WTI $74.21 -$2.97, Brent $77.92 -$2.46, Diff $3.71 +50c, NG $3.98 -21c
With less than two weeks to go before the Opec meeting there is nothing that can hold the price, nor any reason why it would, my traders are telling me that genuine buyers are holding off safe in the knowledge that they can buy cheaper later which is fine but does store up a certain amount of buying at some stage. Brent expired yesterday which makes the new contract a touch more interesting but so far no buyers for January.The Iraqi Finance Minister has announced that a deal has been agreed with Kurdistan over oil exports and Civil Service payments which should further eases tensions between Baghdad and Erbil something that was evident in the Genel presentation in London yesterday.
The EIA inventory stats, like the API numbers actually provided some modest good news with stocks actually drawing 1.74m barrels against forecasts of an 800/- build but the market didn’t want to know. For those of you who like the slightly more off-beat humour will take cheer by seeing that the Opec meeting is on Thanksgiving when the good people of Texas are watching their Cowboys host the Eagles followed by a day out at the shops/malls on ‘black Friday’, quite how black it will be this year is yet to be seen…
Confirmation from BH that they are in ‘preliminary discussions’ with Halliburton pushed the stock up 15.24% last night giving BH a market cap of $25.4bn. Halliburton rose 1.05% which gives them a cap of $45.66bn so the combined total of $70bn is still well shy of the SLB cap of $122bn. Lots of questions but the obvious pluses are that the combined group would gain good market share globally, expand margins, cut overheads and increase competition on Shlumberger. On the flip-side one has to ask what the regulators might say although that rarely counts, as well as what the customers might feel with two firms dominating the oilfield service area…
I think i mentioned yesterday that Caza were reporting imminently and so here are the 3rd quarter numbers along with an operational update. The update is taken as read as all wells have been reported and operationally the business is is great condition with the Bone Spring turning into a truly great call, added to that as it is not a shale play, more a tight clastic oil reserve meaning it produces much higher IRR’s that shale and is making excellent returns even on $70 oil.
The numbers themselves are to a degree impossible to read, year on year gains of hundreds of percent in production, revenue and EBITDA are proof of the success of the Bone Spring and even quarter on quarter the numbers are good. With the exciting drilling programme, enhanced by yesterday’s news of the CWEI deal there is surely much more to come and despite the low oil price Caza is making an excellent return. Investors should sit tight, the pool of value in Caza is building every day and will out eventually.
BP have lost another round in court at the Judge upholds the ‘grossly negligent’ charge he made previously and said that BP was ‘ a victim of its own trial strategy’.
Sound Oil announced yesterday the completion of the RBL for Nervesa which it put in place as a replacement for the Niche farm-out. The funding is provided by Greenberry, an affiliate of Continental and has a 5% coupon which is good for both sides. Sound are very strongly positioned with drilling operations commencing at Nervesa next month and 2015 will have a number of high impact wells to watch out for.
Last week i said that DECC would get 80 odd applications for its 14th round of onshore licences, today it announces that the final number is 95, much better than most expected.
Range Resources had an update from Trinidad yesterday and it appears that slowly but surely operations there are picking up as is production now 592 b/d!
The Genel presentation was first class yesterday and one day the market will understand why i have been so bullish on the gas, more next week.
And Monday sees the Oil Council Annual Assembly, truly the best international gathering of international oil companies and executives, i will be reporting from their during the conference…
Mainly rugby this weekend with England playing South Africa at Twickenham, Scotland carry last weeks good form into a game against the All Blacks and Wales host Fiji.
Muzza went down 0-6, 1-6 to Roger Federer so that all folks for him now until the Australian Open…
And the infernal international break continues, Scotland play Ireland tonight, Northern Ireland are in Romania whilst England host Slovenia at Wembley tomorrow…