WTI $104.06 -42c, Brent $111.00 -24c, Diff $6.94 +18c, NG $4.41 +5c
First blog since last Wednesday as I spent a couple of days in Italy with Sound Oil, more of that later in the week. It doesn’t look like I missed much but I will catch up at the end of todays news.
The oil price has continued to drift off with fundamentals overriding the geo-political risk in Iraq. As I mentioned last week Libya has restarted exports from the terminals at Es Sider and Ras hanuf which should add as much as 500/- b/d and in due course could mean the country gets nearer to around 900/- b/d. This should fill in the excess of demand over supply for Opec crude at the moment although as ever with Libya, nothing is certain even if the acting Prime Minister has said ‘I officially declare this the end of the oil crisis’. If exports from Iraq remain at these levels the oil price will not rise any further for the time being so watch out for those non-professional oil traders who have long positions open and very little patience!
Faroe has announced this morning that the Butch South West well is dry, with pre-drill estimates of around 50m barrels this is disappointing but no more than that. Centrica are continuing with the Butch Main development and this will go ahead as planned. More importantly I suggest is the Bue well which I am led to believe is due to report imminently and of course I think that the size of the Pil discovery is yet to be fully appreciated by the market place. I am seeing Faroe tomorrow so will report back then but if you haven’t seen my comments about them on TipTV last week go to www.malcysblog.com and check out the interviews tab.
Fastnet Oil & Gas
Fastnet has been in the doldrums since the Morocco duster which has been aggravated by worries about changes in senior management at Kosmos. Today they have announced improvement in the terms for the Tendrara Lakbir petroleum agreement onshore Morocco with an extension and an increase in their position there. Fastnet will go from 37.5% to 50% and will carry OGIF in the first appraisal well on the TE-5 gas structure, they will also have the right to elect to carry OGIF for a second appraisal well but not three as before. The deadline for the fist well is December 2015 which gives them time not only to assess all the data available but also to find a new drilling partner, a job the company say will be completed 2H of this year.
Genel announced whilst I was away that the Hagar Qim-1 well offshore Malta was dry which had a minor impact on the Rockhopper/MOG situation.
Genel also had an operational update in which it confirmed that at the moment nothing in Kurdistan is changed and that production and revenues are in line with existing guidance. My views on this remain solid, I think that what has happened in Iraq following the ISIS incursion has had an enormously positive effect on Kurdistan for now and for the future. If you haven’t seen it already I did an extended piece on the situation out there and the likely effects on Genel and GKP in an interview with IG, as ever you can find it on the interviews section on www.malcysblog.com
Chariot announced that it had secured a farm-out on Rabat Deep, offshore Morocco whilst I was away and I am surprised that the shares didn’t go up much more than they did. Chariot has changed significantly in recent months and this deal with Woodside goes to show just how well the management has negotiated these terms, having achieved a number of options that give them maximum flexibility in the process.
Also announced whilst I was away were the board changes at Petroceltic following the recent fund raising. I had a long meeting with Brian and Tom during this process and whilst the fundamentals at the company look good I don’t like the smell of these board changes one bit. I hope to go back in and see them but as I see it, the Worldview Capital Management price for not voting against the proposals at the EGM has been to lose two independent non-executive directors and two other directors to be replaced by two Worldview nominees. As a result the company has gone onto the watch list concerning corporate governance which might just unfortunately overshadow the day to day prospects, more when I go back to see them I hope…
Well that certainly was one big weekend of sport…A great five set final at Wimbledon could have gone either way but Djokovic prevailed in the end.
At Silverstone Lewis Hamilton got his revenge against Rosberg who parked his car, this time not deliberately giving him a DNF. Game on now at they are virtually level and effectively start the season again from here.
In the World Cup the talk ahs all been about two things, Neymar being injured and out for the rest of the tournament and the goalkeeping substitution by Van Gaal to give Holland the penalties win over Costa Rica. All back on tomorrow for the semis and will it be Europe or South America that dominate? Ultimate irony if the final was Germany v Netherlands eh?
And the Tour de France became the Tour de Yorkshire for the weekend as hundreds of thousands of people turned out to watch, a fantastic achievement all round…
And in the cricket, Freddie Flintoff made his reappearance for Lancashire and did well enough, meanwhile down at Lords, Andrew Strauss forgot the old rule that you cant always tell when a microphone is switched off when he used a nasty word to describe English Kev…