WTI $49.19 -$1.67, Brent $56.13 -91c, Diff $6.94 +26c, NG $2.90 +2c
Another day of weakness for crude oil, particularly WTI after the inventory stats yet again foxed the analytical community. The EIA reported a build of some 2.5m barrels when the consensus was for a draw of 2.3m barrels and the market didnt like it, dropping WTI below the important $50 level and taking the differential to nearly $7. Brent fared a little better as the inventory numbers showed higher US import particularly from Saudi Arabia, over 8m b/d in the week.
As you know I love to bandy around big numbers relating to the amount of miles driven in the US, not to force the point about long term demand but to put everything into context. The Federal Highway Administration yesterday released its data for May in which a record was set for the number of miles US motorists drove, at 275bn miles it passed the 271bn achieved in August 2007 and the cumulative figure for the first five months of this year is also a record at 1.26tn miles…
Victoria Oil & Gas
A second quarter update from VOG which is now in a position to give regular statements about production, cash flow and sales. Average gas production in the 2nd quarter was 12.6 mmscf/d with both Bass and Logbaba fully online. Cash received was $9.8m up sharply on gas and condensate sales as the company has now delivered fully on its strategy over recent years. In fact they have accelerated the development work on the two well drilling programme scheduled for 2H 2016 due to ‘massive customer demands’. The company is fully funded from cash flow and local credit opportunities and looks well placed to profit from such a keen local market. VOG shares have come back quite sharply from their 84p peak and at 64.5p look an interesting play for the long term.
Europa Oil & Gas
EOG has announced the take up for its Open Offer it announced on 6th July. On that day it did a firm placing to raise £1.4m whilst announcing an Open Offer to raise another £2m. Today it has announced that only £1.04m was taken up which must be disappointing, however as I said at the time, the aggregate Directors subscription was announced as being only £26,960, hardly encouraging others to apply. The money will go on Wressle, which does look promising as well as the UK Onshore licencing round which they and I believe is imminent, as well as the upcoming Irish round and of course drilling offshore Ireland. As I have said before I think that the latter which is totally in the hands of Kosmos is very much on the back-burner with 2019 as being a possible spud date, pushing the upside further down the line.
The BPC share price has risen off the lows of around 1.5p to sit now at 2.33p as investors start to feel more confidant about the prospects of a favourable conclusion to the Petroleum legislation followed by a farm-out and finding of a strategic partner to fund the drilling programme. With the licence extended to 2018 and drill date of April 2017 they have time on their side but as is so often the case at the moment such farm-outs are taking a long time. Today’s interims suggest that discussions are continuing which should please optimistic holders, as I have said before the opportunity is huge but there are still many steps to take, I hope that I can meet with the company before long.
Weatherford came out with figures yesterday which although produced the expected loss actually beat the whisper, losing 10c a share vs the consensus of -12c. Following the other oilfield service company results in the last week, North America was very poor but again here margins were remarkably robust given that the 2nd quarter must have been dire, International, like the others was significantly better.
Tethys Petroleum has announced that Bill Wells, Founder of Pope Asset Management will join the board subject to completion of the current funding. Following that Pope will own 26.6% of Tethys, my recent report on the company post a meeting with Chairman John Bell was in last week’s blog.
Today sees the second match in the Womens Ashes series with England having taken the lead by winning the first One-dayer. England won the toss and put the Aussies in so good luck down at Bristol.
In football, Celtic cruised through to the next qualifying round of the Champions League winning 4-1 away, 6-1 on aggregate. Tonight the Hammers go to Birkirkara with a slim 1-0 lead from the first leg at Upton Park. And the HubCap Stealers have signed Benteke from the Villa who will be most disappointed…
And Froomey keeps the Yellow jersey in the TdF but I am growing to like Geraint Thomas who must be built of Welsh steel and is now 4th overall…
And today sees the start of the four day Louis Vuitton America’s Cup World Series which is taking place on The Solent offshore Portsmouth. It should be a great spectacle as Sir Ben Ainslie and his British team attempt the biggest Challenge in World Yacht racing and they are expecting 500,000 spectators at the weekend.
Finally a big plug for a good cause…
Friday 18 September will see the second edition of Energy Against Hunger, a charity mud challenge in aid of the Hunger Project. The event will see E&Ps and advisors (banks, lawyers, PRs) competing against each other (and against the 5km obstacle course) all for a great cause. If any companies or advisors would like further info or would like to enter a team into this fun event which also provides an excellent industry focused networking opportunity, then please contact Ben Romney of Buchanan on firstname.lastname@example.org.