WTI $59.20 +77c, Brent $64.39 +$1, Diff -$5.19 +23c, NG $2.33 -9c

Oil price

With no company news on Friday I was justified in waiting for the day, as the best news came from Opec late in the afternoon as the KSA added to the already better than expected deepening of cuts to 1.7m b/d by adding a potential 400/- b/d to make cuts of 2.1m b/d. Opec + will meet again in late March to assess the situation at an extraordinary meeting.

Predator Oil & Gas 

Predator, through subsidiary PGVL  has announced that it has executed a Rig Option Agreement with Star Valley Drilling for the Guercit permits onshore Morocco. The option is to 31 Jan 2020 and provides for a rig mobilisation date with a window of 15/3/2020-30/4/2020.

The plan is to drill Moulouya-1 prospect to a depth of 2,000 metres which is expected to take up to 30 days. Completion of the first well will release $1m of PGVL’s $1.5m bank guarantee with ONHYM. The option with Star allows PGVL to extend the programme by drilling either an appraisal well or a follow-up exploration well to capitalise on the reduced costs of having the rig available.

This is a smart move by Predator, it is cost free until at least 31.1/2020, it has a firm drilling window and the release of the ONHYM guarantee adds to working capital. Also creating efficiency is that as the rig is in country working for SDX mobilisation costs are kept low and there is the potential for drilling partners to contribute dis-proportionately to further exploration costs as the EIA has already been completed.

The company is aiming at multiple gas targets in the first exploration well – which could open up for the first time the Tertiary gas play in the Guercif Basin in a prospective area covering over 1,000 sq. km. Previous drilling had focused only on deeper Jurassic targets which were easily defined on old seismic and gravity as large anticlines. Success on these targets would be transformational for Predator not just in itself but as the licence is close to local infrastructure and its high domestic prices potentially very profitable indeed, 2020 looks most exciting for the company indeed.

Rockhopper Exploration/United Oil & Gas

Confirmation this morning in an Abu Sennan update that Rockhopper will receive cash of $11.5m and 115m odd shares at 3p which is 18.5% of United’s share capital and subject to certain lock-up and orderly market provisions fora period of up to 12 months from completion.

United has said that its suspension has been lifted this morning (the shares are down 22% at 3.125p) having raised $6.25m at 3p issuing the above mentioned 115m shares. The deal is expected to close in January 2020.

Amerisur Resources

ISS Corporate Services has reported on the recommended cash offer of 19.21p for Amerisur Resources by GeoPark saying that the ‘shareholder support for the transaction is considered warranted’. This is based on a ‘significant premium  offered to company’s shareholders, it has a cash consideration bringing certainty of value to shareholders and no other concerns have been identified’. Considering all these matters ISS have recommended the management proposal to shareholders.

The board has received a number of proposals and accepted an offer that was over 50% above the three month VWAP, in that respect it is appropriate that the offer is accepted by shareholders.