WTI (Jan) $55.94 +67c, Brent (Feb) $59.68 +76c, Diff -$3.74 +9c
USNG (Jan) $4.02 +13c, UKNG (Jan) 72.46p +0.96p, TTF (Jan) €27.485 +€0.095

Oil price

Oil has rallied off the lows and Brent is just above $60 as I write. This is probably due to the Venezuelan situation where President Trump is blockading the country after describing Maduro as running a ‘terrorist regime’. 

Oil stocks are difficult to read this week, the API reported a big draw but yesterday’s EIA number, although still a draw, was only 1.3m barrels and with both gasoline and distillates building the picture remans unclear.

BP- Is this a dagger I see before me?

BP has announced that the bp Board has appointed Meg O’Neill as bp’s next chief executive officer, effective 1 April 2026. Murray Auchincloss has ‘decided to step down from his position as CEO and director of the Board’, effective Thursday, 18 December. Carol Howle, current executive vice president, supply, trading & shipping of bp, will serve as interim CEO until Meg joins as CEO. Murray will serve in an advisory role until December 2026 to ensure a smooth transition.

Meg currently serves as CEO of Woodside Energy. Since her appointment as CEO in 2021, Meg O’Neill has grown Woodside Energy into the largest energy company listed on the Australian Securities Exchange. Among her many accomplishments at Woodside Energy, she oversaw the transformative acquisition of BHP Petroleum International, creating a geographically diverse business with a portfolio of high-quality oil and gas assets. Before joining Woodside Energy in 2018, Meg spent 23 years at ExxonMobil in technical, operational and leadership positions around the world.

Albert Manifold, Chair of bp, said: 
“We are delighted to welcome Meg O’Neill to the bp team. Her proven track record of driving transformation, growth, and disciplined capital allocation makes her the right leader for bp. Her relentless focus on business improvement and financial discipline gives us high confidence in her ability to shape this great company for its next phase of growth and pursue significant strategic and financial opportunities.

“Following a comprehensive succession planning process, the Board believes this transition creates an opportunity to accelerate our strategic vision to become a simpler, leaner, and more profitable company. Progress has been made in recent years, but increased rigor and diligence are required to make the necessary transformative changes to maximise value for our shareholders.”

Meg O’Neill said: 
“bp plays a critical role in delivering energy to customers around the world. I am honoured to serve as the company’s next CEO. With an extraordinary portfolio of assets, bp has significant potential to reestablish market leadership and grow shareholder value. I look forward to working with the bp leadership team and colleagues worldwide to accelerate performance, advance safety, drive innovation and sustainability and do our part to meet the world’s energy needs.”

Murray Auchincloss said: “After more than three decades with bp, now is the right time to hand the reins to a new leader. When Albert became Chair, I expressed my openness to step down were an appropriate leader identified who could accelerate delivery of bp’s strategy. I am confident that bp is now well positioned for significant growth and I look forward to watching the company’s future progress and success under Meg’s leadership.”

Albert Manifold continued: 
“On behalf of the Board, I want to thank Murray for his many contributions to bp and for his commitment to our people and our business. We wish him every success in his next chapter.

“The Board is grateful for Carol’s willingness to serve as interim CEO. With 25 years at bp, she has a deep knowledge of the company and will ensure strategic continuity until Meg joins.”

The appointment of Meg O’Neill follows a search process overseen by a search committee of the Board, assisted by an independent recruitment firm, as part of the Board’s long-term succession planning.

I don’t cover the company as such and as such any comments on BP are outside the standard disclaimer below, but I must say that, as I wrote on social media last night, the news that the CEO has been dispatched i.e. can only be good news for shareholders.

As, along with Looney, one of the key architects of the renewables drive, and with huge debt and high costs, it comes as no surprise to see such changes. But the greatest news of all for shareholders is the appointment of Meg O’Neill as new CEO. 

As a leader at Exxon she had a great reputation and she has increased that significantly at Woodside, she stands for a no-nonsense approach with a mandate to simplify and will make BP a leaner, more efficient company. At long last the board of BP have woken up and smelt the coffee, albeit at least ten years too late. 

Whether this move has been made by the new chairman or the activists at the gate, we may never know, but assuming that Meg O’Neill is allowed to get on with it, then next year might actually see some genuine progress for BP, not something that many have said in the recent past.

Arrow Exploration

Arrow has provided an update on the operational activity at the Mateguafa Attic field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50 percent beneficial interest.

Mateguafa HZ7 well

The Mateguafa HZ7 (M-HZ7) well was spud on November 22nd, 2025, and reached target depth on December 4th, 2025.  The M-HZ7 well was drilled, on time and on budget, to a total measured depth of 14,253 MD feet (8,440 feet true vertical depth) and encountered multiple hydrocarbon-bearing intervals.

Arrow has put the M-HZ7 well on production in the Carbonera C9 formation (“C9”), which has approximately 4,053 feet of horizontal oil pay. The pay zone is a clean sandstone exhibiting an average porosity of 23% with high resistivities. An electric submersible pump (ESP) has been inserted in the well after perforating.

The M-HZ7 well also encountered approximately 20 feet of net oil pay (true vertical depth) in the Carbonera C7 formation (“C7”).

The well was put on production at a heavily restricted rate, 25/128 choke and 30 Hz pump frequency, of approximately 1,694 BOPD gross (847 BOPD net). The oil quality is 30.6° API and there is a 4% water cut (completion fluid and formation water).  The well is continuing to clean up.

