WTI $101.94 +50c, Brent $110.33 +$1.22, Diff $8.39 +72c, NG $4.70 -3c
Its a very late and short blog, I have been in the smoke at meetings but there are a couple of items to mention. The oil price is going up because of the Ukraine, nothing more and nothing less. One hopes that soon it will be time to sell it, and the differential as is normal on these occasions as there is plenty of the stuff around.
Another US oilfield service company comes in with figures that beat the whisper although with Weatherford it is masked to an extent by the restructuring/downsizing that is occurring at the moment. The best bit about the statement is the 2014 guidance where EPS are now in the range of 110-120c against current consensus of 100c. Another very positive statement on current trading and into the bargain they are expecting annualised savings of $263m in the process.
Some very good news from Sound this morning as they announced a new, substantial institutional investor in the shape of Continental Investment Partners. Overall, this is a £14m injection of cash and loans at a blended price of 9p a share against last nights close of just over 5p which is very good news. They are taking 100m new shares at 8p and loaning £6m at 10% with warrants of which £1.5m is available straight away. Ending up with 23.41% of the company before exercise it looks like both sides come out of the deal pretty well and there is the intangible of a highly supportive major shareholder that is well known and well connected in the country into the bargain.
I am still expecting, as I have been saying for some time, a number of other transactions that will do even more to beef up the share price. The company say that the Nervesa farm-out is progressing well and I suspect that behind the scenes a Badile farm-out is also on the cards. As you will know, that despite my aversion to over exposure to Italy I feel that Sound is being well run, is now strongly financed and there is more to come, good news indeed.
Interim results from Egdon this morning but that as usual means nothing compared to what has been going on in the company in the period. The time included the Total deal which validated not only their own strategy but rubber stamped the nascent UK shale gas play which is being strongly backed by the UK Government. Along with the results came an independent review of the potential of some of Egdon’s Northern England licences by ERC who have given the company an estimated mean GIIP of 18 TCF of gas on a range of 8-31 TCF and a mid-case of 8TCF. Unsurprisingly the company’s internal management estimates are higher, ranging from 8-48 TCF and a mean of 26 TCF but hey, it wouldn’t be the same if the companies ever agreed with an independent reservoir evaluation specialist would it?
Overall Egdon is in good nick, just after the period end they raised £3m which was obvious and sensible after the share price took off and the company has net cash of £3.75m having paid off a £1m loan facility. The next year or two will see plenty of action in the conventional and unconventional parts of the portfolio and I expect continued wheeling and dealing in the asset market as well as participation in the oft-delayed 14th round expected 2H 2014. As I have said many times before, as one of the earliest proponents of shale and unconventional resources in the UK, I believe that investors have very limited opportunities to participate in the sector and Egdon is albeit at the smaller end, most definitely one of them, maintain the faith.
Tullow have yet another duster, this time offshore Mauritania in the Tapendar-1 well which encountered no hydrocarbons, it was admittedly a very long shot.
Genel are to issue $400m of senior unsecured bonds with a 2019 date on them, this is for general spending and not unexpected.
And Seplat rang the bell to open the Exchange, I am looking forward to meeting this company before long, I like what I see so far.
As we approach the end of the footie season it is hard to see anything but the trophy going to Anfield and their consistency, particularly at the crucial end of the season has been admirable. Sunday sees them play Chelski 2’s and their run-in is nearly as easy as that of the Gooners. Elsewhere Giggsy’s Red Devils will get the Theatre of Dreams jumping but far too late against Norwich on the telly tomorrow, but it will be funner than so far this season. At the bottom of the table can the Maccams keep up their recent wonder form against Cardiff and can Swansea push Villa into danger? Also in danger the Baggies entertain the Hammers, we may be no closer to the final three on Monday morning!
Apparently Rangers are in a ‘precarious’ financial situation, tell me another as management beg for advance season ticket sales and want a £30m share issue and pronto. A shame this is happening as the genuine fans mourn Sandy Jardine, a club legend.
Also it’s the Heineken Cup semis this weekend as the Sarries take on Clermont Auvergne and Toulon play Munster, I wish that I could hand on heart say it would be a Sarries-Munster final but its a long shot.