Weatherford, BP, Genel Energy, Tullow, Ruspetro, Centrica, and AJ Lucas

‹ Glorious Goodwood

WTI $103.08 -1.47, Brent $107.84 -74c, B/WTI Diff – $4.76 +68c , Natural Gas $3.43 -3c

Good morning

Racing start today as it’s another busy one, we have Lansdowne Oil & Gas in today and of course the Genel meeting this afternoon.

Oil Price

Still very quiet as the market awaits the report from the Fed meeting due after hours our time tonight. Tomorrow it will probably be all eyes on the non-farm payroll on Friday…

On the crude stats front the draw was only 740,000, a lot less than the analysts’ consensus of 2.3m bbls, you don’t have to do much to fox that lot do you?

Weatherford

Just a quick note on the Weatherford figures that came out last night, they were complicated by charges in connection with the corruption claims with the US Government but underlying were a little better than might have been expected. More interestingly, as with other players, North America was still slow but business in Asia was up a record 42% in revenue and operating income.

BP

Enough you say and quite right too! I am not going to add very much, it seems like the blog has been full of the company’s woes for ages. Just to say that for investors there are a number of better investments in the worldwide pool of opportunities in the oil and gas sector. The overwhelming message that came out of yesterday’s conference call was one of intense hatred of the US legal system and a feeling of self-pity that has permeated through the company. BP is now apparently “highly unlikely” to enter into any settlement talks with the US Government and is digging in for the long-term, ‘playing it long’ as Bob Dudley said. I’m not sure that this is all in the best interests of the company, internal legal advice has clearly been woeful so far and it’s a long haul playing with a bad hand. Incidentally, Rosneft may be a long haul too and therefore I consider that there are plenty of better homes for investors’ money at the moment, it may take a change in the drivers seat(s) for things to look up.

Genel Energy – With help from DY

The company has released interim results this morning with revenue of $160m and PBT of $109m. 2013 production guidance is unchanged at 45-55 kbopd with the first half averaging 41,500 and the last three months averaging over 50,000 bopd. Capex guidance for 2013 has gone up from $400-500 to $500-550m due to Bina Bawi testing, Miran oil EPF and the Dohuk gas development under way. This leaves revenue guidance unchanged at $300-400m for the full year. The company have confirmed newspaper reports of a significant increase in gas estimates at Miran and Bina Bawi which looks pretty special and also a much higher than estimated recoverable resource at Chia Surkh.

The GSA for Turkish gas sales is moving on nicely, Heads of Terms are agreed and final agreement is expected by the end of 2013. It is our view that the premium listing will happen shortly after this, it has been the sticking point as far as I am aware and will be a huge game-changer for the share price, if you can get in before this happens you should do.

There is a meeting this afternoon but I would be surprised if there weren’t substantial upgrades and a 1.7% rise in the price doesn’t do it justice, next stop 1200p and beyond……………we keep our strong BUY recommendation.

Tullow Oil-From Daily Flow Test – DY

The company has reported first half revenues of US$1.3bn (up 15%) and PBAT of US$313m (down 45%). Production was up 14%, but the company has cut production guidance to 84-88,000boe/d from 86-90,000boe/d. Net debt has increased to US$1.7bn from US$695m in 1H2012 which has resulted in gearing of 31%.

The success rate has fallen to 63%, 20 more wells to be drilled in H2. The company does flag that Kenyan Pmean resources are expected to be in excess of 300mmbbl.

We highlighted that falling production as one of our key concerns in our recent note and the cut in guidance confirms this. We also flagged that increasing debt was also likely to occur. Both of these issues will be addressed with the TEN farm down, but the timing and structure of this is yet to be determined.

We feel that the market may be disappointed by another cut in production, but this is likely to be countered by the resource estimate for Kenya.

Ruspetro

Interesting to see that John Conlin has gone on the board over at Ruspetro, a stock I have historically avoided (see chart). Knowing John as well as I do it may be time to tempt him from his Edinburgh lair and buy him a coffee to see what’s occurring….

Centrica

My new best friends, Centrica, reported good but not offensive profits this morning with a strong performance in the upstream sector and expect to deliver a 20% rise in production this year. The residential operating profit was up slightly from last year, the beano of the long cold winter being offset by having to pay up for higher commodity costs and the penalties associated with the Liberal green costs emanating from DECC.

Centrica confirmed my scoop of January by acquiring a 25% stake in the Bowland shale ( Cuadrilla 56.25%, AJ Lucas 18.75%) and committing itself to at least trying to provide an important source of gas for the UK consumer, not expected to offer benefits to residents of Sussex I presume.

AJ Lucas

While on the subject of AJ Lucas, a stock as you know I have followed for some time, my spies tell me that they are considering a dual-listing and coming over here to be close to their UK investments…………….It’s also worth looking east as there is a bit of a symmetry between the holders of AJL and of IGas, if you know what I mean, watch this space………………………………

Much more I suspect and will catch up as I can!

And finally…

I saw that the draw has been made for the cricket World Cup to be held in Australia in Spring 2015, England are drawn with…………………You’ve guessed it, Australia!

Duel on the downs today as Dawn Approach takes on Toronado in the Sussex Stakes.

I am not here tomorrow so enjoy the test, or Goodwood and no, I’m not going to the ‘desolate’ North East………………..

Given that I won’t be here can I be the first to congratulate Robert Mugabe on his win in tomorrow’s election…

And even more finally I would like to wish a very Happy 60th Birthday to Peter Webb, doyen of Standard Chartered Bank for 40 years.