WTI $58.93 -22c, Brent $66.45 -1c, Diff $7.52 +21c, NG $2.82 +5c
The oil market was quiet yesterday and is much the same this morning. The strong dollar hasn’t helped and further downward pressure is evident from the forecast increase in crude oil stocks when the agencies report tonight and tomorrow, consensus is for a further build of around 2m barrels. Add to that an albeit temporary cease fire in the Yemen as the Saudis halt air attacks to let humanitarian aid through and most pressure is modestly down. The only upward influence is that Libyan production has fallen back below 500/- b/d as the protesters have closed the eastern port of Zueitina again.
The bog will be a bit sporadic this week and next as I am abroad visiting companies, I hope to file reports either while in Italy or next week from Houston.
Kosmos held their analysts presentation yesterday and whilst I didnt listen in I have seen the slides and more importantly the new resource numbers following last week’s discovery in Mauritania. The company have estimated resources at Tortue West at 5-12 TCF with a mean figure of 8 TCF and in the Greater Tortue Complex which extends into Northern Senegal they have suggested a number of between 6 and 22 TCF. This is even more than I had expected when I wrote about it last week and for Kosmos and indeed a number of other players in the two countries will provide significant optimism.
One of those with a read-through to Mauritania is of course Chariot who are also most excited about the find, with their local acreage being more likely oil rather than gas prone. However this morning they have announced that they have taken a knife to board costs and have cut remuneration by 50% which they say will save around $1.5m next year. The first casualty of this is that CFO Mark Reid has decided to leave which is a shame as he was one of the ‘new brooms’ that came in post previous management debacles. The company say that this is very much a ‘precautionary measure’ aimed at protecting cash 2 ½ years down the road and indeed the G&A costs have nearly halved since they came on board. I remain of the view that Chariot, which is fully funded, has few commitments and therefore is comparatively well placed is as good as any to take advantage of the significant upside in its portfolio in the future.
A very short comment on Sound as after last week’s flurry of announcements they held an analysts and investors conference call on Friday lunchtime. The shares have continued to perform well since the placing and open offer was announced and given that the shares rose so strongly it looks like there will be good take up of the available shares. We are promised ‘transformational transactions’ and that the company will deliver and end game in and out of Italy. Following this raise the board will have cash of over £20m with which to pursue these opportunities and we are to expect ‘one or two’ transactions to close before long.
Starting today the company are hosting a series of analyst, press and investor visits to Nervesa which will give all these groups of people chances not only to see the the asset but to spend time with the management and hear the story from the horses mouth, so to speak. I will report back myself as and when the opportunity arises and remain bullish on the shares despite the continuing rise.
It seems that it is the season for making changes to the board, albeit in a number of different ways. In Bowleven’s case they are losing two non-execs in the form of Chief Tabetando and General Counsel Peter Wilson and gaining one in the shape of John Martin. Both of the former stay on with the company in one form or the other and for John Martin this is the second NED he has received in the last week having been appointed Chairman-elect at FOGL recently. He adds this to being on the board of Total and the WPC so he will soon be busier in retirement than he was when he was at Standard Chartered.
The Sunday Times had another go at Afren pointing out that the two disgraced board members, Osman Shahenshah and Shahid Ullah had run up a bill of £640,000 for ‘unauthorised’ private jet flights in 2013 and 2014. Also the new CEO, on a salary of north of £500/- is planning a deep dilutative rights issue which with the stock at 3.4p is hardly going to raise a significant sum…
The fight of the century turned out to be the ‘yawn at dawn’ and failed to live up to the hype and the razzmatazz, cynics would be right in thinking that the world was duped into this one…
England lost the third test match within three days despite Jimmy Anderson yet again delivering heroics with the ball. The whole thing was totally pathetic and how the selectors and the coach can stay in a job totally eludes me. To select a non-specialist opener when you have one in the party is bordering on laughable and to have a potentially match-winning spinner warming the bench is equally disturbing. Do these guys think we were born yesterday or something, they should all be sacked as they are a disgrace to cricket and the country and insult our intelligence.
Chelsea are Champs and Man Who are chumps as the former dutifully won the league and the latter slipped up on the banana skin laid out for them. At the bottom none is yet in the clear although Burnley look like toast and Hull lost to the Gooners last night. Juve v Real tonight should be good but both sides will field below full strength sides.
Stuart Bingham delighted the snooker world by winning in Sheffield, something that Nick Clegg will try to emulate on Thursday. Having to beat top opposition in four rounds was proof that Bingham winning was no fluke and the win was well deserved.