WTI $50.51 -74c, Brent $56.65 -45c, Diff $6.50 -33c, NG $2.82 -5c

Oil price

More drift yesterday as the strong dollar and weakness in the product market left the oil price under modest pressure, the UN Security council and the EU Foreign Ministers nodded through the Iran deal which now goes to Congress for 60 days. With WTI expiring today traders told me that the market was quiet but in no mood to fall significantly. Maybe this is because digestion of the JODI report continues and it did show that 2Q global oil demand was still pretty strong, perhaps this is why refiners are still pedal to the metal and at 95%+ rates are filling the product pipeline every day, it cant go on indefinitely. Also as per my comments yesterday it seems that the diesel buyers at WM Morrison have had some excess stock from Saudi Arabia who are also filling in demand for diesel distillates.

One thing worth taking a look at is the Boeing 20 year outlook, which although written taking somewhat heroic assumptions does make you think that unless a replacement for fossil fuel can be found something has to break. The company say that due to growing demand for air travel 558/- new pilots and 609/- new engineers will be needed over the next 20 years. With the purchase (they hope) of 38/- new passenger jets costing $5.6tn the current fleet size will double. I recently wrote of 100 new airports being built in China where the travel bug has properly been bitten and in India the travel industry is gearing up as well. Doesn’t sound too bearish to me…


Halliburton also cruised past what was admittedly a fairly soft whisper of 29c coming in with 44c. Business activity outpaced the declining market by utilising their market presence and having strong cost efficiencies. Dave Lesar suggested that there was a ‘customer flight to quality’ and that pricing ‘dalliances’ were decelerating whatever that means. He is expecting a ‘meaningful’ pick up in activity in 2016 and that a modest uptick is possible in the 2nd half of this year. Watch out for Baker Hughes numbers later today.

Egdon/Europa/Celtique/Union Jack

The Wressle-1 EWT has produced its first results and whilst operations were not entirely predictable it is a good result under the circumstances. The Ashover Grit oil reservoir was not undertaken due to problems with the down-hole testing equipment so the Operator moved on to the Penistone Flags which over three days produced 168 boe/d. The well was obviously a ‘slight challenge’ as Egdon CEO Mark Abbott described it to me and the Penistone is gassy in the upper part but the oil below is good and flows but does draw in the gas from above. The environmental permit means that they had to stop owing to the gas but of course come development the gas will be treated differently, indeed friends at Alkane may help, it could go direct to local industry or even be compressed.

The syndicate will now go back and address the technical problems with the Ashover, apparently due to complex sliding sleeves which should be easily sorted. Ideally it will be oil with associated gas and the operator might just drill a second well into the gas on the top from another location. Overall the test can be considered pretty successful but obviously we now wait with interest to see how the Ashover goes.

San Leon

Funny old world eh? You get dissed if you spend ages trying to find something then when you do and decide to concentrate on the development you get dissed for giving up some of the expensive acreage. San Leon has decided this morning to dispose of a number of Polish assets as per its long term strategy to reduce the exploration component and focus on appraisal, development and production. Production that will bring near term, much needed operational cash flow into the bargain. Now San Leon has had its rough times but surely it is now making the right decisions and should be applauded for that.


With its AGM coming up on Monday and a petulant 29.9% holder throwing its toys out of the pram how should we look at Petroceltic? As far as I am aware the points that Worldview have made so far are all ones that could be asked as questions at the AGM and one assumes that the CEO will be addressing them anyway. Worldview appear to have requested two EGM’s neither of which appear to be valid and have so far not made it entirely obvious quite what they are after. Not happy with the equity raise (albeit handled badly by PCI), they are now objecting to a debt raise and asset sales, without those three facilities the company definitely would have their hands tied behind their backs. The process that Worldview are going through is bringing the share price down and they appear to be cutting off their nose to spite their face, I genuinely cant see the end game here but I must be missing something…this one is hotting up.


Charlie McQueen

I heard recently that Charlie McQueen, one of my first bosses at Wood Mackenzie had been involved in a car accident and following many complications is  seriously ill in hospital. Charlie is still a legend in the city and always will be, all his friends know that he is an incredible fighter and wish him, Anne and the family all our best wishes.

And finally…

After the debacle that was Lords, the selectors, already a shambolic bunch have to sit down and realise their mistakes. I will add nothing except to say that yesterday James Taylor scored 291 and Jonny Bairstow 139 for their counties and KP is lying on a beach in the West Indies…

The Womens Ashes series starts today with a mixture of one day games and one test in the middle with a points system deciding the winners.

In the TdF there was a horrific fall for Geraint Thomas yesterday, I thought he had gone over the side big time at one stage but he got up and with the team kept Froomey in the yellow jersey.

The fifth day of the Open golf was as good as it gets, at one stage I thought it might be a five man play-off but the last three made it worthwhile and Zach Johnson was a worthy winner.

And it is the funeral today of Jules Bianchi which is terribly sad and shows that even if it is a much safer sport nowadays it is still incredibly dangerous.