WTI $41.37 -14c, Brent $44.07 -36c, Diff -$2.70 -22c, NG $2.49 n/c
Oil was off a touch yesterday as some people drew on the more bearish signals from the EIA report, viz gasoline demand was down from 9.16m b/d to 8.78m b/d. My comments from yesterday remain as it is b obvious that gasoline, and other products will be weaker when punters couldn’t drive due to bad weather…
The job stats were better than expected as were the PMI numbers and today we have the NFP figures, 1.37m jobs were added in August and the unemployment rate down to 8.4% which was much better than expected. This weekend it is the Labor Day Holiday in the US which traditionally signals the end of the driving season but with very hot weather forecast particularly on the west coast it may be a bumper end to the driving summer.
With apologies, pressure of work and numerous conference calls yesterday meant a late blog, however I have had a chance to look at the announcement in detail and talk to Sound Chairman Graham Lyon.
To sum up, the company has received a notification from the Moroccan Tax Administration (MTA) regarding a tax audit for the period 2016-18 restating the basis of tax due.
The company believes that this arises from a ‘misunderstanding of historical licence changes’ and that ‘with its advisors will be engaging with the MTA to seek to resolve this misunderstanding’. In addition ‘whilst the Company will be engaging constructively with the Moroccan Tax Administration in order to resolve the perceived misunderstanding, it will formally write to the Moroccan Tax Administration to formally refute the assessment and the basis thereof’.
It appears that the company are indeed taking a robust approach to this exercise by the MTA and will fight this claim to whatever stage is necessary. The company has excellent relationships within the country, I myself have seen how well they are rated by ONHYM and of course during the recent development funding process have also become close to banks and potential funders of their projects.
I understand it this process will not delay or cease the plan for the company to have FID ‘by the end of this year’ and the Chairman tells me that it is ‘business as usual’ in Morocco.
I have spent a lot of time writing about a number of UK quoted companies who have been encouraged to engage in Morocco for its hydrocarbon opportunities as well as its fiscally attractive terms of business. This includes a ten year tax holiday which applies when a company comes onto production, I assume that the MTA are trying to nip in before that happens to Sound with upcoming development.
I also have enjoyed a really good personal relationship with ONHYM who I have met on many visits to the country and a little while ago where I was a guest speaker of theirs at a conference in Marrakesh where the opportunities in Morocco were propounded. I can imagine that the UK quoteds I refer to, as well as the likes of super major Conoco who have recently taken a substantial onshore acreage package, will be miffed by this action which can only detract from the image Morocco is trying to show in international energy markets…
32nd Licencing Round
Jersey Oil & Gas
JOG has been awarded a 100% WI and operatorship of block 20/5e which contains an extension to the oil discovery at J2 and significantly helps the company’s Greater Buchan Area development plans.
IOG has been awarded 4 new SNS blocks, all adjacent to existing assets and within range of the Thames pipeline. Two awards are joint with CalEnergy, block 49/21e, containing the Viper gas discovery lying 5km from Elland with initial management estimated mid-case recoverable gas resources of 46 billion cubic feet equivalent and block 49/22b, containing the Sinope South gas discovery with initial management estimated mid-case recoverable gas resources of 35 Bcfe.
IOG has been offered 100% of blocks 48/23d and 48/24c, between the Blythe and Harvey licences, containing the Allerdale, Driftwood and Bradfield prospects and a possible northwest extension of the Redwell field.
Serica has been offered a 100% operated interest in all four blocks it applied for, namely 3/25b, 3/30, 4/26 and 9/5a all in the vicinity of the Bruce area.
United Oil & Gas
UOG has been awarded 100% of blocks 15/18e and 15/19c adjacent to the company’s Zeta prospect.
Corralian Energy (34.9% RBD) has been awarded 100% interests in blocks 207/1a (Victory gas discovery), 214/29c and 214/30c (Laxford gas discovery + Scourie prospects)and 3/11a (Oulton oil discovery).
The company confirms that it has received awards in three licence areas in the round and is awaiting confirmation.
Tonight sees more T20 cricket as England host Australia at the Ageas Bowl in the first of the matches in the short game.
Having seen history made this week with the Williams Team sold and the family moved out in short order this weekend sees the Italian GP at Monza, lets see how the Ferrari’s do on home territory…
And if you go to Kempton tomorrow you will probably see Enable for the last time on English soil. There is also racing at Ascot and Haydock where it is the Sprint Cup.