WTI $45.92 +$1.77, Brent $48 89 +$1.31, Diff $2.97 -46c, NG $2.68 +3c
Barring any significant moves later today crude oil will likely be roughly unchanged on the week with fundamentals still weighing strongly on the downside. These include final confirmation that Barry will get his Iran deal through the Senate and Russia continuing to pour cold water on speculation of any production cuts.
Looking for a few straws to clutch at? I suppose that the fact that Opec is ‘considering’ a call by Venezuela for an emergency meeting might sound good but gossip from the Gulf oil producers meeting in Doha was that the Saudis were reluctant to agree. The EIA in its latest report also marked US crude production down by another 83/- b/d to 9.1m at the same time it said that gasoline demand in the States was strong in the last month of the driving season, up 4% y/y. While on the subject of the EIA, the inventory stats last night were mixed, bears will say that the stock build was higher than expected at 2.6m barrels but the bulls will like the fall at Cushing of 897/- was very helpful. Meanwhile the IEA add a bit of fuel for the bulls by forecasting non-Opec supply to fall the most since 1992…
My tame chartist is still pretty positive and says that unless WTI breaks down below $38 the charts show a base being set for a $55-60 target, just to give the bulls a slightly better weekend…..Oh and G Sachs have just cut their forecasts again…..
The UK sees the announcement of the new leader of the Labour party tomorrow, widely expected to be #JezWeCan. Marcus Ashworth in his blog today is marvellous in pointing out Philip Stephens’ article in the FT today where he blames the bankers for Corbyn’s success…it will he says, be the badgers next…
Faroe has announced that the Shell operated Portrush exploration well is dry and will be p&a. As always there is plenty of positive spin being generated saying that there may be more upside in the rest of the licence and that finding the reservoir is a great help but the main positive is that it cost Faroe less than £1m net of tax. Much more importantly is the follow up programme on Pil/Bue which means that Boomerang and Blink wells are going to be key.
Sefton Resources- Turkeys might vote for Christmas…
Yesterday Sefton announced that Jossy Rachmantio is to move to the role of Executive Chairman, as they explain that the policy of targeting distressed operators in Indonesia where he has significant experience. I understand that the company has identified a small number of modest deals which would give them some combination of hydrocarbon production plus a bit of upside. With the minimum amount of up front cash they company believe that this would be a ‘robust, effective way of taking advantage of oil and gas opportunities’.
Unfortunately things are never as simple as that and the company also announced that they have received formal notice of requisition for an Extraordinary General Meeting from former interim Chairman Daniel Levi which proposes the removal of Thomas Milne, Keith Morris and Raylene Whitford as Directors of the Company, and the appointment of Clement Chambers as Interim CEO and Michael Hodges as Non-Executive Director of the Company. Eagle eyed followers of Sefton will know that Levi apparently ‘failed to make certain disclosures under Aim rules’ and The Times later revealed as having been jailed for 16 years for ‘committing serious offences’. Clement Chambers finds himself in notorious company and I suspect that if he does become CEO it will be a short time in the job. There is no certainty that they will lose, they claim to have up to 25% in their camp and shareholder apathy could easily let them in. What is for sure, is that if they did succeed then not only would those directors leave but obviously so would Rachmantio and other directors and advisors. I understand that in the absence of a Nomad the shares would be suspended until a new advisor could be brought on board, who would take on that responsibility I wonder?
The other thing that Sefton has to deal with is the law suit in the USA which is time consuming and again not to be taken for granted. It means that Raylene Whitford will be even more busy and primarily with non-operational matters, not ideal under the circumstances.
One point of interest is that previously it appeared that Rob Shepherd, a consultant to the company, had been identified as the next CEO, I get the impression that with the arrival of the new Chairman and with a fair amount of current ‘baggage’ this may now not happen, something you probably couldnt blame him for…
Sefton has been the source of a number of articles here over the years but rarely has it seemed in so much trouble as it appears to be now. With the attack from the former Executive Chairman in the US courts and from the former interim Chairman via EGM, the plans to revive the company by the board are reduced to background noise. If either of these attacks result in success, I fear that I wont be commenting on Sefton again which is a shame as the team deserve the chance to prove that they are offering an opportunity to shareholders which, given patience, might reward them, unfortunately patience is a commodity in short supply in the Levi/Chambers camp.
With no blog yesterday as I was off seeing some companies I will report on next week, there are a couple of comments on news out during the day. Wood Group announced a contract with Flint Hills Resources for its West refinery in South Texas with no amount specified.
Hurricane, where I recently interviewed CEO Dr Robert Trice, (see interviews on www.malcysblog.com) announced that the UK OGA had granted it Lancaster discovery oilfield status which is an important step as it progresses through EPS and farm-out.
Finally I couldnt help but notice that Pantheon was up sharply again after its preliminary well information on Wednesday. This morning the stock stands at 29p which is up over 30% since then indicating that market participants share my optimism. Whilst it is by no means a dead cert and it will be another three or four weeks until the flow tests are completed, I remain very optimistic that this and the next well recently spudded, are likely to be game changers for the company.
Its the St Leger tomorrow and it has a meaning in the City as those who sold in May will as the old adage goes ‘return on St Leger Day’ not so bad this year I guess. The Irish have scuppered Frankie’s chances of an across the card double, he was due to ride Bondi Beach, favourite in the Leger, before jetting off to Leopardstown to ride Golden Horn in the Irish Champion Stakes but that race has been unexpectedly been brought forward to give Gleneagles a better chance, oops, so he cant make both….
In the US Open tennis there will be a Muzza in the final but it will be brother Jamie in the doubles…
Cricket-wise the Aussies come to the end of their long but unsuccessful tour by trying to win the ODI series, 2-1 up with two to play they can win the series at Headingly today.
In the footy we return after the international break with a full card in the Prem. The big game is clearly the HubCap Stealers going to the Theatre of Dreams, always the big game of the season for those teams. Elsewhere I like the look of the Canaries v the Cherries whilst the Eagles try to carry on their form from Stamford Bridge taking on the Noisy Neighbours. The Gooners host the Potters and with the Hornets taking on the Swans and the Saints at the Baggies, Chelski down on form, go to the Toffees. That just leaves the excitement of the Foxes against Villa and Spurs at the Maccams…
In Vegas Floyd Mayweather takes on Andre Berto in what he says will be his last fight, I dont think so, do you? George Groves is on that card as well fighting Badou Jack for the WBC Super Middle weight title.