image0072WTI $108.80 -1.308c , Brent $116.23 -1.88 , B/WTI Diff – $7.43 -75c , Natural Gas $3.62 +5c

Good morning

So DC took his well-meaning worries to the Mother of Parliaments and got seen off by the ghost of liars past. Barry sits in Pennsylvania Avenue sans best mate Dave and not planning to seek Congressional support for his next move. A day in the life of a Nobel Peace prize winner eh….

Oil Price

Less likihood of immediate international action against Syria saw the oil price fall, last night in the US and again this morning in Singapore and London, at present Brent is down to $114.80.

I didn’t mention the inventory stats yesterday, rather hectic but it’s worth pointing out that there was a stock build of crude of 3m barrels against a forecast of 300,000 barrels by the Wall Street Gurus.

And don’t forget it’s the Labor Day weekend in the states so the end of the driving season, more on Monday…


The FT has noted that ‘BP has made an outspoken verbal attack on the governor and other officials of the State of Louisiana’ which has been met by an equally stinging response from the state. Ed Crooks goes on to say that this clash marks a new low in relations between the company and the State in an increasingly acrimonious debate.

Now call me old fashioned but when you get into a hole shouldn’t you stop digging? Apart from the myriad of court cases on the go, BP are trying to overturn a ruling that forbids them from getting new federal contracts and work in the USA, this doesn’t seem like the best way of winning friends and influencing people and I can’t see it being a stunning success from where I sit.

I wonder just how long the BP Board can sit by and watch their famous company be dragged ignominiously through the courts in the USA, spending buckets of money on expensive attorneys and without doubt taking their eye off the ball in terms of day-to-day business. Amongst the Knights, Admirals, Doctors, Dames and Professors round the non-executive table sits Andrew Shilston, now the Senior independent director who is a shining light and must be, as a genuinely top guy and hugely intelligent bloke just be beginning to think that BP and its executive board have finally come off the rails, time for a change?


After results yesterday, Lamprell has announced the award of a contract for the construction and delivery of a fully outfitted LeTourneau designed jackup rig. No client has been announced but is a ‘highly valued international drilling contractor’. No value has been attributed to the contract either but I think a realistic guess would be around $175m plus extras, maybe squeaking up to $200m at best. This is the start of what will be an important few months for gaining orders for Lamprell and this is a good start, only $4.2bn to go then………….

On a different note, I was very sad to see the departure of the CFO, Frank Nelson which was announced on Wednesday. Frank has been a crucial part of the recovery of Lamprell and will be sorely missed by myself, other analysts and of course the company.

Ophir Energy -From Daily Flow Test -DY/JS

There is increasing speculation that Ophir will be taken out by Chevron (Daily Mail) or by ExxonMobil (The Guardian) for a rumoured £10/share. This follows the recent ONGC/Anadarko deal in Mozambique – US$2.6bn for a 10% stake in Rovuma Area 1 – shows that there is still interest in acquiring East African gas assets.

Ophir has a very attractive discovered asset base and is targeting 920mmboe of net risked resources (4.7bnboe unrisked) across ten wells. So rumours of a bid make a huge amount of sense. Our next quarterly report features M&A in the natural resources sector and we had already identified Ophir as a potential takeout candidate.

This is all rumour at this stage and there has been no official confirmation, but certainly at its current share price Ophir looks a lot more attractive to bidders than it did a few months ago.

We reiterate our Buy recommendation and target price of 710p.

Sefton Resources

Readers will know that I have had a long and undistinguished relationship with Sefton, a relationship that I had hoped might improve as the excellent Keith Morris joined the board recently. A week ago the company announced that it had as a result of ‘allegations made in two internet publications against Jim Ellerton, the Company’s Executive Chairman and certain documentation received’ that he had stepped down from the Board of Directors of the company ‘in the best interests of the company’. He remained on board to provide ‘operational consultancy advice’ to the company.

Today the company announced that ‘it would be in the best interests of the Company for Mr Ellerton to unconditionally step down from the board and as CEO’.

The Board has asked Mr Ellerton to remain on board as a consultant, as George Bush would say, if only the French had a word for ‘plus ca change’.

Great chart though……….

Sefton Resources 1 Year chart, longer ones are available…….

Sefton Resources 1 Year chart

Sefton Resources 1 Year chart

And finally…

A fantastic win at the US Open last night for Dan Evans who beat Australian Bernard Tomic in four sets and progressed to the third round. This from a guy who was told by Tomic’s father last year that he wasn’t good enough to practise with his son……

England also won the Women’s Ashes yesterday, with one match remaining of the series remaining the score is 10-4, an unassailable lead. The game afterwards was a bit of a let-down, only 457 runs in 40 overs and 12 wickets! Incidentally the first win of the summer for the Aussies, a bit late but a fantastic innings by Aaron Finch.

A big weekend of footy as Man U visit the HubCap Stealers and the North London derby sees Arsenal host the Bale-less Spurs. Interesting Champions League draw for Celtic, every tie a glamour tie then lads!!

Also headlines in the press today, ‘Arsenal manager Arsene Wenger says he will not panic buy’……………………………….The transfer market shuts on Monday night and so far he has spent……………zero pounds….

And extra finally…

It was 34 years ago to the day that I stepped off the overnight sleeper in Edinburgh and joined Wood Mackenzie, a journey that has taken me through some fantastic times in the oil industry!!