Oil price, EnQuest, Gulfsands and finally…
WTI $46.31 -$1.47, Brent $48.52 -51c, Diff $2.21 +96c, NG $2.84 -14c
The death of King Abdullah of Saudi Arabia was announced this morning at the age of 90, his successor is King Salman and his successor has already been announced as Prince Muqrin. I do not expect to see any significant change in oil policy from Saudi Arabia as a result of this and although the oil price has risen this morning it is only a token increase, probably seeing one or two bears closing out positions.
The ECB went ahead with its QE yesterday at the slightly higher than expected rate of €60bn a month until September 2016 at a total cost of some €1.1tn. Bond holders all over Europe will be ringing the bells for a while as they queue up to sell their tatty notes at over-inflated prices to the ECB.
The teenage scribblers on the Strasa got the inventory number well wrong again last night, coming in at a huge build of 10.07m barrels against the guess of 2.7m. With oil stocks at historic highs something is going to go pop sometime, maybe soon… Lets see what the rig count is later today.
Finally keep an eye on the Greek election on Sunday where the Syriza are tipped to win and that would just be the start of an interesting battle of wills…
EnQuest has been one of the worst performers in the sector recently having fallen from a high of 148p to a low of just 22p only this month. Apart from the oil price there have been repeated rumours that it was refinancing or even looking for an equity raise. Accordingly the market has been cheered by an operational update this morning that seems to put to rest any financing worries. With production last year at the top end of guidance at 28/- b/d and indication that this year should hit 33-36/- b/d the market is happier than it was. EnQuest has ‘responded expeditiously’ to market conditions having cut cash capex, hedged sensibly and operating costs per barrel are down 10%. Having re-positioned its debt slightly, its financial position is ‘resilient’ and debt is $1bn with further facilities, but strong production growth over the next two years from new developments should ensure that the company remains reasonably comfortable unless things get significantly worse.
Gulfsands Petroleum- The heat is on…
So, things are hotting up at Gulfsands and the incumbent management have brought out the big bazooka, Arawak, with whom they have a strategic cooperation agreement have come to the rescue of messrs Sajjad and Judge. The theory is that if the vote goes against the two of them Arawak will terminate its agreement and loan facility, this would include repayment of $10m plus $1m of costs within 90 days. Right now Waterford have to decide to cut and run or call the bluff and if its the latter will have to prop up Gulfsands themselves. I cant believe that they hadn’t thought this one through and it will be most interesting to see what happens ahead of the vote on 3rd February…
The tennis at the Australian Open is hotting up too, this morning Andy Murray cruised through to the last 16 but Roger Federer did not and that is interesting as Murray was slated to meet him in the quarter finals.
Still in Oz, on Australia Day, England narrowly lost the latest one dayer but signs of an improvement are real. What the team are realising one hopes, is that 300 is really only a par score in this day and age and whilst Bell took them towards a big score, taking only 50 off the last ten overs isn’t good enough.
In rugby it’s still the league games in the European Cup but watch out for Bath v Glasgow and of course the Saints v Racing Metro.
Football wise, we are back to the FA Cup with the early game tonight being the Red Devils travelling to Cambridge for the banana skin game. There are easy ties for Chelski, Noisy Neighbours, HubCap Stealers and the Gooners so to find the interesting action we should look at the Saints v The Eagles, Bristol City taking on the Hammers on Sunday and Bournemouth will fancy their chances at Villa. There is a West Midlands derby as The Baggies go to Brum and the M4 derby as Cardiff host Reading.
In the US, my correspondent is back….
The Seattle Seahawks are the NFC Champions for the second year running after they beat the Packers in an incredible game at CenturyLink Field. The Packers led 19-7 with just over two minutes remaining but the Seahawks somehow managed to drag the game into overtime. Russell Wilson then hit Jermaine Kearse for the game-winning touchdown.
The Patriots smashed the Colts in the AFC Championship game. LeGarrette Blount ran for three touchdowns in what was a miserable trip to Gillette Stadium for Indianapolis. Although they did not have the luxury of throwing under-inflated footballs all night… The Patriots are being investigated for this, although QB Tom Brady and Coach Bill Belichick have denied any wrongdoing.
The Super bowl will take place at the University of Phoenix Stadium in Arizona next Sunday. Two great teams, it should be a classic….
And finally those of you who know top services analyst Alex Brooks at Canaccord will share his despair at leaving his mobile phone charging away in the Aberdeen boardroom of Plexus Holdings on Wednesday. When I enquired about it this morning he was upbeat. ” Well, with the phone, the interesting point is that it’s still on, so I can track it using the Find My Iphone service from Apple. I watched it drive around Dyce yesterday afternoon, head down the M1 at around 6am, and it’s currently in Wapping. So not too worried… and that’s a little more interesting for your blog!