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Oil price, IOG, United O&G. And finally…

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WTI $62.14 +71c, Brent $66.11 +71c, Diff -$3.97 u/c,  NG $2.73 -2c, UKNG 51.25p +0.1p

Oil price

Oil is very much in the doldrums, last week WTI was down by 99 cents and Brent by 66c, the Opec+ meeting on Wednesday may have not much to do. Overnight India noted another 350,000 Covid cases which is awful and its 12.5% GDP growth maybe for another day.

Having said that in the US many more people are venturing out and without masks and the economy is seriously on the move. Libya remains way down from its peak as Port Hariga remains shut and so oil production is below 1m b/d. Even the Baker Hughes rig count was a shadow of its former self with a decline of one rig and one in oil…

IOG

IOG has  announced that it signed off the Blythe and Southwark platforms as mechanically complete earlier this month. Further to achieving this milestone and the arrival of the Noble Hans Deul rig at Elgood in early April, the Company can also confirm that it has now, as planned, fully drawn its bond escrow account into unrestricted cash.

The two normally unmanned installation platforms were constructed by contractor HSM Offshore at their yard in Schiedam, Netherlands. In addition to mechanical completion, onshore commissioning and system testing activities are already well underway and expected to be completed in May. The transportation barges are now at the HSM quayside in preparation for load-out. Once yard departure checks are completed, the platforms will be ready for sail-away. Installation of both platforms is scheduled to be completed before the end of Q2, in preparation for first gas in late Q3.

To accompany this update, IOG has today released a Phase 1 platform construction video as part of  its 2021 video series. Shot mainly over recent weeks, it provides a brief introduction to the topsides and on-board equipment, and can be viewed here: https://bit.ly/2S5aWBd

Andrew Hockey, CEO of IOG, commented:

“Completing the Blythe and Southwark platforms is another key step forward for IOG in executing Phase 1 and laying the foundations for further growth. HSM have done an excellent job in maintaining the construction schedule despite the pandemic challenges. The focus now turns to completing onshore commissioning work, load-out, transport and installation, all of which fall under the same HSM contract.

As small, remotely-operated installations, the Blythe and Southwark platforms will help us to minimise ongoing costs and carbon intensity – key elements of our operating philosophy as we look to scale up an environmentally low-impact UK gas development and production business.

Our latest video provides investors direct insight into both platforms with an on-board view of their key components before they are transported to their field locations later this quarter.”

It is good for IOG that the two platforms have been signed off on time and testing and checking is underway ready for sail-away shortly. IOG has put together a high quality, efficient team both in-house and amongst its contractors all of whom are working flat-out at the moment.

There are two points from watching the video that I particularly took away, one was the efficiency that the project has maintained and the other is the incredibly low carbon footprint, the platform’s power use is ‘less than a small electric car’ which is some boast. The shares have doubled in the year since the oil price fall and Covid which must have made life somewhat straightened, there is no reason to believe that with the first gas date coming up later this year that it couldn’t do the same again.

United Oil & Gas

Final results from UOG this morning, as is usual in this case which are already in the market it is the plans for the future which are most important.

Group Revenues were $9.1m with profit for the year of $0.85m on an average realised oil price of $37.76/bbl and average realised gas price of $2.63/mmbtu. Importantly cash operating cost was an impressive $5.77/boe and  cash capital expenditure was $2.5m. This left cash generated from operation activities $4.8m and a cash balance at 31 December 2020 $2.2m.

Group working interest production averaged 2,195 boepd and full year guidance has been raised to 2,500 to 2,700 boepd. Success of the ASH-3 and ASD-1X wells in early 2021 is likely to lead to a reserves uplift and Group Capital Expenditure is forecast to be $6.0m, fully funded from existing assets. c. $5.4m to be invested in Egypt with three firm wells following the addition of the AJ-8 well to the programme offset by savings on ASH-3 and AD1-X, five workovers, and facilities upgrades with c. $0.6m to be invested in our Jamaican, Italian and UK assets.

Brian Larkin, Chief Executive Officer commented:

“2020 was a landmark year for United Oil and Gas, building on strong foundations to position ourselves as a full-cycle oil and gas company with strong production, diverse assets, an exceptional board and clearly defined avenues to deliver further material growth. These were significant achievements despite one of the toughest years for our sector and wider markets caused by the COVID-19 pandemic.”

 

“Building on this success is key for all at United Oil and Gas and we look forward to driving further activity and material growth in 2021 and beyond.”

United have delivered as promised and are looking in a very strong position with these results and with solid plans for this year. The  shares have at last done well having tripled since last autumn and there is no reason why that outperformance cannot continue.

And finally…

Unsurprisingly, a few players have left the IPL with the country going into lockdown and the record number of virus cases as above.

The Haribo Cup final yesterday was notable only because some fans were allowed in and hopefully is a sign of things to come. Oh and btw the Noisy Neighbours won 1-0.

In the Prem on Friday the Gooners lost 0-1 to the Toffees and on Saturday the Blades beat the Seagulls 1-0, the Hammers lost 0-1 to Chelski and Liverpool conceded to the Magpies in the last minute to draw 1-1. Yesterday Villa drew 2-2 with the Baggies which is like a cup final for some, as is Leeds v Man U which was 0-0 and Wolves lost 0-4 to Burnley. Tonight its the Foxes vs the Eagles.

I will have to give away my allegiance a bit here, only weeks after beating Livingston to win the Scottish League Cup the mighty Saints, aka St Johnstone FC went to Ibrox yesterday and only knocked Rangers out of the Scottish Cup at the quarter final level. Going a goal down with only 5 minutes of extra time left it seemed all over but the Saints keeper came up for the corner and that goal meant a draw and penalties in which he saved two putting them through to tonight’s semi final draw. COYS!

And yes, Friday’s and finally was completely wiped, my sincere apologies, I would have predicted the above though…

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