WTI $37.35 +$1.04, Brent $38.45 +53c, Diff $1.10 +9c, NG $1.82 -7c
So, this afternoon the Fed will announce, arise US interest rates and likely signal further strength in the greenback, not the best news for dollar traded commodities such as crude oil. Yesterday, as can be seen above, oil rallied only to be kicked back down after hours by the API inventory report and the IAEA statement. The API announced that contrary to analysts forecasts of a draw of 1.4m barrels the actualité was a build of 2.3m including a build at Cushing, the EIA tonight may be interesting reading. The IAEA board announced that it was closing down its enquiry into the Iran nuclear bombs situation bringing nearer the day when specific measures can be implemented and we all know what that means…
Elsewhere, Congress brought nearer the day when the US is allowed to export crude oil as part of the Republican spending and tax legislation, in order to avert a Government shutdown. For a great account of this and the Fed moves later its worth Reading Marcus ‘the guru’ Ashworth if you can. Finally Saudi Arabia announced that it was forming the Muslim Antiterror Coalition of 34 nations, not at the moment including Iran or Iraq…
Wood has announced that it has won a main contractor framework agreement worth $400m with Statoil for four installations on the Norwegian continental shelf with a length of six years and another four years possible extension. In addition it has been awarded a ten year competition agreement, together these are incredibly important and I would dare to suggest even a breakthrough for Wood in the area.
Sound has completed the Tendrara farm-in onshore Morocco as previously announced, with the Ministerial approval having been received. The company also announce that they have signed up a rig for a two well back to back appraisal programme and have initiated the procurement process for this. These wells will be the first test of the important collaboration agreement signed recently with Schlumberger and continues to demonstrate the management’s well-funded expansion from Italy into North Africa and the Mediterranean.
Caza Oil & Gas
The Caza announcement yesterday came too late for the blog and I suspect was pretty much what equity holders had been fearing. With no ability to raise equity in the last couple of years Caza had become over-leveraged at just the wrong time and even its high quality portfolio of assets were not able to continue in its old format. It could have been worse as the alternative was bankruptcy but now Talara owns 97.2% of the equity it will be a long haul for holders. I have been correctly critised I guess for being too positive on Caza but I genuinely believe that they have good management and that the Bone Spring is a low-cost high quality set of assets, unfortunately at sub $40 oil and debt with Apollo and Yorkville this was the only exit route. For those remaining, it is a geared play on the oil price with good assets, but that is of little comfort to those who have seen their equity fall. I hope to speak to the company later today and will add if appropriate.
The Halliburton/Baker Hughes deal hasn’t quite hit the buffers although the trade press in some places is writing the deal off. With more disposals needed and the Aussies as yet unsatisfied this will run through to April now.
Pantheon had its AGM yesterday and the Chairman was appropriately optimistic having seen the exceptional drilling success this year. With the second well testing, the results as they say are not yet in but overall the mood is quietly optimistic and with the share price having taken a breather opportunity knocks. I think that there is little doubt that there is significant upside for holders here as I understand that institutions are still nothing like well enough represented in a stock which will become a must have in oil portfolios next year.
Bowleven has announced that it has submitted its Bomono application to the Cameroon authorities. I think that BLVN is well placed at the moment what with the Aminex deal and so on and whilst Kevin probably thinks that no one loves him, he is thick enough skinned not to worry too much, I am sure there is much in his in-tray keeping him occupied although my suggestion of a cash and shares bid for VOG doesnt seem to have hit the sweet spot….
Amerisur has tidied up its NED situation as Doug Ellenor has renounced his options over shares in the company’s LTIP scheme and his company, Jade Oil & Gas Consulting no longer has a consulting service agreement with AMER. This makes him an independent director under the UK Corporate Governance Code and the company have three independent NED’s under the standards of best practice.
As the Chelski board meet to discuss the Special One’s future, the prospect of being in the relegation places at Christmas/New Year must seem somewhat incongruous…
Tonight down in Brighton the mighty Whitehawk take on the Dag and Reds for a place in the 3rd round of the FA Cup..
And Rugby Union is turning nasty as Bristol have blocked Steve Borthwick’s move to be a coach for England. Now i’m sure that these eminently gentlemanly rugby fans are not really looking to stop a chap’s opportunity to serve his country but knowing that the RFU has the cheque book open is too tempting for words….