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Oil price, IOG, Zephyr, Getech Group. And finally…

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WTI $69.62 +81c, Brent $71.89 +58c, Diff -$2.27 -23c, NG $3.10 +6c, UKNG 62.6p -0.45p

Oil price

Last week WTI rose by $3.30 and Brent by $2.57 despite the shorter working week. If there is a rise in Non-Opec production there are few signs of it being in the US as last week’s Baker Hughes revealed a fall of 1 unit overall to 456 whilst oil was unchanged at 359.

With the US NFP’s showing a slight miss which ironically deferred inflation worries, markets rallied and hence the oil rise on the week. Added to that the fall in numbers of Covid 19 in India pushed markets there to a high for the year.

IOG

IOG has confirmed that the Blythe and Southwark gas platforms, which will operate as normally unmanned installations (NUIs), have successfully been installed at their respective offshore field locations in Q2, in line with the project schedule.

For both platforms, after the suction pile foundations were fixed on the seabed and jacket legs cut to height, topsides lift operations were undertaken by the Seaway Strashnov heavy lift vessel. After the final welding of the connections between the topsides and jacket the IOG, HSM Offshore and ODE Asset Management teams then performed all the necessary inspections and checks. Main power was switched on, communications with the onshore control room was established, and the requisite post installation remotely operated vehicle surveys were undertaken, before both platforms were signed off as complete.

Andrew Hockey, CEO of IOG, commented: 

 “Safe, successful and timely installation of the Blythe and Southwark unmanned platforms is another important milestone for our Phase 1 development. These facilities are integral to our infrastructure-led hub strategy and form a pivotal link between our co-owned and operated offshore pipeline network and our onshore Thames Reception Facilities at Bacton Terminal. With forecast average power demand as low as 33kW they are also an important part of our low-carbon operating philosophy.

 This installation is the final element of the EPCI contract we awarded last year to HSM Offshore, with whom we are pleased to have collaborated successfully to bring these platforms to fruition.”

 This is further evidence that all is going well for IOG in the Phase 1 development and that it is on time and first gas planned for late Q3 is still a reality. The shares have moved up in step changes in the last year but with yet another piece of positive operating news out today and with UK gas prices remaining strong I think that it is high time that the stock price should more reflect the potential value of the project. 

Zephyr Energy

Zephyr has announced final results for 2020, during the 2020 financial year and in the period since, Zephyr underwent a wholesale transformation as it evolved from a single project exploration company to a self-sustaining oil producing group with a diverse portfolio of assets in two established oil producing basins in the United States of America.

The Company expects to accumulate substantial cash flows over the next twelve months from its recently acquired non-operated assets in the Williston Basin, North Dakota, U.S. In addition, Zephyr is poised for significant near-term organic growth as it plans to drill and target first production from its flagship appraisal project in the Paradox Basin, Utah, U.S.  The Company also expects to complete its initial analysis of the geologic data acquired from the recently drilled State 16-2 “dual-use” well shortly, in both the Cane Creek and the multiple overlying reservoirs.

Rick Grant, Zephyr’s Non-Executive Chairman, said

 “The period under review was one of remarkable progress for Zephyr, and I’m confident that in the coming months we will continue to see a flurry of corporate activity.  Upcoming operational milestones are expected to occur across our asset portfolio – we expect all of our acquired wells in the Williston Basin to be online and generating significant near-term cash flow soon, and our upcoming drilling and ongoing geologic evaluation activity has the potential to generate considerable value from our Paradox project.

“I am gratified by the growth achieved and I’m proud that we are executing successfully on our twin core values: to be responsible stewards of our investors’ capital, and to be responsible stewards of the environment in which we work.

“The extent of the Company’s recent progress is even more extraordinary when one considers that it was achieved against the turmoil, economic uncertainty and restrictive environment stemming from the COVID-19 pandemic, and I’d like to thank the Zephyr team and our partners and advisers who demonstrated great loyalty, professionalism, tenacity and skill while navigating us successfully through the challenging global environment.  Most of all, I would also like to thank our Shareholders for their ongoing support.

