WTI $58.94 -$1.99, Brent $65.54 -$2.23, Diff $6.60 -24c, NG $2.73 -4c
While I have been away this week the oil price has been quite volatile partly due to the fluctuations in the dollar, its strength certainly knocked the price yesterday. The weakness followed a day when the the first stock draw for a long time gave the bulls a chance to shine but the realisation that despite this draw inventories remain at near record high levels swiftly rained on their parade. Add to that the Iranian Oil Minister’s comments that his production target was as high as 5.7m b/d by 2018 and the gains were lost.
Today we have the US non-farm payroll numbers and after last month’s shock the market again expects a figure of around 228,000. We also have the rig count and whilst the number has been falling fairly relentlessly there must be a chance of a rogue figure at some stage… I am away in Texas next week and hope to get a better idea of how things look on the ground.
A trading update from IGas this morning added to by the resignation of CEO Andrew Austin which came as a bit of a surprise. After ten years in the job it looks like AA feels that having completed the Ineos deal and strengthened the balance sheet this is a good time to move on leaving the company in a ‘good place’. Stephen Bowler takes over in the CEO role and his experience at the company as CFO will serve him well as the next phase of the company’s growth pans out. This includes a carried work programme of $285m, $30m in cash from the Ineos deal and further asset sales and cost savings from the Dart acquisition. More on IGas after I get to chat with Stephen Bowler…
I have spent three days this week in Italy visiting the Sound Oil facilities and spending time with senior management from the UK and over there. Given the amount of news around from the company recently there is little to add but I was extremely impressed by the operation at Nervesa which is drilling at the moment and the site is as efficient as I have seen. If Nervesa delivers the goods then anticipated cash flows, allied with the recent raise will, along with promised acquisitions leave Sound Oil in a very strong position to execute its Mediterranean gas strategy.
A pipeline update from Amerisur this morning as the Colombian Ministry approved the licence modifications for the construction and operation of the Ecuador interconnector oil pipeline, this is another step in the right direction for what will be a significant game-changer for the company. Permission has also been granted for two water disposal wells per production pad which will remove 20/- b/d each. Amerisur shares have risen sharply in recent weeks and whilst the fall was overdone at this level Amerisur shares are exceptional value.
It’s taken longer than we all thought but at long last Pantheon has contracted a drilling rig for their two well programme in Texas. Bad weather has delayed the process and is still responsible for a change in order of the wells, we are being led to believe that the Polk County well will now be drilled before the Tyler County well. I interviewed CEO Jay Cheatham a little while ago and there is little doubting his enthusiasm for this programme which he described as ‘one of the most exciting plays in my career’ which itself is a portent indeed. Pantheon shares will now be front and centre for some weeks and this is no time to be short of the stock…
Another day, another contract for Plexus who today announce an order from Maersk worth £1.25m for operations in the Danish North Sea. Plexus will never be a cheap stock primarily due to limited availability of stock but there is still upside and it is always going to be reassuringly expensive.
So the general election result managed to wrong foot all the pollsters and the UK has a majority Conservative Government. Amongst other influences on the oil sector will be the loss from the House of Commons of former Energy Secretary Ed Davey who was one of the casualties along with Vince Cable, Minister for Business, in addition to that there will be no Balls and three party leaders have already resigned this morning.
Sporting-wise the football season is grinding to an end but at the foot of the Premiership there are at least two relegation places still up for grabs. Key matches will be Hull Tigers v Burnley, the Magpies v the Baggies, Leicester host the Saints and the Super Hoops have a hard nut to crack going to MiddleEastlands….The best match might be Chelski v the HubCap Stealers and the Eagles host Man Who on a shocking run…
F1 is back in Europe with the Spanish Grand Prix on Sunday and will Ferrari have the new bits and pieces on their car yet we wonder?
And in the one dayer in the cricket Ireland are batting and are 56-4 and off for rain, pluie ça change one might say….