WTI $63.98 -42c, Brent $70.61 -49c, Diff -$6.63 -7c, NG $2.70 -1c

Oil price

Oil drifted off yesterday as the IMF whose forecasts one should take with a pinch of salt, cut their global GDP numbers again. Apart from that little changed and supply difficulties remain with fighting in Libya intensifying.

After the close oil rallied, the API numbers were a curates egg, crude built by 4.1m barrels, higher than forecasts but yet again products drew with gasoline down 7.1m b’s and distillates down 2.4m and with stocks falling at Cushing the bulls are happy again this morning, the EIA numbers will as ever be interesting later.

Chariot Oil & Gas

2018 results today from Chariot but information that is very much already in the market and t gives the company the chance to talk a bit more about how they are re-balancing the portfolio going forwards. As announced last week the company has recently been awarded the Lixus licence in Morocco which contains the Anchois-1 gas discovery with 307 bcf of 2C contingent resources as well as deeper potential of another 116 bcf of 2U prospective resource having been identified.

In addition there are material tie-back opportunities for low risk exploration prospects with ‘attractive’ upside of 527 bcf of 2U prospective resources in adjacent satellites and a host of potential exploration opportunities. With the local gas market to be one of the best worldwide, with excellent contract terms and high gas prices this looks to be a gem of an opportunity.

Chariot has $19.8m of cash which is equivalent of 4p per share and no debt. The new licence carries less than $1m of commitments and with the project likely to deliver strong cash flow should attract a significant number of potential partners wishing to join up with Chariot. The demand for these ‘strategic alliances’ in a country with strong demand for gas and one of the best fiscal policies worldwide makes this re-balancing of the portfolio by Chariot very wise. The company will still be able to pursue the exciting high-impact exploration portfolio whilst at the same time tempering some of the beta with this project, this looks like a plan that shareholders will appreciate.

Predator Oil & Gas

Predator has announced an extension to the term of the Licensing Option 16/30 (LO 16/30), Ram Head until 30th November 2019 subject to carrying out a work programme of 2D seismic. The company are re-evaluating the Marathon gas discovery of 1984 on 49/19-1 with updated techniques, modern technology and new economics of local gas markets.

An updated CPR has been commissioned to assess and validate the development concept and will be released ‘within the next few weeks’ and the company believe that 49/19-1 could potentially be the largest undeveloped gas discovery offshore Ireland. It is worth noting that the previous CPR from 2018 showed Best Estimate and High Estimate Prospective Gas resources net to the Company of 508 and 1,370 BCF respectively and scoping initial production rate 400 mm cfgpd to recover 1 TCF of gross gas in 11 years.

This is very good news from Predator who are moving ahead on a number of fronts with recent announcements from all parts of their portfolio. CEO Paul Griffiths says in the RNS that ‘the CPR is an important milestone to independently validate the potential of Ram Head to become a real game changer and to provide the catalyst for further progress’ and who could argue?