Natural Gas, President Energy, Northern Petroleum, Ithaca Energy, and Sefton Resources

WTI $102.91 +25c ; Brent $110.15 +1.35 ; B/WTI Diff – $7.24 +80c ; Natural Gas $3.50 +1c

Good morning

So, that was the week that was, with significant geopolitical moves made in Washington at the highest levels. Now, not one to count any chickens I have to say that even though we predicted this before the election, the speed and willingness to change has, so far, been more optimistic than previously thought.

Last night saw a very good Oil Council reception and today I am privileged to be on the Judging Panel for their 2013 awards of excellence to be made at the November World Assembly and Dinner.

Oil Price

Although the oil price rallied a little yesterday in the USA it was a faux rally and Brent in particular has fallen again this morning. News from the UN and with further statements from Iran overnight there is little to panic about and the physical position remains positively rosy. Looking at the chart the resistance at just over $106 is pretty important, after that it is $100.

Natural Gas

Yesterday’s figures for inventory additions were slightly higher than expected but in this market as we leave September and move to October markets look to weather forecasts and not inventory figures, at the moment NG is in no-mans-land at $3.50 ish.

President Energy

Twice in one week for President after their announcements on Tuesday which we deemed very positive for a company that is very much overlooked by the market. Today the company has announced a proposed equity investment by the International Finance Corporation (IFC) which is the private sector arm of the World Bank Group. The IFC are proposing to invest up to £12.5m in two tranches, the first, raising £9.375m at 25p closing in November, the second, at a price to be determined will raise £3.125m by the end of 2014

There are a number of good things to come out of this transaction which make me even more positive about the future for President, today’s price reaction is rather absurd but I’ve stopped trying to work these things out! Firstly it’s a funding, which never harms an E&P company and at a particularly good price, look at the chart. Secondly its funding from a blue chip investor, equity funding at this stage of the game might well lead to debt funding down the road, the long term nature of the investor is good for Presidents future. Finally, after working together for some months, the partnership between company and investor is obviously working, moreover it looks like Paraguay has appealed to the IFC as it did to President.

So I remain very confident that the outlook for President is rosy, raising good quality money close to the year’s high after a good run is a proper achievement and this company should without doubt be coming on to your radar screens.

Northern Petroleum

The company has appointed Jon Murphy as Non-Executive Chairman with immediate effect. This is interesting as at the analyst meeting earlier in the week the appointment was not imminent….Jon has a good pedigree having been at Venture which was sold to Centrica on the cheap and is a non-exec at Trinity which makes me feel much happier….

Ithaca Energy

News from Ithaca today that Iain McKendrick, CEO, is standing down for ‘personal reasons unrelated to his role or the company’ is most disappointing. We are big fans of Ithaca and the change should not affect the running of the company, the hard work has been done by Mr McKendrick and the outstanding value of the company still exists.

New CEO is Les Thomas who comes from Wood Group which he left last June, so it was an ‘off the peg’ appointment, prior to that he was at Marathon.

Sefton Resources

Take a picture of the chart, returning from suspension the shares are up 14% which is odd, the suspension was due to ‘unauthorised publication of confidential information’ and so far the company have ‘taken steps to correct this problem’ and are undertaking investigations.

As always befits a situation such as this the board is currently undertaking a strategic review in order to consider the best way of delivering future value’.

Work continues in California where they produced 5,096 barrels last month and Dr Ali’s thermal simulation report for the Tapia Canyon field is being revised to optimise the full field development. In Kansas oil production is maintained at around 450-500 barrels a month.

And finally…

Hundreds of people turned out yesterday to remember Matthew Tyler, a former colleague of mine at James Capel and whilst terribly sad it was an opportunity to catch up with ex colleagues and friends.

A big day in cycling as Brian Cookson tries to end the reign of Pat McQuaid as President of the International Cycling Union.

The standout fixture in the Prem this weekend is Spurs v Chelsea, the first test not of football but of BT as I think they have this fixture, they will want to boost their ratings, fortunately Chez le blog we have BT Broadband which enables ze footy. Top of the table Gooners go to Swansea while Sunderland have to host the HubCap Stealers.

And well done to the English Netball team who stamped the series against South Africa by going 2-0 up with one to play, winning 51-33 at Wembley earlier in the week.