Colombia signs new peace deal with Farc – BBC News

Great news for Amerisur Resources as Colombia finally sign in their historic peace deal with FARC rebel group. Congress still need to vote it through but this should be a formality. It will not go to a referendum vote again.

There is still the small matter of the ELN Rebel group which have yet to agree their own deal. They have however agreed to ceasefire and are currently in talks with Colombian Gov.

Colombia signs a revised peace deal with Farc rebels, after a previous deal was rejected by voters.

Source: Colombia signs new peace deal with Farc – BBC News

Heads up – Ophir looking very cheap

Currently 77.5p a share, Ophir is undoubtedly one of the few stocks left out there that has not yet made a meaningful move higher in 2016. Part of thesharehub top ten, Ophir has languished below 80p for the majority of the year. Meanwhile, progress has been made by peers as the PoO recovery continues from lows seen in early 2016.

Ophir’s business has not remained static. In fact, the last update on production in September was 11000bopd and expected to increase as more workovers complete. Add to this, the company announced the start up of the long awaited Kerendan field. Whilst not oil related, the gas prices of late have increased slightly and are expected to rise further in the coming months.

And finally, after the disappointment in early 2016 on Fortuna farm out deal falling through, the company announced in early November a new agreed deal which will see just $150mil capex spend by Ophir (not until 2018/19) on what is expected to be a $2billion capex project.

And finally finally… (yes there is more) SHELL announced the spud of a new well in Tanzania exploring further gas resources to add to the already sizable reserve tally to date. Ophir owns 20% of the licences after selling 20% a few years back to Pavillion for $1.2bln.

Ophir market cap currently…  £545mil with a healthy cash balance of near £150mil net of debt.

Undervalued by a country mile. The market will catch up eventually but for now, this one looks forgotten.

Sharehub price target set at 110p for 2016.

Hurricane Energy snaps up new licence bolt on ‘Halifax’ in a post licence round deal.

Hurricane Energy issued a bit of Friday cheer for shareholders as they released an RNS stating that they had acquired a new licence that could extend the already huge Lancaster discovery. Subject to gaining the necessary drilling permits, Hurricane plan to drill an exploration well on ‘Halifax’ as soon as they have completed drilling on the Lincoln prospect. Back to back drills ensures investors will have plenty to look forward to over the next 3 to 4 months.

The Lancaster Licence is already looking like a 300mmboe to 400mmboe ‘recoverable’ asset 100% wholly owned by Hurricane. Not only does it have volumes of oil but the quality is 38 api – that’s champagne quality oil as opposed to the heavier Guinness type stuff seen in the north sea of late (Enquest’s Kraken, Statoil’s Bressay and Xcite’s Bentley).

Hurricane Energy’s portfolio also contains other prospects such as Warwick, Whirlwind, Typhoon and Strathmore. If Hurricane do confirm the extension into Halifax, it becomes very likely that the Rona Ridge is following on from Clair Ridge, BP’s huge West Shetland Project cited to contain as much as 8 billion barrels of which 1.75billion is expected to be recoverable.

It’s mind boggling to contemplate at this early stage, but Hurricane could be sitting on a mirror like asset to Clair Ridge and the key point here is that it is not that far away from Clair meaning infrastructure, tie ins and future HUB developments should be even more cost efficient assuming they involve BP of course!

Map below shows the proximity of Hurricane’s assets to BP’s Clair licence area.


From BP’s website, the following outlines Clair Ridge… and the potential extension of Rona Ridge through Hurricane’s asset folio.

Exciting times for Hurricane Investors.

The Clair field is located 75 km west of the Shetland Islands in 150 m of water and extends over an area of 220 km²

Clair Ridge is the second phase of development of the Clair field which, with an estimated eight billion barrels of oil in place, is the largest undeveloped hydrocarbon resource on the UKCS. Clair was discovered in 1977, but challenging reservoir characteristics and the technological limits of the time meant it was the mid-1990s before the field saw extensive drilling and 2001 before BP and partners approved a development plan.

Targeting the 300 million barrels of recoverable reserves believed to be held in the Phase 1 area, BP and partners brought the field onstream in 2005 with the first fixed offshore facility to be installed in the west of Shetland area. Horizontal drilling and high-quality seismic imaging have both played an important role in BP’s ability to tap the reservoir’s complex geology. Clair Phase 1 had produced more than 100 million barrels by October 2014.

To the north is Clair Ridge, where BP is targeting 640 million barrels of recoverable resources. The £4.5bn investment involves two new bridge-linked platforms, the jackets (legs) of which were installed in the summer of 2013. In 2015, the platform’s quarters and utilities (QU) topside modules were safely installed and construction was complete in June 2016 with the installation of the final topside modules. Hook-up and commissioning is now under way with first oil expected at the end of 2017.

Clair Ridge is designed to continue producing until 2050 at a peak rate of more than 100,000 barrels of oil per day.

It will see the world’s first deployment of BP’s enhanced oil recovery technology LoSal®, a water injection method that is expected to deliver an additional 40 million barrels of oil.

We are continuing our appraisal drilling programme in the Clair field to help define a possible third phase of development.

Why you SHOULD expect a CUT at the Nov 30th OPEC meeting.

First caveat upfront… never assume anything with the Saudi’s involved! Second caveat… never trust anything with the Russian’s involved!

The above just about makes what I am about to write irrelevant, but I’ll continue on the basis that I think the Saudi’s and Russian’s have nothing to lose, and much to gain.

