image0071WTI $106.12 +2.72 , Brent $107.83 +1.31 , B/WTI Diff – $1.71 -89c , Natural Gas $3.23 -7c

Good morning

It’s a big week for economic stats in the US as retail sales, consumer prices, housing starts, industrial production and the regional manufacturing survey all report.

Oil Price

I said on Friday that the oil price should rally, not just because of the five days of consecutive falls but because there are still some exporting shortfalls around the world and seasonal maintenance is at a peak. The September Brent contract expires this week but the news from Libya is that the main exporting terminal should be back in business any day now.

Caza Oil & Gas

Caza has announced the result of the Caza Ridge 14 4H horizontal 3rd Bone Spring well which has been fracture stimulated in twenty-four stages and has been flowing back for several days. The flow rates are very encouraging, the well produced at a peak 24 hour rate of 1,004 barrels of oil a day and 1.3m scuffs of natural gas, equivalent of 1,221 barrels of oil per day. There were also indications in the well data that oil and gas were evident in the Brushy Canyon, Avalon and 2nd Bone Spring Sand intervals which is very exciting.

This well is exceptionally good news for Caza and comes on the back of encouraging interims last week and with a highly promising, fully funded drilling programme to come the outlook is most pleasing. The management are presenting at Proactive investors next Thursday which gives investors a chance to hear the story from the horse’s mouth, we have management available for meetings on the 21st and 22nd so please ask if you would like to see them.

I am sure that there is still huge upside from here despite the big rise this morning.

Caza Oil & Gas 1 Year chart

Caza Oil & Gas 1 Year chart

Genel Energy

Genel has agreed to acquire a 40% interest in the Adigala block onshore Ethiopia from New Age Limited for an undisclosed sum. The consideration involves a payment in respect of back costs and a contribution to the cost of a 2D seismic acquisition planned before the end of 2013.

The acreage is analogous to the Jurassic Rift basins in the Yemen with oil seeps and outcrops suggesting an active Jurassic oil prone system.

We feel that although the Genel story has up til now been primarily predicated in Kurdistan, the extensive exploration portfolio in Africa is complemented by this acquisition with particular reference to the company’s extensive interests onshore Somaliland.

Still plenty of upside here as although it has reached 1000p our valuation gives plenty of headroom, the stock is under owned, misunderstood and as the 2 year chart shows only just back to float levels. BUY

Genel Energy 2 Year chart

Genel Energy 2 Year chart

Soma Oil & Gas Exploration

Whilst we are that part of Africa its worth keeping an eye on Soma Oil & Gas, founded this year with plans to spend an initial $20m to survey prospects in Somalia. Initially it will be looking at data already in existence but new 2D seismic will be shot and should be completed in 12-18 months. CEO Robert Sheppard, (not to be confused with Rialto boss Rob Shepherd) has said that ‘depending on the data we find we will decide which blocks to apply for’.

State-owned Somalia Petroleum Corp has announced that it will sign as many as 30 oil and gas PSC’s this year.

Watch this space…..

Trinity Exploration & Production

I used to watch Trinity and its forbears closely and I have a lot of respect for Bruce Dingwall and his team but it’s all gone quiet lately and I have been unsuccessful in getting a meeting with the company for some months.

So it is interesting to see the company announcing that it is to spud two offshore exploration wells, one on the West coast and one on the East coast of Trinidad in the 4th quarter of 2013.

The company says that they are embarking on a high impact, low risk exploration programme which sounds good if it were always so sweet!

Trinity 1 Year chart

Trinity 1 Year chart

Fortune Oil

I was going to have another go at Fortune today anyway for those people who might have been away last week (or didn’t get the positive message!) so it was excellent timing that they have announced today that they have received approval for the FGIH interest to China Gas Holdings.

This is a landmark development in Fortune’s asset disposal and has probably occurred earlier than the market had been anticipating. Along with last week’s news along with the special 2.36p/share dividend we expect significant upward momentum, our target price is 20p and we remain confident with our BUY recommendation.

As usual if you would like the full note from last week please just reply to this and I can send it.

Fortune Oil 1 Year chart

Fortune Oil 1 Year chart

Tower Resources

Tower has announced the results of the Open Offer which has raised £1.04m to add to the £9m raised in the placing last month, all were done at 1.125p per share. The proceeds of the raise will be used to fund the company’s share of its drilling costs associated with the well in Namibia, the cash consideration for the Wilton Petroleum acquisition, general working capital purposes and to ‘enhance the company’s ability to pursue its new ventures strategy.

Tower Resources 1 Year chart

Tower Resources 1 Year chart

And finally…

The test match has turned into a very exciting contest, as I write it could go either way…..

The football season is not far away now although the junior leagues have been at it for a week or two. The Charity Shield happened yesterday but it’s never meaningful although Man U won in a non-contest.

Apart from all the noise around Suarez, Bale, Rooney etc the Hubcap Stealers have sold Stewart Downing to West Ham…

I tried to order some tickets for Hull City Tigers’ first home game in the Premier League and got through to their operator.’ We’ve sold out’ he said.

I said, I know but I’d still like some tickets please………………………..

Loved Usain Bolt, as ever a joy to watch but said afterwards that he wasn’t feeling that well…Might go to Glasgow for the Commonwealth Games, careful what you wish for big fella……………..

Golf was very boring tho but nice to see Rory putting some shots together.

It’s the ‘Glorious 12th’ today, great news unless you are a grouse…