Oil price, Union Jack/Reabold, Helium One, GKP. And finally…

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WTI $61.42 +$1.42, Brent $64.53 +$1.25, Diff -$3.11 -17c, NG $2.54 +5c, UKNG 43.59p +0.23p

Oil price

Last week saw the oil price fall by $4.19 for WTI and $4.69 for Brent, the first meaningful fall for a while and for the reasons that we have been monitoring. Firstly it’s all about the virus, in particular how different countries are dealing with it, and of course with the vaccination progress. The UK started well, and has more than half the population jabbed up and the USA has caught on quickly too, some states better than others but the virus and death numbers are falling.

However in Europe where a combination of incompetence and poor investment has left very few people vaccinated the numbers are still looking grim. In Germany the easing of the lockdown looks like it is going to be reversed, in France new lockdowns were introduced at the weekend and in Italy and Poland they are already in place. With low numbers being vaccinated it’s not getting any better and there is no lack of vaccines either whatever the regime might say and attempt to purloin from others..

Finally the economic situation in the US and the economic package recently voted through have made for an environment in which the dollar has moved into a strong pattern which traditionally hits demand and add to that the rig count rising by 9 oil units last week had an effect.

Union Jack/Reabold

Union Jack and Reabold, note that Rathlin Energy, the Operator of PEDL183 and the West Newton Field, has today launched an online consultation event on a proposed hydrocarbon development of the West Newton A site as part of a public planning consultation process.

During January 2021, Rathlin received a Screening Opinion from the East Riding of Yorkshire Council in response to its screening request for the proposed West Newton A site extension. The Opinion considered that the proposed development would not comprise EIA (Environmental Impact Assessment) development. The Screening Opinion covered the proposed extension of the existing West Newton A (WNA) wellsite and associated work programme, which would provide for testing, appraisal and production from the two existing wells (WN-A1 and WN-A2) and the potential for drilling, testing, appraisal and production from up to six new wells on the WNA site over a 25-year period.

The next step, prior to submitting a formal planning application, is a public consultation process. Under normal circumstances, the consultation process would encompass in-person and open meetings. Under the current restrictions associated with the Covid-19 pandemic, in-person gatherings are not possible, with a virtual consultation now being undertaken to communicate with the West Newton Community Liaison Group, landowners, local community, Councils, regulators and other stakeholders.

As part of the public planning consultation process, the information provided in the online consultation event on the proposed field development at West Newton is extensive and includes conceptual development plans and indicative drilling and production schematics on a potential hydrocarbon development.

Rathlin believes the West Newton Field has the potential to provide local feedstock to a Humber net zero project replacing the need for imported hydrocarbons while at the same time developing indigenous energy sources, contributing to the economic welfare of the Humber region and enhancing local job prospects.

It is good news for all that this next step for West Newton is underway, without an EIA and that should get this stage of the process into the planning for the field. I still believe that this is a very substantial field and of significant worth to UJO and Reabold.

Helium One

Helium One has announced the appointment of Mitchell Drilling Limited as drilling contractor for the Company’s maiden three well exploration programme on  its Rukwa Project (100%) in Tanzania.  Mitchell Drilling will mobilise a drill rig from Tanzania which is anticipated to commence work in mid-May.

David Minchin, Chief Executive Officer, commented:

“We are delighted to work with Mitchell Drilling as contractor for our maiden exploration drilling campaign.  Mitchell Drilling are highly experienced in gas exploration with all the technical knowledge and expertise required to deliver a safe and successful exploration campaign.

 “Mitchell Drilling have indicated that they are willing to take 50% of the contract value in shares, with a commitment to drill the 3rd hole and optional 4th hole for equity.  Not only does this demonstrate Mitchell’s commitment to the project, but also offers Helium One the potential to expand our exploration programme to include additional targets that may be identified from the current infill seismic campaign.

 “Drilling is expected to commence in mid-May, supported by accelerated mobilisation with a drill rig which is already in Tanzania. The rig that Mitchell Drilling are providing is larger than originally contracted and is suitable for drilling of 6¾“ appraisal wells. This will allow the Company to move directly from exploration into the appraisal phase, saving considerable time and money in demobilisation and remobilisation costs and allowing Helium One to continue the fast-track development of our globally strategic Rukwa helium project.”

Gulf Keystone Petroleum

Gulf Keystone has announced the resumption of the Company’s growth plans to ramp-up gross production towards 55,000 barrels of oil per day. With support from its partner Kalegran B.V. (a subsidiary of MOL Hungarian Oil & Gas plc), Gulf Keystone has restarted 55,000 bopd expansion activity. Considering the requirement to manage the ongoing impact of COVID-19 and to remobilise people, services and equipment, the Company currently expects drilling operations to begin in Q3 2021.

Remaining expansion activity includes completion of SH-13, which was suspended last year, drilling SH-I, the final well in the programme from the same pad, and installing electric submersible pumps in two existing wells.
Guidance for 2021 average gross production remains unchanged at 40,000 to 44,000 bopd, with the increase in gross production towards 55,000 bopd expected to occur in Q1 2022. Remaining Capex required to deliver the 55,000 bopd programme is estimated to be $40-45 million net, resulting in total 2021 Capex of $55-65 million net.

Jon Harris, Gulf Keystone’s Chief Executive Officer, said:

 “After a year of successfully managing the impact of COVID-19 on our people and production operations at Shaikan, we are pleased to announce that we are resuming the 55,000 bopd expansion programme.

 Workstreams have already begun, and we are targeting to restart the drilling of SH-13 in Q3 2021, subject to managing the continuing impact of COVID-19 on the movement of people, services and equipment.”

It is highly encouraging to see GKP back in business by reverting to the ramp-up of the production at Shaikan. Given the oil price and the deal with the KRG this was inevitable, indeed not doing it would have asked some tricky to answer questions, the next one will be about ramping-up even more, time to dust off those presentation packs, indeed I think I still have mine…

And finally…

The almost final day of the 6 Nations rugby saw Scotland beat Italy, Ireland beat England and France beat Wales 32-30 in a tense final few minutes. Scotland can still play a part in the denouement as they play France on Friday, only a substantial win by Les Bleus gives them the title.

In the Prem before the international break Fulham lost 1-2 to Leeds, the Seagulls beat the Magpies 3-0, Spurs beat Villa 0-2 and the Hammers and the Gooners fought out a 3-3 draw with Hammers players scoring 5 of the 6 goals..

In the FA Cup the Saints beat the Cherries and will play the Foxes in the semis who beat the Red Devils. Chelski beat the Blades 2-0 giving them a SF tie against the Noisy Neighbours who beat the Toffees.

India beat England 3-2 in the 5 match T20 series and we will see them here for tests in the summer.

Cheltenham without fans was peculiar but maybe it should have been like that last year. Whether it spurred on the Irish horses or not it was a difficult few days to make any moulah…

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