Crude oil rebounded recently, as WTI retook the $60 level and currently trades around $62.60, as of February 2018. According to the International Energy Agency’s February Oil Market Report, OECD inventories are now only 52 million barrels above the five-year average. This compares to a massive surplus of 264 million barrels a year ago. “With the surplus having shrunk so dramatically, the success of the output agreement might be close to hand,” detailed the IEA’s February Oil Market Report.
Furthermore, OPEC continues forward with plans to extend its oil production throughout the vast majority of this year. Saudi Arabia, in particular, needs to have oil prices closer to the $70 level in order for the successful IPO of Saudi Aramco.
“If we have to overbalance the market a little bit, then so be it. Rather than quitting too early and finding out we were dealing with less reliable information,” detailed Saudi oil minister Khalid al-Falih. It’s better to “stay the course and make sure that inventories are where the industry needs them.”
This is great news for the oil markets, as OPEC continues to be committed to output cuts. Oil inventories continue to remain elevated, but the sharp reduction over the past year shows that production cuts are working as demand is increasing.
Quality, low-cost oil producers, such as Advantagewon Oil Corporation (OTCQB: ANTGF) (CSE: AOC), will also be major benefactors of rising energy prices.
ANTGF: Recent Drilling Update Shows Oil Production Growth
Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) recently released an update on its first quarter 2018 drilling program. The update detailed that the company has signed a contract with a Texas-based secondary oilfield services company for work to be completed on its LaVernia property. Drilling on the LaVernia property is set to begin on February 27, 2018.
Ultimately, Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) is preparing to drill two wells on each of the company’s three leases on the LaVernia property. These six new wells are estimated to product 15 barrels of per day (BOPD) each, for a total of 90 BOPD. This is just from the first six wells, management notes that additional locations are being prepared elsewhere on the leases for further drilling in the future.
Aside from the LaVernia property, management announced that a once shut-in well on the Saratoga property is once again producing oil after having its downhole equipment repaired. The formerly shut-in well is expected to produce around five BOPD.
ANTGF: Daily Oil Production Nearing 140 BOPD Once Drilling Program Complete
In January 2018, Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) announced that it is currently producing a total of 45 BOPD across all of its properties. Furthermore, management estimated that revenues net of royalties should come in around $60,000 for the month.
Once management completes its proposed first quarter drilling program, Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) will be seeing daily production around 140 barrels of oil. This shows that management continues to focus on exponentially expanding production capabilities and further development of its oil properties.
At today’s WTI Crude Oil prices, the increased production would likely give Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) total gross monthly revenues of around $260,400 (considering the following: 30 days x 140 BOPD = 4,200 barrels of oil x $62 WTI Crude Oil price = $260,400). This is of course a rough estimate without taking out royalties, costs, etc. However, this does show the massive earnings potential the company faces as production continues to be ramped up.
Overall, low-cost oil producers like Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) are in a great environment right now, as oil fundamentals continue to improve. Overall, oil may not be out of woods completely yet, but the massive inventory drawdowns are very encouraging. Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) continues to press forward with its first quarter drilling program, which effectively begins this week. As the oil markets continue to stabilize and OPEC pushes production cuts, companies like Advantagewon Oil Corp. (OTCQB: ANTGF) (CSE: AOC) will continue to be major beneficiaries.
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