WTI $99.48 -28c, Brent $107.72 -87c, Diff $8.24 +1c, NG $4.69 +1c
With London and Asia closed yesterday volume was thin although Brent traded a reasonable amount. Economic news is not really having much of an effect, a cracking set of NFP’s on Friday with added upward revisions to previous months proved that it probably was the polar vortex after all. Good US services PMI and ISM numbers have also helped but Chinese manufacturing PMI figures were poor. Despite the Ukraine, Brent was ‘grinding lower’ according to a trader friend and if we get bad inventory stats tonight or tomorrow WTI will probably drift too. This week, US retail gasoline and diesel prices have fallen a bit as the big west coast refineries come back on-stream ahead of the driving season which may provide some support for the oil price in the short term.
1Q figures from Chevron last Friday were rather disappointing coming in at $2.36 per share against the whisper of $2.51. The market had not fully realised I suspect, that having less exposure to US natural gas reduced the upside reported by most of the other majors. Also, bad weather in Kazakhstan seriously affected lifting there during the quarter and the market responded by keeping the stock close to recent highs.
Fastnet Oil & Gas
Kosmos has announced the FA-1, the Foum Assaka well offshore Morocco has been p&a’d as not finding commercial hydrocarbons. The well did encounter oil and gas shows which proves evidence of a working system but no more. Although bad news indeed, it should be borne in mind that Fastnet are carried on this for two wells following their canny farm-out to SK last December and the company has exposure to not only that second well offshore but also an onshore programme, not to mention the Celtic Sea acreage.
I can hear people starting to get a touch panicky about Morocco now after this and the Cairn duster, but it is very early days and whilst the old adage of never ruining a good prospect by drilling it has some truth to it there is a long way to go.
An IMS from Salamander today although to be fair the market’s attention is likely to be less on the production guidance (the same 13-16/- b/d) and more on the possible sale of the company announced last week. The gas discovery on West Kerendan and the development drilling on Bualuang will have added to the asset value but that is probably now in the price.
The board of BG came out of the weekend’s press looking rather tragic, as suspected Mr Finlayson was given a silver revolver and a large scotch and then chose to resign for ‘personal reasons’. The board then decided to chivvy-up the asset disposal programme whilst at the same time saying it was business as usual. How the mighty are fallen….its breakupsville now.
Tangiers Petroleum were in town last week but due to the tube strike I was unable to meet them. Tangiers has, how you say, a rather interesting recent history and is now showing off its new board having also disposed of its highly regarded previous slate (this is getting repetitive…) for whatever reasons. We are back in Morocco here and Tangiers is carried by Galp Energia in the upcoming well but needs more money for the usual reasons.
Xcite Energy is rallying again today as it has announced a deal with Statoil and Shell to compare the Bentley and Bressay fields. As Statoil is the industry favourite to farm-in to Bentley, the jungle drums they are a beating and weary shareholders sense paydirt, this may just be a touch premature as this negotiation has taken much longer than they had expected to complete. The words ‘don’t hold your breath’ come to mind…
It seems that the fashionable way to voice one’s opinions on management is to set up an action group and according to the Daily Telegraph that is happening at Gulf Keystone. It sounds right to me as on Friday I was deluged with calls about GKP and the natives are certainly restless at least. The company say that it is business as usual ahead of results and presentations later this month and the AGM in July but there is undoubtedly some smoke…
Talking of restive shareholders takes me back to Wessex Exploration which I mentioned a little while ago, you will remember that a group of unhappy holders are trying to remove the board who have presided over a ‘95% loss of value over 2 years’ apparently. The company then announced that it had miraculously found a dream acquisition including off the peg management raring to run Wessex. According to what looks like a ‘very well informed’ piece by Gary Parkinson in The Times at the weekend, this dream is actually Andrew Cochran, late of this parish with some assets off the Philippines just waiting to be backed into Wessex. Don’t forget that shareholders have to agree not to remove the management on May 15th to be able to partake of this blandishment…
Make no mistake the Premiership is still up for grabs as the final shootout takes place over the next few days. With the Noisy Neighbours winning against the Toffees at the weekend the HubCap Stealers had to win against the Eagles last night to keep the pressure on and when three nil up it all looked as if it was going to plan, but the best laid of those ‘gang aft aglay’ and it ended 3-3.
Mark Selby, the Jester from Leicester, beat Rocket Ronnie in the snooker in a very good final last night and it could have gone either way.
The boxing was interesting, will Khan get a crack at Mr Mayweather I wonder?
And in the end the 2,000 Guineas was won by a big outsider but these races can be ruined as a spectacle when there are two races one each side of the track, bring on the Derby and Royal Ascot where we will learn more.
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