WTI $31.72 -56c, Brent $34.46 -58c, Diff $2.74 -2c, NG $1.97 -7c
The oil price drifted yesterday, concerns about the US economy after recent farcical statements from the Fed and of course today is Non-farm payroll day, much to watch.
Also, Saudi Aramco announced that it was cutting prices to European, Asian and Mediterranean customers which doesnt sound like a move away from market share grabbing policy…
An operational update from Faroe this morning, the company remains one of the most disciplined in the sector, holding onto its cash, cutting costs and keeping to a modest drilling programme in tax efficient Norway. Last year can be described as a disappointing one with the drill bit but production beat the guidance at 10,530 boe/d. This year guidance is down, this is due to Njord and Hyme being suspended in the summer, more details on redevelopment and costs due shortly, currently in pre-FEED which will lead to yard selection. Capex last year was a net $15m, this year will be $12m thanks to the tax efficiency in Norway. As for Opex, last year was $23 boe but will rise to $27 boe this year due to that production fall mid year. Butch, Pil, Bue and Boomerang are all working their way through the process, Butch is likely to be up for FID in the 4th quarter. All in all Faroe remains very much one of the favoured plays in this difficult sector, its relative financial strength with cash and a mostly undrawn RBL means that should the opportunity arise it could be a consolidator with all the advantages that might bring.
The ENVIA Energy GTL JV moves on, contractor Ventech has signed its first major contract and Velocys has provided $12m of funding of which $9m is a loan at 10%. This is further good news from Velocys and I am looking forward to meeting the new CEO to get an idea of his plans.
Two pieces of news from Sound in the last 48 hours, the Badile process rolls on and another suite of information is being prepared but movement is forwards at least. Much better news is that first gas has been achieved at Nervesa, commercial production is really important and when ramped up will deliver 1.8 mmscf/d and goes into the GSA with Shell.
Finally I did a CEO interview with James Parsons of Sound on TipTV yesterday, another good chat and a promising update on the portfolio and upcoming plans for the company.
In the Prem this weekend there are two standout fixtures, undoubtedly the best is the Noisy Neighbours entertaining the Foxes whilst Man Who go to Chelski. Spurs host the Hornets, the Hammers go to the Saints, the HubCap Stealers have the Maccams at Anfield and the Gooners go to the Cherries. At the bottom its Villa v the Canaries and the Magpies take on the Baggies.
Of course it is also Superbowl weekend where the Denver Broncos take on the Carolina Panthers starting at 2330 on Sunday…
Finally of course, tomorrow sees that start of the Six Nations Championship and after the RWC is very welcome. It’s the battles of the old enemies with France taking on Italy and Ireland playing Wales but I shall be at Murrayfield where the Calcutta Cup is likely to be as close as it has been for many years after Scotland showed England a thing or two in the world cup. There is the small matter of the Scottish Oil Clubs Dinner to get over first however, tonight in Auld Reekie may get very messy….