WTI (Nov) $90.03 +40c, Brent (Nov) $93.27 +3c, Diff -$3.24 -43c
USNG (Oct) $2.63 u/c, UKNG (Oct) 101.15p +2.15p, TTF (Oct) €42.36 +€4.16

Oil price

Oil was virtually unchanged on the week, less than a dollar off after Russia embargoed products and inventories fell in most areas keeping the market tight. The Baker Hughes rig count saw another big fall, down 11 units overall and a fall of 8 in oil to 507. 

Probably more interesting was the comment from SOMO, the Iraqi State marketing company that said that Kurdistan region’s oil export is expected to be resumed as a test through the Iraqi-Turkey Pipeline ‘soon’. Clearly no official comment and we have heard these rumours before but maybe this time…?

Gulf Keystone Petroleum

Gulf Keystone, has today provided an update on Shaikan Field local sales.

Since closure of the export pipeline and subsequent commencement of local sales on 19 July 2023, gross average monthly local sales of Shaikan crude have steadily increased: c.4,900 bopd in July, c.17,200 bopd in August and c.28,800 bopd between 1-24 September. Realised prices have continued to average around $30/bbl, in line with local market pricing.

Following recent agreements with buyers, GKP has ceased trucking operations and is injecting all crude sales into the pipeline for transportation to a local refinery in Kurdistan. The Company is receiving advance payments into its UK bank account for its net entitlement of 36% of gross sales revenue.

Current local sales volumes and realised prices enable GKP to more than cover its estimated monthly costs of around $6 million in H2 2023, while strengthening its financial position. The Company remains focused on preserving liquidity and continues to explore opportunities for further cost reductions.

Gross average sales are currently c.33,000 bopd and GKP is striving to increase sales volumes while prudently managing the start-up of wells that have been shut-in for several months and avoid traces of water. However, the continuity of local sales remains uncertain.

GKP continues to make a silk purse from a sows ear as it is now not selling to tankers at the gate but through the pipeline to a local recovery. This enables it to at least ‘more than cover’ its costs whilst strengthening the balance sheet. 

See oil price for comment on the pipeline.

Coro Energy

Coro has announced its unaudited interim results for the six-month period ended 30 June 2023.

Results

• Reduced loss after tax from continuing operations of $2.5m (restated H1 2022: $3.8m) mainly due to the contribution of gross profit from Vietnam operations and a reduction in net finance expense. Total loss further reduced to $2.3m (restated H1 2022: $3.0m) if gain for the period from discontinued Italy operations of $0.2m is included.
• Coro has a strong funding position from a combination of its cash position of approximately US$0.7m (as at 30 June 2023), and more recently supported by the post balance sheet events of the sale of shares in ion Ventures Holding Ltd and a further advance of Italy sale proceeds.

Operational

Italy

• Coro signed a Sale and Purchase Agreement (“SPA”) for the disposal of its Italian natural gas assets (the “Italian Portfolio”) to Zodiac Energy plc (“Zodiac” or the “buyer”) by way of the sale of the entire issued share capital of Coro Europe Limited for a total consideration of up to EUR 7.5M, including contingent payments of up to an aggregate of EUR 1.5M through a 10% net profit interest (“NPI”) in the Italian Portfolio over the three years from the date of completion of any disposal of the Italian Portfolio. An initial cash payment of EUR 1.5M was received. Following the interim period an Addendum to the Sale and Purchase Agreement (“SPA”) of the Italian Portfolio whereby Zodiac agreed to make a further cash advance of EUR 0.7M. Coro has agreed to reduce the sum due at completion by the further cash advance and an additional EUR 0.14m. The total potential consideration for the transaction is now therefore EUR 7.4M from the previous EUR 7.5M.

Indonesia

• The operator of the Duyung PSC continues to make steady progress commercially derisking the Mako gas field and preparing for Final Investment Decision (“FID”). During the period the Operator Conrad advised of negotiation of key terms of the Mako gas sales agreement between a Singaporean buyer and the Indonesian regulator (SKKMigas).
• In addition Conrad engaged a global investment bank to lead a farm-down process for the divestment of a portion of its interest in the Duyung Production Sharing Contract. Coro, which holds a 15.0% interest in the Duyung PSC, may participate pro rata in the farm-down process as various drag and tag-along clauses exist in the Joint Operating Agreement. Coro may also entertain a full exit, depending on the terms offered.

Renewables

Vietnam

• The 3MW solar rooftop project has been operational since October 2022 and generated revenue of US$116,000 during the first six months of 2023.
• Coro announced the acquisition of a 2.39MW rooftop solar portfolio from the shareholders of KIMY Trading and Service JSC (“KIMY”). The total acquisition price is US$1.3 million (US$543/MW) with Coro assuming US$600,000 of existing specialist renewables debt with a Vietnamese bank and the remainder of the consideration in cash and shares.
• Following the interim period Coro reported advanced talks with Capton Energy regarding possible co-investment solutions for Coro’s 50MW pipeline of Vietnamese rooftop solar projects. Capton Energy, based in Dubai, is a joint venture between Siemens Financial Services and Desert Technologies.

Philippines

• Coro has two development stage renewables projects in the Oslob onshore area of Cebu in the Philippines, a 100MW solar project and a 100MW wind project. The Company is currently focused on securing land access alongside regulatory permits and approvals, securing offtake arrangements, and data gathering at the proposed sites.
• Coro originally had a right to 80% of the dividends from the Philippines projects and this was restructured to achieve 88% of dividends.
• The application for the Philippines Department of Energy’s Wind Energy Service Contract (“WESC”) in respect of the wind project was approved and a WESC was formally awarded.

Corporate

• Coro announced on  24 August 2023 the sale of its 18.76% shareholding in ion Ventures Holdings Ltd (“ion”) to SLT1 LLC a privately owned entity based in the USA for a cash consideration of £1.25 million ($1.59 million), of which £1 million was paid immediately, and the remaining £250,000 will be paid by the 31 March 2024.
• Naheed Memon and Tom Richardson were appointed as independent non-executive directors of the Company.

A modest comment from Coro who continue to restructure the portfolio. In Italy the have sold to Zodiac and in Indonesia they are making steady progress with a GSA and Conrad are leading a farm-out process which Coro might get involved in. In the Philippines the company were awarded a WESC contract.  

KeyFacts Energy Industry Directory: Malcy's Blog