WTI $102.23 +1.02 ; Brent $110.44 +83c ; B/WTI Diff – $8.21 -51c ; Natural Gas $3.76 -3c
Good morning
Very little company news out this morning I’m afraid.
The deal finally got done, was it ever in any doubt we ask but recalcitrant Republicans fought until the end, will the electorate remember this at the next election? The government is now open til January 15th and the debt ceiling until Feb 7th, not long til our next fight then….
Oil Price
As predicted with little intelligence yesterday the oil price rallied on the deal completion, there are few influences on the oil price at the moment with no EIA data, that should resume now. The analysts covered themselves in glory on the API stats which had a crude build of 5.94m barrels against consensus forecasts of 2.3m.
Talks between Iran and the six leading nations concluded yesterday in Geneva after having appeared to have made significant progress. Even the US said that the world could “possibly have an agreement” at the end of the process. Technical meetings will take place before November 7th after which meetings will reconvene.
Apart from that there is plenty of crude around an in the absence of anything else it shouldn’t rise from here.
Brent crude oil 1 Year chart
Cairn Energy From DFT – DY/JS
IMS today confirmed what we already know, which is cash of US$1.4bn and valuation of the 10% stake in Cairn India of US$1bn, these combined underpin the current share price. Cairn is also starting a US$300m share buyback programme which will be reviewed quarterly.
On the exploration side, drilling will start in the Foum Draa block (CNE: 50%) in Morocco imminently. This block is estimated to have 2.1bn boe of gross resources and Cairn will drill two prospects.
Cairn will also make a decision on going back to Greenland in Q4. We hope that they decide against this given the performance of the last campaign. The overall drilling campaign is targeting more than 4bnboe of resources.
On the development front, the Kraken FDP is awaiting DECC approval which we would expect to be granted by year end. The Catcher FDP continues to make progress and we would expect this to be submitted later this year.
Overall a positive RNS, highlighting several share price drivers for the remainder of this year. The only downside is the share buyback scheme which we are not fans of generally. A special dividend may have been a more attractive option.
Cairn Energy 1 Year chart
BG Group
BG has announced the sale of its entire holding in TGGT, a joint venture midstream company operating in East Texas and northern Louisiana to Azure Midstream Energy. BG will receive cash of $231m plus 4% of Azure currently worth around $17m.
And finally…
No surprise to see that England will not be seeded in the world cup draw on 6th December as the latest FIFA rankings have them id 10th position, I think that’s pretty flattering………………….
Cricket, in what seemed like an enthralling one day game in Jaipur, Australia set India 360 to win in 50 overs, India scored 362-1 with nearly 7 overs to spare………….Surprisingly this is not the highest ever winning score, that was set by South Africa, funnily also against Australia!
Staying with cricket I am delighted to see Paul ‘Nobby’ Downton appointed to the senior position of Managing Director of the England and Wales cricket Board today. Paul was a fantastic cricketer for Kent, Middlesex and England but kept the hard graft for the institutional sales desk at James Capel before semi-retiring to Cazenove…. We wish him well, a great appointment for a great bloke……………now, where are those tickets…………………?
A lot of fuss about Roy’s half-time joke in the game the other day but he has apologised and apparently no insult was taken.
And a nice story from the Wales-Belgium game on Tuesday as a grandfather who had put £50 on with the bookies that his grandson would play for Wales at 2,500-1 when the boy was 18 months old saw him come on and gain his cap winning granddad £125,000. Cynics amongst us tell me he was only played so he couldn’t then play for England!!
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