WTI (Apr)* $66.31 u/c, Brent (Apr) $71.49 -27c, Diff -$5.18 u/c
USNG (Mar) $2.99 -6c, UKNG (Mar) 76.72p +1.89p, TTF (Mar) €31.215 -€0.415
*Denotes expiry of WTI March contract

Oil price

Oil was up sharply last week as Iran simmers, it has now paused as yesterday it was announced that phase 3 of the talks will resume on Thursday in Geneva. WTI rolled over yesterday also staying quiet. 

Chariot

Chariot reported yesterday that Etana, the South African electricity trading platform in which Chariot’s subsidiary, Chariot Generation and Trading (Pty) Limited holds an economic interest of 34%, alongside H1 Holdings, Norfund and Standard Bank, has signed up a further 150MWAC in sole offtake from the Orkney 219MWDC solar photovoltaic project which has now reached financial close. Chariot Generation and Trading is co-owned by Chariot and the Mahlako Energy Fund.

The Orkney project, located in the North-West province of South Africa, is being built by Mulilo a leading renewable energy developer and independent power producer and will be financed by Mulilo and a consortium of South African financial institutions. Once operational, Orkney will have an export capacity of 150MWAC and is expected to produce around 478GWh of renewable electricity annually, which will be wheeled to Etana’s customers via South Africa’s national and municipal distribution network. This is the second project that has been completed through the Etana and Mulilo partnership, the first being the 75MWAC Du Plessis Dam Solar PV2 project that commenced construction last year.

Benoit Garrivier, CEO of Chariot’s Renewable Power division, commented:
“This is a further example of Etana delivering on its strategy and underlines how its business model is addressing both the supply and demand for renewable energy by enabling and instigating the build of these projects. Etana is executing its plans at pace, closing projects expected to generate in excess of 500MW in the last 12 months, and is, in turn, serving to help redefine and enhance South Africa’s long term energy infrastructure.”

This announcement yesterday shows that the renewable business is growing rapidly and this is another large solar project under construction with Etana to trade the electricity. It can only make the renewable business more valuable at a time when Chariot has announced that it is their intention to now monetise this business and to use the proceeds to reinvest in another oil production deal. I look forward to watching the progress as Chariot in the coming months, they are back on the radar screen, no mistake. 

United Oil & Gas

United yesterday announced the completion of Stage 2 of its Surface Geochemical Exploration programme and the commencement of Stage 3 piston coring operations on the Walton-Morant Licence offshore Jamaica.

Highlights

• Stage 2 seabed heat-flow measurements successfully completed
• Stage 3 piston coring now underway – the critical phase of the programme
• Up to 42 cores planned, primarily within the Walton Basin near the key Colibri, Streamertail and Oriole prospects, with select key locations in the Morant basin also identified
• Programme designed to physically confirm an active petroleum system and further de-risk the licence

Operational Update

Stage 2 heat-flow measurements have now been completed and will provide valuable technical information for future geological modelling. Data from the previously completed Stage 1 high-resolution multibeam echosounder (“MBES”) acquisition have also been integrated with the existing seismic dataset. This has resulted in the identification of numerous seabed features of interest and the selection of 42 optimal piston core locations for Stage 3 of the survey.

Figure 1 (above): Conceptual illustration of MBES seabed mapping integrated with seismic interpretation to identify seabed features of interest and optimise piston core locations (not to scale).

Stage 3 piston coring is now underway, with up to 42 cores planned across priority areas, predominantly within the Walton Basin and in proximity to the Company’s Colibri, Streamertail and Oriole prospects, where existing 3D seismic and supporting datasets indicate potential hydrocarbon migration. Additionally, key locations in the Morant basin will also be cored.

This stage of the survey will recover seabed sediment samples for geochemical analysis to test for thermogenic hydrocarbons, which if present, will provide direct physical evidence of an active petroleum system offshore Jamaica.

The piston coring operations are expected to take approximately one week, subject to weather conditions, with samples then shipped to Houston, Texas for laboratory analysis.

The SGE programme represents a key operational step toward further de-risking the Walton-Morant Licence and advancing the project’s technical evaluation and commercial discussions. 

Brian Larkin, CEO of United Oil & Gas, commented:
“The completion of heat-flow measurements and commencement of piston coring marks a major step forward in our Jamaica exploration programme. The integration of the acquired data has allowed us to optimise coring locations in the Walton Basin, including near our key Colibri, Streamertail and Oriole prospects, as well as at key locations in the Morant Basin.

Piston coring is the defining phase of this programme, providing the opportunity to physically confirm the presence of thermogenic hydrocarbons offshore Jamaica. We look forward to completing operations and updating the market in due course.”

Nothing much to add here, another detailed update from UOG which is highly commendable and is keeping shareholders up to date with activity at Walton Morant. I’m also looking forward to some idea of a timeline as to the Farm-out process which whilst getting closer must still be a bit of a way off.