WTI $30.66 +$1.62, Brent $34.50 +$2.32, Diff $3.84 +70c, NG $1.94 +4c

Oil price

Further gains in the oil market yesterday as bulls pounced on any potentially good news around. It could easily be found after the meeting between Iran, Iraq, Venezuela and Qatar produced a seemingly positive outcome. Iran’s Minister said that the proposed production ceiling should be the first step to stabilising the market but added that they wouldnt be joining the process. Now call me an old cynic but what does this tell you? Probably that Iran can see that before long it will be producing as much as it can at the moment and what better way to disguise that than being seen to be the Opec nice guys…Either way the Saudi/Russian move are the first signs of, whilst not changing policy, of drawing some sort of line in the sand.

After the market closed the API stats were also positive for the sector showing a stock draw of 3.3m barrels when analysts estimates were foe a 3.9m build, whadda they know eh? In addition the numbers showed a draw at Cushing of 175/- which if echoed by the EIA stats tonight would be further good news for the sector.

Amerisur

At long last the news that AMER shareholders had been waiting for for what seemed an age, the final approvals for the OBA pipeline have been granted and the company can finalise the work to link the Platanillo field in Colombia to Victor Hugo Ruales in Ecuador. The company are already drilling under the river and with the reception station and storage tanks completed will be ready for first exports of crude next month. As I have said many times before, this is transformational for Amerisur as it, at a stroke, cuts costs by at least $11 a barrel and re-opens fields shut in last year. It cannot be ruled out also that other local producers may like to use the pipe as well giving added income to the company and creating an annuity income and value in itself.

Providence Resources

Today Providence have given a detailed asset portfolio update which now has more than usual interest following the Irish licencing round which has been part announced. Whilst it comes as no surprise that Barryroe has yet to be farmed out the company continue to say that discussions are continuing, as is a possible alliance of contractors being considered. What I find of more interest is the new neighbours on the block, or at least adjacent to the blocks. Interest in Ireland has been confirmed by the recent round and this is confirmed by the fact that the largest acreage in the Porcupine Basin is now held by the Exxon/Statoil JV then CNOOC, PVR used to be the largest holder but that is now less relevant, its the company you keep that matters sometime. Finally, like everywhere else the costs of drilling are coming down, proposals under review have fallen from $80m to $24m making those dollars stretch way longer than they used to. PVR has let people down in the past and for some only when Barryroe is finally farmed-out will they restart the trust programme, but it should be well and truly on the radar screens for investors at the moment.

Sundry

Victoria Oil & Gas has acquired Glencore’s 75% WI in the Matanda Block PSC onshore and offshore Cameroon. The block is adjacent to Logbaba and looks like a sensible enough deal to me.

Tullow has said that has had a minor problem on its FPSO at Jubilee but that no production has been lost.

And Xcite Energy has announced that the UK Government has extended the licence for the Bentley field until June 2017. The company say that this will enable them to find development funding for the field and to repay its bonds due in June of this year.

Petroceltic has confirmed the sale of its Egyptian Assets to Edison for $9.5m, $5.8m net. The words drop and ocean come to mind.

And finally…

Not much around, Manny Pacquiao has lost his Nike contract for inappropriate gobbing off, Wayne Rooney is out for two months which means he wont play in the Boropa Cup tonight at FC Midtjylla and Lloris is out for Spurs at Fiorentina. Finally the HubCap Stealers go to FC Augsburg.