WTI $35.97 -79c, Brent $36.42 -80c, Diff -45c -1c, NG $2.32 -1c

Oil price

Further misery for the oil price and Brent in particular, today the price has fallen back through the 11+ year lows and as I write is trading at $35.32. WTI appears to have been protected by a slightly odd set of API inventory stats which came out after the US close. Whilst the good news was that crude stocks overall drew by 5.6m barrels the bad news was that at Cushing they actually increased by 1.4m barrels and in product, gasoline was a build of 7.1m barrels and distillates were up 5.6m b’s, make something out of that. Tonight’s EIA numbers are forecast to be a modest crude draw…

In Libya the National Oil Company has said that it is subject to attacks from ISIS that are destroying the oil facilities at Es-Sider and Ras Lanat and that it needs help from the international community. Saudi pricing details for February are out and show no change in policy but it is interesting to note that Iran has definitely moderated its views, having been saying that when able it would produce flat out it now suggests that a more ‘responsible attitude’ to oil prices might be better…Finally the dollar strengthened again yesterday and gives no short term respite to the oil market.

Sound Energy

A portfolio update from Sound this morning, at Tendrara they have signed a letter of intent with Entrepose Drilling for the first two back-to-back wells on the licence and ground works will start shortly. At Nervesa things are progressing well and first gas is imminent, whilst at Badile the economics continue to improve as the COS has gone up from 22% to 34% with costs coming down. With the passing of the Italian Budget Law a number of companies are reassessing assets, Sound have little offshore and are working with the authorities to ensure that Laura will be classified as an onshore well, which is what it is. With the offshore side of Italy getting worse the Sound strategy of remaining onshore and diversifying around the Mediterranean and North Africa looks to be paying off.

Rockhopper Exploration

The company has a good portfolio of assets in the Greater Mediterranean area following its MOG acquisition and further deals are probably in the pipeline. The Italian Government has, as mentioned above, reintroduced restrictions on offshore oil and gas exploration and production activity within 12 nautical miles of the coast. The frustration that is caused by constant changing of the parameters in-country mean that it is unlikely to attract much in the way of further offshore investment and for RKH that means that Ombrina Mare goes on the back burner, albeit with a years extension of the licence. Elsewhere in the country Rockhopper has Guendalina which is exempted and the exciting onshore prospect of Monte Grosso to explore. Revenues of around $10m pa are not affected.

Velocys

Velocys has announced that its new CEO is David Pummell who arrives from ACAL, a P/E backed fuel cell technology company where he was CEO. A 22 year veteran at BP followed by CEO ship at Ceres Power gives him the credentials to take on the commercial phase at VLS. I think that it is only natural that we will now see a review of the company’s key milestones and an indication of the strategy for the future. It is understood that he is fully aware of the support of the blue chip shareholder list and is planning to be collaborative with all investors. Watch this space…

Faroe Petroleum

Faroe has announced that it has an updated independent technical report from Senergy. In it the 2P reserves are almost doubled from 30.6m boe to 60.6m boe which emphasises and endorses the company’s strategy even after a disappointing year with the drill bit. The bulk of the increase, 23.8m boe comes from Pil and Butch contributes 6.4m.

Sundry

Cape has announced a JV with OLIO Resources which is intended to serve the Malaysian market, no more details but probably the right call knowing Cape.

The KRG has been paying its bills again and announcements from Genel and Gulf Keystone show that payments for Taq Taq and Tawke as well as Shaikan have been received.

And finally…

The cricket, which should have petered out into a draw has suddenly become a match that South Africa can win, a combination of appalling catching and rag losing by England means that this afternoon may be nail biting…

Last night the HubCap Stealers won the first leg of the semi final of the Clueless Cup 0-1 at the Potteries, I had forgotten that these things are two leggers and will watch the 1966 World Cup final three times more in the next week or two. With Three more injuries Klippetty may be forced into the transfer window, is it me or are there more injuries than ever before. Another chance to watch Bobby Moore and co tonight as the Noisy Neighbours go to the Toffees…

And equally as good sport appears to be the Shadow Cabinet reshuffle, now being described as the ‘Night of the blunt knives’ it has taken so long and Corbo is still locked in that room…