WTI $59.52 -44c, Brent $62.61 -$1.26, Diff $3.09 -82c, NG $2.89 +14c

Oil price

The oil price continues to drift, yesterday worries that China demand really was falling and that Saudi Aramco were trying to fix a deal with the country led to traders cutting some positions. In addition the US led start of peace talks in the Yemen took what remaining geopolitical heat out of the area. With storms in the Gulf of Mexico not taking oil off the market, yet, oil was in abundance ahead of tonight’s API inventory stats. Retail gasoline has picked up for the first time in about three weeks and is now up to $2.84 a gallon, up six cents on last week.

Sound Oil

Sound has announced that the second well at Nervesa has not achieved a flow rate and with no permeability has been abandoned. Whilst this is disappointing it is still likely to flow gas from the first well which should be a producer. The upside for Sound is still very much in place as the Moroccan deal has been signed and an exploration well will be drilled later this year and of course Badile is yet to come. Nervesa was scheduled to provide some cash flow but the price deck is still strongly in favour of investors and having recently received strong support by way of a funding the shares at this level look extremely attractive. The company also showed that it has other interesting acreage in its portfolio by gaining EIA approval for its Dora and Dalla permits yesterday.

Amerisur Resources

I am led to believe that some platforms did not receive the blog on Friday in which I wrote about the approval for the Ecuadorian pipeline approval which is a game-changer for the company, herewith my views.

An Ecuador-Colombia interconnector update from Amerisur this morning and very good news it is too. An agreement has been signed with PETROAMAZONAS EP , operator of the pipeline system for the construction and use of the pipeline from Ecuadorian border to the point of connection with the RODA gathering system for Amerisur’s crude oil. Under the agreement the minimum volume commitment by PA is 5,000 b/d and the tariff is US $1.09 per barrel.

Amerisur has received a number of offers for the onward transport and sale of the crude oil and is evaluating them at present. Construction work on the pipeline system as well…

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