WTI $49.76 +$1.59, Brent $62.58 +$2.53, Diff $12.82 +94c, NG $2.73 +4c
Friday saw further strength in the oil price on the last day of the month that was to prove one of the best in percentage terms for a long time. With WTI eventually putting in a 3% rise on the month and Brent an impressive 19.7% hike, things appear to be looking up but it could have been better as the Baker Hughes rig count wasnt brilliant. With 43 rigs being junked, 33 of them oil rigs, crude bulls wanted a higher figure and the CFTC figures showed that money managers have actually cut their long US crude futures positions in the last few days.
It is also worth noting that some product prices have shifted up sharply due to a combination of shortages and weather conditions and the strike still continuing, this means that US diesel for example has surged ahead of its contract expiry. It is ironic that in some cases refiners have imported more Brent type crude to process in preference to the WTI in which stocks are building to significant levels.
Finally it looks like Ed Davey and the UK Government are taking on the formidable Mikhail Fridman who in an attempt to diversify his portfolio away from Russia has bought RWE assets including those in the North Sea, over at DECC they are worried that further sanctions on Russia might at some stage leave operations in the area uncontrolled, something one can have some sympathy with.
Kosmos has this morning announced the results of the CB-1 well at the Cap Boujdour permit offshore Western Sahara. The well encountered non-commercial hydrocarbons of gas and condensate and whilst there was a working petroleum system more work will have to be done to decide if and when to drill another well. For Cairn this was no more than a modest disappointment, all is not lost and at the moment all eyes are on Senegal for progress this year, for Kosmos they have a number of very exciting prospects on the go at the moment.
The Ebok debt facility repayment of $50m due on the 31st of January has now been delayed until the 31st of March as the company continues to try and extricate itself from its financial difficulties. (It is also ‘utilising’ a 30 day grace period for the 2016 bonds where payment was due on 1/2/15…?) I am hearing of a number of bids including one from founder Bert Cooper backed by a Chinese consortium, at least two African bidders and of course the bondholders will have a significant interest in the situation. Time is not on the bidders sides especially given that due diligence will need to be done, the upside doesnt look substantial although the stock is up 20% today……………at 10.4p.
A post-script to the shenanigans at the EGM last week is that Don Wolcott and Joe Mach have resigned from the board effective immediately. They had, as Worldview nominees, dissented from the rest of the board’s views and lost all the votes they contested. Reading reports of the meeting and some of the speaker’s comments it was quite theatrical but from now on much has to be done. Worldview have failed in getting rid of the CEO, failed in putting up additional board members and have resigned their existing slate, in addition they have claimed that the company are not fully funded for the Algerian project. Such a situation does not a happy ship make so Brian O’Cathain has much to do to sort this situation out for once and for all, not easy given the fact that Dragon cannot be relied upon to return and if they did whether Worldview would find a new, lower bid acceptable…
Victoria Oil and Gas
VOG came out with results at 4.15 on Friday and although this can sometimes arouse suspicions this was far from the case here, as I suggested in my recent report on the company all is going very well. The results proved that it has been an excellent year for VOG with GDC substantially completing the scope of work for the ENEO project construction phase and has built and tested gas pipelines to both stations. Bassa now has its completion certificate and Logbaba should follow shortly meaning that the project can come on line by the end of 1Q 2015, no mean feat. With a two year take or pay gas contract at $9/mmbtu and optimism that demand may actually be better than originally thought I see a fair bit of potential upside for VOG. With further optimism on drilling and success with the extra perforating of the La-105 well where new zones have performed well it made for further good news in the period. The only fly in the ointment I suppose is that it has proved difficult to move on the Russian property and an impairment charge of $49.8m has been taken as a precaution here. Overall as I noted having seen the Chairman fairly recently things are going well at VOG and I look to them and Bowleven to prove that the Cameroon experiment works very well.
I reported a few weeks ago that my Alma Mater, Wood Mackenzie had been put up for sale by its majority owners, Hellman & Friedman. With this process proving relatively successful, (bids of $1.6bn from Verisk Analytics and $1.5bn from Platts owner McGraw Hill in already reported in the FT) Wood Mack have now appointed Lazards in order to see if they can maybe get away an IPO which could realise somewhat more, my spies tell me that the magic number starts with a 2…
So, farewell to Salamander who depart from the Official List this morning after what can only be described as a chaotic bid process whereby management presented the company on a plate to Ophir. In current circumstances it wont be the last faller in the E&P long distance hurdle..
Difficult to know just where to start in what was a difficult weekend of being an England fan in cricket or rugby. In the cricket the English management and selectors are putting their heads in the sand as former captains and fans alike know that Hales has to play and the bowling is inept, even Tredwell must get a game as Broad, Anderson and Finn are not performing. Having put 309 on the board, which on these motorways is only par, to lose by 9 wickets with three overs to go is more than disappointing. The good news is that the new Chairman of the ECB appears not to share the vilification treatment being dished out to KP and has said that if he scores plenty of county runs his name will be in the frame again…If that means we have to lose the management, the coach and the selectors it will be a price worth paying, not least for Surrey fans who will see KP batting with Sangakara…
As for the rugby England were also very poor, whoever told Hartley to throw long to the line-out when England were on the Irish line waiting for a maul I dont know. Apart from that they were far too slow to the breakdown, missed tackles and gave away silly penalties, apart from that they looked great…
In the football two deflected goals won Chelski the Clueless Cup but better news had already come in from Anfield where two fantastic goals had seen off the Noisy Neighbours. Elsewhere the Gooners beat the Toffees, Man Who saw off the Maccams (sorry David) and with the Baggies beating the Saints and Villa losing again (sorry Mike) its massive down at the bottom with Hull and Burnley losing.
Carl Frampton won easy enough and the match with Scott Quigg is surely to be made if only for the money, I suspect outside somewhere in the summer might just do the trick in the Northern Ireland v England clash.
Re Afren you said “one from founder Bert Cooper backed by a Chinese consortium, at least two African bidders and of course the bondholders”
So far publicly we’ve had Bert + SEPLAT + Bondholders. Can you expand on the other African bidder you mentioned?
I’m afraid that I cant expand as the process is still going on. The people I speak to are not confident that it can be done in the time frame and without the real support of the bondholders.