WTI $105.30 -1.93, Brent $108.30 -1.41, B/WTI Diff – $3.00 +38c , Natural Gas $3.71 -4c
Another quick note today as a diary full of meetings! Last day of Kentz marketing went well and clients who saw them were very impressed, well done the team, one more meeting today. We have Tony O’Reilly, CEO of Providence Resources in this morning which is very convenient, it was to be a Malcy’s blog CEO interview, probably more about Barryroe now though.
UK GDP figure came in at 0.6% dead in line with expectations although wait for the revised figure as the flash number is often a figment of some ONS scribblers imagination.
At last the oil price has come back a bit and for the same reasons as I gave yesterday, inventory stats proved to be a bit of a help but the Chinese data proved that the contraction continues. Tonight sees the EIA International Energy outlook which is always worth a read and they have confirmed that last month US domestic crude production was at a 22 year high. The EIA in turn report that some crude is not getting to the market, Libya is now well below its peak at 1.2m b/d and South Sudan at 75,000 b/d is 300,000 b/d off their potential. With North Sea maintenance at its peak the technical position for Brent is favourable but longer term there is plenty of crude oil about. WTI has slipped to a $3 discount again, proving that, yet again, going to a premium is a transient thing, remember the day!
We noted the other day that Chevron had invested in the assets expropriated from YPF and felt at the time it was remarkably, how you say, untimely and not without risk. On the ‘what goes around comes around’ theory one might have some sympathy with Repsol and have a teeny hope that the Argentinian Government decides at some stage to nationalise these assets again………………………..
Another cracking set of figures from Technip as net income grows nearly 20% year on year. The backlog was a record high of €15.2bn of which €4.4bn will be carried out by the end of the year. We note that the revenue growth guidance remains at +11%-16% at €9.1 – €9.5bn and remain very confident that this will be exceeded, accordingly I am still very keen on Technip at these levels.
To conclude a highly successful few days with Chris Brown and team, today the company has announced a project management consultancy services contract with Transnet for work on elements of the new Multi-product pipeline project in South Africa. The contract will be executed through the EPC business unit and will provide project management services and support across a full multi-discipline scope. Although this is a contract of modest value it is a second contract with the client which is good and is in a strong region, South Africa and is fully reimbursable.
Having gone on a bit about the company this week I will quieten down now but just leave you with a thought, this stock is on a sub-10 P/E for this tear and sub-9 for next year, it yields 2.5% and 2.8% respectively on conservative dividend and EPS forecasts and has few, if any peers in the UK and few in the US, it remains a straight BUY with a target price of 590p. (Note available on request)
The company has announced that Netherland Sewell has provided an estimate of the cash flows attributable to the company from the Basal Wealden A oil reservoir at Barryroe. The following valuations are by their very nature very formative but net contingent cash flow to Providence discounted at 10% of $0.7bn in 1C, $2.6bn in 2C and c $7bn in 3C. The mid case 2C number would seem to indicate a current undiluted value for Barryroe of c £27 per share which gives pretty good support for the shares down here and I am astounded why the shares have not gone up this morning.
As I said above Tony O’Reilly, CEO is in our office presenting this morning so I will have much more for tomorrows blog.
I rest my case……………
So, Prince Malcy was never going to be a runner and by George it is……………………
In the IPC Athletics World Championships in Lyon 16 year old Sophie Hahn took the gold in the 1oo metres having only taken up sprinting this spring.
The Hubcap Stealers have turned down the latest Gooners bid for Suarez, I would have bitten their arm off if it was me………………….
Talking about violent players David Warner got 193 for Australia A against South Africa A which should secure his place in the side for the third test. Memo to Manc bar owners, you need to stock up on Tequila and Jaeger bomb supplies…………………………..
And we wish the very best to James Alexander Gordon who has retired from reading the football results on the BBC after recent surgery for cancer, to many he has been the voice of football.