WTI $108.54 +89c, Brent $115.57 +1.38 , B/WTI Diff – $7.03 -48c , Natural Gas $3.67 +1c

Good morning

Now that Barry has the broad all clear from Congress we should expect rumours of missile launches any time now, indeed there have already been stories in some markets of activity in the area. So far there hasn’t been any reaction in the oil markets but once it starts we should expect if only short term, volatility. G20 will meet today and Obama may wait until that meeting sends a message.

No president has ever been turned down by congress on a request for military action.

Oil Price

Yesterday Brent had a backwardation of $2 which shows that the combination of geopolitical panic and short term supply risks is very real and that the risk is still on the upside for the time being.


Eni CEO Paolo Scaroni has followed up yesterday’s further find in Area 4 Mozambique by suggesting it might listen to offers for another 10% of the block. If they get the same as they did for the last 20%, the 10% should raise another $2bn or more.

Eni 1 Year chart makes interesting viewing…..

Eni 1 Year chart

Eni 1 Year chart


It looks like Cuadrilla are using the same lawyers as BP as they appear to have made a nightime drink out of the application for planning for fraccing in Balcombe. Let’s hope that when they start doing the serious stuff they do the easy stuff better.

In the meantime Lord Stern has given an interview to the Independent suggesting that David Cameron’s claim that ‘fracking has real potential to drive energy bills down’ as ‘doesn’t sound like economics to me’. For a ‘so called’ highly influential economist, Lord Stern appears to have lost the plot rather as DC was only suggesting that it might be a lost opportunity and not an economic theory.


Amec CEO Samir Brikho has said that he was not happy that his indicated offer for Kentz was leaked and that the price indicated is very fair. He noted, as he did at the analysts meeting that the company are looking at a number of other options to bid for. There is no doubt that if he got the company for anything close to today’s price it would be the steal of a lifetime.

Sound Oil

Sound Oil have put an RNS out scheduling a ‘business update call’ for Friday and although we have had no details of such a call it has had the effect of taking 8% off the share price. The company have been a favourite for a while and appear in good nick financially and operationally although they have appointed a new Finance Director recently who might come a bit expensive! Clearly they have no IR advice as the market is panicking and probably for no good reason. Watch this space, especially at 6:00 AM ET on Friday……

Sound Oil 1 Year chart

Sound Oil 1 Year chart

Dart Energy From Daily Flow Test – DY/JS

Dart has successfully raised A$11.9m through the placing of 131.8m shares at A$0.09/share. The company is intending to raise a further A$8.8m through a 1 for 9 non-renounceable entitlement offer to eligible shareholders at A$0.09/share, for a total A$20.7m.

These funds will provide greater financial strength as the company pursues an active drilling program in the UK and seeks farm-in partners for its UK shale assets. The fundraise will also provide greater financial flexibility given the nature of Dart’s loan facility with HSBC and the two important transactions in China pending approval.

This announcement is welcome news and complements Dart’s sale of its interest in the Liulin PSC in China for US$20.8m. We have previously noted the significant potential value of the company’s UK CBM and shale gas assets and we expect this will be recognised by the market now the company is further funded.

Crucially, these funds put Dart in a position of strength as it negotiates any farm-ins to its UK shale gas assets. Dart remains one of the last companies with large UK shale gas acreage yet to be backed by a major, after Centrica’s move to buy a 25% stake in Cuadrilla’s Bowland exploration licence and CNOOC’s part ownership of IGas (via NEXEN).

Dart is also considering a dual listing in the UK at the present time and given that it is the largest acreage holder of shale gas in the UK the company sees this as a new focus as well as its already established CBM projects.

Very good news for the company as it is now well funded which puts it in a much stronger position when negotiating farm downs. The stock closed up 15% in Australia.

Dart Energy 1 Year chart

Dart Energy 1 Year chart

Gulf Keystone

Finally yesterday the Gulf Keystone Board was increased by a significant number after the shenanigans in the summer. Messrs Andrew Simon, Jeremy Asher, Thomas Shull, John Bell and Philip Dimmock have been appointed and there is still one more to come which will make for fun board meetings…

We are eagerly awaiting the judgement to be handed down in the court case which is already running later than expected, latest news is for it to be out anytime now but that is only an indication. It goes without saying that investors wanting to profit from the judgement will need to be agile, probably working on a wing and a prayer as the market tries to call the judgement. Best guess obv is up if they win and down then up if they lose…………….

And finally…

England played Ireland at cricket yesterday, or more appropriately in the absence of our South Africans, our Irish players beat their Irish players. For example, in 2007 Joyce, playing for England, was dismissed by Rankin playing for Ireland. Yesterday, Joyce, playing for Ireland, was dismissed by Rankin playing for England………………………………….

Andy Murray beat Denis Istomin in the US Open to set up a quarter final with Stanislas Wawrinka tomorrow.

On Monday, In the worst kept secret category, Red Bull announced Daniel Ricciardo as their new second driver for next year and he is expected to compete or at least do what Vettel tells him to do… Mark Webber is leaving to join Porsche sports car racing next season.