WTI 45.20 -$1.12, Brent $47.98 -60c, Diff $2.78 +52c, NG $2.36 +10c
Oil price
With the continued strong dollar and only signs of further build up in stock levels the pressure is firmly downwards at the moment. Strikes in Brazil and shutting-in in Libya are temporary, monotonous pumping from most producers is, at least for the time being less so. News yesterday that the Saudis had cut their prices to US and EU customers didn't help and the interesting thing about that was the EU bit, not normally a key client, Europe has clearly got onto the radar screens of the marketing department at Aramco…
Today is non-farm payroll day and the reason why the greenback is so strong, a number over 200,000 will fuel the flames of the December raisers and be another downward pressure on the oil price. Finally, it is worth taking a look at the EIA gas report just out, they note that the winter natural gas strip prices (4 contracts from Dec 15-March 16) average $2.419 which is 40% lower than the five year average.
Amerisur Resources
A disappointing result in the end for Loto-2 with water cut in both zones and mobility problems. Further testing and analysis will be needed but this should be taken in the context of the whole Petro Dorado deal which not only brought the company CPO-5 but the Tacacho contract and tax losses worth $20m to AMER, all for $6m…The well was drilled very cheaply, about $2m all in to Amerisur and continued proof of how well the guys on the ground work operationally.
The key focus however for AMER is the upcoming opening up of the interconnector pipeline between Ecuador and Colombia which is on track for the end of this quarter. At this stage the company will be able to increase its production by drilling more wells and reinstating those shut in earlier this year. More importantly the costs of distributing the oil will fall, dramatically transforming the economics of the company, indeed if they persuade other companies to share the pipeline then you have another income with negligible costs.
Pantheon Resources
Just as I was about to complete a valuation of the last well, news comes in that the current one, VOS#1 has encountered an oil and gas bearing zone at 12,600 feet which has flowed hydrocarbons. This is a separate and completely independent zone to the primary and secondary…
