WTI $97.20 +1.16;Brent $111.88 -74c;Differential $14.68 -$1.90;NG $3.96 -2c
Much going on in the oil markets as is often the case around Opec meetings. Much has been made of a spat between Iran and Saudi but ’twas ever thus, this time Iran, through Oil Minister Zangareh took their chance to remind their fellow suppliers what might be if sanctions are lifted. Although the threat to put 4m b/d on the market is a bit rich it is the top end number I have been using, probably best to think 2.5m in the medium term.
Opec then predictably rolled over the 30m b/d existing quota for 1H 2014 and will assess potential supply growth from Libya, Iraq and Iran when it actually happens.
Brent weakened a touch and the differential narrowed sharply, again, after WTI rallied on the inventory stats. The EIA number came in at a draw of 5.59m barrels, this number having been trailed by the API, the analysts on the street returned shame-faced to the corner with the dunces hats on having had a consensus build of 300,000 barrels.
US GDP and jobs data today and tomorrow will ignite those who believe that if either show positive signs for the economy demand for crude will push higher.
Hunting has finally given in to the inevitable and is moving to US dollars for its financial statements. This is an inevitable move in this industry although not all of the UK’s international major service companies have gone down this route. Given Hunting’s exposure in assets and operations to the greenback this will be a more meaningful expression of those interests in the Group. I imagine though that this decision may not have been an entirely easy one, coming as it does from an old family business who will want to ensure that future dividends will not be eroded by currency movements…..
Further expansion of its portfolio offshore Southern Ireland comes today as the company has been offered a new licensing option in the South Celtic Sea Basin. The company continues to be a major player offshore Ireland and sees in this licence a number of structures including the Silverback anticlinal closure. It is clear that with the on-going technical re-evaluation in this area as well as others significant potential is being opened up.
The company has taken another three blocks in the Zambian licensing round being 25,28 and 29. The modest initial work programme shouldn’t exceed $500,000 and further evaluation can then take place. On block 11b, the airborne geophysical survey has been completed so next up is some 2D seismic to attend to.
I looked at some Zambian acreage as a well-seasoned geologist brought some maps and possible acreage in to me, at the time, and probably still the case, Zambia was a mining only area but if this was to prove anything up who knows what upside potential there might be. In the meantime Bowleven has a lot of work to do elsewhere and may need to sharpen up on its funding which wasn’t exactly brilliantly done recently…
It is interesting that Pura Vida, Tangiers and Jacka are all on the radar screen this morning, all are properly interesting outfits, all of whom I have met and really like.
Pura Vida first then, the company has raised A$13.5m at 63c in a deal that was ‘heavily oversubscribed’ which is good as it would been difficult for the PR people to try and explain anything less!
Following its farm-in to Sterling Energy’s block in Madagascar (an interesting place at present) the company is raising the money to prepare for the farm-out of its Gabon offshore acreage as well as to prepare for seismic in Morocco. ASX quoted but a very interesting play with excellent management.
Tangiers has made a ‘friendly’ recommended offer for Jacka of 0.468 of its own shares for each Jacka share, valuing them at 11.2 cents, an increase of 56% on the previous close of 7.2 cents. Into the bargain Tangiers will loan Jacka A$2.5m for 1Q 2014 funding.
Management wise the highly impressive Eve Howell stays on Chairing the new group but Bob Cassie of Jacka will become MD. The group will have very strong African credentials going forward, the highly exciting Tarfaya Block offshore Morocco with Galp, Tunisia, Nigeria where they have their stake in the Aje field, Somaliland with Genel and Tanzania. In fact outside of Kurdistan the new group looks like a mini-Genel, like bite-sized……
Egdon have farmed into onshore blocks PL161 and PL162 in the East Midlands with Scottish Power Generation, they intend to do some work on the licence and possibly drill an option well that would earn them a 50% working interest. With a lot of acreage in local prospective blocks Egdon must feel confident about prospects here.
The cricket ended up after day one about even, ominously Michael Clark is not out 48 but England may rue at least three dropped catches..
The football was exciting, Moyes still cant get things right as Man Who were turned over at the Theatre of Nightmares again, this time by his former employers. Wins for all the other leading clubs and a hatful of good goals from Biteman but not Robin….
And Sprinter Sacre is to miss the Tingle Creek at Sandown on Saturday, trainer states he has a bit of a bug.