WTI $92.80 +$1.24, Brent $96.95, Diff $4.15 -$1.14, NG $3.91 +10c
A very quick, very late blog today as I have been out and about seeing a whole host of companies.
Yesterday the Brent price touched $95.60 at one stage which was a two year low, probably on the back of news that Libya is pumping over 900/- b/d of oil into the market. A decent rally late yesterday in WTI came after the EIA inventory stats which showed a smaller draw than the API numbers at 4.3m barrels of crude oil but still way away from the analysts forecasts for a build of 500/- b’s. Typically for September the numbers were a bit at odds with each other, with products showing better demand than normal for this time of year. Refinery utilisation was therefore up to 93.4% which is high for this time of year.
The EIA also raised domestic production numbers saying that it will be 8.9m b/d soon and with that comes yet again lower imports, this is a theme that the blog has been writing about for a while. Net imports of oil and products are at more than 20 year lows as domestic production rises and cant be exported while products can and makes the net figure even lower.
Cairn has announced that it has sold 10% of Catcher to Dyas for costs capped at $182m which seems fair enough to me. As we all know though this market is not looking on the bright sides of things and until the Indian tax situation is sorted then it will take more than this to hike the shares by a meaningful amount.
I mentioned yesterday that there were rumours about of a Madagascar fund raising and indeed late yesterday for some reason they announced such a raise. The basics are that three shareholders are putting up $20m plus an open offer for $6.4m at 10.25p, an 8.9% discount to the price which isn’t too bad. They have also said that they will pump up to $50m into MOIL should the company get approval for the Tsimiroro play. More when I have spoken to the company but I also suspect that there may be more news around as it would make a lot of sense to bring another company into this play which could be very substantial in due course, watch this space.
I spent some of the morning at the Oil Barrel conference which I can tell you is recovering after falling seriously into disrepair in recent years. A full house and a good card meant that even if the sector is showing signs of weariness investors are as keen as ever to identify good stories. And that is what they heard in particular from Sound Oil and Hurricane Energy. I have covered both a lot in recent weeks but James Parsons at Sound with new director Luca Madeddu gave a good run down of the play which has solid value from existing discoveries and lots of upside from the exploration portfolio. Rob Trice at Hurricane was his usual witty self and as ever gave a great analysis of Lancaster and indeed the rest of his portfolio of assets which makes the company exceptionally cheap. The market is worried about financing for the Lancaster area which is probably unwise and may be wrong-footed especially if something clever on the financing side pops up to go with the Early Production System. Thoughts of waiting for a traditional farm-out or vanilla equity raise may be only part of the funding solution.
Rarely before has a county Championship cricket match had so much on it and could be decided by such odd factors. I defer to my old friend and Middlesex fan Gilbert Ellacombe from Equity Development who tells me that Middlesex do indeed only need a draw against Lancashire but are sliding to defeat, should that happen they would be relegated by one point. It is worth noting that he tells me that earlier in the season Middlesex were docked two points for a slow over rate, I bet the captain on the day never thought that such profligacy would come back to haunt the club…
Scottish tennis player Andy Murray wins in China, his face is on the advertising for the O2 season end show so he has to win and soon…
The Shermans are not bidding for Spurs even after beating Forrest last night, elsewhere the noisy neighbours put 7 past the Owls and there were easy wins for Chelski, the Baggies, Newcastle and Brighton.
Tomorrow when I write the Ryder Cup will have started and will I’m sure be very close, with or without litigation gags…The oft expected invitation from The Standard Life never made it, if it’s a stand-in postman tomorrow I will know what happened to it.
Talking of invitations that I didn’t receive I hear that the good and the great of the oil industry are getting together tonight at the Faroe Petroleum reception, Ed Westrupp at FTI tells me that they lost my e-mail address….Enjoy!