WTI $85.74 -8c, Brent $88.89 -$1.32, Diff $3.15 -$1.24, NG $3.92 +6c
A short and sharp blog today as I am off to do a CEO interview with Rory Scott Russell of Range Resources, I will add to company news later if I glean more.
The oil price remains persistently weak and will do if this perfect storm continues, everyday there is more oil on world markets and buyers are unsurprisingly holding off. Beware of becoming too complacent though as demand will pick up at the end of this month and although November will be a challenge things can change very quickly should any one of a number of levers be tweaked.
The situation at Afren as reported this morning is roughly as I suggested last time I mentioned them. They have failed to comply with some rules, there is no material loss and the CEO, COO, two associate Directors and 7 current and former employees have been found guilty of assorted misdemeanours. The directors have all been sacked and staff will be ‘disciplined’.
What is more important is what happens next. There is no doubt that this has seriously damaged Afren in a number of ways but if this really is the end of the matter there might just be a way back. The company will be vulnerable to a potential bid or competitors attempting to buy their assets on the cheap but it doesn’t look terminal to me. Investors will have to try and assess the risk in a situation that has not been transparent for some time and should be looked on with a large degree of caution.
Aminex has announced that it has sold a 13% interest in Kiliwani North to Solo Oil for $7m. This will reduce debt and strengthen the balance sheet. More on this later and as I am interviewing Jay on my CEO slot on TipTV on Thursday it will be a good opportunity to find out more.
A trading update from Enteq this morning, it has been a longer and harder journey than most would have expected but it looks to me if the rewards are finally becoming visible. Trading is in line with expectations and revenues are 45% of the full year and gross margins are as planned. Revenue and EBITDA have shown ‘significant growth and new business to China and Middle East markets is encouraging. I hope to see Martin Perry before long and maybe it is time to look at Enteq again after a bit of a false start, me included!
A very quick word about Ineos as I think we will be hearing a lot more about this company over the next few months. Today they have bought 80% of PEDL 162 from Reach for an undisclosed sum but will include seismic work and two vertical wells. Jim Ratcliffe is on the prowl and as I said I expect him to cut a number of deals, first up will probably a chat with Andrew Austin who may have parts of his empire to do deals with. That reminds me, I need a meeting with IGas before too long.
The infernal international break seems to go on forever but for Welsh fans it is good news as a 2-1 win over Cyprus puts them at the top of the table. Ireland and Scotland have forbidding fixtures tonight as they go to Germany and Poland respectively…