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Oil price, Tullow, Cairn, Cape, Velocys, And finally…

WTI $52.39 +2c, Brent $55.66 -20c, Diff -$3.27 +19c, NG $3.50 +8c

Oil price

The above prices are slightly skewed as the US was shut for MLK day, I suspect that tomorrow will rearrange the order of things. I remain sceptical about bulls and bears sticking to their view, yesterday the Saudis said that after the May meeting the quotas may not need to be rolled over as ‘the market should have re-balanced by then’ especially as they are over cutting to make up for the likes of Libya. Cue whooping and shouting but no, the bears immediately went off saying that the game was over and the end was high, you pays your money and makes your choice.

Dav-oh starts today and all those people paying 30 grand each for the privilege cant be wrong, can they? They didnt expect Brexit or Trump and so far havent managed to fix the world in any way shape or form. They have said that you could put the richest 8 people in the world in a golf buggy and they would be worth the same as 50% of the rest of the world but do nothing about it, shame on you all….!

Tullow 

A nice discovery from Tullow today at Erut-1 in Kenya where the oil column was 100-125m which is indeed impressive. The well was to test the structural trap at the northern limit of the South Lokichar basin and de-risks multiple prospects. With Kenya looking better the farm-out to Total (right this time) in Uganda looks smarter and smarter.

Cairn Energy

A pre-close update from Cairn today but very little to add. The 3rd phase of drilling in Senegal is about to start with SNE-5 and 6 to be drilled at the southern end of the structure in an attempt to provide connectivity and deliverability. After that the selection process for the next wells takes place. Kraken plods on with first oil due in Q2 2017 and Catcher also looks likely to be onstream H2 2017. Here capex is $1.6bn which is $600m less than originally estimated. With $335m of cash and the RBL undrawn all looks good but after UK devex of $170m this year plus E&A of $125m those receivables will be handy. The arbitration re CIL continues and with some big cheques to write i’m sure they wish they could access some of that cash pile.

Cape

Same old, same old Cape, repeatedly delivering the goods and not always being appreciated…Today they announce a contract for the Saudi Aramco Jazan refinery in Saudi Arabia and also the scope of the contract with Daewoo on the same project has been increased. Whilst the legal matters do, I understand, hang over them, the company cannot be accused of slowing the rate of growth in the business proper and the market should be more appreciative.

Velocys

The company announce a strategic alliance with Morimatsu Heavy Industry today which is intended to reduce the costs of the smaller scale GTL plants. MHI will be the preferred supplier of module engineering and fabrication services for all Velocys’ plants. I have a meeting in the book with David Pummell the Velocys CEO and look forward to a proper catch-up then.

And finally…

Wins this morning down under for Konta, Watson and Edmund with Sir Andy to come.

Valtteri Bottas signs for Mercedes on a one year contract hoping to be ‘equal with Lewis please’ and asking for the ability to race each other with no rules…

And of course it is FA Cup replay week, several tonight including Wimbledon v Sutton, the Eagles v Bolton and of course Lincoln v the Tractor Boys…

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