WTI $97.80 +58c, Brent $109.63 +1.19, Differential $11.83 -1.36, NG $4.25 -4c
The easy answer is not much change after the taper tattle from the Fed, a combination of a modest reduction in purchases ($5bn less of T Bill purchases and $5bn off mortgage backed securities from January) left markets uninspired. With interest rates staying low for a long time (until well past 6.5% unemployment) the markets were remarkably sanguine.
The EIA inventory stats came in better than forecast at 2.94m barrels, expectations were of 3.5m.
The company announced yesterday that it has sold its 3 Texas power stations to Blackstone for $685m, with a supply agreement there is no need for them to own the assets, accordingly there is another£420m in the return to shareholders account.
Slipping in yesterday behind the G o M discovery came a duster offshore Brazil on former Devon acreage, the write off will be $1.08bn.
Wood Group Mustang has won a good contract in Canada where it is doing the detailed engineering and design of an integrated topsides jacket for the White Rose extension project in Newfoundland and Labrador.
Two pieces of news from Rockhopper, one that slipped by me yesterday of the CGT deal with the Falkland Islands Government and interims today. The former reveal a successful negotiation with the FIG whereby the company will pay CGT of $146m in total (FIG claim $296m) but only $42m down, having put $39m of that in the pot already. The remaining $104 wont be paid until first Sea Lion oil is due to pay its royalty in 2017/18 depending on your view.
Elsewhere there will be much to do on Sea Lion next year, an FDP and concept decisions and of course there may be exploration drilling towards the end of the year. Having been very right on Rockhopper for a long time I was carried out until I waved the white flag earlier this year. I am still convinced that the long term valuation of the stock will be much higher than at present but I will have to perfect my timing skills a bit before I have another go!
Providence is another stock where I have been too optimistic, I think its a timing thing but the farm-out of Barryroe has taken a long time and todays announcement hasn’t helped. Whilst it is nice to know that ‘discussions are on-going with a select number of international E&P companies’ it is still fair to say that there is not only no guidance on timing but also ‘whether any deal will happen at all’ …..gulp.
I am still of the view that there is plenty of upside in this stock and the dismal performance this year has been caused by the long drawn out farm-out discussions but it has been much longer than anyone ever imagined. However, patience being a virtue and virtue being a grace I suppose 2014 will be the year that Grace and indeed the Providence share price really will wash its face…
In the Clueless Cup last night Spurs’ misery was compounded by being beaten at home by arch-enemies the Irons whilst Stoke continued their dismal run against Man U losing 0-2. Semi-final draw kept the Manchester clubs apart so it will probably be a Sunderland Hammers final!
And farewell to Ronnie Biggs who like Nelson Mandela obliged film makers by dying on the day the movie came out. I understand that the BBC are planning to send 280 people to the Biggs funeral and hope that it will be hot and sunny for all their hard working executives to attend.