WTI $95.28 -68c, Brent $101.91 -$1.28, Diff $6.63 -60c, NG $4.00 -7c

Oil price

With US markets closed yesterday there wasn’t much volume elsewhere but its the economy, or should I say economies, that are for choice are weighing on the oil price. With Brent sub $102 and yet again flirting with support levels just above $101, the bad news this morning from the Eurozone isn’t helping. With August PMI down again particularly in France and Italy and German factory output at an 11 month low the ECB may have to act quicker than it thought. The trouble is, as George Bush would often say, the trouble with the French is that they don’t have a word for grand vitesse, although Super Mario may inject something on Thursday.

Rosneft

The company has proposed that China takes a stake in the Vankor Field as part of the increasing tie-up of energy glasnost between the two nations. President Putin said yesterday ‘overall we take a cautious approach to letting in our foreign partners but we of course set no restrictions for our Chinese friends’. Quite where that puts Bo Diddeley I’m not sure but certainly sets out the pecking, or should I say, Peking order…

Wressle- Who put the hydrocarbons in Scunthorpe?

News today from the onshore conventional exploration well being drilled near Scunthorpe by Egdon Resources, EOG, Celtique and Union Jack. Initial results look very promising as there looks to be the presence of a hydrocarbon play with pay in three main intervals. I spoke to Mark Abbott, Egdon CEO who explained the slightly unusual result announced by the operator.  Difficulty down hole with the logging tool meant that wireline tools couldn’t get through and therefore no pressure data was available, this means that it is impossible to tell right now the nature, pressure or mix of the hydrocarbons in the well. So now it effectively becomes an Extended Well Test as the operator will perforate and isolate the zones they want to test. Whilst the rig will demobilise within 5-10 days the EWT will probably take ‘a few weeks’ to do all the work, this would have been done anyway and doesn’t add to the cost of the well. Overall a positive result for all concerned although we will have to wait a little while for confirmation of the good news. I have strong recommendations out on Egdon, (which I talked about on TipTV recently) and EOG which I wrote up last month after a long meeting with Hugh Mackay and am scheduled to see Union Jack before too long.

Sound Oil

I have spoken about Sound a lot lately and for good reasons, the shares are going up and today we have seen further news likely to frank my optimistic valuations for the company. They have received EIA approval for the second well on Nervesa and are commencing operations on the site Q4 2014. If all goes well they might spud soon after and a rig is already under LOI.

Another piece of good news, not just for Sound is also close to my heart. Longer term readers will know that I have been cautious about oil companies with high exposure to Italy as the process for getting anything done is pedestrian at best. Sound have found things easier than most as they are onshore and primarily gassy but in the last few days there has been good news all round. The Prime Minister has started the streamlining of the energy industry permitting process which should remove the regional blockages and simplify the process with maximum timeframes and less EIA holdups. Good news indeed but I’m sure it will take time to implement! Either way you should look very carefully at Sound, there is plenty of upside and despite the run-up this year the next 12-18 months looks very interesting indeed.

Sundry

Another scoop for Gary Parkinson at The Times today as he appears to have the story about the return of two oilmen who have recently left the E&P space. Enter Iain McKendrick, former CEO of Ithaca Energy and Tom Reynolds who ran Bridge before the Hitecvision takeout. It looks like these two are going to be Chairman and CEO respectively of Iona Energy, a TSX quoted company at present focused on Alaska and the UK North Sea. There should be some grain of truth in it as the current CEO of Iona is none other than Neil Carson, who was the co-founder of, yes you’ve guessed it- Ithaca Energy. It looks as if the chaps have got $500m of backing to go out and buy stuff and given the state of the North Sea they shouldn’t have any trouble spending it. It also looks like they are aiming for a London quote which would make sense as being listed in Toronto is not ideal if they want to play over here. This is a very much watch this space situation as markets like successful guys like these and it might shake things up a bit…

Another oil man returning to the scene is Tom Mackay, I haven’t got space to list where he has been but I have always had considerable respect for him and have worked with him once or twice. Interesting to see then that he has popped up as a non-exec at Aminex which is currently having a bit of a makeover under Jay Bhattacherjee who I have also worked with and wrote about a little while ago in his new job.

And finally…

When I saw the headline “COOK OUT” I didn’t know whether it was talking about cricket or BakedAlaskagate at the great British bake off, but despite taking the ice-cream out of the freezer, thus sending a fellow competitor out of the competition the selectors should do the same at cricket, viz restructure before its too late even if it means feigning an injury. 2-0 down with two to play isn’t the best ways to start ones assault on the World Cup next spring but too many of our best one day players are not in the squad…

A great win by Andy Murray last night which should make him feel good for the first time in a while, he’s got Djokovic tomorrow night but the recovery starts here.

Not long to go until the Ryder Cup places are announced, my deep throat in Scotland Craig Y we shall call him tells me that it will be Poults, Lee Westwood and Stevie G…..

Not much to add to the transfer window but the Gooners get Welbeck and apart from Falcao I reckon the Hull City Tigers did best apart from that…

And farewell Boris Island, Bojo comes up with a few whacky ideas but this was wackier than any before and him and Daniel Moylan can now concentrate on things that do work…