WTI $101.14 +85c, Brent $106.72 +57c, Diff $5.58 -28c, NG $4.44 -3c
The prices above are Fridays close and as is often the case, things change over the weekend and Monday opens up somewhat different. This morning prices are down, 50 cents for WTI and around a dollar foe Brent with the latter falling more due to developments on the Libya front. As I have been writing for a few days the rebels who have been blockading a number of ports have come to an agreement with the Government which at least for the time being people are giving the benefit of the doubt to. With Zueitina and Hariga ports apparently opening imminently and Ras Lanuf and Es Sider able to open in a fortnight or so Libya’s Oil Ministry is confident that at least 600,000 b/d can come on stream again and the country is set to get back to 1m b/d before too long. Whilst it has been wise normally to wait until the oil actually gets shipped and reaches the market, so far traders are expecting it to happen.
On the other side of the coin the economic news from the US in particular is not too bad, admittedly the non-farm payroll number missed consensus by a little but a previous month upgrade and the EIA stats showing a decent hike in gasoline demand are modest pluses.
Dart has announced this morning that on Friday it lodged the “Pre-Admission Announcement” for its Aim quote and dual listing (It will remain quoted on the ASX) and intends to come to the London market on May 12th. No new shares are going to be issued and with their prime assets in the UK, business in the UK and investors who understand and value the ‘transformational potential of the country’s shale gas reserves’ the move is ‘ a logical and value-adding step’ for Dart.
After the surprise on Friday of the CFO retiring, today its back to business as usual for Kentz with another big contract award. Ichthys is fast becoming the new Gorgon and in a way will indeed take over from it as orders from there will slow down in mid 2015. This contract is worth $570m to Kentz for the E&I scope and means that both E&I packages have been awarded to the company. To give some scale, around $1bn of contracts have now been won on Ichthys including temporary telecoms, underground cabling and SMP work, with 30 months of work and 1,200 staff this now substantially underpins forecasts for 2014 and 2015. It has been a good time for contract awards for Kentz and as reported in the final results a fortnight ago this has fed into a backlog of $4.1bn and the pipeline is over $15bn. I am aware that the shares have had a very good run since AmecGate but remain confident that this order book size and quality will feed through to revenue and ultimately convert to a significant increase in profitability. Accordingly, whilst no longer on a ‘laughable’ rating, the company is still exceptional value in a sector that offers long term upside to its better players, Kentz is just such a stock and remains a favourite in its field.
As the search goes on for the next CEO of Premier Oil, the Sunday Times claims a scoop by saying that a favourite has emerged and that he is Peter Kallos, currently CEO of Buried Hill Energy. The industry has been talking non-stop since Simon Lockett stepped down and so far most of the names I have heard have been from candidates at oil majors who, frankly have not excited me one bit. However, I do know Peter Kallos and think that he would make a very interesting choice for Premier, he ticks a lot of boxes in what is not an easy job to fill and knows the industry well on a world-wide scale. It would also, as an aside, be another major award for the ex Enterprise Oil alumni who, after the takeover by Shell have provided the British oil and gas industry with more senior executives than it is almost possible to mention. Watch this space and don’t forget that Rockhopper has been weak whilst waiting for the white smoke from Pimlico turns to black…
A couple of things going down in the debt market at the moment…On Friday Gulf Keystone Petroleum announced that they had completed a roadshow of fixed income meetings in the Us, Europe and Asia and that we should expect, this week, a privately placed debt offering of up to $250m. There is no doubt that this would be good news for the company and that the recent shenanigans in the market place will calm down, the sight of Evil Knieval or whatever he is called and others shorting and talking their books everywhere obscures the underlying position and at one stage I thought that my recommendation on TipTV to buy at 100p would be another awful call, again watch this space…Another debt market operator is Tullow Oil Who have announced that they have increased the size of their revolver from $500m to $750m and extended it to 2017.
In the almost daily event of a company stepping into the Scottish independence debate, today is the turn of Samir Brikho, Swiss/London resident and CEO of Amec who claims that a Scottish split would be ‘bad for business’ and ‘would create uncertainty at a time that the North Sea requires billions of pounds of investment to maximise oil and gas production and to pay for abandonment costs’. In an interesting interview with The Sunday Telegraph yesterday, after showing off pictures of himself with many world leaders, he talks at length about the Foster Wheeler acquisition and the potential for the combination. The diversification from offshore and upstream to midstream and downstream as well as to significantly enhance Amec’s geographical footprint is a major move and he claims the addressable market has just gone from $100bn to $300bn before cost savings of $75m are taken into account.
The short list for the Chairmanship of Glencore Xstrata looks mighty interesting with Tony Hayward, CEO of Genel Energy amongst other things leading the market. But in a rather amusing twist, the other two front runners are believed to be Sir Frank Chapman of BG fame and Roger Agnelli formerly of Vale according to the well-informed Danny Fortson…
Well, that was a massive weekend of sport across the globe…Lets get the disappointments out of the way first as the England women’s T20 team lost to the Aussies and in the tennis Great Britain snatched defeat from the jaws of victory in Italy. In the men’s cricket Sri Lanka managed to beat favourites India quite easily in the end.
In the Premier League the HubCap Stealers are still on course for the title after another game of penalties at Upton Park and the other interesting result at the top was the comprehensive win by the Toffees over the Gooners…Down at the bottom anyone could still go but Cardiff look in trouble, Norwich sacked the manager with odd timing and the Eagles and the Baggies will probably consider themselves safe…
In the new sport of silent motor racing Lewis Hamilton beat teammate Nico Rosberg in what looks like being an interesting duel, one they have been having for years.
And it was a spectacular weekend for the cock-up theorists… The Sheffield half marathon was abandoned for health and safety reasons as the water didn’t show but despite police road blocks to stop the runners, many got through to claim their medals in a race that technically didn’t happen. Now to the boat race, a competition that has never quite got it for me as overtaking appears tricky and partisan chaps in funny hats adjudicate, yesterday was no exception, just after they started, a clash of oars happened (what about lanes?), the light blue fella nearly catapulted into the noggin and it was game over, not exactly riveting? Finally, the starter in the Grand National didn’t have a clue whether he had let them go or not as 39 horses (bar the sensible one that didn’t fancy the idea) eventually went off despite, rather than thanks to the bloke in the funny clobber on a rostrum…