WTI $29.42 -$1.78, Brent $28.94 -$1.94, Diff +48c, NG $ 2.10 -4c
So, the removal of sanctions happened slightly faster than expected and the oil price duly fell again on Friday. That fall meant that WTI was down $3.74 on the week and Brent $4.99, with a fall of 20%+ over the fortnight the sector has been hard hit by Iran and China to name but two. Product prices have not been far behind also falling in the high teens %age. Quite how much Iran can produce and when is still a moot point, I will stick with around 300/- b/d before long but the ramp up to another 1m b/d could well take as much as another year. What is not up for discussion is that the market is not in a good position to absorb it at the moment, today’s fall to $29.12 for WTI and $28.67 for Brent might have been worse and still could be. Martin Luther King day in the US so not everybody is at work so let’s assume it will get weaker before any signs of strength.
It is of course Davos week and long standing readers will know my views on showboating in the snow by CEO’s and politicians. It is worth tracking the share prices of those companies that spend a small fortune being there, it doesnt look good. Take for example an investment house in Dundee who should have stayed at home rather than rubbing shoulders with the rich and famous on the slopes…
Amec Foster Wheeler
The company announce today that they have parted company with CEO Samir Brikho with immediate effect. Ian McHoul, the current CFO takes over as a stop gap and a new boss will be appointed in due course although Ian isnt in the running for the position. It is well documented that I felt that the FW acquisition was the wrong deal at the wrong time and the wrong price. I felt at the time that following the Kentz non-bid fiasco that Amec felt it had to a deal fora deal’s sake, even if FW was the right thing the price could have been negotiated down after due diligence. Added to that it was never a good fit with the existing Amec businesses and putting all this together in the current market has resulted in misery. Although today’s statement says that figures will be ‘in line with guidance’ something must be in there that caused a Sunday night meeting of the board and the announcement this morning. I stick to my guns and expect to see significant impairments or write-offs, todays rally in the shares may be a relief one and I would not get involved yet.
Empyrean Energy, market cap £10.81m, sells its admittedly main asset for $71.5m (and possibly $10m more) and the share price rises by a measly 5.4% what is one to suppose? It looks like another one for the pool of value list I have been tracking lately as shareholders will eventually get the benefit of this deal. Tom Kelly and his team should be applauded for getting this deal over the line at such a price in this market, and whilst I know that some will feel it might have been more, it is better than most recently. The rationale for doing the deal was simple enough, Marathon were plugging away with a big drilling programme which would have taken some funding by Empyrean, hence the sale. The moulah may take a little while to come through, as taxes will be worked out etc but investors will be able to at least chalk up one victory in this bear market albeit a modest one, it could have been so much more…
The Sunday Telegraph reports that Petroceltic is ‘scrambling for survival’ as it runs out of cash, although this morning the company has announced a further waiver of its debt repayments whilst it conducts a strategic review. Readers will know that the latest operational and financial review was announced to the market at 4.31 pm on the 23rd December and after I was critical of this move the IR people felt that I had done them an injustice by pointing that out. Whilst the company’s ‘world class asset’ in Algeria is indeed that it will need funding and some sort of restructuring by the company including the sale of some or all of its assets. Since the Dragon Oil bid Petroceltic has been through the mill, including having to spend time and money dealing with Worldview to whom a fair amount of blame for all this can justifiably be laid. The market is not confident that success is guaranteed and the shares are down some 25% this morning.
Today is the last day for FOGL as the court has cleared the bid and tomorrow it will be part of Rockhopper. Tim Bushell can be rightly proud of his achievements with the company in the North Falkland Basin but will forever I suspect have nightmares about the South and the huge cheques he had to write out…
In the Prem, the game of the weekend was indeed at Anfield but lacked a little lustre and was won by a Wayne Rooney goal late in the match thus saving the blushes of LVG who interestingly has almost a perfect record against the HubCap Stealers. Elsewhere Stoke held the Gooners to a draw and the Noisy Neighbours and Spurs had big wins. Chelski got a last minute equaliser against the Toffees and the Foxes could only draw with Villa. The Magpies beat the Hammers 2-1, the Cherries beat the Canaries 3-0 and the Saints beat the Baggies by the same amount.
Ronnie O’Sullivan cruised the snooker, after losing the first frame he went on to win the next 10 without reply…
England sealed up the cricket series in South Africa winning inside three days, this team is exciting and young and when it takes its catches they are very good!
And tennis is the latest sport in the hall of shame with match fixing being prevalent apparently, the Aussie Open starts today.
This weekend in the NFL,
Tom Brady led the Patriots to victory over the Chiefs. The Cardinals overcame the Packers in overtime. The Broncos beat the Steelers and the Panthers led the Seahawks 31-0 at half time and ended up winning 31-24…
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