The testing results indicate the well is capable of higher rates and the ultimate flow rate will be determined in the first few weeks of production.

Initial production results are not necessarily indicative of long-term performance or ultimate recovery.

Mateguafa 6 well

The Mateguafa 6 well (M-6) continues to produce at approximately 772 BOPD gross (386 BOPD net) with a 4% water cut. The M-6 well is producing from the C7 formation. The well has experienced very low decline rates during this initial production phase.

Mateguafa 5 well

The Mateguafa 5 well (M-5) is currently shut in for a 7-day mandated pressure test.  Before being shut in, the well was producing at approximately 800 BOPD gross (400 BOPD net) with a 30% water cut. The M-5 well is producing from the C9 formation. Management’s expectations are that the well will resume production at similar rates after the pressure test is complete. The increase in the production rate from this well since the well results were announced in November is due to the well cleaning up after the original production period.

Mateguafa 8 well

The Mateguafa 8 (M-8) well was spud on December 14th, 2025.  This well is targeting the C7 formation, which all wells drilled at Mateguafa have encountered. Expectations are that the well will take approximately two weeks to drill and complete and will be put onto production in late December

Forward Drilling Plans

After the M-8 well is put on production the company plans to drill the Mateguafa 9 (M-9) well which will be drilled as a delineation well to be used  for water disposal. Arrow then plans to drill additional horizontal and vertical development wells into the Mateguafa field before moving the rig to Icaco for a first exploration well.

Production

Including the restricted production from the M-HZ7 well, total corporate production is approximately 4,510 boe/d. This does not include any production from the M-5 well which was flowing at approximately 800 BOPD gross (400 BOPD net) before being shut in and is expected to resume production shortly.

Marshall Abbott, CEO of Arrow commented:
“The M-HZ7 well was drilled on time and on budget and initial production has exceeded expectations. In addition to the thick pay zone encountered in the C7 formation, currently behind pipe, the C9 formation has proven to be an excellent producing zone into which the Company plans to drill additional horizontal wells.

“The M-HZ7 well reinforces the materiality that the Mateguafa Attic discovery represents for Arrow. Future wells will help determine the extent of the pools and the potential reserves additions. The area has definitely turned into another core area for Arrow with the potential for further horizontal drilling development.

“M-9 will be the final well drilled in the 2025 program. This large step-out well’s primary purpose is to become a water disposal well for the Mateguafa area. The well is being located outside the estimated extent of the pool, but could become a producing well if the pool extends beyond seismic interpretation. We look forward to providing further updates on the low-risk ongoing development of the Mateguafa Attic field.”

This is an outstanding well result and as I understand it way beyond the pre-drill expectations. The M-HZ-7 well was drilled on time and on budget and encountered multiple hydrocarbon bearing intervals. The C9 formation is already on production, having encountered 4,053 feet of horizontal pay, which is incredible. The well also encountered 20 feet of our old friend, the C7 formation. 

The well was put on production at a heavily restricted rate, 25/128 choke and 30 Hz pump frequency, of approximately 1,694 BOPD gross, it is 30.6° API and there is a 4% water cut made up of water and completion fluid. That rate is way better than I had expected and the company say that ‘the testing results indicate the well is capable of higher rates and the ultimate flow rate will be determined in the first few weeks of production’. 

The M-8 well was spudded on 14th December and targets the C7, which we know well in the Tapir Block and following that the final well in the 2025 programme will be the M-9 which is planned as a delineation well for water disposal but on the odd chance it finds oil outside the seismic expectations then all bets are off and it too will go into production. 

As the year ends on a highly satisfactory note, Arrow should look forward to a racing start to next year, with plenty of horizontals to drill on the Mateguafa Attic field and of course, the exploration well at Icaco, which could be exciting. 

Arrow remains a prime choice in the sector, my 40p TP stands, and I’m sure it will remain in the Bucket List when I review it next month. Recent strength has only scratched the sides of the potential of this first-class portfolio in Colombia, and I’m sure that if the market doesn’t revalue the shares, then they might just become the dinner rather than being the diner as they are right now. 

Deltic Energy

On 30 June 2025, the boards of Viaro Bidco and Deltic announced that they had reached agreement on the terms of a recommended cash offer for the entire issued and to be issued ordinary share capital of Deltic, to be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006  which was approved by Deltic shareholders on 28 August 2025.

Completion of the Acquisition remains subject to outstanding conditions, which include, inter alia, the consent of the North Sea Transition Authority (the “NSTA”) to a change in control of the North Sea exploration licences held by Deltic. The NSTA is the UK regulator focused, among other areas, on oil and gas exploration and production activities in the UK’s North Sea.

Deltic has been informed that Viaro Bidco has requested, and the NSTA has agreed to, an extension to the date by which it requires further representations from Viaro Bidco in order to reach a definitive conclusion in relation to concerns it has which will affect whether it will grant the proposed change of control of the licences held by Deltic. The NSTA has now agreed that this information should be provided to it by 30 January 2026.

A further announcement will be made in due course.

Not much to add here, except that the NSTA are prevaricating way out of their comfort zone in delaying an agreed deal, in which the bidder is already in possession of a portfolio of assets which I assume are already under their jurisdiction in this country. I’m not sure that outwith of this country anything comes under that jurisdiction but then who am I to judge on such things…

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog