Tap Oil Limited (ASX: TAP) is into the business of exploration and production of oil and gas. It is currently a debt-free company generating its cash flow from the Manora Oil Field in the Gulf of Thailand and an Australian exploration portfolio.
Manora Oil Fields is a production and exploration unit situated in the G1/48 Concession, Gulf of Thailand. It is being operated by Mubadala Petroleum (Thailand) Ltd., an oil & natural gas company in Bangkok, Thailand.
TAP holds a 30% direct interest in the region. The oil field was discovered in November 2009, with TAP entering in July 2012 and first lifting was done on 25 December 2014.
TAP’s Australian portfolio includes Carnarvon Basin in north-west Western Australia including Maitland and Prometheus/Rubicon gas discoveries located in WA-33R and WA-34-R retention leases, 20% interest in Tallaganda gas discovery in the WA-72-R permit, Eni Australia LTD in the WA-25-L permit and the Woollybutt oil field (ceased production in May 2012).
As per ASX announcement dated 14th December 2019, TAP Oil Limited entered into a new oil offtake agreement that has been signed in relation to the marketing of crude from the Manora oil field, offshore Thailand. The crude oil will be provided at a slightly improved price premium to current arrangements.
The Manora oil field Operator and Tap’s wholly owned subsidiary, Tap Energy (Thailand) Pty Ltd (Sellers), have secured a crude offtake agreement with PTT Public Company Limited (for domestic Thailand sales) and PTT International Trading Pte Ltd (for international sales) (Buyer) for 100% of the Seller’s entitlement to Manora crude oil produced in 2019.
Offtake will have a cap of lifting 300,000 barrels every month (subject to the Seller’s discretion) at a price of Platts Dubai (physical price of Dubai crude oil loading through the month of assessment) plus a premium in line with improved oil market conditions.
PTT Public Company Limited is a Thai state-owned SET-listed oil and gas company with PTT International Trading Pte Ltd being the East Flagship for International Trading Business Unit of PTT.
This agreement will get into effect from 1 January 2019. It will have a term of 12 months.
As per the management, Manora’s sweet low sulphur crude with a higher value reflects increasing market recognition for Manora crude (majorly in Asia). Any structural change in the oil market will be driven by the International Maritime Organization which may enforce a new law capping the shipment of lower sulphur content fuel by 2020.
In the last month, on 30th November 2018 , in accordance with the Company’s strategy of rationalizing and monetizing its Australian portfolio, TAP announced a Sale and Purchase Agreement (SPA) for the sale of its 22.474% non-operated interest in WA-33-R containing Maitland gas discovery, located in the offshore Carnarvon basin, to its JV partners Quadrant Oil Australia Pty Limited (12.361%) and Santos (BOL) Pty Ltd. (10.113%).
TAP’s scrip price has increased massively this year from 5.7 cents at the beginning of the year to 9.1 cents today. Company’s stock yield impressive YTD return of around 60%. But from the past one month, the scrip price has been trading around 9.1 cents with slight movements in the price.
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