WTI $40.81 +22c, Brent $43.28 +14c, Diff -$2.47 -8c, NG $1.64 -8c

Oil price

Oil has followed up yesterdays modest strength with a bounce this morning of over a $1.50 a barrel. The market has taken heart from the reports of a potentially successful vaccine from Oxford University and Astra Zeneca as well as a deal announced overnight from the EU worth some €750bn.

Whilst the vaccine is very much at its early stage, straw clutching never did anyone any harm and thus millions of orders have been made for it in the hope that it will do the trick. The EU leaders have announced grants of some €290bn and loans of €460bn for EU states but it took time, the ‘frugal five’ resisted France and Germany and it is worth noting that the Union is still arguing without the UK even being in the room.

Retail gasoline prices in the US have dipped for the first week in a long time albeit only 0.9c but it does show some lessening of demand for the product. It will be interesting to see the inventory stats later in the week to see how refinery runs are coping.

Chariot Oil & Gas

Chariot has announced that CEO Larry Bottomley has stepped down with immediate effect and that Adonis Pouroulis, NED and Founder of the company will take over as Acting CEO. CFO Julian Maurice-Williams has joined the board as has Exploration Manager Duncan Wallace as new Technical Director.

Chariot remain on track to extract the maximum from the Anchois discovery at the Lixus licence in Morocco and ‘believes that the asset has the potential to deliver near term cash flows to the business’, has ESG credentials and remains an ‘attractive asset for potential farm-in suitors’.

Chariot has also said that it plans to evaluate other opportunities available to it and continues to benefit from a strong financial position, with a cash balance of US$9.6 million as at 31 December 2019 with no remaining work commitments. Acquisitions would have to be accretive to shareholders and it is clear talking to the company today that value added deals are being looked at already.

Deltic Energy

Deltic has announced that it has received a letter from IPGL, its largest shareholder, who own 16.8% of its equity (and none of Reabold) in which it says that it does not support the proposed offer. IPGL reiterated its continuing support of Deltic’s management team, its technical capability, focused asset base with high impact potential and current strategy.

Whilst this bid is in its very early stages and I am still waiting to talk to either team, this is an early score on the board for Deltic. Given a look at the Reabold initial announcement this is a serious outing and I would be surprised if Michael Spencer’s decision will have changed the boys view much, there is still 83.2% still to persuade and I look forward to hearing the full pitch. This is not a pig in a poke and what looks like a low opening gambit must have some legs…

Cairn Energy

The Indian Arbitration Tribunal has announced that ‘whilst it has encountered some difficulties created by the Covid-19 pandemic, it does not expect significant delays and hopes to remain reasonably within the lead-time it had anticipated’.

The Tribunal adds, ‘whilst it is not yet able to commit to a specific date for its ruling, it expects a release of the Award after the end of the summer’. Cairn is looking for restitution for losses of some $1.4bn and ‘has a high level of confidence in the arbitration’, I wish that I could share their confidence, after all the Tribunal didn’t say which summer…

KeyFacts Energy Industry Directory: Malcy's Blog