WTI $47.48 -$1.61, Brent $53.78 -71c, Diff -$6.30 +90c, NG $2.89 -9c
Hurricane Irma is battering Florida as I write and apart from the billions of dollars that will be needed to rebuild, it has clearly significantly hit local product demand which will have a knock on effect on crude requirements. The bigger picture is still being hit by the after effects of Harvey, 20% of US refining capacity is still shut in and the Government has suspended the Jones Act, allowing imports of products from abroad. Helpfully, European refiners have ramped up production to assist the US and South America (who have had their US imports cut) which has relatively strengthened Brent at the expense of WTI, hence the differential being $6.30 today.
The rig count, a bit like the upcoming inventory stats, is probably not worth the paper its written on at the moment but was down again on Friday at least in oil by 3 units to 756. Overall last week WTI ended up 19 cents while Brent was up 103 cents, this will surely unravel somewhat once the hurricane season comes to an end and refiners go back to WTI.
Jersey Oil and Gas
JOG has announced this morning that the Statoil operated well on the Verbier prospect in the North Sea reached TD yesterday and encountered water bearing Upper Jurassic sands deeper than anticipated. It is possible that there may be a sidetrack but JOG think that is unlikely. This is clearly a disappointment but it should be remembered that it was drilled at no cost to them and they end the campaign with £2.5m of cash in the bank. The company is still planning to continue with its stated strategy of growth through acquisitions of assets including production with a number of potential deals being currently assessed. JOG has a good team and is without a doubt in this for the long haul, it has good sources of funding for its longer term strategy.
PVR has announced this morning that its Drombeg prospect encountered the Lower Cretaceous reservoir as expected but that it too was water bearing. With the possible presence of bitumen in the drill cuttings indicating a possible oil charge that was not retained, further interpretation will be needed. This was only the second well in the Porcupine Basin and so this is early days for such a frontier exploration play. PVR were carried for this well and therefore remain well financed and able to continue with other work on their portfolio the next of which is an appraisal well on the now infamous Barryroe discovery.
Columbus Energy Resources
CERP has announced that it has successfully renegotiated certain terms of the $8.9m convertible with Lind Partners. They have increased the conversion price from 3p to 4.5p and increased the funding agreement by $750,000. With the possibility of taking the repayments in cash or shares (next month will be shares) CERP now have more flexibility and hopefully a floor under the share price. In recent months much has changed at CERP, existing already implemented initiatives have reduced the cost base and increased production, from existing cash resources and the company expect to be cash flow positive by Q4 2017. I met with new Chairman Leo Koot again last week and he and his impressive team are working hard to enhance production and pursue an interesting exploration portfolio. I expect continued news flow and of course the company are actively looking to expand south into Latin America in due course.
England duly won the test series against the Windies but not without putting a few obstacles in their own way, next up is The Ashes in November and they will have to be better by then. Perhaps the selectors might at long last trust Alex Hales with a spot in the middle order…?
In a rain soaked Italian MotoGP, home hero Danilo Petrucci put in a great ride but succumbed on the last lap to the sheer class of Marc Marquez who won with rival Andrea Dovizioso in third resulting in them going to the next race on level Championship points and Maverick Vinales’ 4th place means he’s still in the hunt. ..The rain caused many riders to slide off including Jorge Lorenzo who was looking strong until then and Cal Crutchlow who remounted to finish 13th with fellow Brit Scott Redding an excellent 7th. The day’s worst weather in Moto3 saw more than half of the field fail to stay on board including John McPhee. Joan Mir’s 2nd behind Fenati means he must be able to smell the Championship now with a 61 point lead.
In the Prem at the weekend the Noisy Neighbours beat the 10 man HubCap Stealers 5-0 wins also for Chelski, the Gooners, Spurs, the Seagulls, Hornets and Magpies. The Eagles lost again and don’t have a point or a goal so far this season, as of this morning they don’t have a manager after sacking Frank de Boer after 77 days in the job… Hammers v the Terriers tonight.