WTI $91.80 -92c, Brent $106.75 -50c, Differential $14.90 +37c, NG $4.27 +22c
Its dullsville Arizona today as Brent is trading lower but bounced off the crucial support of $106.36 with the front end of the spread strengthened by 3 majors and 2 trading houses but sellers are still around and they stalled the rally ahead of expiry. In WTI concerns that the API inventory stats would show a build of crude of around 500/- barrels weakened that grade a little more.
Following up from the Amec deal yesterday, the company seems to have received what might be described as muted support for its deal. Comments in the press were mixed but generally supportive, the FT wrote that it was tentative but a full price, must deliver on move into cyclical mid and downstream. The WSJ said it was ‘strategically appealing’ but not terribly cheap and would take ‘all hands’ to make the most of it. Most other comments appear to be giving Samir Brikho the benefit of the doubt given his skills but he has not got a bargain here. Speaking to some institutions here I detect luke warm support, probably ok for now but the jury is most definitely out and I would watch that 1039p support level like a hawk.
Its all going on at Sound Oil, a stock I have written about a lot recently, fired up partly due to my own curious nature with my dislike of investing in Italy and partly as a number of respected clients have asked me lately about the company’s investability. I will look at the deal announced today but as the conference call isn’t until Thursday(?????) comment will probably be best reserved until then, I am also meeting the grand fromages that day as well so Friday should be analysis time.
The company has announced some new directors, one of whom, Simon Davies, is underwriting an equity issue and loaning the company money to replace an existing facility. There is an open offer of £1.6m at 4.2p, a 33% discount on a 2 for 15 basis which looks attractive enough not to have been underwritten, if 4.2p isn’t cheap enough I would have packed my tent and gone home but never mind!
The announcement also discusses the funding of individual projects, specifically Badile and Nervesa where the company is expecting to farm-out whilst ‘minimising equity dilution’. As expected an asset backed debt structure is likely to be put in place for Nervesa. Overall the company are probably doing the right thing but all the companies exposed to Italy say the same thing, viz ‘we’ve got the right assets and having got this far we must develop them’. Fair enough but its only so good to be ahead of the pack in a snail race.
I should reserve judgement until Thursday but in the meantime I would say that there is little doubt that these assets are very good, will be properly funded and with the open offer, the company is set fair and very cheap. I hope that my long lamented desire for removing some of the eggs from the Italy basket or at least diluting them with assets elsewhere will be borne in mind and should that happen this could yet be one to own. More later…
More misery for shale watchers in Poland as Eni have decided to allow their three licences to expire. At this point I haven’t spoken to any of the Poland gurus but I’m sure the spin from Oisin fanning will paint a positive picture, watch this space…
The Gooners beat Villa to go to the top of the table, getting crowded up there, lets leave them alone for a while eh…?
Andy Murray cruises home in the Aussie Open first round beating Go Soeda 6-1,6-1,6-3 in over 40c temperatures where even water bottles left out in the sun were melting!
England were out on a cricket pitch again as they took on the might of the Prime Ministers x1, some things never change as Cook and Root both got 1’s. Ballance and Buttler got them out of jail, again and I would have both men in the test team end of.
And in the snooker, Judd Trump was knocked out in the first round of the Masters last night.