railway. This partnership is an important step toward defining the locations of Getech’s initial green hydrogen hubs.

Jonathan Copus, Chief Executive Officer commented:
“Hydrogen has been designated a strategic fuel by the UK Government and it is set to play a key role in the decarbonisation of commercial transport. Getech is working to accelerate hydrogen adoption by using our location analytics to identify optimal sites to develop hydrogen production, storage, and refuelling networks. We are also progressing multiple discussions with potential anchor customers.

For rail companies operating in remote locations, there is a compelling economic and business rationale to be both early adopters and large volume customers of green hydrogen. We are therefore pleased to be working in partnership with Eversholt Rail, a leading UK railway rolling stock owner, to advance the infrastructure essential to supporting wide-scale deployment of hydrogen-powered trains.

This partnership is an important step toward defining the locations of our initial green hydrogen hubs, and we look forward to updating shareholders with further developments.”

KeyFacts Energy Industry Directory: Malcy's Blog