Oil prices, Zephyr Energy, San Leon, Falcon. And finally…
With rising Covid numbers in China and major banks slashing growth forecasts, oil is under pressure, last week WTI fell $ 5.67 and Brent fell $ 4.71 and this morning , both are down about $ 1.70.
WTI $ 68.28 -81c, Brent $ 70.70 -59c, Diff -2.42 $ + 22c, NG $ 4.14 u / c, UKNG 108.04p -2.2p
With rising Covid numbers in China and major banks slashing growth forecasts, oil is under pressure, last week WTI fell $ 5.67 and Brent fell $ 4.71 and this morning , both are down about $ 1.70. With some feeling that the United States is still vulnerable amid rising Covid numbers, few are willing to take a chance on the demand numbers right now, but I’m sure the industry’s monthly reports don’t. will not panic.
After the NFP figures in the United States on Friday showing many more jobs created, the decline appears to be earlier than expected and it is not bearish for the US economy, but the strength of the dollar has not helped the oil price.
Zephyr provided an update on its flagship project in the Paradox Basin, Utah, United States. The well reached full depth at 14,370 feet at which time a full series of wireline logs were completed and production casing was placed.
The well successfully encountered the primary target of the Cane Creek Reservoir as well as several secondary targets in the overlying reservoirs and penetrated 4,555 feet from the Cane Creek Reservoir and was drilled 100% in the area. The Cane Creek reservoir target indicated an entire hydrocarbon load, based on wireline logs, cuttings and mud gas readings. Multiple overlying reservoirs also indicated an oil load.
Detailed analysis of the log data is now in progress. This analysis will inform the selection of an optimal method of well completion, which should be determined within the next week. Based on the multitude of positive indications gathered to date, the Company has elected to lay production casing in anticipation of upcoming completion and production test activities.
Colin Harrington, CEO of Zephyr, said:
“I am delighted to report the safe and successful conclusion of the drilling operations. I’m even happier that we successfully hit the Cane Creek reservoir target and stayed in that reservoir all the way down the side of the well. It is also exciting to see evidence of oil loadings over the entire Cane Creek Lateral, as well as in several overlying reservoirs.
“Now that we have the production casing in place, we have an excellent wellbore from which to complete the well and test the production from the Cane Creek reservoir – and the logging data collected during drilling operations will help. to determine the optimal method for doing so. .
“The log evaluation is underway and we will keep our shareholders informed in the coming days when the results of this analysis are finalized and the well completion method is selected. “
Zephyr continues to grow stronger and today’s news from the Paradox Basin takes the company one step further towards production from the Cane Creek Reservoir. In turn, this will create a revenue stream that will fund the further development of what could be a substantial operation eclipsing the size of the business achieved so far.
Indeed, alongside the significant oil production of the Williston Basin interests which are now in service and remembered to be sheltered from federal corporate tax, the company is in a very strong position. solid, which places it in a powerful financial position from which to step up to the “flagship” of the Paradox Basin project and of course leaves the company overwhelmingly well positioned to build here and “pursue accretive transactions”. It should not be forgotten that the company has already announced an increase in its operating land position by acquiring an additional 12,260 acres in the Paradox Basin.
San Leon Energy
San Leon provided an update on its investment in Energy Link Infrastructure (Malta) Limited (“ELI”), the company that owns the Alternative Crude Oil Evacuation System (“ACOES”) project. ACOES is under construction to provide a dedicated oil export route from OML 18, including a new pipeline from OML 18 and a floating storage and offloading vessel.
As previously announced by San Leon on August 3, 2020, the company initially invested US $ 15 million in ELI. The investment included a 10% stake in ELI as well as a shareholder loan of US $ 15 million with a coupon of 14% per annum over four years, repayable quarterly after a one-year moratorium from the date of investment. ELI’s first installment of repayment, which amounts to approximately US $ 2.2 million, recently expired.
San Leon announced on June 24, 2021 that it plans to make further debt and equity investments in ELI and reaffirmed this intention in subsequent announcements in July 2021. The Company has agreed with ELI that if these additional investments were realized, the first tranche be deducted from any investment sum payable to ELI by San Leon under some of these new agreements. Pending any further investment in ELI, the first tranche will continue to bear interest at 14% per annum.
It seems like a perfectly sane way to handle the situation to me and given that they want to continue with the project and improve their roll-up value, making up for missed payments is a smart way to do it. I always rate SLE for overall capital and income growth in the industry with many benefits.
Falcon Oil and Gas
Falcon has announced the start of production test operations at Amungee NW-1H (“Amungee”) in the Beetaloo sub-basin, Northern Territory, Australia with their joint venture partner, Origin Energy B2 Pty Ltd., a subsidiary of 100% Origin Energy Limited.
Site operations at Amungee have started with all equipment on site and preparatory work has been completed. A production test is currently underway to determine whether the eleven fracturing stages contributed to the initial extended production test (“EPT”) in 2016.
So far, the Amungee horizontal well has been drilled to 1,100 meters, 11 fracturing stages have been completed across the entire horizontal section and on December 22, 2016, Falcon announced that after a 57-day EPT of the well, the production was on average 1.10 MMscf / d.
On February 15, 2017, Falcon announced that Origin had submitted the results of the discovery assessment and preliminary estimate of oil in place for the Amungee NW-1H Velkerri B shale gas pool to the Government of the Territory of the North amounting to a gross contingent resource of 6.6 TCF, 1.46 TCF net to Falcon.
Philip O’Quigley (CEO of Falcon) commented:
“We look forward to completing this production test and production logging operations. This production test at Amungee could provide interesting information on the contribution of all the fracturing stages to the results obtained. Updates will be provided as they become available.
I have remained loyal to Falcon over the years and admire the tirelessness of shareholders and even management. It will be interesting to see if the operator’s optimism is confirmed, it certainly deserves it.
The Olympic Games which almost did not take place ended yesterday with the GB team in 4th place, comprising a rare and exciting mix of old and new sports.
The first test against India ended in a draw after the last day at Trent Bridge was swept away, there by the grace of God as India would likely have hit a low total. It was great to see Joe Root smile when no one else had scored…
A bitter and irrelevant series of tests in South Africa ended with the Springboks winning, I never blamed anyone for winning but the way Rassie Erasmus fared in questioning integrity officials instead change that.
Finally, with the establishment of Scottish football, a bit of a setback happened this weekend. Dundee City provided the action as Celtic beat Dundee 6-0 and Dundee United beat undefeated Rangers 1-0. I can’t fail to mention the mighty Saint Johnstone who traveled to Galatasaray in the Boropa Cup last week and had a more than commendable 1-1 draw.