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The IEA’s world energy investment trends

The IEA recently released their World Energy Investment, giving a good overview of the trends that occurred in 2016. Here are a few of the stats that caught our eye: Energy investment worldwide accounted for 2.2% of global GDP with an investment of just over $1.7 trillion. For the first time ever, the electricity sector beats out the oil and gas sector for largest energy investment recipient. This can be attributed to falling unit capital costs as well as reduced drilling.  Since 2014, there has been a 38% fall in…

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One fund that’s bucking the negativity train

Going against popular opinion in the markets has often resulted in huge gains. Recently, French-born fund manager, Pierre Andurand has been following in the footsteps of visionaries by swimming upstream in the oil markets. The eponymous fund manager of Andurand Capital is placing huge stakes on the return of $100 oil, and the timing of it as well.  These stakes have dropped roughly 15% but the short-term outlook hasn’t caused his view to waver. Andurand gave a good analogy in a rare interview to London’s Financial Times, that just as…

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Cash today, oil tomorrow

Venezuela has offered up an ownership stake to Russia for nine of Venezuela’s most productive oil projects.  Negotiations began early in the year between Venezuela’s state-owned oil firm, Petroleos de Venezuela (PDVSA) and Russia’s state-owned oil company, Rosneft.  Since reaching extreme levels of civil unrest, Venezuela’s government has been in need of money to avoid defaulting on sovereign bond payments totaling approximately $6 billion due this year. The socialist government of Venezuela, run by President Nicolas Maduro, received $1 billion from Russia in exchange for equity positions in nine oil…

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Photos from the Cheal D-1 exploration well

TAG Oil’s Cheal-D1 exploration well has been successfully drilled and cased. We still have another two weeks to wait for results, however, as we are completing testing on an 18m section of high quality gas and condensate-bearing sands.  During this wait period, we thought shareholders would like to see a few pictures that the TAG team took at the Cheal D site located in New Zealand’s Taranaki Basin. Enjoy!    

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Benefiting from the lows in the energy market

It’s been a long few years for oil producers, including TAG Oil. The ongoing oil-price slump has driven a lot of positives for TAG, such as lowering costs across the board and proving to our shareholders that we are more resilient than the many producers who have suffered, and even had to close their doors. But it has also pushed our stock from highs of over $10 to where we sit today, under $1. Frustrating, to say the least. But as we have shared in recent posts, it seems as…

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Global gas: evolution and transformation

The IEA is predicting a 1.6% rise in natural gas demand every year for the next five years, with consumption reaching 4,000 bcm in 2022, up from 3,630 bcm in 2016. The change is partially driven by growing demand in developing economies: in fact between 2005 and now, countries consuming liquid natural gas grew from 15 to 39. Also, the rising use of gas in the industrial sector in China, replacing coal in large part, is responsible for 40% of this demand. The United States’ domestic shale industry will be…

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Shale may face tough times…again

Oil prices are taking a toll on everyone, including shale producers who are slashing their Capital Expenditures (CAPEX) in dramatic ways.  With oil prices trading between $40 and $50 as of late, it is starting to impact US shale production and growth. The EIA (U.S. Energy and Information Administration) and leading investments banks have also been revising their oil price forecasts in a downward trend for the second half of 2017. It seems like there is a consensus that the shale industry is slowing down once again.  This slowdown is…

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ERC Equipoise Oil Price Review Report – 2017 Q3

TAG Oil is pleased that ERC Equipoise has given us permission to share their 2017 Q3 oil price review with our followers. Through forecasts from SEC, petroleum consultants, oil analysts and their own assumptions, ERCE’s report gives investors an in-depth look to understand the fundamentals and trends of the oil markets. Download the full PDF here

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Algorithms confound long-time oil traders

Oil markets continue to puzzle followers, and investors and energy analysts, along with us at TAG Oil, are always looking for the root causes. As energy analysts are saying—based on fundamental information—prices should be rising.  But even with OPEC announcing cut extensions, oil prices dropped roughly 5%. Many fingers are now being pointed at algorithmic traders, which seem to be skewing the market by program trading.  Algorithmic trading uses computers to follow instructions for placing a trade, using signals such as moving averages and volatility to follow trends.  This type…

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Lifting the shares of oil and gas exploration companies?

Could sentiment towards oil be shifting? As demand exceeds supply, Citigroup Senior energy analyst Eric Lee sees oil rising by 35% later this year, heading to $60.  Featured in Barron’s, Lee had foreseen the current drop when oil was over $100 a barrel.  In fact, he believes the main culprit for the continued oil low is the struggle to understand the cross-current effects in the oil market between the bearish over-reaction to U.S. shale output and over-optimism to OPEC cuts (which were, in fact, less than expected due to ramping…

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