WTI $102.92 -39c, Brent $110.30 -17c, Diff $7.38 +22c, NG $6.06 -9c
So as the weary punters start to wend their way home after IP week the oil price remains flat, the influences in the last few days hardly changing much at all. In Vienna at the Iran and super six talks, progress has been made and a timetable set up for further dialog, as good as might have been expected. Troubles continue in Libya, Venezuela and in South Sudan where a rebel strike on oilfields at Malakal on the Upper Nile has cut production further whilst Angola has announced that due to maintenance work in March exports will be down by around 180,000?- b/d.
The EIA inventory stocks came out last night, a day late due to Presidents Day and as is often the case Wall Streets finest analysts didn’t have a clue. The build in overall stocks was 973/- barrels against the consensus guess of 2.2m.
Roll up, roll up as BvB’s sale of the century continues, todays bargain is the sale of their downstream operations in Australia to Vitol for $2.6bn. He might as well stay there as the Woodside stake must be next up for auction..
The company has announced that the recently purchased stake in the Norwegian North Sea, the Trell well on 25/5-9 in the Heimdal reservoir has come in as an oil discovery. Although relatively modest, the find is deemed to be 3.1-12.5m barrels of recoverable oil and is of course close to existing infrastructure. As Napoleon said, better to be lucky than clever and this is good news for Ithaca, one of my top tips at the moment.
On the flipside, Tullow cant buy any luck at the moment and its 7222/4-2 well on the Langlitinden prospect has turned out to be oil bearing but not bearing enough to justify a field development.
Gulf Keystone Petroleum
I haven’t written much about GKP lately as I know that they have a very busy quarter coming up and there hasn’t been much news recently as the company keeps its powder dry. Shareholders in GKP are notoriously savvy and also a tad impatient so the dearth of news has been how you say, uncomfortable. So what have they got to look forward to and what is good news and what is less so?
In terms of how much they are producing and more importantly selling, I think the progress is still a bit pedestrian, as although they have received payment for two cargoes they are still waiting for one more. PF-1 is producing at nearly 10/- barrels a day which is a touch light but with Shaikan- 4 being worked over this should get up to nearer 15/- b/d by the end of March. Shaikan-8 which was due to be a gas injector may end up as a producer after all and PF-2 is due to completion next month and three wells are being prepared to feed it with a target of 20/- b/d although with sales uncertain at the moment I wouldn’t ink in too much revenue quite yet. Finally on drilling, Shaikan -7 which was about to spud when I visited back in June is still drilling, after some equipment problems, now fixed, I understand that the well is around three months away from TD as it is still in the Jurassic with the deeper and dicier Triassic still to come.
So whilst that news is ok, if a bit tardy what else is to come? Well I expect a host of announcements in the next month or two, all connected to the move up to the main market one way and another. The move will be accompanied by a new CPR which I expect in the second half of March and although there are some analysts expressing some concern about more possible than probable and proven it will be an opportunity for the company to give us all some real detail on the assets. The move up process, like almost everything, has taken longer than expected but if this really is imminent then it should be good news, after that the company can release results and get more information into the market.
The shares, like a lot of E&P companies, have suffered in the malaise attributed to the sector and in no way reflect the substantial value that exists in its portfolio. Rumours of bids and even the successful court case have not boosted the price at all lately and the chart is looking dangerously close to the 150p support, any further weakness and 130p is the next level. The company are doing all they can on an operational level to deliver the goods and over the next couple of months we shall see what this will mean, the truth is that they will need support from other operators in the region to restore faith in what is a notoriously tricky political and physical region. Whether it be oil sales by Genel and DNO, drill bit success by Hess or Chevron or cohesion between Erbil and Baghdad, as ever patience will be needed, I still think that the upside from this level is substantial but will be dependent in the first instance by a good CPR. Watch this space…
I have been running through a few of my current recommendations this week, on TipTV on Wednesday I talked about Trinity,Caza, Africa Oil and Bahamas whilst on Proactive I discussed President, Andes, Trinity, UK shale ( IGas, Dart, Egdon, Alkane), Hurricane, Afren, Ophir, Fastnet and Sound oil, all will go up on the website in due course but can still be accessed before then.
So, none of the English teams playing in Europe this week managed to even score a goal and the return legs will be tricky to say the least, Spurs seem to be the best placed.
At the Olympics its a huge day for the curling team who are in the final later, silver is assured but gold the ultimate prize.
The English cricket team, having had a long winter holiday in Australia, are heading off to the Caribbean for a well deserved rest, put your feet up boys you’ve earned it.
The six nations return this weekend with the fixture at Twickenham being the pick of the games, no disrespect to the rest. Surely although Les Bleus are unbeaten, the Irish will think that a victory at HQ will get their hands half on the trophy.
Finally I cant finish without mentioning Vigo Communications, the newest IR/PR team in town who hosted a wonderful dinner last night which was the icing on the cake for all those weary from working so hard at IP Week. Unsurprisingly for such a team, they used their legendary pulling power to bring together an incredible guest list of oily executives old and new and having only been around for under a year they have assembled quite a client list, full marks to the team.