WTI (May) $80.42 +$4.75, Brent (June) $84.93 +5.04, Diff -$4.51 +29c
USNG (May) $2.09 -12c, UKNG (May) 127.5p +8.5p, TTF (May) €49.990 +€62.34

Oil price

After the Lord Mayors Show the oil price has hardened by just under a dollar and with the shortage happening just as Americans go driving then The White House aint gonna that SPR back anytime soon. Indeed today is retail gasoline time and a gallon of Exxon’s finest will rush you an average price of $3.497 which is back rising again, up 7.6 cents w/w and 10c m/m, y/y is still down some 67.3 cents.

United Oil & Gas

United Oil & Gas has provided an update on operations in the Abu Sennan licence, onshore Egypt. United holds a 22% non-operating interest in the Abu Sennan licence, which is operated by Kuwait Energy Egypt.

ASD-3 Well Spud
The ASD-3 development well has now commenced drilling. This well will be drilled approx. 1.2km to the north-west of the ASD-2 well which was drilled in March 2022, and which has recovered circa 400,000 bbls since it came on production just over a year ago. The ASD-3 well has primary targets in the Abu Roash-E (“ARE”) and Abu Roash-C (“ARC”) reservoirs, as well as secondary objectives in the Lower Bahariya. The well has a prognosed total depth of 3,649 metres, and is expected to take approx. 55 days to drill and complete.

Abu Sennan Production Update
United’s net oil production from Abu Sennan for Q1 2023 averaged 841 bopd. The exit rate for the quarter was 1,275 bopd oil and 170 boepd gas (1,445 boepd net) which incorporates the material contribution from the ASH-8 well, which has continued to flow at a stable rate with no water-cut since it came onstream on the 16 March 2023.

United Chief Executive Officer, Brian Larkin commented:
“We are happy to report that the next well in our 2023 drilling campaign has spud at ASD-3, in an area of the field we believe contains extensive unrecovered resources. We are excited by the potential that this well is planned to test and the follow-on development drilling targets it could unlock in a success case. It is also really pleasing to see the continued strong production performance from the ASH-8 well, which supports our view that there is significant long term value remaining in the Abu Sennan licence”.

It is good that UOG has got straight into drilling the ASD-3 development well which will have a number of targets and take around 55 days to complete. It will be targeting a number of targets, as above and have significant potential with success. CEO Brian Larkin is happy with Abu Sennan and so am I after a small hiccup. 

Predator Oil & Gas

Predator has announced that Predator Gas Ventures Morocco Branch (“PGVMB”) has awarded the contract for the construction of the MOU-3 well pad platform and the improvement of access roads to Moroccan company Skayavers Sarl.

Completion of permitting and survey requirements are expected to be finalised shortly. Civil works are due to start on or before 10 April 2023 to facilitate the commencement of drilling activities prior to the end of May.

The exact timing of the start of drilling operations is dependent on transit times for the arrival of all outstanding long-lead well items from a number of different international locations. As this becomes defined then the drilling schedule can be amended accordingly.

PGVMB is pleased to confirm that it has managed to source and order for delivery the most critical outstanding long lead items in what is a very competitive and challenging international market at present due to supply chain deficiencies.

An update on the MOU-1 testing programme will be provided in due course and it is expected to be executed in April. It will be scheduled around the MOU-3 pre-drill planning, which is the current priority in order to enable MOU-3 to commence drilling at the earliest opportunity.

The materials and logistical requirements for a potential re-entry of the suspended well MOU-2 are being evaluated, but it is not expected that any such operation would be executed before the completion of drilling at the MOU-3 location.    

Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings Plc commented:
“This is an extremely congested period of operational activity in Morocco for the Company during the next two to three months that has to be carefully managed and scheduled to ensure execution in an efficient and cost-effective manner.

Separately we are working to secure the acquisition of TRex Holdings Trinidad Ltd. and the Cory Moruga asset, subject to the Ministry of Energy and Energy Industries consent, after the completion of the MOU-3 drilling programme. This is another key objective for our shareholders to see realised as it creates the opportunity to establish production, independent of the later application of our CO2 EOR expertise, and cash flow from early reactivation of wells that have demonstrated the ability to flow oil at attractive rates but have never been taken to full development status.”

Whilst this RNS adds little new to what we already know about the drilling programme, it is important to know that key activity such as the contract for the construction of the MOU-3 well pad platform and the improvement of access roads have been awarded. Indeed it is as important to hear from Chairman Paul Griffiths about caseful management of the situation.

With drilling activities expected to get under way before the end of May there is much to be done but they are good at logistics and the programme should remain on track given no unforeseen circumstances.

KeyFacts Energy Industry Directory: Malcy's Blog