WTI $39.79 -$1.66, Brent $40.47 -$1.32, Diff 68c +34c, NG $1.79 -7c
The euphoria of earlier in the week has dissipated and so it should, excitement about a meeting that can only freeze production with no ability to check adhesion is an over exuberation big time. Libya has announced that it will not be attending, no surprise there, given what they are producing at the moment a freeze would be madness. To repeat my point, although the Saudis have intimated that they will freeze along with the rest, it must give them sleepless nights seeing the WTI price over $40 and the rig count turning positive.
The inventory stats over the last two days have been on the side of the bears, builds of 8.8m by the API and 9.4m by the EIA were miles higher than the teenage scribbler’s guesses and this time gasoline didnt bale them out. After Easter will see the refinery maintenance season and that’s hardly conducive to stock draw.
Figures this morning from Parkmead but very little to add to our sum knowledge since previous announcements. Having raised some dosh Tom has £29.6m of cash which protects the business and gives him some firepower should he see someone in distress, i’m quite surprised that he hasn’t already had the cheque book out to be honest with you. Still very much a bucket list stock with all its hidden secrets, should be well placed in this market.
Yesterdays figures from Lamprell were bound to get the full check-over as despite a reassuring visit to Dubai in November there are still some of the view that the outlook is far from rosy for the company. I can understand that in the short term there are indeed concerns that the market for new build and refurbishment of rigs is quiet, the fact that they have nine rigs stacked in Hamriyah tells that story.
At present however Lamprell has a record level of activity in the yards and a good deal of 2016 revenue is covered, the company is not immune to the market slowdown but the bid pipeline at $5.4bn is of high enough quality to give it the benefit of the doubt. The work that Jim Moffat has done is exceptional and although the company will share the burdens of the international markets his legacy will leave Lamprell in good shape. With a ‘robust’ cash position the company have been able to fund Project Evolution as well as the Compass roll-out and have no qualms about spending $35m on a state of the art pipe-shop which will ensure that Lamprell remains highly competitive in the market. For the longer term I have no doubt that the company will be building new rigs before long and at the right prices, their quiet but potentially interesting build up of partnerships to access larger markets should not be missed out on and their client focus and flexibility will do well going forward.
Just a quick word on Ithaca as i was unable to attend the meeting and hope to catch up with the management before too long. I thought that it was a very creditable set of results, production was above guidance and this year looks good too obviously with Stella adding the barrels. Indeed I expect that Stella will be taking a fair bit of time to ensure a satisfactory start-up. Cash flow is up and opex is down, to $31 p/b against $55 last year and expected to be $25 with Stella’s contribution. Still pretty much the favourite in its space and Stella now key, all looks ok at Ithaca.
Wood Group popped up with a contract with Shell yesterday on some gas plants and cementing that relationship.
I talked about Gulfsands on Monday and it has been very much the talk of the town, at one stage the shares had doubled in two days. Clearly the attention of Ayman Asfari and excitement about a peace deal in Syria have brought GPX back into the spotlight big time. Now of course if anything is the Syria ‘play’ the this is it but I have a feeling that this may be a little bit premature…
With the ludicrous ‘international break’ ruining a perfectly good Easter football programme and the 6 Nations and Cheltenham over, the sporting scene this weekend resembles the Gobi desert.
In tennis, ‘Paygate’ rumbles on how desperately boring hearing all those little darlings squabbling.
England’s cricketers decided to give us all a wake-up call yesterday by nearly getting beaten by Afghanistan, weren’t they meant to lie down to their olders and betters? One or two of those batters need the back of their bare legs smacked as they subsided to 75-7 or whatever it was. Now even a win against Sri Lanka might not do it as we have such a poor run rate…
Have a great Easter.