A very good morning for the diehards who are still craving the few bits of news that we can find out there in the energy sector! I have a few comments on the oil price today and two companies, one doing a bit of portfolio restructuring, one adding to more of the same, in the latter I have managed to get the comments of the CEO already this morning.
At the moment, without a huge amount of pressure I think the oil price will continue to remain solid, outside influences are modestly bullish and bad news from over-supply or demand weakness are not obvious. US GDP figures were revised up for the 3rd quarter from 3.6% to 4.1% and gasoline prices are picking up in the US, with new year refinery maintenance that might take hold a bit more so a small positive for margins maybe.
Internationally, news is also favourable with export shortages in Libya still, Nigeria and now South Sudan where although the total exports cant possibly exceed 250/- b/d top whack and shouldn’t have any effect on a market that demands over 90m b/d. However, the FT managed to create a headline today of “Oil fears over crisis in South Sudan” which is bordering on the irresponsible…
Sound Oil has announced the award of the Santa Maria Goretti permit from the Italian Ministry of Economic Development which itself must be a non-sequitur. SMG as it is to be known, is another low-risk onshore appraisal which with modest costs and high gas prices will over the long term profitable. Sound will continue to attempt to diversify outside Italy through acquisition and are looking at other Mediterranean prospects and indeed onshore opportunities as well.
Todays deal is just fine and will no doubt add to the value of the company long term, the market has raised a small glass of Prosecco to it which is just fine and dandy. What it doesn’t do is address the problem I keep getting asked about, viz the miserable performance of the shares and whether one should buy them as they must be incredible value. I intend to visit the company as soon as possible in the New Year to find out a bit more about strategy, as, without geog diversification, this is a nice cheap pool of value and it will remain just that, the market and me are hoping that James Parsons and of course the irrepressible Stuart Joyner can deliver the goods…watch this space.
A bit of portfolio restructuring today from GP which is on my radar having been a bête noir stock for a long time. The company has decided to remain onshore Tunisia by buying up the remainder of the Chorbane Permit at a cost of $1.75m whilst offshore Tunisia has gone, with the company relinquishing its Kerkouane Permit and Pantellaria Licence. In Colombia, GP has farmed-out to Sloane investors their onshore Putumayo Area 14 and Llanos Area 50 acreage with a smart deal that gets them carried and they keep 55% and operatorship. Still very much on the radar.
The big game of the weekend is tonight as the Gooners take on Chelski which will be interesting after wins for both the scousers at the weekend and Spurs yesterday. Malcy Mackay is still in a job which is some feat after Mr Tan came all this way to sack him, actually he wanted Malcy to walk and save him some money but that was never going to happen.
Last night in the NFL,
In the first of the televised games, Carolina edged out New Orleans 13-17. Victory against Atlanta next week will secure the NFC South for the Panthers. The late televised game saw the Patriots smash the Ravens 41-7. The reigning Super Bowl Champions now face a tough task to make the playoffs. The Eagles beat the Bears in Philadelphia. Chicago must now beat the Packers next week to take the NFC North title. The Detroit Lions hopes of making the playoffs were well and truly ended by the Giants after an overtime win. The Lions were looking promising but have now lost 5 of their last 6 games. The Broncos secured the AFC West title with a win over the Texans. Kansas City lost to the Colts but had already qualified for the playoffs. In tonight’s game, the 49ers play the Falcons.
And the highlight of the British rugby weekend was at Gloucester where an inflatable ball broke the crossbar in the pre-match antics and delayed the game by half an hour, my how we laughed!!!