WTI $49.28 -17c, Brent $58.66 -24c, Diff $9.38 -7c, NG $2.90 +2c
Another late and brief blog, much to expand on later in the week I hope. With Janet Yellen doing her testimony to the Senate Banking Committee markets waited to hear news of US recovery and growth, overall it was good news but only just, instead of being at least two fed meetings away interest rate hikes can be judged on a ‘meeting to meeting’ basis.
Barry unsurprisingly vetoed the Keystone XL pipeline and without the wherewithal to push the Act through, the Republicans look like they cant go anywhere from here, yet… And the API stats showed a stock build of 8.9m barrels of crude oil while unsurprisingly gasoline and distillates drew by 1.6m and 2.4m barrels respectively.
It was results day today for Petrofac and they provided us with a Capital Markets Day during the morning. I will write that up in more detail, hopefully on Friday being so late today, and according to CFO Tim Weller I also need to ‘brush up’ on my model, I will stick to basics now. The results were in line with many updates and briefings at $581m net profit, EPS of 168.99c and the dividend was maintained, no surprise there, a more appropriate time to review payout will be at the interim stage at the earliest. The year-end backlog of $18.9bn is added to by $3.5bn of orders taken so far this year and this gives ‘excellent revenue visibility’ for 2015 and beyond.
2014 was indeed no ordinary year which is reflected in the action taken with regard to Ticleni, Greater Stella and Laggan-Tormore, the latter being the only and ever time the company has lost money on a lump-sum contract.
Greater Stella/Ithaca has been a major league problem and Ithaca also announced that the FPF-1 is now not expected on site until 2016, maybe as Mr Pickup suggested, to take advantage of the higher oil price expectations, that’s almost as heretic as Mr Weller suggesting I dont use a model…For my sins I have Ithaca in the bucket list but I remain convinced that the company will come good, the value hasn’t been lost, just deferred…
The Gulf Keystone announcement will have caused intense pain for longstanding shareholders who have been through more grief than almost any other I can imagine. To make matters worse it looks like the company have had to wave the white flag right at the bottom as although payments are coming through it might just be too late. I often get asked what my takeout price would be for GKP and carrying a 300p target at the moment I do look like a bit of a clown, todays announcement doesnt make it any more likely that the make up will be coming off any time soon. I hope to speak to the company in the next day or two and will comment after that but at least by putting yourself on the market you are at least certain to find out who might expose themselves…
There will be one hell of a drinks party tonight at San Leon as at long last the ultra-patient shareholders have been rewarded by a well actually coming in, and in Poland. The Rawicz-1 well in southwest Poland flowed gas at 4.1mmscf/d with no water and the flow was getting better and better until it was time to stem the flow to stop wasting the flared gas. Next stop 3-5 wells to develop the field, the next of which San Leon proudly claim they are not paying for. The stock is deservedly up 40% today and extrapolating the value at the high gas prices in Poland and with ever increasing European demand one can get to a lot higher.
I wish I was somewhere near Petroceltic’s offices tonight because there will be quite a pour-out there as well, tonight Irish eyes are definitely smiling. CEO Brian O’Cathain was facing a vote to remove him and Worldview Capital Management were also trying to add two directors of their own to what was already an unbalanced Board. In addition, Worldview opposed the company’s own slate of two new independent directors, Nicholas Gay and Neeve Billis. The results have just been announced and if there can be any winners or losers in these things it seems that Worldview have lost on all counts. Brian O’Cathain remains as CEO, messrs Dijols and Moskov didn’t make it to the board (although the Dijols vote was tight at 49-51%) and messrs Gay and Billis were voted onto the board (although for Neeve it was, lets just say, a damned close run thing…). What happens from here is uncertain but surely things can’t remain the same, the Worldview stake surely has to be sorted, either via a placing or better for all concerned if Dragon or somebody else can be persuaded to bid or re-bid, the new board has much to do…
The one place in Dublin where there wont be any drinks flowing tonight will be at Providence who have announced what looks like a deeply discounted placing and open offer in order to keep the company funded for the’foreseeable’ future. With the Barryroe farm-out dragging yet again and continued calls on their purse from elsewhere it looks like this might be the last throw of the dice for Provvies, lets hope that they can get that deal signed and sealed and they can at last concentrate on the rest of the portfolio.
This blog is so late its almost kick off time at the Emirates as the Gooners take on Monaco in what is surely a virtual bye if one can be got in these stages of the Champions League. Last night nearly was one at MiddleEastlands as Barca turned it on big-time, Luis S scored twice and a down to 10 men team of Noisy Neighbours were definitely not noisy until they got a goal back and then magical Messi failed to convert a pen and the rebound, it could have been so much worse…
In the cricket Ireland were also extremely confident of their tie against the UAE, unusually favourites, the Irish made quite a meal of winning the game after rather letting the oppo get at least 100 more runs than they should have.