WTI $96.33 +16c ; Brent $107.42 +19c ; Natural Gas $3.48 +2c

Good morning

With the US markets closed yesterday there was unsurprisingly little direction for oil prices, this morning in the Far East the trend is upwards but with very little impetus. Yesterday France flip-flopped around with regard to sanctions on Iran, to begin with it was going it alone, later it became obvious that as a consumer of only 2% of their exports it would be wiser to join with other EU countries who take around 18% or 455,000 b/d. Given that China, India, Japan and South Korea account for 60% of Iran’s exports I would not expect much support if I was them!

Chevron has been barred from drilling in Brazil following the recent spill on the Frade field, the Government Petroleum agency, the ANP, has suggested that there is evidence that the company had been ‘negligent’ in its contingency planning in the event of an accident.

In company news, Ascent Resources has had a highly successful frac job on its Pg-10 well in Slovenia which saw gas flow of 8.5mcf/d during preliminary testing. The company are clearly very excited about this after the less prolific Pg-11A frac job and are ‘confident that the redevelopment of the Petisovci field can and will now proceed’. This is all very good news for the company and given that they are confident about the future funding, the 42% rise in the price today is justified.

Magnolia Petroleum has finally made its debut on the London market having thought about it for some years, and what a time to appear! The company has raised £1.2m at 0.55p which gives it a market cap of £3.1m. The money raised is to develop and drill its acreage in the Bakken and Three Forks areas in North Dakota as well as the Woodford and Hunton areas in Oklahoma.

Caza Oil & Gas has announced a successful re-entry of its Caza McMillan #1 well in Wharton County, Texas. The new well has perforated at new levels to test the Yegua 9,650 sand and following fraccing the well has flowed at gross initial rates of 1.375mcf of natural gas, 57 barrels of oil and 29 barrels of water on November 20th. After recovery of frac fluids the well will be online within the next ten days. This is a genuinely good result for Caza as it progresses towards profitability and becoming cash-flow positive. Caza has a number of interesting wells coming up with a mixture of prospects to generate cash flow and a material increase in its reserves. With cash of $16m as well as production from existing and upcoming developments Caza looks particularly well placed to benefit from any future discoveries, we also believe that the management is continually looking at opportunities that will in due course transform the company and revalue the share price.

And finally, with the longest odds ever available about a double of Sepp Blatter and Rob Andrew resigning we have to go for an easier target! How about the dismantling of the Euro before January 2012? The mechanics of such a manoeuvre require markets to be closed, and preferably a minimum of a weekend so a slightly longer break would do the trick perfectly……….