At present the Saudi’s have signaled an intention to return OPEC numbers to 32.5mbopd. That would require a cut of around 1mbopd. Naturally they would prefer all OPEC members contribute as well as non-OPEC members like Russia. The irony is, Russian and Saudi output has risen by around 1mbopd since September. They are the main reason why numbers are near 34mbopd. If you want PoO to rebalance, then you certainly don’t start pumping more oil than you were doing at the last talks. Unless of course, you are deliberately playing for market share and facilitating some room for a CUT. Furthermore, there are questions over the Saudi’s and Russian’s ability to sustain or even increase production any further than current record peak levels. Many believe they are already at maximum output. And historically… the Saudi’s and Russian’s often shut down wells for maintenance during the winter periods. So, what you might see following the OPEC Nov meeting is a drop in production from Saudi’s and Russian’s regardless of any deal being struck. Of course I doubt they will miss a PR opportunity and let that happen – they will want to manufacture a positive out of what in reality is … going to happen anyway.

So my view is simple … expect a CUT. Why? Because the Saudi’s and Russian’s have nothing to lose by agreeing to one. And … if it is only for 6 months, then it buys all involved a little stability at around $50pb to $55pb range instead of the probable $40pb to $45pb range should a CUT not happen.

So all in all, if they agree to CUT by 1mbopd, then it equates to just 3% of total output. Yet the net result is likely to deliver around a 20% increase in PoO.

But the real story going forwards is whether a freeze at 32.5mbopd will include Iran and Iraq and if not (as currently expected) what are the agreed caps on these two? Will Iran agree to a 4mbopd freeze?

This issue is not in the Saudi’s control. Although the recent TRUMP victory may well have handed the Saudi’s some added leverage. Iran will be concerned over TRUMP and his ability to revise down the Obama led Nuclear Sanction deal. This may not happen until June next year, but it has the potential to CUT 1mbopd from Iran if revised down. The impact of that would send PoO spiralling higher, even to heights of $90pb last seen in 2014. Of course, the Saudi’s and Iraq would plug that surplus and US Shale would kick in once again adding to supplies too. So any PoO prices in that region would come down pretty soon after. But should such an event happen, it could be a lifesaver for many companies and countries as hedges are snapped up and put in place. In theory… a new reduced deal on Iran via TRUMP would solve the PoO crisis in a second. TRUMP has already stated that he wants the US O&G industry to grow again. So watch out for news on TRUMP and IRAN hitting the headlines in the future. The market funded media won’t be spinning that story just yet as they are mostly ‘short’ oil. But that position seems a little old hat now, especially after 2 years+ of lower capex spend by majors which ultimately will lead to lower reserves and shortages in the future. A re-balance of PoO will happen… but the question still remains.. when?

If the Saudi’s and OPEC make a CUT on Nov 30th, it will be a symbolic message of cohesion. In reality they are doing very little but just enough. I can’t see them missing that opportunity as the cost to them is low. What follows in 6 months time could be a new deal on Iran Sanctions and that has the potential to move PoO prices dramatically more than any Saudi CUT deal, that’s for sure.

Colombia Reaches New ‘Final’ Peace Agreement With FARC Rebels

Good to see solid progress in Colombia after the unexpected referendum NO vote. It’s clear that all involved are 100% committed to ‘peace’ and this bodes well for the region going forwards. As mentioned on the ShareHub recently, the Carlyle Group are said to be on the hunt in the region for Oil & Gas investments with Tony Hayward apparently charged with finding the right kind of acquisitions. It might not have to look too far before he comes across AMERISUR RESOURCES (AMER). The company has recently started pipeline exports to Ecuador which is roughly $11pb cheaper than the traditional trucking route. AMER own the pipeline 100% and the capacity stands at roughly 50kbopd. AMER are expected to take capacity of around 8kbopd to 12kbopd over the next 2 years leaving a whopping 38kbopd free capacity which could be sold on a tariff basis thus generating significant revenues for AMER. Saving $11pb in a low PoO environment is priceless. Their phone should be ringing every day from here on.

Colombia’s government has reached a new agreement with Marxist guerrillas to end the nation’s civil conflict, six weeks after voters unexpectedly rejected a previous deal.

Source: Colombia Reaches New ‘Final’ Peace Agreement With FARC Rebels

Multi-baggers Galore – Kaz Minerals 3 bags

It has been a cracking year for thesharehub’s top ten picks for 2016.

Kaz Minerals joins the 3 bagger team. Still plenty of time for Tullow to join the elite multi-bagger group. Hurricane Energy leads the race notching up a 4 bagger thus far and looks like more to come from them with 2 huge exploration/appraisal wells underway.

TheShareHub Multi-bagger list thus far (based on 2016 highs):

  1. Hurricane Energy – 4 bagger (up 440% / 10.25p to 45p)
  2. Kaz Minerals – 3 bagger (up 345% / 102.25p to 355p)
  3. Ithaca Energy – 3 bagger (up 330% / 28p to 92p)
  4. Glencore – 3 bagger (up 320% / 90.48p to 290p)

Staggering performance. Tullow currently 60% up on the year and has every chance of making that magic 100% level.

Talking of which, the sharehub top ten picks are now dangerously close to Multi-bagging as a group. The top ten picks are currently up 94%.

Not many funds out there delivering that kind of performance in 2016. One man’s gain is another man’s loss as they say. And looking at the likes of Crispin Odey’s funds…they’ve been taken to the cleaners in 2016.

Crispin… if only you had followed the sharehub…

A full update of thesharehub top ten will be posted next week.