WTI $77.94 +54c, Brent $81.67 -67c, Diff $3.73 -$1.21, NG $4.25 -1c
Its a very quick and very late blog today which has been full of meetings. If i speak to the companies below later i will do a big round up on Friday as tomorrow is mad with Kurdistan companies all reporting as are Ithaca and Premier plus one or two others and its the Genel Capital Markets Day…
The oil price has remained flat and whilst it hasn’t properly fallen through the support level it is hardly bouncing off it. In Libya the El Sharara field is back up and running but Hariga port is still blocked so still off recent high levels of export. The UAE energy Minister put his couple of bob in yesterday which didn’t help matters, if the rumoured 500/- b/d is cut it wont touch the sides.
There is no doubt that there are signs in the industry of capex falling, see the Tullow announcement as an example and companies are taking the opportunity to revise budgets in line with lower oil prices. I am getting much more anecdotal evidence that there is a bit of slowing down going on.
A perfect example of what i have just said but interestingly the share price has risen on Tullow’s review of capex and the cost base as if the market wanted them to do this a long time ago. Exploration will be ‘significantly’ reduced and will concentrate on East Africa and the company is to re-allocate capital towards producing assets and the commercialisation of existing projects. There is likely to be a big impairment charge pretty whatever happens and Uganda may well regret its hardball attitude whilst goodwill on Spring energy will be hit as well as reducing carry values elsewhere in the portfolio.
Another day, another order for more of those Super 116E class jack-up rigs which Lamprell have become so good at making. This time it is for two plus the option for three more from its favourite customer, NDC of Abu Dhabi and is worth $385m. Readers will know that Lamprell is a big favourite of mine and whilst there will be some cutbacks in capex in the industry I suspect that this market will be as protected as any.
Results from Bowleven and as ever there is little if anything to pull from them that hasnt already been said. Etinde is looking like it is genuinely going well and there are wells at Bomono and some interest in Zambia. I am seeing the senior management soon and will report back after that.
Also having updated in detail recently at the Capital Markets day and awaiting a write-up here Cape couldn’t really surprise either this morning. Trading is in line with expectations which mean that the UK, Europe and the CIS appear steady with a strong contribution from the newly formed Cape Speciality services business. MENA is ‘robust with a strong performance from Saudi Arabia whilst Asia Pacific is mixed. I am much happier about Cape nowadays but it may tread water at the moment as projects are being looked at worldwide.
I am going to write up Caza after the quarterly figures as then i can have a decent session with the management on numbers but followers should be aware that this deal is eminently sensible and should make Caza an even more likely target if it stays at these ridiculous levels..
Not much going on as we are, yet again in the infernal international break but at least Andy Murray won yesterday and can still qualify subject to other matches or beating Mr Federer…