WTI $31.62 -$2.00, Brent $34.69 -5c, Diff $3.07 -$1.95, NG $2.15 -15c
As per the blog yesterday the oil market came to its senses somewhat and got back to fundamentals. So, poor Chinese data, increased activity from Iran and doubts about a non-Opec meeting taking place hit crude prices.
BP’s turn to produce 4Q and final year numbers today which were entirely predictable. The loss was $2.2bn after the also predictable huge list of charges for impairments to upstream assets, restructuring charges and the final bill for Macondo. The year was down 51%, roughly in line as the crude price did its worst but downstream made hay. The dividend was maintained, also as expected although at a far higher rate than this company should be paying, echoes of a reckless increase by this board in happier times. This and the significantly weaker position in this volatile market means that other majors are preferred investments for the brave. The board are preparing for life after Bo Diddeley with Lamar McKay appointed Deputy CEO and Bernard Looney as head of upstream respectively.
I noticed that yesterday Premier served notice to Ocean Rig for breach of material obligations re the Eirik Raude rig, currently being used in the North Falkland Basin. The rig is at the moment working on the abandonment of the Isobel well and was then intended to drill the Chatham prospect. This will go ahead if the parties can agree on solving the problems but should that not happen there must be some doubt about drilling Chatham. I doubt if the problems are serious enough to cause any issues with plugging and abandoning the existing wells or we would have had more details.
Should this situation arise I suspect it is not the end of the world for Premier and Rockhopper, with such a successful drilling season almost at an end Chatham would only marginally add to the sum knowledge and of course not drilling it would conserve quite a bit of cash which is no bad thing in this environment. The parties win both ways, either the problems are sorted and Chatham goes ahead or they save cash and press ahead with Sea Lion.
Plexus report a contact worth £0.9m for Repsol in Malaysia, a small step back after a miserable week which included a substantial profit warning.
Erratum….Many readers were quick to spot a major league error yesterday when I heaped opprobrium on Tony Durrant and team at Premier instead of the intended approbation. I blamed the spell check and my incompetent proof reading but merely meant to say that they had done a good job in the circumstances and should have stuck to plain English….
All football today and the biggest non-surprise of all time was the announcement that Pep Guardiola is to take over from Manuel Pellegrini at the Noisy Neighbours in June.
On transfer deadline day it was pretty quiet, Everton signed Niasse from Lokomotiv Moscow and Stoke splashed out £18.3m for Porto’s Imbula, neither I have to admit I have ever heard of.
A big slate of Premiership games tonight the pick of which is very much the Foxes taking on the HubCap Stealers. There is a claret and blue derby as Villa visit the happy Hammers and the Gooners host the Saints whilst Man Who v Stoke will hardly keep the fans warm…
A lot of share action at Plexus, up over 50% in a week.
What’s your view?
Hi Pete, difficult to say, its a long way back after a market darling has a profit warning and Ben should have sold shares over the years. Still like the company a lot though.