IEA, BG Group, Amec, Bowleven, French Guiana stocks, Tullow, Ophir, Longreach

WTI $93.06 -2.08, Brent $105.89 -13c, B/WTI Diff – $12.83 +1.96, Natural Gas $3.65 +7c

Good morning

There’s a fair bit going on this morning, typical when it’s so busy with other meetings etc! I will give a brief synopsis of each announcement and try to follow up with more details etc tomorrow.

Oil Price

Interestingly my guys in the market are telling me that Brent is feeling quite firm although last night it nearly touched $108 before settling back at $105.89, at least above the crucial $105.50 resistance. With December roll imminent shorter contracts are seeing buyers and the Dec roll buying is still to come, the Chinese are the best buyers in the market as well as refiners buying back shorts.

If only WTI was so well bid……………………………….stocks are to brimming with the EIA inventory number tonight expected to be +800/- and forecasts of higher and higher US production are all over the shop.

IEA

Talking of the IEA they have had a lot of publicity for their latest report which addresses both the US cheap energy situation and its rapidly rising production. As we have said many times, the ability for cheap shale gas to fuel US industry is fantastic and foreign companies such as Vallourec, Sasol and probably Shell are moving in with big multi-billion dollar projects.

The report also says that they now expect the US to be the No 1 oil producer in the world by 2015 but have cut their forecasts for longer term dominance.

BG Group

BG has announced that Martin Houston, COO, has stepped down from the Board and the Group Executive Committee with immediate effect and will retire from the Group by 31 December 2014. He will be replaced by Sami Iskander, currently EVP Operations.

This was to be expected, maybe even sooner as the Board overlooked Martin for the CEO role earlier this year, the only surprise is that he is staying all next year, maybe a contractual situation?

Amec

The company has announced a contract with GDF for the hook up and commissioning of the Cygnet gas field in the southern North Sea. This follows on from the FEED contract so it comes as no surprise but is nevertheless another good contract.

Bowleven…………………………….

As you know this is a stock I have never been happy with and today’s news only feeds my bearish stance, normally I am caught out with a bullish story of some sort and I trot out the ‘get out of jail free’ story, today the mighty houses of Merrill Lynch and Barclays have managed to raise £13.3m at 45p……………………

Shell/Total/Tullow/Northern/Wessex

Another duster in French Guiana for the above consortium as the initial excitement of Zaedyus disappoints for the fourth well in a row. So it’s back to square one and probably many months of testing for the Shell operators whilst the smaller members try to decide whether to stick or twist. To be honest Wessex have already thrown in the towel and Northern are financing their share already, this might push them over.

As for Northern its not such a problem, they can afford to wait and see what the other guys do and mop-up Wessex costs along the way. The decision won’t be easy, the size of the initial discovery was huge and it must be worth another pop………………..

Tullow Oil

– From Daily Flow Test –Dougie Youngson

Our focus on today’s IMS was the progress on the TEN farm down in Ghana. Whilst all of the key contracts have now been awarded, Tullow is expecting bids later this month. Given that we are rapidly approaching Christmas, we feel that this process is now unlikely to be completed this year which would be a disappointment.

The planned shutdown at Jubilee was completed ahead of time which was a positive. Production will now average 100,000bbl/d in 2013.

In French Guiana, the latest well has again proven to be dry. It would appear that the geological model for the original discovery is not fully understood and will need to be revised.

The financials look in line with our model, but the TEN farm down will be crucial in terms of managing the capex profile moving into 2014.

We feel the share price will fall today

Ophir Energy

– From Daily Flow Test – Dougie Youngson

More positive news from Tanzania at Ophir’s latest appraisal well Mzia-3 (OPHR: 40%). The resource base has been upgraded by 0.7tcf to 5.2tcf. The market’s attention will now be on the crucial Mlinzi exploration well (OPHR: 80%) which will spud later this quarter and is targeting 2.8bn boe of net resources (CoS: 20%).

A good result today and we would expect the share price to strengthen.

Longreach

Has announced that has decided not to pursue the dual listing on the Aim market ‘at this time’ as it is too busy………………………………………chart looks pretty grim I hope they weren’t hoping to raise a lot of money…………..

And finally…

England’s cricketers struggled at the SCG on their latest warm-up game, having started well, taking 5 quick wickets they toiled for the rest of the day wicketless.

Misery for the brilliant Alex Corbisiero who is injured again and will miss the All Blacks game on Saturday, I do feel for him and chatting to his dad this morning on the train (he works in the city) the lad is totally gutted. In addition to that Manu Tuilagi will likely miss the six nations with his injury.

Lance Armstrong appears to want his ban lifted but the President of the World Anti-Doping Agency says he needs ‘something close to a miracle’ for his lifetime ban to be lifted…………………..