Power/Alkane Energy, Primeline Energy, Kentz Corp, Nighthawk, and North River Resources

WTI $103.09 -75c ; Brent $109.80 +29c ; B/WTI Diff – $6.71 +87c ; Natural Gas $3.64 +13c

Good morning

It’s gone a bit quiet in Washington so I thought these bon mots might amuse, if only the French had a word for bon mots eh?

America was not shut down properly. Would you like to start America in safe mode, with free healthcare & without the guns?(Recommended)

The US Government has shut down. A lot of people are asking: How will America get by without an effective Government?

Same as they did yesterday I guess…………….

Oil Price

It’s still very quiet down on the trading floor, volumes are low and the weak dollar keeps prices limited. Brent volumes for November are at recent highs and OPEC Secretary General said yesterday that the oil market looks well balanced for the foreseeable future.

Retail gasoline prices in the States continue to fall, last week it was $3.37 a gallon down 5.8 cents on the week, 48.3 cents year on year which is quite interesting.

Power/Alkane Energy

So after many warnings about the power situation, people are beginning to wake up and smell the coffee, we are on a dangerously conceited road whereby a combination of political ideologies and years of mind-blowingly incompetent energy policy meet to create misery for consumers.

It was only last week that I reported that Centrica had to abandon its gas storage plans and write-off shedloads of money because the minister at DECC deemed that it was too expensive or unwise to store the gas in the summer and use it in the winter, sounds pretty stupid now eh?

Just wait til its v chilly and Gazprom or Qatar gas are invoicing you for their gas or LNG…..And that will be on a dark night when there is no wind or too much wind and no sun so your beloved green energy can’t provide any power and you have to go onto your friends at, say Alkane Energy where they have power response and for a modest £100++ per megawatt hour they can get Corrie back up and running and recharge all those freebie BlackBerrys in Whitehall. So as I have always said, BUY Alkane which have had a slight breather recently as they will have another run.

Primeline Energy Holdings (PEH-TSX)

We did a roadshow a few months ago with Primeline, those who saw this stock will remember it, the stock is astoundingly cheap and begged the question in almost every meeting, ‘where’s the catch’. Well there isn’t one, the development is complete and CNOOC have said in their half year review that its project with Primeline (37.5% WI)in the East China Sea is now on-stream and ready for production. When we were on the roadshow we reminded you that cash flow would soon be on us and I would like to re-endorse that statistic, McDaniel’s forecast Net cash flow after tax for 2014 of $81.4m attributable to Primeline who’s market cap is $38m, now what was that I was talking of as a no-brainer?

Look at the chart, the market is just beginning to work it out, this could be a ten bagger………………….

Kentz Corporation

Kentz has won a Manpower Services contract for the Qatargas Laffan Refinery Phase 2 Project in Qatar. This will support the management of the project over the next three years as it processes an additional 146,000 bopd of condensate from the North Field. We like repeat business with Qatargas and another reimbursable contract is also good news.

Unsurprisingly no value is given for this contract, but we expect it to be of a decent size and it should be well received as it falls in the higher margin TSS part of Kentz’ business. This contract emphasises the number bid prospects coming up in the Middle East, particularly from existing customers, and highlights how winning the early work can generate value in the region. I confidently expect more successful contracts from the region and indeed elsewhere from Kentz and after all the recent hiatus the shares are now very attractive.

Nighthawk

Nighthawk has announced a production update and probably feels a bit aggrieved that the shares have fallen but then again they have had a solid run. Third quarter average oil production was 1,528 barrels a day, a 142% uplift on 2Q 2013 at Smoky Hill and Jolly Ranch projects in Colorado and brings with it 3Q net revenue of over $10m. The fall in the share price may be due to the September production number but this was expected and I would expect things to get back to normal soon if it hasn’t already happened. In addition to this Nighthawk are about to start another drilling campaign later this month which gives a possibility of further upside. Having been out to Jolly Ranch, albeit some years ago, I am glad that it appears that patience has to a small degree been vindicated and some investors rewarded, there is still a fair bit of work to be done to get back to historic levels, the five year chart is still a nightmare for Nighthawk.

Finally away from Oil & Gas, I very much enjoyed going on a roadshow recently with North River Resources a Namibia based lead/zinc play. Today we have put out a great and very positive note on the company so please ask if you would like me to send you a copy.

And finally…

Gus Poyet has been named the new Sunderland boss, at least he will be able to play against his old side again next season, unless Brighton get promoted that is….

And Wales manager Chris Coleman has been told that his new contract will not hinge solely on their final World Cup qualifiers coming up………………………………….

AC Milan have to play their next match behind closed doors after ‘insulting’ chanting towards Juve fans..

And staying with the bad boys, David Warner is in trouble again after missing a game for his local club side and being spotted at the races………..oops

Manchester’s got talent, official -as the City host an NBA pre-season match between Oklahoma City Thunder and the Philadelphia 76ers fans will be able to see the mercurial gold medal winning Kevin Durant who has agreed to play.

And good luck to the Harvey Nash Oil and Gas team led by Sherree Young as they host their annual board dinner in aid of Raft, let’s hope the extremely distinguished guest list raise lots of money for this excellent charity at which Lord Digby Jones is the Guest Speaker……