WTI $104.05 +31c, Brent $109.07 +$1.74, Diff $5.02 +$1.43, NG $4.56 -6c
My friendly traders say that the Brent market was well bid yesterday albeit on low volume as the contract expiry is imminent. Good buying from the ‘right players’ in the window left the market a bit short and even the news that Zawiga port in Libya had re-opened didn’t put them off. WTI was less impressive, analysts expect a stock build in the API stats tonight of around 1.5-1.8m barrels. Unsurprisingly the situation in the Ukraine dominates and with talks planned in Geneva on Thursday between the US, the EU, Russia and the Ukraine it will be tense up until then.
The idea of Glencore buying Caracal has been mooted more than once recently so the premium to the share price was a bit of a surprise, not that I think that Glencore has overpaid, this is a perfectly complimentary asset in many ways. Partners in Chad, it makes a lot of sense for Glencore who have been building their West African exposure bit by bit, this adds significantly more at a stroke. The Caracal shareholders will be pleased to be out of the Transglobe deal and will be able to trouser the cash when the rest of the exploration sector is struggling to get any value. This deal may do something for deals in the sector but don’t hold your breath, there are plenty of cheap stocks out there and so far, limited M&A rescue opportunities.
Another contract for Kentz, this time in Canada from Suncor, a new client for the company won last year. The $64m award is for telecoms work in the oilsands and is further scope on a contract won last year for this client. Unlike some of its peers, Kentz continues to do well in Canada and their telecoms expertise bodes well for the future especially in LNG where they are dominant in the market. The Kentz price has drifted from the recent highs and I am confident that they will continue to do very well.
Results today from Northern and as is often the case there is nothing new in the figures. 2013 was a very mixed year for the new management team to drop into and what happens this year will be far more interesting for shareholders. Write downs in Italy and dusters in French Guiana didn’t help but there is a light at the end of the tunnel in Canada. Views on this stock will be formed by the presentations the board give to shareholders and analysts in the next week or two and having spoken to the CFO last week I look forward to a chat soon. There will be much talk of ‘refocusing’ and although the shares have had the most modest of bounces in recent days it may still be a long haul but lets wait and see the presentation.
Worth noting that Temasek has paid $150m for a stake in Seven Energy in Nigeria and at the same time the World Bank through IFC has bought a stake for $105m. I once thought that Petrofac were the only buyers of this stock so proof maybe that things are actually happening in West Africa what with this and the Glencore deal.
I hear that the Independent is reporting that Providence Resources, along with Lansdowne Oil & Gas may have finally done a farm-out deal on Barryroe. The paper is talking about a ‘large American operator’ being the last man standing in the bidding process and an announcement will happen anytime soon. You will excuse me for not standing on one foot waiting for this as I have been burnt big time for expecting something big and a long time ago for this deal. The numbers that I had about a year ago would probably be two or three times what might now happen I imagine be appropriate but would, if true still be above the current share price for both stocks. Very cautiously indeed, watch this space…
Tangiers Petroleum has appointed a non-oil man as its new MD but apparently he has ‘strong commercial and strategic skills’, I wonder if finding oil is one of them?
Taipan Resources run by Max Birley has always been a stock I have followed as albeit very small has had some interesting acreage in Africa. Most interesting is block 2B onshore Kenya which was first farmed into by Premier and very recently Tower Resources. News yesterday that Steve Lowden, a former colleague of Birley’s has joined the Taipan board as a non-exec director with the mandate to help Taipan acquire further assets and acreage in Africa. Watch this space very, very carefully for the time being and expect the sparks to fly.
I don’t often comment on other brokers comments, it’s a no win situation but I must share a great comment I read this morning. A broker putting Sefton Resources out as a ‘screaming buy’ must be on something not available over the counter…
An interesting game in the Prem tonight, at this time all games are must win and its The Gooners hosting the Hammers and 4th place and the Champions League spot is between Arsenal and Everton who’s must win game is v Man City…
County cricket is so soft I wonder whether we shouldn’t go to a Shield system, I say that because Alastair Cook and Ian Bell who couldn’t buy runs in the winter both got hundreds yesterday to add to Matt Priors century last week. With potential opener Sam Robson also into three figures everything appears to be back to normal again and we can forget the winter of misery ever happened. With Carberry and Trott both missing out the side is almost picking itself…
Another City legend who ran the marathon on Sunday was Robert Emmet of Throgmorton Street Capital and very well done to him for chasing Mo round the warm streets, never again he says…
And finally I cant believe that I am missing out on the Offshore Well Intervention Conference in Aberdeen this week, what was I doing when this invite came round…!