WTI $45.54 +80c, Brent $48.13 +44c, Diff $2.59 -36c, NG $2.45 +2c
Both WTI and Brent fell marginally on the week, on the month they were both off about a dollar but on the quarter it was much worse, coming in at around $15 below the end June prices. The news from the US on Friday was mixed as far as the oil price is concerned, the NFP numbers were well below expectations and the August number was also revised down genuinely surprising the market. One has to wonder how the cumulative brains trust at the Fed had managed to spoof the markets into thinking that the economy was capable of a rate rise, although according to guru Marcus Ashworth this morning some are still saying that it may still happen in December. The oil price likes a weaker greenback but is less happy that it is weak due to economic malaise particularly if the US economy is faltering and the employment, wage info and factory orders have all been disappointing.
The Baker Hughes rig count also helped the market, overall the number was down 29 units to 809 with oil rigs down 26 to 614 being the bulk of it with all major shale basins seeing reductions. News over the weekend is that Saudi Aramco has cut crude oil prices to its Asian clients by $1.70 p/b which takes it to a discount to the Dubai benchmark, it has also cut heavy oil prices by $2 a barrel.
An operational update from Ithaca this morning for the 3rd quarter although most of the pertinent information came out with last week’s FPF-1 and the ‘incentivisation’ of Petrofac. Production in the year-to-date is 12,300 boe/d and guidance of 12/- b/d is maintained. Full year capex guidance is down by $30m and end 2015 net debt will be approximately $750m against previous expectations of $800m reflecting cost savings across the board. With the extent of the hedging programme being significantly beneficial, Ithaca deserves to be right up there as one of the best companies in the sector, assuming Greater Stella goes ahead as planned next summer it will have production growth to go alongside lower costs and stable finances. I am seeing the company this week for an update which I hope will confirm this.
Aminex has announced that the Tanzania Petroleum Development Corporation is to acquire a 5% stake in its Kiliwani North development licence as a full working partner. Whilst this dilutes Aminex it is surely good news to see such confidence and of course shared costs and reimbursement. They are now waiting for completion of the Songo Songo processing plant which will complete ‘shortly’ according to the company. The GSA, which has been patiently waited for for what seems a very long time, has still not been signed yet although that too is imminent according to partners in the project. Time for a meeting with Jay I feel…
Magma Global, a private company, has announced that it has raised $60m from Strategic Investment Capital Partners as well as existing investors. I recently visited Magma at its Portsmouth facility and was very impressed with the company, its innovative products and top quality management. I will write more in due course but Magma is a perfect example of how such innovation can add to reliability, longevity and of course cut costs. Its M-Pipe product, a carbon fibre pipe is set to add to the industry cost savings and the company recently announced a JV with BP and Subsea 7. The proceeds of this raise, which shows that backers have confidence in the management and of course the products, will be used for Magma’s manufacturing capability and for working capital to support the rental business. Although this is still a private business and I dont expect a quote anytime soon, this company should be on the radar screens as you will hear plenty more about it in the future.
Oil Search had better get the Rolodex out as it appears that Woodside have no plans to either raise the offer or include any cash in its recent bid…
Tethys Petroleum’s share price has been all over the place recently with an assortment of bids, loans and proposals that have left it, at the moment, still in exclusive negotiations with Nostrum regarding a possible bid and short term funding. Now there is an added spice to the situation as the Olisol Investment Group has submitted a non-binding proposal to the company in which it envisages putting an initial C$8m in at C$0.16 per share with $24m behind it. Olisol is a Cyprus based company working mainly in the Russian Federation and Kazakhstan and has partnered with Tethys in its Aral Oil Terminal and is therefore familiar with the company. It seems that this game has still got some time to run…
So England are out of their own World Cup which takes some doing, indeed has never been done before by the hosts at the Group Stage. The damage was done last week to be fair as losing to Wales was of their own making. This week the team were undone by the far better side on the night and highlighted the inadequacies of the England team and management who couldnt pick its best players because they play abroad or have been naughty boys.
The Premiership results at the week have been rather overwhelmed by the departure of managers at the Maccams and the HubCap Stealers yesterday. Both were entirely predictable as Richard Avocado found Sunderland way beyond his substantial skills and Brendan Rodgers being the victim of availability, ie better managers being available. It has been suggested to me that with at least two other big clubs in the league potentially about to need new managers the Fenway Group will have to act fast if they havent done already to secure Mr Klopp…So losses by Chelski and the Red Devils against the Saints and the Gooners have been forgotten as has the comeback by the Noisy Neighbours. One result not to be forgotten is the visit of Saint Johnstone to SPL leaders Aberdeen which ended up 1-5 to the boys from Perth…
The Arc de Triomphe was supposed to be the crowning of Treve or whatever you do in a Republic, but Frankie Dettori and John Gosden raided Longchamps with Derby winner Golden Horn and justifiably beat Europe’s best on the day.