WTI $59.96 -81c, Brent $63.87 -$1.24, Diff $3.91 -43c, NG $2.75 -8c

Oil price

The oil price had a mixed week ending up slightly for the better, WTI was 83 cents up with Brent up 56 cents to the good. On the plus side the dollar was weak, massive refinery runs backed by strong product demand drew stocks down and the rig count was down again, albeit by only 9 rigs, 7 in oil. Countering that was that Saudi Aramco told anyone who was prepared to listen that it could and would increase production ‘to meet demand’ thus rendering time spent by Opec in Vienna pretty much worthless. In this scenario it is worth listening to oil expert David Hufton of PVM when he points out that Opec have revised down their ‘fair price’ from $100 a barrel only six months ago to $75-80 now and the range might be $40-80…

There is little doubt that despite some weeks of stock draws in the US the second half of this year will still see over production of oil and pretty much whatever demand figure one uses worldwide stocks will go into 2016 higher, not lower than expected. It does look like it is the majors’ reduction in their capex budgets that will be more responsible for taking crude oil off the market in the next year or two rather than a battle for market share between Opec and US shale.


It looks like we are witnessing the denouement of the Dragon Oil story as ENOC have returned with a bid of 750p in cash which has secured the recommendation of the Independent Committee of directors of Dragon. Although there might be some curmudgeonly shareholders who consider the price to still be parsimonious if I were them I would take the money and run. With ENOC saying that once it has reached the threshold of acceptances it will de-list I think that the time for being a braveheart is now over  and the time for counting the cash has begun.

Plexus Holdings

I was just thinking that it was about time for some news from Plexus and sure enough another decent order from a new customer pops up. This time it is for Total in the Norwegian North Sea on the Solaris gas exploration well and is worth £3.3m. This well is ultra high pressure and high temperature, indeed it may be the highest pressure well ever and proves that Plexus kit is called for in these extreme conditions.


I had a meeting with Cath Norman, MD of FAR Ltd last week to get an update on the situation in Senegal and to keep an eye on the progress down there. Timing-wise the consortium are moving ahead with good progress being made on all fronts and analysis of the well data continues.  The rig will be on-site in September for the contracted spud date of 1st October and the rig costs have been significantly reduced as one might expect in the three well programme. The programme is appraisal as well as exploration and I understand that a number of good prospects are being assessed.

I remain extremely optimistic about Senegal and believe that FAR is the most leveraged way to play the discoveries, further funding will be needed but the company has solid support from its shareholders and I dont see that being a problem. Indeed I more than suspect that Cairn too, despite being strongly financed will need to address this issue and maybe in due course relinquish the operatorship to Conoco.

President Energy

An update today from President on their operations in Argentina where the four well work-over on Puesto Guardian has been completed on time and on budget. Now the operator, President has effected a big change with this operation and production is now 190 b/d, up 92% offering a significant return on the $1.6m cost of the work-over and with realisations of $70 a barrel or more it exhibits strong cash flow. A brief mention of Paraguay where seismic operations should conclude in July with results in Q3 2015 and the company says that levels of interest ‘remain encouraging’.


FOGL has announced that its Humpback well in the South Falklands Basin spudded at the weekend and will take approximately 65 days to drill. Undoubtedly the highest risk well of the programme, especially now that a second well in the south has been ducked by the operator, Humpback really needs to come in if the Southern Basin remains a realistic hydrocarbon province.

Providence Resources has released a technical update on their acreage shared with Cairn in the north Porcupine Basin, offshore the west of Ireland. This is an exciting prospect but it is early days and the market is hardly likely to give any of the benefit of the doubt when other matters prevail. Other matters of course mean Barryroe where the market still dont know who is farming-in and how they will pay for it. I know that farm-outs nowadays take a lot longer than ever before but this is borderline taking the Mickey…

And finally…

Victory at Le Mans for Porsche for once now that Audi tend to dominate proceedings. For the first time in many years a current F1 driver was in the team as Tandy/Hulkenberg/Bamber took the honours.

Its time for Queens Club to open its doors and this week’s tournament is about the best ever with 9 of the top 15 world rated players looking for success on the grass a fortnight before the start of Wimbledon.

New England cricket is certainly fun to watch and with over 750 runs at the Oval on Friday and 600 yesterday the crowds love it, although there are justifiable worries about not batting out the overs as Captain Morgan said yesterday getting 250 in 50 overs would have been infuriating. Catching catches would help though just to be a minor pedant…

With Royal Ascot starting tomorrow Frankie Dettori continued his classic form from last week’s Derby by winning the French Oaks on Star of Seville, again for John Gosden where the old partnership is thriving.

It was a busy weekend for the home countries in the race to qualify for next years European Championships in France. Neither side really wanted a 1-1 draw between Ireland and Scotland in such a difficult group but Wales beating world no 2 side Belgium was an incredible achievement. Northern Ireland got a 0-0 against Romania which keeps them in with a shout and after a few wobbles England succeeded 2-3 in Slovenia with a genuine wonder goal from Wilshere.

And in the Womens World Cup England’s group is wide open, with a win against Mexico on Saturday prospects looked up but Colombia beating favourites France the last match takes on a nerve wracking resonance…