WTI $100.26 -51c, Brent $108.04 -9c, Diff $7.78 +42c, NG $4.57 -17c
A quiet day in oil markets with the Ukraine still nervous ahead of the weekend and talks between the nuclear experts in Iran +6 being ‘useful’ but still hard work ahead of next weeks senior meeting in Vienna.
A fairly modest blog today as I have a number of meetings and of course the PFC conference call has taken time at the opening.
Having got much more positive about Petrofac after the last meeting, today they delivered a curates egg of a trading statement which was very positive in major division ECOM, with a spectacular quarter on the order front but some negative news from IES. The order book is a record $18.6bn after that 1st quarter of $5.5bn in total and there continues to be strong performance in EPC. IES has been hit by the delay of around six months in delivery of Greater Stella and some delay in Ticlen. Also there is a dilution of Seven Energy post the fund raise there as PFC reduce to 15% from 20% and now don’t recognise earnings only dividends. Better news from IES comes from Mexico and Malaysia and with the cut back in capex next year will see spend of nearer $600m rather than previously anticipated $800-1000m.
More on PFC later I hope but this is clearly a small fly in the ointment and those critics of IES and conspiracy theorists post Andy Inglis’ departure may have been proved accurate. On the plus side this should see a slimmed down and profitable IES but mainly Petrofac will concentrate on its basic and core strengths, on the minus side having nearly clawed its way back to earlier profits expectations net profits are likely to be at the lower end of the $580-600m range. I remain confident despite this setback and with Ayman running the conference call it seems like he is fully back in command and confident about the core ECOM numbers but expect a significant shake-out today, after which I will be a buyer, and will confirm later.
More about Greater Stella as Ithaca has warned that the delay until mid-2015 will affect costs by about $5-10m and obviously the six month delay in production is a disappointment. Disappointing mainly as the drilling work on the project and the subsea installation activity had been very good. The shares have traded about 10% down as I speak and the good long term performance may take a short term knock but I remain totally committed to the good things going on at Ithaca and would consider this to be a buying opportunity, it is after all only a delay and modest increase in costs.
At long last Aminex has out pen to paper on disposing of its US business but its hardly carnival time, the $5m sale price only has $150/- of cash with $350/- of shares and all the rest as a production payments. However, relatively new CEO Jay Bhattacherjee is known to me and I would like to give him the benefit of the doubt as the company concentrates on Africa in general and Tanzania specifically. It goes back on the watch list and if I get to catch up with Jay at all I may have more to add.
Yet another announcement from Hawk as production goes above 2,000 b/d which is a very creditable milestone and worthy of congratulation. Readers know that previous history with this company is indeed extremely chequered but I have been much happier of late. I remain positive but the announcement does say that finances are a bit tight and whilst the refinancing of all the company’s debt is completed in the next month or two leading shareholder is standing by to provide a loan of $3m which I understand to be at 15% so the sooner the refinancing is done the better.
Again briefly but its a crucial weekend at the top of the Prem with the bottom end already sorted. The noisy neighbours need a draw against the Hammers but the HubCap Stealers must also beat Newcastle, not normally a problem but they would have said that against Palace having been three up. First play-off last night in the Championship saw Brighton lose at home to Derby who must feel they have a foot in the final.
England play Scotland at cricket today with the prospect of an easy win to start the new season off despite the management being ‘second hand’ goods. Farbrace looks good though and despite Moores having been sacked last time for lack of success, Farbs may make the difference, its a cabal of wicketkeepers in charge which should be funny as they have a reputation for being, how you say, eccentric…!
Muzza lost in Spain and is clearly feeling the loss of Eeevaaan, somebody come and help him, J P McEnroe perhaps…?
And back in Spain, its the Grand Prix there this weekend, after the recent break will anyone be catching Lewis?
Jadeveon Clowney will be playing for the Houston Texans next year as he was the first pick in the 2014 NFL draft. Johnny Manziel goes to the Cleveland Browns.
In the NBA, we are into the second round of playoff games.
The Heat lead the Nets after winning both games in Miami. The Spurs also lead 2-0 against the Trail blazers.
The Clippers and Thunder go to LA all square. Chris Paul hit eight 3’s in the first game. Durant with 32 points in the second.
The Pacers head back to Washington all tied up against the Wizards after Roy Hibbert produced his first meaningful contribution of the play offs with a season high 28 points.