WTI $98.17 -$2.10, Brent $106.02 -49c, Diff $7.85 +$1.61, NG $3.84 +6c
Last night saw Wall Street finally have a fit of the vapours although losing 300 points from up here is hardly more than the smallest of corrections. Labour data this afternoon may confirm the bearish stance, consensus is for growth of 231/- in non-farm payrolls but as ever its all in the revisions, as I said yesterday gasoline isn’t flying off the shelves, so to speak.
The WSJ has an interesting article and has been persistently following the crude export story, yesterday saw a shipment from Texas of condensate which isn’t counted as crude oil… My old friend Dan ‘The Prize’ Yergin, who has been leading the charge for abolition of the export ban said yesterday that this ‘is the wedge that’s pushing the door open’ if you sort of get his drift. WTI certainly took a bath yesterday and the differential is now five bucks off the recent bottom. If you looked at the link yesterday to my interview with IG you will know that chartists are getting very excited about the oil price and say it will move sharply out of this range, they just don’t know whether it will be up or down, I said that at present there is plenty of crude around. A three day ceasefire in Gaza also started this morning.
Shell has ‘paused’ its JV in Eastern Ukraine which is near the site of the crashed aeroplane, more details are rather scant. (Worth noting that Ukraine stocks such as Regal Petroleum -12.3% and Cadogan -3.1%, fell yesterday, distant sound of stable doors slamming, investors in these stocks should have fled a long time ago and they don’t come into blue chip category either, caveat emptor)
Shell now has a bit of a problem with its stake in Woodside to deal with. As I mentioned as a possibility yesterday the vote by Woodside shareholders didn’t get to the magic 75% and therefore wont go ahead, Shell has announced that they are ‘reviewing the situation’ but rule nothing out. Quite a bumpy ride being a Woodside shareholder at the moment.
Success for Andes in the Colombian bidding round with the award of 3 undeveloped fields in the Llanos Basin. I suspect that apart from the potential of some reasonable production from this field, there may be exciting upside in the unconventional play in the Gacheta formation. Andes is suffering from the inevitable Argentina blues at the moment which is quite understandable, but mark my words on a medium term view I think that there is proper money to be made here.
Debut day for Savannah Petroleum on the Aim market, the company has raised $50m at a price of 56p giving it a market cap of £73.5m so it is a meaningful sized vehicle. I haven’t seen the company yet so will reserve judgement until I have, but to get this away at this time is some achievement and investors who bought the stock clearly are not worried about the Afren effect nor the state of the IPO market. It also has an interesting board, Steve Jenkins the Chairman is first rate but the only oilman on it, the CEO and non-execs are a combination of an investment manager, a former head of research and a founding partner of Vitol…
I have been waiting to speak to Rory Scott Russell, CEO of Range Resources before I commentated on their recent update. The shares have recently fallen around 35% from the high but this should not be taken in isolation, the shares have still tripled so far this year. Operationally all is going very well indeed and in Trinidad the key metric is getting all the rigs back in action, as I understand it that is going well and only rig 7 needs more work. The target of 1,000 b/d by the year end is still realistic and recent production numbers, averaged over the quarter seemed to confuse some people but confidence is high. Elsewhere everything appears to be as it says on the tin, further discussions are imminent in Colombia and in Guatemala, Range are waiting for further details from Citation before taking a final decision. There is much positive news from LandOcean, they are more than living up to expectations and putting money into projects, for Range having a keen, low cost and incentivised Chinese operator is critical as that aligns with their own requirements.
Overall I am very happy with my position on Range, this year has seen more achievements than one might have realistically have dreamt of as a shareholder and there is more to come. Rory will be doing another webcast next month as part of a quarterly update programme and he has agreed to do a CEO interview with me on TipTV so watch out for that.
MX Oil (Formerly Astar Minerals) Down Mexico way..
I wanted to mention this company as I went to see them a few weeks ago as I have interest in Mexico, after which I mentioned them in the blog and I got a fair bit of feedback. Today they have confirmed their JV with Geo Estratos, an oil services business in Mexico with strong credentials, they have worked with many leading companies including Petrofac. The JV is looking at three potential asset transactions identified by Geo as highly prospective. With an oversubscribed placing at 3p to raise £2m for working capital they are well positioned ahead of the upcoming licence round. The company have also entered into a ‘strategic relationship’ with Northcote Energy which I am slightly concerned about, I hope that they have done their due diligence, I do not cover Northcote.
MX is a very interesting play in an area I am sure we are going to hear more about and should be very much on the watch list for investors.
A few more post results comments, Murphy fell sharply yesterday after they missed consensus forecasts and lowered guidance, meanwhile Exxon fell 4.2% after their numbers which I reported yesterday. Subsea 7 beat the whisper and increased the buy back with a positive statement.
At the C Games we are reaching the conclusion and Glasgow awaits the arrival of Mr Bolt this evening. Yesterday saw David Weir win yet another gold medal and England won gold’s in gymnastics and at the velodrome. The biggest cheer in the stadium last night was for Eilidh Child who won silver and brought the house down.
After the win in the cricket, attention turns to the case against Jimmy Anderson, assiduously promoted by the Indian team and hordes of lawyers apparently. Let justice play out but what is it when something like this is being handled in such a way…?
Football is well back in front of us and Hull City Tigers got a 0-0 draw last night at AS Trencin whilst Aberdeen lost at Real Sociedad and unlucky St Johnstone lost 1-2 at home to Spartak T’s. Having signed another defender the Gooners have loaned out Jenkinson to the Hammers for the season. My favourite team may about to be Napoli as they have expressed an interest in Fellaini, now as ever, no longer required at the Theatre of Dreams where he is out of his depth.
And the women’s Rugby World Cup starts today, England have been in the last three finals and not won once, would be nice to change that.