WTI $102.72 -$1.39, Brent $109.81 -21c, Diff $7.09 +$1.18, NG $4.62 +11c
Oil prices drifted a bit yesterday and Bent is playing with the $110 support level and WTI having failed to break through $105 fell on the inventory numbers. The API stats showed an overall build of 3.5m barrels which was way above expectations but crude held at Cushing actually fell by 1.51m barrels rather against expectations of a rise. Interestingly gasoline stocks fell sharply which is generally a good sign in the run up to the Memorial Day weekend, tonight’s API stats should give more information. Its US GDP today but don’t expect much, the numbers are very small at the moment.
For BP another day in court and another defat as they fight valiantly to have Macondo pay-outs blocked. The Fifth Circuit appeals court denied their request to block any payments while the Supreme Court decides BP’s fate. So what do BP do? Of course they are submitting another, second appeal to the Supreme Court to overturn the first decision and to nullify the second decision, still with me? Remember that the lawyers meters are still running throughout all this but BP must think that its cheaper than having to pay out to punters they don’t think are genuine, bona fide claimants.
Caza Oil & Gas
Another ‘exceptional’ result from Caza this morning and at long last the stock price is starting to genuinely reflect the potential value the company is creating in the Bone Springs play. I am glad I kept my faith as the underperformance lasted way longer than I expected as rumours of a big seller persisted and outweighed the good news with the drill bit.
So, the Gramma Ridge well flowed 830 b/d of oil and 4.63 million cubic feet of natural gas/d making for 1,002 b/d of oil equivalent. The well is a step-out from the Marathon Road and West Copperline successes in the Bone Springs play and the exciting news is that the 3rd Bone Springs sand is one of only 6 potential plays present on the property.
Caza exhibits what can only be described as potentially massive upside potential with these Bone Springs plays and even at 21p the scope for the stock price is huge, my initial target of 50p a share+ is now looking decidedly parsimonious and I am looking forward to a long chat with Mike Ford to try and get a feel of the upside, still a big buy.
Firstly I would like to get the Range Resources stuff out of the way! I have apologised in person to Rory Scott Russell for getting his name slightly wrong in yesterdays blog, my fingers were skipping along the keyboard as I rushed for a deadline, that’s my excuse and I’m sticking to it! Secondly, and I will try to get back to as many of the messages as I can later, (I’m off to town to attend a presentation by Peter Rose, excellent CFO at Hunting) my comments about shareholders were not intended as a criticism, rather a feeling that the management to me, appears to be working very hard to sort the situation out. I do have a huge amount of sympathy for longstanding shareholders who have had a very hard time and I think the news is getting better all the time.
So who was the best paid CEO in the US last year then? Step forward Anthony Petrello, CEO of Nabors who took a cool $68.3m for his labours at Nabors…
Falcon Resources have results out today but as I almost always say, its not usually anything in the figures that means much for the share price, in this case it is a couple of fantastic farm-outs with top international companies that has caught the eye lately. I am getting a lot of enquiries about Falcon at the moment and I will write something much more substantial after I have met the company. I think I am on the list for a meeting so hopefully that wont be too long, in the meantime its fully on the radar screen and on the face of it looks very cheap.
Trap Oil have also been on the radar screen for a while as they appear to have some good, rather undervalued assets in the North Sea if only someone would share their view. Today sees them sorting out the Suncor situation on Romeo and also cutting a deal with Prostar, a private equity vehicle who have apparently got a fund bulging with dollars ready to invest in undervalued assets and companies in the North Sea. Now form an orderly queue here please as I have seen and heard of quite a number of ‘undervalued assets and companies’ in the last year or so, many of which are just that. With a lot of M&A work going on in the sector could this be the mopping up of the smaller end of the North Sea predicted by a number of people for some time? Probably right to urge some caution but don’t rule it out, in the meantime I’m hoping to have a chat with Trap about what’s going on!
At every World Cup we wait to see what the geeks over at G Sachs predict for the winners, this summer is no different and with two weeks to go exactly they have given forth their views. I have to say that I am rather disappointed at their lack of creativity as the have gone for Brazil to beat Argentina 3-1 in the final but they would say that this is an objective, form only calculation and one I suspect the bookies agree with. They have also said that England wont get out of their group which whilst being a real possibility may just give those people who feel that its a good year to be no-hopers a glimmer of hope, after all GS don’t always get everything right…
In the much talked about match fixing game yesterday between Nigeria and Scotland in London, the sweaties nearly held on to a narrow lead but it ended 2-2 as predicted in the far east…
The Tiger is out of the US Open as his injury woes continue, in the old days that would have made a huge difference, alas no longer.
English cricket, what is it like? After a dismal showing at Durham the bowlers, led by Jimmy Anderson and followed up by Chris Jordan getting a Michelle (Fifer) took Sri Lanka apart dismissing them for 67 or so, whatever next?
In the NBA, the Indiana Pacers led by Paul George kept the Eastern Conference Finals alive last night with victory over the Miami Heat. George scored 21 of his 37 points in the 4th quarter as the Pacers managed to hold off elimination. Game five between OKC and San Antonio takes place early tomorrow morning.