WTI $99.79 +9c ; Brent $110.99 +70c ; Natural Gas $2.68 +7c
With the better than expected US GDP news and continued tension over Iran the oil price has stayed within the very tight range of recent weeks. Although only producing around 375,000 b/d South Sudan has completed the shut-in of its crude and that will have a modest effect on world markets. The problem won’t go away and a settlement of disputed areas and tariffs will have to be sorted out, either way the pipeline to the Kenyan coast we mentioned last week is probably an important way for South Sudan to achieve true independence.
For pretty much the first time this winter Europe is expecting a lengthy cold snap and although the worst of the weather is expected on the continent gas prices in the UK will probably be only moderately effected. On the subject of Gas, Centrica has this morning acquired a portfolio of North Sea assets from ConocoPhillips for $223m with a further $313m in field development costs. The main target was the 15.17% interest in Statfjord (that takes me back!) taking Centrica to 34.3% and a host of other satellite fields tied back to the hub. The deal increases Centrica’s reserves by 9% and the numbers look pretty much along the right lines for this sort of deal.
In other company news it looks like Apollo Global Management are the likely winner in the auction for the El Paso exploration company that was put up for sale by Kinder Morgan after it purchased the whole outfit for $21bn recently. Apollo have apparently the winning bid of around $7bn waiting to be verified.
The Sunday Times ran a story that suggested that Total was the latest supermajor to join in the rush for acreage in Kurdistan, something that if true would more than rubber-stamp our own belief that the area is set to grow significantly. After the Exxon deal I have expected the floodgates to open and as the amount of land available to licence from the KRG dwindles the opportunities equally become smaller. The small and medium sized companies that have done their traditional job of de-risking the frontier acreage will likely become more and more valuable, in the meantime watch all my usual suspects.
Cove Energy has today sold to Wentworth Resources its interest in the Mnazi Bay concession in Tanzania in a deal worth around $39m. The deal includes Wentworth ceding its interest in Rovuma-1 as well as giving 2 million shares to Cove and a contingent payment of $8.5m subject to production thresholds being met. There are still pre-emption rights to the TPDC as well as Maurel & Prom which last until 26th February.
New World Oil & Gas have managed to take 16% off the share price by pre-announcing a fundraise of $35m next month which would significantly increase the size of the business.
Tangiers Petroleum which is due to make its debut on the Aim market on Friday has announced a A$4.6m fund raising from investors in Australia, the UK and the USA. The money will be used to fund its assets in Australia as well as its Tarfaya licence in Morocco.
Rock Solid Images has announced yet another contract win, this time worth $700,000 to a leading exploration company operating in West Africa. RSI has now in the space of only the last two months announced nearly $4m worth of new business which is very impressive when one considers where the company has come from in recent times. RSI is clearly good quality work in progress and definitely should stay on the watch list.
President Petroleum has announced that Peter Levine will become Executive Chairman with effect from 1 May 2012, John Hamilton will remain on the board after that time. As part of President’s youth policy the Company has announced two more new appointments, Dr David Jenkins (73) joins board and Dr Richard Hubbard (61) joins the senior management team. You know what they say, ‘two doctors a day….’
And finally where does one start with much to comment on; Kweku Adoboli has pleaded not guilty to charges of fraud and false accounting after UBS ‘lost’ $2.3bn, and news today that Hoare Govett is about to be sold for a nominal amount to a US investment bank, how the mighty are fallen eh?