WTI $82.81 +10c, Brent $86.22 +82c, Diff $3.41 +72c, NG $3.71 +4c
Whisper it very quietly….but we might just have seen the bottom for the oil price, at least for the time being. Now this is no cause for breaking out the champagne nor does it signify a meaningful rally but there are a couple of small signs that the major part of the fall has now happened. I mentioned last Thursday that we were at a very important technical level for the oil price, with Brent flirting with $82.30 which is the 50% retracement from the five year high, that day with world markets in a bad state, Brent got very close but bounced at $82.60, voilá. Today we are at $86.62 after the recent modest bounce which has been mainly Chinese inspired as i mentioned yesterday, maybe, just maybe that strategic buying has given us some downside protection. The fundamentals are still very weak, especially for 1H 2015 and we have the Iran nuclear talks and the Opec meeting to come next month though.
The API inventory stats showed a rise in crude stocks of 1.2m barrels, short of the 2.7m whisper, EIA tonight to confirm but gasoline and also distillates now will also be interesting.
Almost the end of the results season already for the big service companies and Nabors, like all except BH, beat the whisper. Earnings came in at 39c versus consensus of 36c and revenue was up 17% at $1.81bn for the quarter, also ahead of the market. Biggest areas to contribute were at home with the Bakken in North Dakota and the Permian Basin in Texas. International operations were pretty good and the company has also said that at the moment there is no sign of work falling off or margin erosion.
Shell has announced a major gas discovery at their Leopard-1 well offshore Gabon. The discovery of a ‘substantial gas column with around 200m of net gas pay in a pre-salt reservoir’ is clearly very encouraging. Elsewhere, Shell has confirmed that it has signed sales agreements for all its Nigerian assets put up for sale in the last year.
Amerisur has announced a JV with Talisman in Colombia by going 50:50 on the Put-30 licence awarded to Talisman. Being only 55km from the Platanillo field on Put-12 obviously gives the company a heads up although the oil will be of a different viscosity. A total work programme of $26.9m over three years is perfectly acceptable and Amerisur may even operate it. I have a meeting coming up soon with John Wardle so more to come on this one i hope.
I recently met with Matt Lofgran, CEO of NTOG as i needed an update following his recent acquisition and modest fundraise. Few shares can have performed with such volatility as NTOG which almost doubled on the news of the White Buffalo acquisition but subsequently fell during and after the raising of £1.75m at 0.3p a share in late September.
Following on from success in the Chisholm trail with Ward, Lofgran has been looking for the chance to buy something significantly more meaningful on which NTOG could be 100% owner, and operator of. After looking at a number of prospects, White Buffalo appeared to fit the bill, it is in the prolific Big Horn Basin in Wyoming and has big players nearby, most notably Devon Energy. There are also possible further packages of land nearby which might fall Nostra’s way giving them a slightly bigger footprint than the 6,100 acres acquired so far. Over the next few months there is much to do, NTOG has to become an operator formally and up to three locations are to be permitted. Lofgran has always said that the funding of wells here will be done by getting in new partners at the time so watch out for that happening in the next few months. I expect all this to have happened in time for first drilling to happen in 1H 2015 which probably means 2Q 2015 realistically.
Although NTOG only has a market cap of £9.4m it generates a lot of interest particularly in the retail market, many of whom supported the recent raise. White Buffalo is a genuinely potentially game-changing acquisition for the company and provided all of the above factors can be achieved and if the management are up to it there is no reason why it should not be very rewarding. Watch out for every move and ensure all the boxes are ticked, if they are this might just be a stock to keep an eye on next year.
An old favourite of the blog is Tangiers Petroleum, its latest visit to the confessional otherwise known as the ASX, is to lodge a ‘cleansing prospectus’ to remove any trading restrictions on the shares to be issued with regard to the September the 14th placement. Now I agree that if anyone needs cleansing it is Tangiers but a prospectus doesn’t go nearly far enough and the words ‘Tangiers’ and ‘placement’ should be removed from the language or at least deep cleansed…
After the news yesterday from Total i noticed that another oilman also passed away, Nelson Bunker Hunt was indeed an oil legend having discovered with BP ironically, the Sarir field in Libya many years ago. Although Hunt Oil remains run by the delightfully named Houston Hunt, many older readers will still remember his dad for a memorable but unsuccessful attempt to corner the silver market in the late 1970’s.
The Noisy Neighbours were noticeably quiet in the CSKA stadium last night although they claim that some home fans did get in. Having led 2-0 they conceded twice in the second half which must be two badly dropped points. The HubCap Stealers have got some work to do in their Champions League campaign starting tonight with Real Madrid at Anfield whilst the Gooners are at Anderlecht with a distinct shortage of keepers.
And the flat jockeys title race is over with Richard Hughes taking the spoils, technically Ryan Moore can still catch him but being off sick at the moment plus globetrotting to Australia the US and Hong Kong means that he has conceded the race.
Leave A Comment