WTI $44.66 +$1.20, Brent $55.91 +$2.40, Diff $11.25 +$1.28, NG $2.92 +7c

Oil price

It was all down to one word, by withdrawing ‘patient’ from its communique, the Fed, despite it being expected, saw the dollar fall 3% which more than offset poor inventory stats. They showed a build of 9.6m barrels to 458.5m which is apparently a high since 1930. At Cushing the rise was 2.9m barrels to 54.4m barrels but since records have only been kept there since 2004 the record is measly.

There is a lot of discussion around what will happen if and when the tanks are full and whilst the situation is possible I suspect it is being overdone. Adding stocks at Cushing at 2/3m barrels a week starting from here would indeed fill the tanks to capacity (71m) by May, but given it is no longer locked in and there is capacity elsewhere I think the risk is being overplayed. Current domestic production according to the EIA is still 9.4m b/d which will fall in due course and imports are running a bit high at the moment as well. Finally, as oft mentioned here the refinery maintenance season started early due to the strike and is at its peak now, expect a pick up in demand once runs start to pick up in April ahead of the driving season, there I’ve mentioned it for the first time this year…

Nothing to add on the UK budget yesterday, those changes are good without being earth shattering and the tax allowance scheme for early spend should encourage the industry.


What can only be described as a cracking set of figures from Lamprell this morning as 2014 smashed the whisper and beat every target in the book. This is truly a landmark for Lamprell in every way, significant progress has been made in profits, the backlog and order book which also reveals a huge rise in the contract win rate, add to that a much stronger financial position and exemplary safety record and they do indeed tick all the boxes. Behind all this is the new strategy which encompasses a better commercial performance including a much better focus on biddable projects and savings on procurement and factory efficiency, aided by some very smart new kit.

The numbers speak for themselves with profits more than doubled, EBITDA doubled, margins up from 7.1% to 12.6% and the order book up to $1.2bn. 9 majors orders were delivered including all the legacy projects and there is a high quality backlog of tier 1 clients which give a very solid look to the order book going into what might be a challenging period. Whilst the company acknowledge that anything might happen in their space they are confident that they are ‘well positioned to weather the storm’ and to be fair the market in their space where the ‘long term fundamentals remain strong’. They are fully aware that there are things that are outwith their control including price cutting by the competition but so far that has not been evident. The ‘acting CFO’ said that the very high margins achieved in 2014 may not be held but given that they have 80% of the 2015 order book in the bag I suspect he was just being cautious. The work in the yard looks very solid with 6 jackups under construction and one more to start in May and 8 rig refurb projects and an onshore on the go this year looks good too. Lamprell has indeed turned the corner and whilst will get tarred with the same brush as other service companies should be viewed in a very different light, going forward this company is indeed in excellent nick, now all we need to do is to kick the tyres…

Ophir Energy

As the results season grinds on it becomes more difficult for companies to differentiate last years numbers so forward thing is most important. Ophir declared a profit, the completion of its asset sale and has $1.17bn of cash which the CEO may spend as he sees now as a ‘unique opportunity to acquire exploration acreage at low cost and with minimal commitment’ which is very true. Having snapped up Salamander one cannot rule out further corporate action from Ophir and will drill only the best possible locations with the most upside, indeed interestingly the company only has $100m of commitments out until 2017 which leaves it in a very strong position.


A sigh of relief around the market today as EnQuest delivered a good set of figures and announced production of 27,895 b/d up 15.2% for 2014. Guidance for this year is a solid 33-36/- b/d up 24% and there is a reserve upgrade into the bargain. Net 2P reserves are up by 25 mmboe to 220 mmboe although there was an impairment charge of $335.3m and net debt is $932.8m. EnQuest has suffered more than most lately as concerns over its debt has worried the market but todays numbers, along with an impressive hedging position may have allayed some negative vibes.

And finally…

Last nights Champions League saw the exit of the final English side as the Noisy Neighbours couldnt control Lionel Messi and to be fair it may have been worse than just the one goal. After Tuesday’s loss Arsene Wenger has called for a change in the away goals rule, funny that…Tonight in the Boropa Cup the Toffees go to Dynamo Kiev holding a 2-1 win from the home leg.

The CWC is hotting up big time and today India cruised past the Bangas and will play the winner of the Aussies v Pakistan which is tomorrow.

This may be the last ever blog, according to those in the know the combination of the eclipse of the sun, the Spring equinox and the position of the stars mean that the world will end in the morning…