Repsol, Petroceltic, Plexus Holdings, Amec, and Quadrise

WTI $103.61 +30c ; Brent $109.45 +76c ; B/WTI Diff – $5.84 +14c ; Natural Gas $3.51 +1c

Good morning

Nothing much to report from Washington over the weekend, the Department of Defense reinterpreted a bill from 30th September meaning that 350,000 civilians could return to work. The House then passed a bill to enable all civilians ‘furloughed’ during the shutdown will be repaid if and when the shutdown ends.

The economic situation in the US becomes increasingly murky as without any economic data the Fed will have even less of an idea than usual about the state of the economy which probably means little chance of tapering before Christmas.

Oil Price

Tropical Storm Karen blew hard on Friday night but instead of becoming a hurricane it has been downgraded to a mere depression, accordingly all Gulf of Mexico employers returned their workers offshore yesterday.

Oil prices are really stuck in the $107-110 range with little news on the horizon to make any difference up or down.

Repsol

As the time approaches for Repsol to sell off its stake in Gas Natural the list of potential buyers gains traction and the price gets higher. Not being a forced seller helps, the stake is considered to be worth over 5bn Euros and although Temasek and Sinopec are the favoured bidders my mole inside the process has told me that there are a couple of wild card bidders in the auction. Funds are earmarked for the exploration budget meanwhile Repsol remains a favourite in the European major space.

Petroceltic

Interestingly, I was only the other day talking to someone about this deal, ie Sonatrach exercising its right to pre-empt the sale of an 18.375% stake in the Isarene PSC already arranged with ONGC. The fact that Sonatrach has pre-empted is interesting, in particular as the state company will now have 43.375% of the licence and must lead one to think that the deal struck with ONGC might have been a touch too cheap for Sonatrach to take advantage off.

So, having been a touch cautious following the Melrose deal, one can be a good deal more positive about Petroceltic following this news and also the exciting prospects under way in Kurdistan and Romania, not forgetting the more mundane but revenue enhancing gas fields in Bulgaria. Worth putting very much on the radar screen this one………….

Plexus Holdings

Plexus has announced a contract from Centrica Energi Norway for supplying its POS-GRIP 18-3/4″ surface wellhead system for an appraisal well in Norway. The order was from a client that had used Plexus before and drilled eight wells offshore Norway extremely successfully, once again the company getting repeat business from existing customers.

Readers know just how much I rate this company and that my biggest regret is the relatively modest free-float with the founder holding tight to his 71% of the company. Unusually I am putting both the 1 and 2 year charts here, this is because earlier this year it temporarily lost its premium rating, fortunately I didn’t lose faith and you can see the bounce recently, the two year or longer charts show just how much the shares have done to reward investors, I see that continuing to happen.

Amec

As predicted last week, Amec and partners in NMP have won the extension of the contract from the NDA for Sellafield operations. There had been much discussion about this contract and indeed in Parliament and other committees some had felt that the last few years had not been a total success. The renewal of the contract details are not revealed but one suspects that the new targets are fairly onerous and what the companies earn from the deal will be very much performance related.

Long term I’m very happy that Amec are involved in this business and the contract win is important but it should be borne in mind that not unlike awards in other parts of the business, customers are ‘sharpening the pencil’ a bit.

Quadrise Fuels International

I wish that I had been following Quadrise for longer as the company has been flying in the last few months and my knowledge of the heavy fuels market is still extremely poor. I do however think I can spot a game-changing concept when it is put in front of me and so far I think this company has such an opportunity. Today’s results themselves are not key to the investment case but the various announcements pre and post the year-end most certainly are and the business is being de-risked as the company says ‘albeit at a modest cost’. This is definitely one to keep watching, I don’t think we have missed the boat only having gone positive this summer as lots of good news is yet to come.

And finally…

Some interesting football at the weekend, star of the show was undoubtedly West Ham who went to White Hart Lane and won 3-0, The Baggies continued where they left off last week and probably deserved all the points, it helped that Wilshere played like he normally does for England, total pony….

And from the Daily Mail a story that makes you understand all those stories about Harry Redknapp, as he met someone at a casino who claimed he was a jockey, Harry gave him the red carpet treatment at Spurs in return for tips that never came in until…………………he met the real jockey at the races and found out he had been done by a washer-upper from a pub in Newmarket!!

In the Grand Prix the usual car won but if it’s true that F1 boss Bernie has asked Pirelli for dodgy tyres then fine but the Pirelli bloke on the telly didn’t assume guilt but dished it out to drivers that had rubbish rubber on which exploded at random! Hardly an advert for Pirelli wouldn’t you say…………………?

Treve won the Arc in some style how irritated must Frankie be after being ruled out injured for the big race, a good day for the Heads and a bad one for the Japanese, if 2nd and 4th is a bad day.

And of course, Happy Birthday Greggo!!