WTI $102.59 +76c, Brent $109.52 +1c, Diff $6.93 -75c, NG $4.86 -24c
Note the differential between WTI and Brent, now below 7 bucks as for various reasons WTI remains more popular and not just because of the cold weather. Last nights inventory stats showed a very small build of crude (68/- b) against forecast consensus of +1.2m tightening the market. The product figures that have been all over the place lately, this time definitely due to the cold weather, were mixed, gasoline showed a big fall in stocks of 2.8m barrels against analysts guesses of a build of 1m indicating the country getting back on the roads. Distillates came in with a modest build of 338/- barrels foxing those scribblers who again got the sign wrong expecting a draw of 1.2m barrels.
Also look at the natural gas price, at $4.86 it is flat on its back, remember it was $6.41 in intra-day trading only one week ago….
Lots concerning Repsol after yesterdays news about YPF and the $5bn settlement in Argentina. I have been a big fan of the stock and in the second half of last year the performance was very good, this year it had a bit of a dip but is heading back to high territory. Recent worries about the situation in Venezuela should not be ignored, nor the capex diminution from Petrobras but the fact that a deal has been done is good and the company can look forward from what is still a fairly cheap rating.
For Argentina, this is to me a very important deal too, I have been saying for some time that although the political situation in the country cant change until next year, the will to draw in energy investors is crucial and couldn’t happen until this closed. I have mentioned the Vaca Muerta a number of times recently and now it should be able to attract more inward investment I expect to see much more activity here. It will come as no surprise that I think in terms of quoted stocks, investors in the UK should continue to look carefully at Andes Energia and President Energy.
To be frank there isn’t anything in here not already discussed at the time of the operational update or Simon’s resignation. Production will remain flat and the profit figure is down after impairments. The divvi is unchanged and everything depends on who the board decide the new CEO is to be. No policy, such as farm-outs of Sea Lion or Catcher are under way, nor will they be until that person arrives at his desk. I still avoid the company for choice as I perceive better plays across the board in the E&P sector but it is a good stock to trade when clearly at one end of the range or the other, trouble is, at the moment its in the middle. Wait until the appointment is made and a direction for the company is indicated I suspect.
Kentz announced yesterday while I was up to my ears with Weir and Petrofac that they had won a contract at the Ichthys onshore LNG plant in Darwin, Australia. Make no mistake this is a very good contract to win, in total it is worth $640m to the UGL Kentz JV with a 50:50 split, so to put it into perspective it is 11% of Kentz’ year end backlog of $3.1bn. Also this is for structural, mechanical and piping work and I suspect that with other pitching in for work, getting this part is a real bonus so stand by for more good news. The shares actually fell yesterday but I heard that there was an overhanging order the night below at 777p which cleared the market as this was coming out, either way this is great news for the company and investors. With the share price approaching 800p, I often get asked if the run is over for Kentz, which is my favourite service company at the moment, the answer is that if they continue to deliver work like this and with more to come, the rating is, as yet, still undemanding and its still a buy.
BP lose their latest battle in the US Courts as a judge denies them a chance to halt payments to fishermen etc.
Transocean reported a sharp fall in revenues and profits for 4Q 2013.
Rockhopper has appointed Stewart MacDonald as its new CFO.
A sign of the Financial Times, Petrofac’s full year results didn’t even make the printed version of the FT, a lot of mickey mouse tiny companies did though…!
Welcome to Hell, Chelski got a draw in Istanbul and became the first British team to get a point or a goal in the Champions League last night, tonight the Boropa Cup continues with Spurs and Swansea in action. Did you watch the Schalke-Real game last night, it was a true demonstration of class, even Bale looked top class, (shame he’s not playing tonight in the Boropa), mind you best goal was for Huntelaar at the death for the Germans and would Ronaldo have been subbed on a hatrick like Bale was..?
Muzza powers through the Mexico Open, Ayman Asfari will be able to see him if he gets lucky!
And the Merkelmeistress is in town, addressing MP’s and Lords and taking tea with La Reigne, DC keeping very closely in touch…