WTI $97.32 +59c, Brent $107.58 -69c, Differential $10.26 -$1.28, NG $4.73 +4c
A bit of something and nothing on the oil price front as neither WTI nor Brent reacted much to various pieces of news in the market place. The cold weather on the east coast showed through in the distillates inventory stocks number with the EIA reporting a draw of 3.2m barrels against consensus expectations of 900/- barrels. The drawing in of products to the hungry east coast market reversed the longer term trend of the normally export led market from refineries up there but I’m sure it will only be tempory. I highlighted the natural gas price yesterday and today it has crept higher, what says $5 natural gas before winter is over?
Worth looking at the EIA’s report on gasoline stats that show that retail prices are at a three year low and according to them will fall for next two years. Against that, 2013 was a record year for US car sales, the highest since 2007 although gasoline costs are down 6% on that time which tells you something although I’m not sure what!
Cairn has announced that the Income Tax Department of India has contacted the company to ‘discuss’ its income tax assessments for the year ending March 2007. Whilst these ‘discussions’ take place Cairn are seemingly banned from selling any more of its stake in Cairn India.
This seems like a storm in a teacup but will probably have created a minor panic at the treasury department in Edinburgh as the number crunchers go back six years to check the tax bills and their submissions. Watch this space, certainly until we get a better picture of how Cairn see the situation.
Don’t say you weren’t warned as President has tripled since September last year and could easily be an outstanding stock for this year. (See my video interview on Interactive Investor on www.malcysblog .com )
Today the company announce that the independent audit of their Paraguay resources ahead of the 2014 drilling programme are ‘substantially’ ahead of expectations and those expectations were pretty high to begin with.
For President this is a new onshore hydrocarbon province in a politically stable country with a good fiscal regime and little domestic production creating instant demand for anything that might be discovered.
For full details of the RPS report you can as they say, go to the President website where this mornings presentation is now on display and it is very impressive. Paraguay has seen pretty limited drilling up until now, so when the 2014 campaign gets under way in May, all eyes will be on President as they look to drill the Cretaceous and Palaeozoic plays in the country. They have 791 km2 of 2D and 1054 km2 of 3D seismic data which has thrown up 130m mean risked boe with a risked net to President of $2.4bn of which 75% is oil and 25% is condensate.
My view on President has always been very positive and this is an under researched, rather forgotten stock with the tag of being in the ‘too hard’ category with its historical Argentine tag. For me this is perfect as one by one, the lazy analysts in the city will be forced to look at a stock which now has a market cap of well over £100m. Normally when a stock has performed so well these analysts will, in order to have to do any work, say that its too late and having tripled there is nothing to go for, this excuse is equally invalid, if the upside is even partially proved President could be five times as big as it is now in a year or so’s time. Well financed by the World Bank and with good management, the risk in President as I always put it is not being in the stock and as I said at the top, you have been warned.
San Leon – Cracking the code?
Time pressure yesterday meant that I couldn’t include San Leon’s successful well result and it is worth having a look at as Lewino- 1G2 well as it appears to have moved SL much further down the road to ‘cracking the code’ as Mr Fanning describes it. Now I’m sure there are plenty of people who know much more about Poland than I do but the fact that a vertical well fracced and successfully flowed gas at 45-60/- scuffs a day is pretty positive. The statement says that it could be 200-400/- scf/d and next up will be a horizontal well with a multi stage frac. Whisper it very carefully but could this be the break through that many people have been waiting for.
News this week that at long last the Hurricane IPO is about to happen. I have been looking at Hurricane for many years and have been most impressed by the persistence of Rob Trice who has been in the basement since he was at Enterprise Oil. The money raised will go on the Lancaster prospect which the company think will cost £40m. This will be an interesting one for the market to assess as it is a genuinely rare beast in that fractured basement reservoirs are yet to be run of the mill developments in the North Sea although are found elsewhere in the world. Hurricane has a number of other potential basement reservoirs and it will be worth a read when the prospectus comes out.
As Juan Mata joins Man Who from Chelski whatever happened to the old unwritten rule of not selling to your rivals? Well firstly Chels probably don’t consider them to be any competition and they have now played them twice in the League, something Mr Wenger is most hacked off about. Secondly it may be that Chelsea have done a deal with Man U and relaxed the inter-club trade off rules in the hope of persuading them to sell them Wazza in the summer…?
Hardly any decent games in the FA Cup this weekend, even the minnows couldn’t get a big money game at Old Trafford this time..
England win a cricket match should almost have been the headline as the elusive victory was achieved doing handstands this morning, shows how easy it is really!
Rafa cruises past Roger squashing the chance to have an all Switzerland final and will add another to the Mallorcan’s slam tally.
And those of you who have been reading for years will know that I cant let Davos go without expressing my usual opinions of the total waste of time and money that the charade in the Alps is. If you are a Prime Minister or political hanger-on go back to your country and stop wasting all our money, if you work for a company you should know better and the CEO’s who think its money well spent should hang their heads in shame…That’s that off my chest for another year then!