Oil price, Ophir/CEPSA/Salamander, Sound Oil, Trinity, Bowleven, Sundry-Jacka-GKP-Green Dragon-Wessex-Results week, and finally…

WTI $81.01 -$1.08, Brent $86.13 -70c, Diff $5.12 +38c, NG $3.62 n/c 

Oil price

Where to start today? Rousseff wins the election in Brazil, not so clever for oil or international markets, those blimmin voters eh? Chatting to traders today they tell me that whilst the market has certainly paused for breath the underlying is still nothing to write home about. Buyers are holding off safe in the knowledge that there is ample supply and the market lacks clarity, that will remain the case until the Opec meeting.

Two rather nasty facts have crept into view, firstly that speculators have returned to the market, net length has increased and I worry that  the punters may think the worst is over. Secondly G Sachs has slashed its forecasts for the oil price, only now realising that $115 crude oil is a thing of the past. Whilst I agree that Goldmans numbers are now creeping down to the land of the living, it is always uncomfortable being so close to a shop with such a record of disastrous forecasting, remember $200 oil…?

The FOMC meeting this week is probably the most important occurrence and the release (no conference) will probably end QE but  give dovish guidance on rates, not something our rabid hawks in the UK seem able to do. After that, US 3Q GDP stats will likely show a fall to around 3% after the 2Q bonanza of 4.4% itself bouncing back from the winters bad weather related stats.

Ophir/CEPSA/Salamander

The whispering around the sector is turning into possible bids for Salamander from Ophir and CEPSA who have both made ‘proposals’ to the board. At least this time the Salamander board have made these two proposals public, word on the street a few months ago was that at the time of the SONA deal a bid was rather summarily dismissed at a price that I suspect now might be knockout…Anyway, keeping on right to the end, the Salamander board say that the SONA transaction is ‘still on track’ for completion by the end of 2014 and ‘is in the best interests of shareholders’.  It will be interesting if either of the proposals get to being a bid as they both appear to require board acquiescence, rule nothing out and if they rebuff these bids the shares can only go one way…

Sound Oil

Sound Oil, in collaboration with Continental Investment Partners held a marketing event over the weekend in Europe. Continental are very important to Sound as 20% holders of their equity and with £7m of debt from their investment earlier this year and remain very supportive. Indeed in September Sound announced that they were no longer pursuing a farm-out of Nervesa but that CIP had arranged  £5.8m of Reserve Based Lending for the project.

This marketing event that only used existing publicly available information, enabled presentations to be made by the Company, CIP and outside consultants, of which I was one. These presentations re-enforced the quality of the story which I have been so keen on this year, with onshore gas in Italy now covering the company’s G&A costs and an exciting amount of exploration upside in the short and medium term there is both downside protection and potential for growth. The nature of the conference, which targeted primarily high net worth European investors, showed not only the support and commitment by Continental but also that the management is able to demonstrate to prospective and existing investors that they are skilled and energetic at telling their story. The management have a realistic set of operational and financial targets and 2015 will be very interesting, the shares look most appealing at 11p.

Trinity Exploration and Production

The company has released an operational update for the 3rd quarter this morning which appears to cover all the bases although the production during the quarter may have disappointed some. Readers will know that I am rather keen on Trinity although getting hold of the company lately has been somewhat difficult. This looks as if is about to change with a new head of IR and i hope to catch up and get more information from the management before too long. Production is rising a fair bit from the 3,619 boe/d in the quarter after work-over activity and the key priority is to progress TGAL with the aim of getting to FDP approval in 1Q 2015. They also intend to fast-track 1a and 1b to FDP and then a GSA as soon as is possible. More on Trinity before too long I hope.

Bowleven

I get almost as many questions about Bowleven as I do about any other company especially after I turned more positive a little while ago. Today they have announced Government approval for the Etinde farm-out to LUKOIL/NewAge and passing of operatorship to the latter. The deal should be completed by the end of 2014 when BLVN will receive $170m, with cash at the moment of $20m the company appear to have adopted a belt and braces approach by announcing a $30m bridging facility with Macquarie Bank just in case. The idea of this not happening or being delayed isn’t worth thinking about but with Bowleven anything can happen. I haven’t been able to see this company this year yet despite repeated attempts, I think I may have to emigrate to Edinburgh and hang out there…

Sundry

Couldn’t help but spot that Jacka Resources has shoved up the reserves at the Ruhuhu exploration block in South West Tanzania. Readers will remember that Jacka was due to be taken over by Tangiers Petroleum a while back before the red mist enveloped the latter. Fortunately all has worked out for the best for Jacka who are now ten times bigger that Tangiers and at least remain of investment grade, not something one can say about Tangiers.

And I spotted that Gulf Keystone appears to have won its lawsuit and has been awarded £4-5m which is to  be paid for by some nine parties. Another pain that is now behind them and one hopes with the IMS and conference call due on Thursday that better information might just be forthcoming for patient shareholders.

Green Dragon Gas has its first day of dealings as it joins the main market of the LSE although I see no reason why anyone other than ‘specialist’ and highly knowledgeable investors should want to get involved here, I certainly won’t.

Now here’s a spooky story, on the day that Wessex announced the HALO deal which brings the delightful Andrew Cochran back into our lives, there are announcements by Ophir, (to which AC sold Dominion) and Salamander (which AC joint founded) and CEPSA (which bought Coastal)….this may turn out to be a day never to be forgotten…

And before finishing i’m sure you know that its the majors results week, tomorrow is BP and BG, Wednesday we have Total, Phillips, Conoco and Statoil whilst on Thursday we have RDS and Eni finishing up with Chevron and Exxon on Friday…pip pip!

And finally…

So, lets get this one out of the way straight away shall we? It was a draw at the Theatre of Dreams and I would have taken that all week long, genuinely thinking  that the runaway leaders would score a hatful, never mind at least Jose has already done both Manchester clubs away in the Prem now. The big result of the weekend by a country mile was the win by the happy Hammers over the Noisy Neighbours on Saturday, with them and Southampton in the top four all bets are off at the moment and in East London good football is being played, not many clubs will relish a trip to Upton Park at the moment. Elsewhere Hull got another draw against a big name club as Balotelli missed another sitter for the HubCap Stealers and the Maccams gifted the Gooners two goals to give away the points. Even Spurs managed to lose at home to the Magpies, not often they win on the road nowadays. El Clasico was just that and with Real going behind it looked like it might be the Suarez and Neymar show but not for long…

The rugby was European with Harlequins beating Wasps one last time at Adams park before they move North and start perfecting their Midlands twang up in Coventry…wins for Racing, Toulon, Toulouse (at Bath) and of course the Saints whilst Munster beat the Sarries which is magnificent to see…and the Saints won any way they liked…

In the world of American sports…

The Giants are up 3-2 in the World Series. They are now just one game away from another Championship.. Game six in Kansas on Tuesday.

The Detroit Lions faced the Atlanta Falcons at Wembley yesterday afternoon. Down 21-0 at half time, the Lions managed to win 22-21 with a late field goal. The Seahawks manage to end their two game losing streak with victory over the Panthers.

Tom Brady threw 5 TD’s as the Patriots demolished the Bears and Ben Roethlisberger threw 6 TD’s as the Steelers top the Colts and move to 5-3. The Saints maintain their unbeaten home record as they beat the Packers in New Orleans.

Tonight sees the Cowboys host the Redskins.

 

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