WTI $103.13 -6c, Brent $107.24 -65c, Diff $4.11 +$1.34, NG $3.95 n/c
Interestingly the oil price hasn’t held the higher levels that both crudes jumped to immediately after the Ukraine air disaster on Friday. This morning’s prices are lower than the close by about 75 cents for WTI and 6 cents for Brent ahead of WTI expiry tomorrow. This reflects the fact that whilst the situation in Ukraine is appalling, the market is realistic, unless sanctions are substantial, supply of oil to international markets is unlikely to be affected. To a certain extent one might be uncharitable and suggest that as long as Germany and much of Europe are dependent on Russia for their gas needs they are unlikely to back greater sanctions suggested by the world wide community. Quite what has to happen for them to place their principals ahead of their wallets is difficult to tell, but maybe shows that energy policy has to change, as to exclude a number of sources on ideological grounds doesn’t quite fit with modern day nationally sponsored terrorism…
Elsewhere the Iran +6 deadline passed yesterday and to avoid embarrassment all round was extended to November 20th. As part of the ‘semi-agreement’ Iran has taken new steps to ‘contain nuclear work’ and in return the US have given access to $2.8bn of frozen oil revenues and around $4.2bn of other assets.
So, the SONA deal has completed this morning and Salamander has announced that having assessed a ‘multiple’ number of proposals none were acceptable and accordingly the company is no longer in play. This has come as a major disappointment to the market place especially those who had expected a bid at a price nearer to 200p a share. As you know I have made it clear that any bid north of 150p or so should have been snapped up, this has either not happened or has been declined by the Salamander board which would be a brave move. Either way, having capitalised on the excellent value in Bualuang to the credit of the board, the value of the rest of the company in the absence of a contested bid looks decidedly meagre. Shareholders will get $50m back which is something and nothing whilst the board have released capital and get to fight another day.
Caza Oil & Gas
More good news from the Bone Springs as Caza announce that the West Copperline 29 Fed #4H horizontal well has come in with a controlled flowback at a peak 24 hour gross rate of 1,598 boe/d. Of this 1,227 b/d was oil and 2.27 mcf/d of natural gas. The news actually gets better as with continued success in this play and with the ability to refine their operations, costs are falling, wells are being drilled quicker and cheaper every time and accordingly the economics improve substantially. In addition to this drilling news, Caza has announced that it has repaid all money owing on the $4.3m CULS from Yorkville which will please investors. The Caza story goes from strength to strength, regular good news with the drill bit adds to the value of the company, expensive debt is being paid off and the recent fund raise leaves them in a good position. I am convinced that this is not appreciated by the market and that if the stock price remains at these levels it is only a matter of time before someone comes in with a bid.
At long last the onshore well at Wressle spudded at the weekend. For Egdon, Europa, Celtique and Union Jack this conventional oil play has a 1:3 chance of success with so much oil around nearby. For Egdon it proves that there is more in the portfolio than shale and if it comes in it will be a useful addition for the others a mixed bag. I am writing on EOG at present having spent some useful time with Hugh Mackay last week and am hoping to catch up with David Bramhill soon as well. This well wont take long and results should be known by the end of August so watch this space.
Halliburton figures are due later and expect them to beat the whisper of 91 cents a share. All the service companies are motoring at the moment and although Schlumberger drifted after their numbers upward resumption of the price is only a matter of time. This may be the same for HAL as the shares are up 39.6% in the year to date and not much off the peak but expect a positive statement to go with the figures.
American Energy Partners, the new-ish vehicle of old friend Aubrey McClendon is seeking another $2bn through a blind pool investment vehicle which will enable his fans to back him without knowing what they are buying, just like the old days then…
Worth checking out the full page interview in yesterdays Sunday Telegraph with ‘marvellous’ Marvin Odum, head of Shell in the Americas as he talks about deep-water drilling amongst other stuff.
Plexus has announced a modest order from Centrica for surface and wellhead equipment and services, I mention this only as the shares have slipped from the peak and are entering good value territory again.
Tullow and Ithaca have announced that the Lupus well in the Norwegian North Sea is dry, good sandstone was found in the Hermod formation but none in the Ty formation.
And Sefton Resources has announced that it is paying some bills with stock, sounds good to be getting 8.7m shares but for Keith Morris that is poor recompense for all that hard work!!
And I received notice of Lamprell’s results last week, unfortunately they are on the same day as Hunting which means that most oil service company analysts will be tied up elsewhere, a shame as I seem to be hoping against hope for more coverage of this excellent company, staging a results day shouldn’t be that tricky………..?
Up at Royal Liverpool Rory did his stuff and although his final round was a 70 it was workmanlike and did what was needed in the circumstances. Being only 25 he made a big bet come in for his dad and a few mates and now its just the Green jacket he needs for all the majors.
Starting from 20th on the grid didn’t worry Lewis too much and if it hadn’t been for one scrap too far with Jenson he might have been 2nd. Off to Hungary now with still all to play for.
An uphill task is probably how you could describe the cricket but to be fair its what they deserve, however the good news for Captain Cook is that he has been told by the assistant coach, Paul Farbrace that he has his ‘full support’, oh dear, be very afraid…
The transfer season is well under way and as cheque books come out and slimy agents crawl from under rocks it seems as if Spurs have signed Ben Davies from Swansea under the nose of the HubCap Stealers…
An American sports update…
LeBron James signed with the Cleveland Cavaliers last week after on-going negotiations with owner Dan Gilbert. James leaves Miami with two Championship rings and already the Cavs have been cut from 100-1 to 3-1 to win the Championship next year. Mike Miller has already been recruited to join James and Kevin Love could move from the Timberwolves in a trade that could potentially see the Cavaliers take the Eastern Division by storm. It will be interesting to see how Miami fare next season…