Madagascar Oil and Lamprell

WTI $94.19 -61c, Brent $103.09 -1.59, B/WTI Diff – $8.90 -97c, Natural Gas $3.52 +2c

Good morning

There appears to be an ‘initial’ agreement on sanctions as President Obama has sent Secretary of State John Kerry to Geneva to cut a deal with Iran following a good meeting with the group of 6 this week. This will be the first phase in a broad diplomatic process that aims, over a period of six months, to wind down Iran’s nuclear capability. Whilst there will inevitably be some opposition, primarily from Israel and ‘lawmakers’ in the senate who want to crackdown further on Iran never mind the opportunity to make the world a more peaceful place…

See yesterday’s blog for breakdown of crude oil that may reappear on the market and of course added to that one can start to factor in money owed to Iran that is frozen in banks around the world which might be released in the early rolling back of sanctions.

Oil Price

I am putting in the Brent chart in again today although you’ve seen it plenty of times lately, it is showing that the support levels are falling away, the next level is $103…………..

Chinese data overnight was bearish for oil as the amount of crude oil imported was down, however there are major refining turnarounds ongoing at the moment and little stock build so this should be a temporary situation.

Madagascar Oil

This is definitely one for the radar screen, I’m starting to hear what may be the makings of a very interesting story down Madagascar way………….

Yesterday the company announced that it had reached a settlement with the tax authorities who had made claims against the company in respect of its filings for the years 2007-2011. The company has paid 10.026 billion Ariary ($4.5million) which settles all tax demands to date.

On the operational front things should start to motor next year, the company is expecting to declare the Tsimiroro field commercial in the first quarter of next year and this will be followed by a Field Development Plan in 2014.

Madagascar remains ‘cashed up’ with around $30m in the bank even after this settlement.

Finally it was interesting to note that ExxonMobil announced yesterday that it was going back into waters offshore Madagascar after a four year gap. The company walked away from the country after a coup in 2009, it seems that things are now a lot better after announcements of presidential elections and stability in the economy.

Watch this space, very carefully indeed it could be a winner, big time…………..

Lamprell

Lamprell has announced that it has successfully completed and delivered the first of two Caspian Sea jack-up rigs to its client. These rigs, which are fabricated and assembled in Hamriyah before being disassembled, transported to the Caspian and re-assembled in Astrakhan. I’m sure that on the way in this very long trip, the rig passes some excellent rig makers and assemblers making the choice of Lamprell even more odd. Interestingly I’m sure I saw this rig on the ground in Hamriyah last time I was at the yard………..even then taking it to the Caspian seemed odd!

I remain confident that James Moffat and team are continuing the progress of restructuring and the share price reflects this, every contract, every completed rig and cost saved is making Lamprell more investible. The underlying quality is undeniable, I look forward to going back to see how things have changed, as I understand it this visit is now scheduled for the new year when the new CFO has settled in, it can’t come a moment too soon. We remain very keen on the shares, there is still plenty of upside.

And finally…

So, AP McCoy finally made the 4,000 winners mark yesterday at Towcester an amazing feat unlikely to be bettered, certainly over jumps.

Cricket, rain for two days in an England match, no surprise you may say but this wasn’t Manchester or Durham but in Hobart, Tasmania, Australia!

Three fantastic rugby games to watch over the weekend as England face the Argentines and Wales take on South Africa over here whilst France take on the mighty All Blacks in Paris.

In the Premiership the Gooners are still 4-1 to take the title, if they beat Man Who (8-1) at the Theatre of Dreams on Sunday afternoon they won’t stay like that…..

And unbelievably, Chris Coleman, manager of Wales, will meet FA of Wales officials to discuss a new contract, I guess it must be the enviable record of 15 games, won 4, drawn 2 and lost 9 that will keep him in the job……………..