WTI $52.21 +$2.37, Brent $57.05 +$2.39, Diff $4.84 -98c, NG $2.71 -8c
More fun and games for the oil bulls after taking their feet off the pedals for the last couple of days. Brent celebrates the new contract by being over $60 this morning, as I write it is actually $61.23 buoyed by export shortages from the Middle East primarily. Yesterday I mentioned bad weather in Kuwait and you can now add Iraq to that list, down south its so bad that half a million barrels a day, maybe more has been withdrawn from the market.
The market has also taken to second guessing the Baker Hughes rig count, due anytime, as the goons who normally foul up inventory forecasts are joined by oil market punters, talk about flanneled fools at the wickets and muddied oafs in the goals…
A further comment on what Total said yesterday when I skimmed their figures but can now add that they took a €6.5bn impairment charge for Canadian oil-sands, US shale and European refining, including one in the UK. Elsewhere BvB was talking somewhere at IP Week (could it have been the dinner, alas I was not invited!) that he expects supply growth to fall and maybe quicker than some predict, we should watch what Shell do on upcoming FID’s with interest…
Victoria Oil & Gas
The chance to spend some time with Kevin Foo, Chairman and acting CEO of VOG is always time well spent particularly at the moment as he is overseeing the denouement of a long period of investment. VOG is an onshore gas supplier to industrial customers in Cameroon via its business Gaz du Cameroun. What has really made the difference is the signing of the GSA with ENEO, Cameroon’s energy utility company which doubles VOG’s revenue by supplying gas to two power stations that will generate 50 MW and take the gas at $9/mmbtu on a 2 year fixed price contract. There is a difference between supplying gas in the dry and wet seasons but I am led to believe that it will even out in due course.
The point about VOG is that it really is a utility, or as the blurb puts it, ‘an operating African utility’ and with exciting opportunities to drill more wells and with what looks like a massive market out there to aim at, the upside from here seems entirely logical. That market has been using other energy sources which are mainly imported, expensive fuel oils which are neither sufficient for Cameroons needs nor anything like as efficient giving a local gas producer very much an open goal. Cameroon in general and Douala specifically, face a significant energy shortfall and VOG is the sole supplier of gas in an increasingly large central African hub. Whats not to like about being the sole supplier of gas, with a strong cash position, a range of energy products and a good client base in a market crying out for your product? Just as a btw, investors should watch out for Bowleven who will be drilling nearby, if successful there’s plenty of room in this market, as the song should have said ‘this town is big enough for the both of us…’
Ruspetro has announced that a concert party holds 33.8% of its shares, something that would normally trigger a bid but the trusty old takeover panel has concluded that this was ‘an inadvertent mistake’ and that the party should be brought to a halt by someone selling a few of their shares to go back below 30%. The question is who will sell or, hush my mouth, will they find someone else to accommodate them…I nearly got a meeting with John Conlin at Christmas time when he was in town, I think its high time to resurrect that meeting…
While on the subject of the Takeover Panel over at Afren there are as far as i’m aware been any announcements regarding the 5pm today deadline for Seplat to make its move. If i had to guess I would say that given a further extension is unlikely that Seplat will either walk or return with that ‘derisory’ bid I mentioned last time, if I were them I would probably give it a wide berth, after all the bondholders will be holding a fire sale before long…
Its back to the FA Cup this weekend and there are few stand-out fixtures. The Baggies under Pulis will fancy their chances at home against the Hammers while the Eagles host the HubCap Stealers. Other uninspiring fixtures are Villa v Leicester and the Gooners v Middlesborough.
Much more fun is the 6 nations rugby as Italy go to Twickenham, but with Ireland hosting France being the ‘biggie’ and Scotland hosting Wales being probably the best chance of an upset there is excitement all around.
And the Cricket World Cup starts today but dont hold your breath, the final is the weekend before Easter, 44 days from now! England start with a game against tournament favourites Australia at 3am tomorrow.
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