Oil price, Plexus, Sound, Hurricane, Sundry-Williams-Tullow-Afren-IOG- And finally…
WTI $59.61 -84c, Brent $63.02 -$1.24, Diff $3.41 -40c, NG $2.82 +4c
Last week the oil price fell a little, WTI was down 35 cents while Brent lost 85 cents amid various worries primarily led by substantial stock positions. Although the US inventory figures showed a continued draw, worldwide tankers are fully loaded and with deadline day in the Iran talks only a few days away some of that oil might be unleashed uncomfortably soon.
Today is the first of the ‘final’ deadline days in the Greek talks too and whilst it seems likely that some deal will be patched together that is hardly the ideal solution. Other stories around in the market concern Mexico which is an annual pastime as traders try to ascertain just what hedging has been going on and by whom. Saudi Minister Ali al-Naimi added to the confusion by confirming the comments made by Aramco earlier in the week that the Kingdom could and would step up production to meet increased demand…
Finally the rig count showed a tiny fall of two rigs on Friday down to 857, in oil it was very slightly better dropping by four to 631 units.
Plexus has announced that the launch date for the Python Subsea Wellhead as the HGSS is now to be known as will be September the 8th. Under development with the JIP industry programme, this will mean that Plexus will facilitate entry into the global subsea market and will considerably expand the addressable market for the company.
Following the disappointment of the Nervesa well earlier in the week Sound held a conference call on Friday which I listened in to. As usual the management were efficient and to the point and without pulling any punches explained what had happened and what to expect from the company in the short and medium term time scales.
The next event will be the drilling of the well at Tendrara in Morocco with that acquisition already bedding in. Management changes have been made that take Luca Madeddu to Morocco and Leo Spicci steps up to run Italy, its a good thing that Sound have strength and depth in management.
CEO James Parsons told the call that all was on track at the company, with two game-changing wells in the next 12 months in addition to the other wells in Italy backing up the strategy. The company is well funded with €26m of cash which will be increased subject to the take up of the Open offer and the end game has been forcefully enunciated. This means that the plan for Sound is to become a ‘mid-cap’ size of company which means that they expect the company to grow by between three and six times over a 2-4 year period. There is little doubt that management are creating a company that will as they say themselves, be attractive to other, bigger players who will value the gas-based vehicle that is being assembled. Expect an exciting ride as a Sound shareholder.
Readers will know that I am a very big fan of Dr Robert Trice and what he is up to over at Hurricane Energy. After last year’s highly successful well at the Lancaster prospect that market have not given enough credit yet for the fractured basement play and the value that it will create. With the data room open there are bound to be a number of companies considering farm-in and with the Early Production System able to obviate the need for additional funding and speedily bring on production, financing worries have been overdone. I am seeing the company next month and will update more then but readers should take a look at the recent highly informative and detailed report on the company by Edison Investment Research which is now out in full on my website, www.malcysblog.com and the link to the report is here.
Proving that M&A activity is here to stay I notice that Energy Transfer has made a $48bn bid for Williams which has been turned down…
Tullow have settled their Ugandan CGT dispute with a one and for all payment of $250m.
The situation at Afren goes from bad to worse as the rights issue details came out when they hoped no one was watching and the Sunday Times pointed out that the wife of a Nigerian General may decide the fate of the issue. Given that if the rights issue doesnt get away the company will likely go bust, the argument for backing it is somewhat logical one may have thought….I also thought I spotted some new names creeping in on the advisors list and a change in Head of IR, whither Simon Hawkins….
Independent Oil & Gas have followed up the recent funding announcement by saying today that they have raised £145,000 at 23.79p, a 51% premium to the price and as they had promised, not raised money at less than the last time which was…23.79p. The raise takes them through to September when the Darwin note comes up. The company state that the longer term funding is ‘progressing well’ but also correctly point out that nothing is guaranteed at this stage. I consider IOG to be a very interesting play with strong management and subject to that funding going ahead, is a strong contender for bucket list entry in due course.
And congratulations to my former colleague Keith Skeoch who was appointed CEO of Standard Life on Friday…
After today there will be a short rest for the blog as I am away for a few days, back on 1st July…
The US Open at Chamber Pot turned out a close finish as Dustin managed to three putt when he needed one for victory or two for a play-off. Apparently it was like putting on cauliflower (was originally broccoli but it was pointed out that there was no green) and the course has been unilaterally slammed for its quality, well done to Spieth though who seems a great guy and him v Rory in the upcoming years should be great sport.
Its England v Norway in tonight game in the Womens World Cup as France, China, Australia and Canada get through to the next round.
Muzza cruised though two rounds at Queens Club yesterday as he wrapped up the trophy in preparation for Wimbledon…
And Rosberg won the Austrian GP with Lewis suffering from a faulty clutch and unable to get to the first corner ahead of him, only 10 points difference now..