WTI $98.42 -87c, Brent $110.80 -41c, Differential $12.38 +14c, NG $4.23 -20c

Oil price

Much of a muchness as crude eases after disappointing factory  activity in  China, the December number showed the slowest growth in the quarter.

The API stats also showed that crude inventories in the US are falling, last week the drop was 5.7m barrels almost double the 3m consensus forecast.


Confirmation that the purchase of LNG assets in Peru and Trinidad and Tobago from Repsol has completed at a total cost of $4.3bn was announced this morning. Although we have known about this for a long time it is a sign of the significant portfolio activity I expect to see in the next few months from the company. There will be divestments, most obviously the  Woodside stake and Nigerian assets amongst others but also acquisitions and investments as the new CEO puts his seal on things.

Ophir Energy

Ophir announced this morning that the Mlinzi Mbali-1 well (80%), their first well on block 7 offshore Tanzania is water bearing and will be plugged and abandoned. Whilst this is a big disappointment, it was a high risk, high impact well targeting the Cretaceous and Jurassic in the block. At 306p, down 6.5% today the market is probably looking at the significant development costs ahead rather than the reserves the company has found in such a short period and appears a bit short-sighted to me. I still believe that Ophir, certainly at around 300p is a big pool of value and must be high up the list of M&A targets maybe even this year.

Caza Oil & Gas

News today that Caza is drawing down another $10m from the Apollo facility making $35m to date. The money is to be used to fund development drilling at West Copperline and the company has announced that it has contracted a rig to drill two horizontal Bone Springs development wells. One of these (3H) spudded yesterday and if it and the second well (2H) are successful then production facilities are in place to be able to start selling oil and gas immediately. This would be a significant boost to Caza’s reserves but also it goes without saying good for revenues as well. I am enormously confident that the company will repay faith in the managements moves in the last year or so and with market rumours that a persistent, large seller has been depressing the price, the technical downward pressure must end soon. With revenue coming in, the opportunities for Caza to add to its portfolio and demonstrate its local expertise  should make this stock very appealing in the short to medium term.

And finally…

The theatre of dreams is indeed, as predicted becoming the theatre of disappointments as Man Who lose at home again. Claims for a penalty etc. may have been valid but no real excuse as taking over a team that won the Premiership easily last term is proving to be more difficult than most envisaged. All made worse by all the other teams above them managed to win and open up the gap.

In the darts van Gerwin predictably beat the Snakebite to win the title, all a bit downgraded without Phil ‘The Power’ in the shae-up.

Tonight sees the resumption of the Ashes in Sydney and England may make more changes, it looks like Root will open again with Cook and Gary Ballance will come in at No 5.