WTI $101.57 -1.06 ; Brent $107.46 – 2.69; B/WTI Diff – $5.89 -1.35; Natural Gas $3.59 +9c
The US is due to shut down its Government functions tonight, not quite sure when but it will be late our time. Everyone is expecting a last minute compromise but top blogger Marcus Ashworth indicates this could be the first shut down since 1996 when it lasted 23 days……………………..Thanks to Marcus take a look at this link as to what happens next.
Oil Price – Iran’s ‘new era’
So, Iran’s ‘new era’ as described by President Rohani has begun and the oil price has been reacting to the ongoing thaw in relationships between the USA and Iran following the presentations at the UN last week. On Friday the two Presidents spoke on the phone, unbelievably for the first time in over thirty years and agreed to up the pace on negotiations.
The pace was accordingly stepped up yesterday when Secretary of State John Kerry, appearing on the CBS programme 60 minutes said that there was ‘potential for a quick Iran nuclear deal which would dramatically improve relationships’ and that the 3-6 month time frame was ‘still on, maybe sooner’.
The oil price fell on Friday in the US but on hearing the weekend news it has fallen further in Singapore trading this morning. (See above and chart)
Another day, another trial as phase two of the Deepwater Horizon trial starts at the US District Court in New Orleans. I bet BP wished that it was happening anywhere but New Orleans…………..This part of the trial is to cover the attempts to plug the well and how much oil actually went into the Gulf during the process, the answer to the latter is pretty meaningful as BP estimate 2.45m barrels and the plaintiffs estimate 4.2m barrels. The decision on gross negligence is made at the end of this trial and the fine is $1,100 per barrel rising to $4,300 if BP is found to have acted with gross negligence, do the math as they say out there….
Interim results today from Providence but the investment community is concentrating almost exclusively on two things at present, the farm-out of Barryroe and the ongoing drilling programme. The former appears to be taking longer than the market was expecting and has been the primary driver for the weakness in the share price recently, the latter is ongoing but the next well is scheduled for 2Q 2014 so still some way off, the conference call with management confirmed some slippage to the right in the drilling programme.
The arrival of more international oil companies to the area is positive but the amount of drilling is still pretty few and far between making it a long time for prospects to be drilled and valuations established. Providence is still remarkably cheap, a really good farm-out deal would transform the shares ahead of the 2014 drilling programme. Investors will have to be patient but it should be rewarded.
Today the bad news outweighs the good as Salamander announces a good gas test from the Sinphuhorm field onshore Thailand and a dry hole offshore in the Gulf of Thailand. The successful well is down to the recent 3D data acquisition which seems to have confirmed the field extension and will be used to identify further upside elsewhere in the field.
Now the bad news, the offshore well Ayutthaya in block G4/50 is a duster with excellent quality reservoirs found but no oil or gas indications were observed.
Salamander is not a favourite of mine at present and despite a recent meeting I am yet to be convinced that it offers much in the way of value, however I will watch it carefully, the chart however looks dodgy, it needs not to go into new, lower territory.
Final results from Rialto today, not the final results as some people would have you believe a little while ago as there is a tiny glimmer of light at the end of the tunnel. The numbers make grim reading and if it wasn’t for Vitol funding, a small placing and Rob Shepherd and Andrew Rose things would be worse. Below is a two year chart showing what the previous management did to the company, in the meantime I probably can’t still be a seller although I vowed never to be turned over again, maybe we need a session with Mr Shepherd….
Today’s CEO resignation is John Scott of Victoria Oil & Gas who has stepped down ‘for personal reasons’. So we have recently had senior resignations at Amec, Ithaca, Lamprell and now VOG and yet again the market doesn’t like it.
Martin Taylor tipped for top job at Lloyds, how good would that be, or Philip Augar perhaps?
Get this from today’s FT ” University of Cambridge rules for graduation attire change from today to allow women to graduate in trouser suits and men to wear skirts should they so wish”. The words I rest and my case come to mind…………………………
There was indeed some football over the weekend, gloom in Manchester as the noisy neighbours lost at Villa and the baggies turned over Man Who, tell you forget about Fergie, David Gill should never have left, this new bloke, Edward Woodward should have stayed acting………………
Whilst on managers, apparently Galatasaray want Henry Mancini and Derby want the wally with a brolly, oh well……………
In cricket Lancashire have signed Jos Buttler which is good for both parties, I really rate him and one day he will be a test batsman.
And in terms of major league comebacks, David Howell won the Alfred Dunhill Links Championship having not won a tour victory for seven years.
And couldn’t resist talking about the NFL, it’s a joy to have a game over here and in a near sell-out game at Wembley yesterday the Minnesota Vikings beat the Pittsburgh Steelers 34-27, next month we get the Jacksonville Jaguars against the San Francisco 49ers.