WTI $47.78 +$1.31, Brent $49.03 +$1.04, Diff $1.25 -27c, NG $2.97 +14c
A modest bounce in the oil price yesterday as news leaked out that the ECB will announce today that Euro-QE will be €50bn a month for a minimum of 12 months. Opec Secretary General El-Badri again said that there would be no Opec cuts and he was surprised only that the market was surprised by the oil price fall. Discussing cuts being made by oil companies, ENI suggested that if there were 4/5 years of reductions the oil price might bounce back to $200 a barrel. This is not a ridiculous suggestion as history shows that like a lot of other highly cyclical industries lessons are rarely learned. I was in Aberdeen yesterday and will write up some thoughts from there tomorrow. Comments by Bo Diddeley on the radio this morning were somewhat more peculiar and oddly unrealistic, nay naive.
API stock data showed a build of 5.7m barrels and the EIA numbers are tonight, delayed due Martin Luther King day on Monday.
Tullow has announced an update on operations in Kenya and whilst Epir-1 is not a discovery there appears to be proof of a working oil system in the North Kerio Basin. Ngamia wells 5 and 6 appraisal wells tick the boxes on oil pay and Amosing-3 had 107m of net oil pay in good reservoir sands. Finally the Ekales-2 well can be described as an ‘exploratory appraisal well’ or as Angus says ‘ a bold step-out’.
Listening to the Faroe conference call this morning was quite uplifting although I noticed that Peter Hitchens, oil market legend, thought that Graham Stuart was sounding rather ‘depressed’ which both he and Jon Cooper denied! More on Faroe soon but having been at the top end of guidance for last year and the same forecast for this, things are in line with expectations. Faroe is fully financed for an exciting well programme this year of high impact drilling, has plenty of cash, undrawn debt facilities and no imminent development capital commitments. Faroe is well placed in this very difficult market and depending on whether you are Eni or BP will shape your investment decision!
Whilst I was out yesterday I noticed that planning for Cuadrilla’s two wells in Lancashire was refused which is a significant disappointment to all in the industry, not to mention anyone in the country that consumes power. I am out today but will comment in much more detail after I have spoken at length to industry participants, maybe tomorrow.
Gulf Keystone has announced its new CFO as expected in my report of last week. Sami Zouari takes over the role having been an investment banker at BNP Paribas in a former life, and an advisor to GKP as it would happen…
And another company changing the board is Madagascar Oil who have appointed Robert Estrill as their new, long awaited CEO. Accompanying this appointment was the announcement that Gordon Stein, who has single-handedly held this company together lately, would step down from the board whilst remaining CFO. This might be a disturbing situation and I will report back after I have spoken to the company, there may be a simple explanation…
Very brief today as I am dashing off, a full round-up tomorrow but I notice that in the Clueless Cup last night that although Spurs did beat Sheffield Utd 1-0 it was only due to a silly penalty given away and that the Blades deserved a draw.