WTI $97.61 -87c ; Brent $110.58 -19c ; Natural Gas $2.38 -12c
With the positive take on economic news from the USA, Germany, China and indeed the UK the oil price has remained firm, indeed the Brent price edged above $112 this morning. WTI slipped as crude stocks rose and although consensus forecasts from Wall Street gurus got the sign right, the number at a rise of 4.2m bbls was way above the estimates of 2.6m bbls. In gasoline the forecast of a fall in stocks were reassuringly totally wide of the mark with a rise of 3.02m bbls. Gasoline demand has slipped again after recent price hikes and are now below 8m b/d for the first time for a while. It is worth reading that again, 8m barrels a day on gasoline!
Japanese and Chinese buyers are expecting to lose the oil they formerly bought from South Sudan after the country remained adamant that they would continue to shut in 375,000 b/d after talks broke down to make peace with the North.
In international company news Exxon has spudded its well in PNG which a number of companies have been interested in, not the least New Guinea Energy to which a success would boost its acreage valuation, currently being eyed by a number of interested companies.
Shell has produced final results for 2011 today and following other super-majors numbers the content was hardly surprising. The figures echoed other companies and the fall in the natural gas price in the states negatively affected the numbers and of course we already knew how bad downstream is at the moment. Again as expected the LNG number was good which should continue and it bodes well for BG next week. The shares fell on the news which is more a reflection on the parsimonious nature of the dividend announcement, up by 2% as of the next quarter than the actual figures. All afternoon presentation later today so a further analysis after that.
In a separate story Shell are believed to have sold a 20% stake in a Canadian shale gas play to PetroChina for $1bn, this comes as no surprise, we have been watching carefully the acquisition of such plays which not only increase the Chinese position in the unconventional but give them valuable expertise in the sector.
BP which is 5 days away from its finals and we had hoped a radical and much needed reconstruction of the business, are continuing to spend a lot of time in court in the states. Today’s attempt to get the CEO of Transocean in the witness box has apparently failed and Steven Newman is unlikely to be forced to attend as he is a parent company director. The amount of time either adding up the numbers, appearing in court or hopefully looking at restructuring continues to make one think that the Chairman should be too busy to be driving a Volvo. For what it’s worth it’s 25 days until the court case opens and thus there is still plenty of time to cut a deal out of court, maybe that will come on Tuesday?
Alkane Energy has announced that it has conditionally agreed to buy Greenpark Energy Ltd for up to £5.7m. Alkane will buy the coal mine methane assets and operations of Greenpark which are an excellent fit with their own geographically and economically. We will be publishing a full note on the company and the acquisition details imminently, indeed if I can hold this blog long enough it may be an attachment. The management of Alkane are ambitious and this deal will expand the scope and scale of the company to make them the largest CMM developer/producer in the UK and we expect a 2012 eps number of 2.8p and 3.2p next year, accordingly we have a price target of 38p.
Caza Oil & Gas have provided an operational update with regards to the Hite Offset Property in Wharton County, Texas. This re-entry announced recently has been completed successfully and is now producing 1.13 million cubic feet of gas and 45 barrels of oil per day on a 12/64th choke. As part of an exciting drilling programme for this year this is a very positive start for Caza and provides another boost to revenues to back up further exploration this year.
Gulfsands Petroleum has announced that their Chief Financial Officer, Andrew Rose, has resigned to pursue other interests. He will stay on to ensure that the 2011 financial statements are signed off.
Tower Resources has announced that the Mvule-1 well in Uganda is expected to spud within 6-9 days and will drill to 600 metres and get there within two weeks of spud. The estimated recoverable resource to evaluate is a potential 80 million barrels.
President Petroleum has announced that it has conditionally placed 13.8m shares with investors at 45 pence per share raising £6.2m. The money raised will be spent on their operations in Argentina where the acquisition is growing at some pace.
And finally, headlines you thought you wouldn’t see, after last night’s game a headline in today’s sports pages reads ” At least we didn’t lose, says Wenger”………..