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Saudi Arabian Oil Company or Saudi Aramco, the giant state-owned oil company, got officially listed on the Saudi Stock Exchange (Tadawul) on 11 December 2019 under the ticker ‘ARAMCO’. The initial public offering (IPO) of the Saudi state-owned oil behemoth came as a surprise to the energy community amid the declining prices of the commodity and building supply chains of the rival oil exporters (such as the US).
Despite the difficult market for global oil equities, the IPO generated proceeds of USD 25.6 billion and involved the sale of 3 billion shares (equivalent to 1.5% of the Company’s share capital), marking the world’s largest IPO after beating Alibaba's record USD 25 billion listing in 2014 at the Wall Street.
At the completion of the IPO, Mr. Amin H. Nasser, President and Chief Executive Officer of Saudi Aramco, stated
The Aramco IPO was a much-awaited event for the crude oil industry and a new dynamic for all the players in the oil industry. Oil stocks were favourite among investors before the technology boom; however, this IPO has brought back the investor focus on oil players. Saudi Aramco is currently the largest company in the world, with a market cap of SAR 7.12 trillion (close to USD 2 trillion), as on 24 December 2019.
Recently, the benchmark Brent crude oil spot reached the present high of USD 67.01 (as on 19 December 2019), increasing from USD 56.69 per barrel (intraday low on 3 October 2019) and supporting a price appreciation of more than 18%.
Moreover, the OPEC members announcing a production cut of 0.5 million barrels per day at the 177th Annual meet and ease in a bilateral trade dispute between the United States and China are also supporting the crude oil prices. Additionally, several other global economic indicators are showing a promising recovery.
EIA Oil Forecast
Production in the United States is expected to average at 13.2 million barrels per day in 2020, representing an increase of 0.9 million barrels as compared to the average production in 2019, according to data from the Energy Information Administration (EIA).
As efficiency of oil producers based in the US is improving and shale production from various basins is growing, oil production in the United States is surging, which is not just supporting the domestic demand but also resulting in higher exports.
Prominence Energy – Operator of A Low CAPEX, High Margin, Oil Appraisal / Development Project
Crude oil prices are increasing, on the back of improving economic conditions, which in turn is aiding oil & gas stocks listed on ASX. Prominence Energy NL (ASX: PRM) is an ASX listed oil & gas exploration and development company, which has its core asset in Louisiana, United States. The company has a 100% working interest in more than 1,100 acres leased in the Breton Sound Area, where PRM is focusing on developing and bringing its Bowsprit Oil Project to production as early as possible.
The Bowsprit Lease
· The lease area contains numerous historical fields, including an oilfield that is yet to be developed
· Lease overlies a field that was first developed by Shell in the 1960s for deep gas (450 feet column, approx. 46 billion cubic feet produced)
· Oil & gas has been proven to flow from shallower oil & gas zones but was too small to fully develop in 1960s (76,000bbls &1bcf) – “Bowsprit”
· Minimum economic field size is <0.5MMbbls (possible from Proven sand)
· Secondary potential in additional sands
To Know More: Read A Deep Dive into Sun Resources’ Ace Project- Bowsprit Oil Project
The company has already secured all the three permits required to drill the first well at the project and is currently in farm out discussions targeted towards securing funding for the first well. Though subject to the completion of farm out process, Prominence Energy intends to drill the well in first quarter of 2020.
Do Read: Sun Resources Secures Final Permit To Drill Bowsprit-1 Well In Inland Waters Of Louisiana
The stock of Prominence Energy NL last traded at AUD 0.002 on 20 December 2019 with a market cap of AUD 2.64 million and approx. 1.32 billion outstanding shares.
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