Malcy's Oil Report - PANR, VOG, COP

WTI $43.20 -78c, Brent $46.81 -73c, Diff $3.61 +5c, NG $2.09 +3c

Oil price

The API stats came in late yesterday and although they showed a slightly bigger than expected rise of 4.1m barrels (F/c 3.4) there was a small draw at Cushing which the bulls latched on to. Having seen a low of $42.58 during the day the close was therefore a modest rally, this morning that has continued and crude is at $44 and $47 respectively. The EIA numbers tonight will, as ever, be more widely respected.

Pantheon Resources - Don't you just love it when….

Deserved jubilation in Texas as the VOBM#1 well comes in, this is a plan that really has come off and I am delighted for Jay Cheatham and his team and for the small band of committed shareholders who have held their nerve. I have been in touch with the team despite the early hour and will report back more fully tomorrow but meantime, here are the bare bones.

The well encountered 62 feet of net pay in the Eagle Ford Sandstone which flowed natural gas at 6,145 mcf/d and oil of 504 b/d which equates to over 1,500 b/d which is incredibly good. The well has even exceeded initial pre-drill estimates of P50 prospective Resources which had been 1.4 mmboe. Suffice it to say, Jay was effervescent, saying ‘this is truly transformational for Pantheon adding valuable revenue and NPV to our company’. It should be noted that Pantheon has extremely low operating costs which add even more value to this find. Despite the shares being up 36% as I write, valuing the company at £101m, I see no reason why the shares should not rise much further in due course. If the second well was to come in equally well I could conservatively consider a value of twice the current price, conceivably significantly more…

Victoria Oil & Gas

Not much to add as usual in results to June but Kevin Foo makes an interesting case for the company to be valued much more highly than the £65m market cap. There is no doubt that this is a serious success story not yet appreciated by the market and readers will know that I have been a fan for some time. Russia aside, the Cameroon story has been efficiently converted and the wellhead to customer model is highly profitable. The succession issue has been one point of concern for the market and today VOG announce that Ahmet Dik is to take over as CEO of first GDC and then VOG when Kevin Foo leaves his ‘interim’ CEO position. The jury will be out until this is proved to be the right call but the market should believe it for the time being.

Quite how more value can be ascribed to VOG is difficult to work out, obviously the best way is to continue to do more of the same good work and in due course it will come, the alternatives are only corporate, if it’s that cheap someone might bid, another Kevin is in the hood and could do worse than get out the slide rule…

Circle Oil

Circle has announced that CGD-13 is a gas discovery, with 5.9m of net pay in the Sebou Permit onshore Morocco they have a flow rate of 4.45 mmcf/d. With drilling costs down by 30%+ and a significant improvement in operational efficiency this is very positive for Circle, I am doing a CEO interview on TipTV next week with Mitch Flegg which should prove timely.

Sundry

Figures too from Plexus Holdings this morning and no surprise that they are seriously good. EPS are up 17.5% and including a special element the divvi is up 182.3%. An even longer statement than usual from Big Ben but deservedly so, Plexus remains a shining light in the sector.

If you have a few minutes and a few bob to spare you can nip down to Bonhams today where they are selling the Afren art collection on behalf of the administrators, a pretty grim finale to a disgraceful story, shame the punishment can’t fit the crime…

And finally…

Not a good night for London clubs in the Clueless Cup last night as the Gooners went down 3-0 at the Owls and Chelski got done on pens by the Potters. The chosen one said it was a brilliant performance from his warriors who were blameless apparently. Wins too for Hull City Tigers and the Toffees. Tonight the other 8 clubs left in play, the HubCap Stealers host the Cherries, the Eagles go to the Noisy Neighbours, manager-less Villa are at the Saints and Middlesboro go to the Theatre of Dreams.

After 5 hours and 14 innings, the Kansas City Royals have taken a 1-0 lead over the Mets. The Royals stay at home for game two before 3 consecutive games in New York.