WTI $99.48 +1.27 ; Brent $111.49 +2.13 ; Natural Gas $3.63 +26c
The oil price continues to exhibit strength in the short term as modest but significant supply wobbles create nervousness ahead of the US inventory figures tonight. Much higher than expected Conference Board consumer confidence index of 56 vs Octobers number of 40.9 also fuelled the market after the best gain since April 2003 was released.
In company news, reports suggest that Exxon has sold its stake in the West Qurna-1 oil field in Iraq to Lukoil for an undisclosed amount.
Wood Group has announced the launch of its JV in Angola this morning, this should provide a decent stream of work to the company without it being game changing. As if by magic, the company also managed to conjure up the JV’s first contract win, a deal with BP for maintenance services to an FPSO.
Seadrill reported today and they occasionally creep onto our radar screens, today they had a very mixed bag, poor figures, dominated by huge derivative losses but interestingly a very optimistic statement about the rig market. The company specifically forecast that the ultra-deep water rates will firm to over $550,000 per day in the first half of 2012.
I would like to mention Plexus which I have followed for some time and despite being a difficult share to buy (as there is a small free float) is one to tuck away. The superior technology developed by Plexus is industry leading and slowly customers are increasing as the need for POS-GRIP friction-grip wellhead engineering increases.
Cairn has announced that both the wells plugged and abandoned in today’s release were dry although the company remains upbeat about the prospects for the frontier acreage. Describing the area as having ‘promising reservoir sands’ the company also said that ‘all the ingredients for success are in evidence’. It is interesting that these comments are made against a backdrop of ‘active farm-out discussions’. Whilst this is not the end of the world for Cairn we still maintain our long term preference for Tullow who, despite being more expensive on rating grounds offer more chance of exploration upside in the short to medium term.
Chariot has taken a bit of a hiding this morning and I am not surprised. Whilst the company is a preferred stock and has an exciting future with the drill bit in a very popular area, today’s announcement show another delay as they lose a rig that investors thought they were going to use to drill Tapir South any minute now. It seems that the costs of a one well programme were high and the option they had would have involved paying a significant premium. That’s a big call as today’s announcement has taken $50m off the market cap and that doesn’t include carrying cost until they eventually drill the prospect next spring/summer. Also if Seadrill are correct (see above) then drilling offshore Namibia isn’t getting any cheaper and it will have been a false economy ducking the option on today’s rig…………..
Tangiers Petroleum have identified three prospects following interpretation of 2D seismic on their Tarfaya offshore licence in Morocco. We are seeing a significant interest in Morocco, yesterday saw figures from Longreach another interesting play in the area.
Enteq Upstream has announced interim results today which contain no new news, as it is a stock I have championed since flotation I thought I would say that they are still looking for the right acquisition in the oil and gas services market. In these volatile market the price is still unchanged, a starring performance if ever there was.
And finally…….after getting off half of his punishment for atrocious behaviour at the rugby world cup, disgraced England captain Mike Tindall still says that ‘ the RFU made me world cup scapegoat’, no Mike you made yourself the scapegoat even if you don’t remember it at the time………..