WTI $40.90 +28c, Brent $43.29 +21c, Diff -$2.39 -7c, NG $1.82 -5c

Oil price

Back on uptrend yesterday where again glimmers of good news outpointed the rise in virus numbers and some signs of force majeure in Libya at the Es Sider terminal. The EIA inventory stats looked bad when looking at the headline build of 5.7m b’s of crude but that was due to a jump of 1.4m b of imports to 7.4m.

Much better was the gasoline data showing a draw of a huge 4.8m barrels and with demand up 200/- b/d at 8.8m b’s stock levels fall again. Refinery capacity utilisation was up 2 points at 77.5% with production of 900/-.

Pharos Energy

A trading and operational update from Pharos this morning. Production is in-line with guidance, from Egypt H1 was 5,979 bopd and from Vietnam 6,114 boepd net making 12,093 boepd with 2020 remains in-line with previous guidance.

1H revenue was $77m including $21m of hedges, the cash balance at 30/6 was c.$38m after RBL repayment of $22.3m. Net debt was c.$36m with a further RBL payment of $9.4m expected imminently. The company continue to deliver on cost across the board, cash capex for the full year is expected to be c.$37m with the majority of that having already been spent and overall cash cost savings of c.25% are ongoing. Finally due to the oil price ‘a significant non-cash impairment charge is expected’.

Pharos is in a relatively strong position, with strong finances and production it has been able to cut back costs and curtail its naturally aggressive M&A options until better times in the industry, when that happens they will again be a force to reckon with.

KeyFacts Energy Industry Directory: Malcy's Blog