WTI $90.34 +60c, Brent $92.79 +48c, Diff $2.45 -12c, NG $3.90 -14c
Arrived back from La Belle France yesterday afternoon (more on France later…) and managed to get a swift flash blog out on the Dragon/Petroceltic story, again more later.
The oil price is still languishing and didn’t even rally on the employment stats on Friday which beat the whisper and revised upwards previous months numbers. Today and yesterday has seen some fairly grim economic stats from Germany, factory orders down 5.6% and today industrial output has fallen sharply, minus 4% was way away from the 1.5% economists expected.
In the states there is a lot of news about gasoline at the moment, US retail prices are falling as you would expect at this time of the year but some local markets are strong. This is particularly the case in the North East where Irving Oil has announced that its New Brunswick refinery will stay shut until November 30th making that month quite tight as it provides 300/- b/d day of gasoline and general product into those markets. API stats tonight and plenty of releases from the agencies later this week.
Cairn Energy (and maybe Chariot too)
Cairn has announced what looks like a tidy oil discovery at their FAN-1 exploration well offshore Senegal. With 29 metres of net oil bearing reservoir in the Cretaceous with no water content in a 500m gross oil bearing interval and oil of 28º-41º. This looks very promising and their will be much testing and the rig is moving to drill SNE-1 which has already had the top hole already pre-drilled. Another interesting point regarding this well has some knock-on effects for Chariot Oil & Gas as this well exhibits the same characteristics of their acreage in Mauritania which Cairn farmed into last year. With the same source rock, trap and reservoir shared between the two areas it may be that Cairn have a cunning plan and Chariot may well benefit from it…
Another favourite of mine and I am very close to a meeting here, I guess that Giles Clarke probably has quite a busy week of reading though… In Colombia Platanillo -20 has been successful and it already has the added bonus of 3 useful sidetracks plus the test of the T sand proved very positive. I remain keen and will report back after my meeting with the company.
A quick run through a few stories from over the weekend and some follow ups. BG got a bit of a mauling from Danny Fortson in the Sunday Times as he joined Credit Suisse in calling the stock a sell. Now, the shares are the best part of 20% off the recent high in May and whilst there may be problems in Australia I think that even BG would have warned by now if recent lessons have been learned. In Brazil the numbers I am seeing show if anything better than expected volumes and although the elections are causing some political uncertainty this will pass. My biggest complaint is that, having sacked Chris Finlayson for not delivering change quickly enough, the company has neither done any deals nor hired a new CEO, maybe the board’s rushed decision to get rid of him was poorly thought through. My own view would be to consider change from £11 a share to be an interesting point to consider adding to a holding but one must bear in mind that management at BG is proving to be extraordinarily lacklustre, even pedestrian so a break-up would be in the best interests of everyone but at least they got $350m back from the Egyptians, only $1.2bn left to get back now…
Circle Oil has made a discovery onshore Morocco with its CGD-12 well in the Sebou Permit , the second in a 6 well programme according to the company. And Jupiter Energy has borrowed $5m at 12% from Waterford Petroleum who are 29.5% shareholders and represented on the board. This loan is there until Jupiter raises $20m or more at which stage Waterford can offset its loan plus any interest owed against that raise. So think very, very carefully if you are approached for an equity issue by this company as part of it will go to pay off another loan made by its part owners and the best recommendation is to steer very well clear of this one. A quick addition to my comments on Petroceltic yesterday afternoon as I had a call from Brian O’Cathain just after the blog went out. I think that whilst there is no doubt that in another market the bid might have been a fair bit higher, 230p will probably look fair enough and a counter bidder is probably unlikely. With Worldview holding 24% odd plus a bit more in their pocket and Adair with around 18% there is a fair wind behind it and the next two or three holders push it way through 50% which should see it done and dusted soon enough.
Follow up on Apache which the Sunday Times revealed is leaving the UK, another company where agitating shareholders come in and upset long term planning for a fast buck…It looks like Danny Fortson was a busy boy this week as he also reported that BP had arranged a $1.5bn loan for Rosneft just weeks before the latest round of sanctions were imposed. Interestingly it was agreed on June 27th, after Igor Sechin (Rosneft CEO and mate of Putin) was put on the blacklist drawn up by the US, one might have thought that Bo Diddeley might have known about that….And Faroe has been awarded three new licencing options in the Celtic Sea where they tell me that they will be looking for the Triassic Sherwood Sandstone reservoir they know so well. Finally EOG had final results but as ever nothing new in these, news for Hugh Mackay and team will come from Wressle and Kiln Lane but more importantly from Ireland where ‘ in due course we will get greater clarity on Irish drilling plans’ i.e. news from Kosmos about their order of drilling preferences. EOG is one of those stocks with huge potential upside but investors should be aware of just quite how important that Kosmos decision is.
So much to write, so little space!
The Grand Prix at Suzuka was marred by the terrible injuries to Jules Bianchi which made Hamilton’s win rather hollow but it does mean the last four races with points for five will be interesting plus a new track for the Russian GP I understand.
I watched the Chelski v Gooners game which might have been a good advert for Jose’s management but not for football, quite how many red cards were not given I don’t know, and that’s just the managers… Even this early the league looks like Chelsea’s to lose but the table makes interesting reading as we approach the infernal international break.
And I couldn’t help laughing at Gareth Bale winning the Welsh footballer of the year award, I wonder what the pre-result betting was looking like….or the opposition.
Its going to be a big week in cricket as ‘that book’ comes out and the reasons for sacking England’s most prolific run scorer are given from KP’s side…
In the US…
Last night, Russell Wilson led the Seahawks past the Redskins 27-17. Peyton Manning threw his 500th NFL touchdown pass as the Broncos beat the Cardinals. Brett Favre the only other player to achieve this feat.
The Steelers win in Jacksonville. The Jaguars now slide to 0-5… Alex Smith fails to beat his former team as the 49ers edge out the Chiefs 22-17. A big win for them and coach Jim Harbaugh…
In the other games, the Patriots smashed the Bengals, the Chargers beat the Jets 31-0 and the Browns came from 28-0 down to win against the Titans.
A quick MLB post season update, The Orioles will face the Royals in the AL Championship game.
In the NL, the Giants are 2-1 up in their series against the Nationals. The Cardinals beat the Dodgers last night and take a 2-1 lead in their series also.
And a few of us went to France for the Arc and very good it was too with Treve romping up and also having a touch on Found, I think we are all hoarse from calling Ryan home!
But the remarks from the man from John Lewis were ringing in our ears and he couldn’t have been more accurate if he tried. This is an economy in tatters and where the people have lost the will to live. Things happen you couldn’t make up, such as getting to the front of the queue for the bar (you have to queue for everything) and ordering three bottles of red wine only to be told that they only had two left, and this was before the racing had even started, in France! Into the ‘tabac’ to buy a few Marlboro to be told that you can’t buy cigarettes without buying something else with it so I added to my health problems buy buying a packet of Smarties to facilitate the purchase, again you couldn’t make it up. And its no wonder that Eurostar is up the pictures, you cant spend any money on it, one bloke at the buffet car and thirty in the queue but at least the unavailable food was from Waitrose! C’est la vie and all that.