“These are exciting times for Zephyr, and we look forward to keeping our stakeholders updated on our continued progress over the coming period.”

Exciting times indeed and the management at Zephyr have without doubt made their mark on the sector with their progress in the Paradox Basin and to have followed that up with a deal such as they have done in the Williston is pure text book stuff. Investors have had a very good run in the shares which have already quadrupled this year to date but as I have said before I think that there is still significant upside. This should see exploration in the Paradox Basin and cash flow from the Williston and possibly more.  I am interviewing CEO Colin Harrington this week and I look forward to getting up to date in that discussion.

Getech Group

Finals from Getech today in which they announce revenue of  £3.6 million (£6.1), gross margin of 53%, protected by cost management initiatives (58%, adjusted). The orderbook remained strong at £2.7 million at 31 December 2020 (£3.1 million) with annualised Recurring Revenue £2.1 million at 31 December 2020 (£2.3 million).

Total cost base 20% below 2019 (2020: £5.1 million; 2019: £6.4 million), adjusted* EBITDA £0.5 million loss (£0.9 million profit)
with net cash at 31 December 2020 £1.4 million (£2.7 million).

Beyond 2020, in what the company describe as ‘delivering diversified growth’ the company has an extensive list of current plans. It is using its earth science and geospatial expertise to accelerate progress to global net-zero, by supporting its customers in the optimisation of existing, and delivery of new, energy assets and strategic mineral resources.

For existing customers this means helping identify the highest value/lowest carbon-impact petroleum assets, whilst also utilising Getech’s skills and technologies to support their net-zero asset investment. This work connects Getech with a wider group of net zero customers, with whom the Company is beginning to build a more diversified baseline of product and service sales.

Getech’s commitment to this path is underlined by the Company joining the United Nations’ Race to Zero campaign – Getech’s pledge is to be carbon-neutral by 2030. They plan to deliver this through the application of its products and skills, and by direct decarbonisation steps – taking targeted equity exposures in emergent carbon neutral value chains.

In April 2021 Getech raised £6.25 million through a Placing, Subscription and Open Offer of shares which will be used to grow and diversify Getech’s activities across the zero-carbon economy, with particular focus on the green hydrogen, carbon capture, geothermal and strategic minerals sectors.

The company’s mission statement says ‘our focus is on activities that are essential, repeatable and strongly scalable and we will measure success through our carbon-neutral goal, our profit and the creation of asset value. In March 2021 Getech completed its first project investment – acquiring H2 Green, a data-led business that is using Getech’s location analytics to establish a national network of green hydrogen hubs’.

‘Getech is also aligning its Board to these areas of focus – appointing a new Chairman and new NEDs. This brings expertise in clean technologies, zero-carbon investment, ESG and business scale up. Getech’s Board is excited by the opportunities ahead and values the continued support of the Company’s shareholders, customers and business partners’.

Richard Bennett Chairman commented:

“It is a pleasure to become chairman of Getech at this inflection point in the development of the Group, as we apply our core geoscience skills and geospatial services to the energy transition and contribute to the decarbonisation of the world’s energy systems.”

And finally…

The Lords test against World No 1 side the Black Caps ended in a tame draw after a declaration that would have been interesting if Stokes and Buttler had been playing but England’s batting line up is full of rookies and out of form plodders. It looks like Crawley has been spending too much time within a metre of James Vince as he seems to have caught the latest virus of edge-id-19 from him.

As a result of Tweets sent when he was a teenager and now 27, Ollie Robinson has been suspended from international cricket despite a full and detailed apology when it was discovered on Wednesday. No judges here of course but it seems like pretty hard lines on the lad.

Over in Baku you couldn’t make it up, with Max having dropped out with a high speed puncture and the restarted race only 2 laps long Lewis just had to sit tight for a few points to catch up with the Dutchman. But oh no, he smoked the brakes up on the line and going into turn one level with Cheko touched the anchors and went straight on…

Global Energy Ventures begins development of pilot 430-tonne compressed hydrogen ship

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