WTI $37.84 -45c, Brent $40.05 -$1.02, Diff $2.21 -57c, NG $1.79 +4c

Oil price

Yesterday’s oil price fall coincided with Draghi day in Europe and his late evening actions supported the Euro and the greenback fell by nearly 3% at one stage giving a modest boost to oil prices which had been weak during the day.  This was because both the meetings being convened to stabilise the oil price have run into diary bother. The Latin American contingent havent met yet and the Opec/Non-Opec meeting scheduled originally for 20th March has also had problems. They include, not knowing who’s coming, where it is taking place or when it might actually happen.

To add to the problem, Iran has said that as it is not partaking in any price freeze there is no point in attending such a meeting. That gets Kuwait off the hook as you will remember that on Wednesday they said that they would freeze if Iran did, I didnt believe it then and I dont believe it now. The IEA monthly is out today, I expect it to say that although there has been some supply interruption that demand is still low and stocks are very high…Stop press, the first headline on Bloomberg is ‘IEA say prices may have bottomed out’…

Providence Resources

I have written more about PVR recently than for a while, partly because of the Barryroe fiasco and partly as they were sitting quietly waiting for the oil industry to return to Irish waters, well it looks like their patience has been rewarded and the oil industry just did turn up. I have already written about the presence of the very biggest majors in phase 1 of the Irish licencing round and today PVR come up with a portfolio update.

To add to the farm-out of Spanish Point which is already under way, they have announced the launch of the data rooms for the South Porcupine Basin. As part of the ‘collaboration in exploration’ agreement with Schlumberger significant technical work has been completed and de-risks the prospects. The recent licence round has meant that PVR is ‘encircled’ by large companies in the Goban Spur whilst in the Southern Porcupine majors are adjacent. Indeed, last week at APPEX 2016 Statoil’s SVP for Northern Hemisphere Exploration said that the company were ‘pleased to be re-entering the Irish oil scene with ExxonMobil‘. If I were Providence I would be getting the welcome mats out too…

SDX Energy

SDX is the merger of Sea Dragon Energy and Madison PetroGas and is listed in Toronto with its head office in London and assets in Egypt and Cameroon. I don’t normally cover stocks not in London and the same goes for this one but after meeting with the company this week I am keeping a close eye on it for a number of reasons. Its operations are primarily in Egypt and whilst that country has had its problems there are reasons to believe an improvement is happening, from an investment level and of course operationally following Eni’s Zohr discovery. Finally, I suspect that  CEO Paul Welch having made the merger is likely to want to come to London for a quote.

In brief, the company has low cost oil production on decent terms which it seems to get paid for and some interesting exploration acreage in oil and gas which might be transformational. With $13m of cash the company is fully funded and has positive free cash flow and apart from Egypt it has shallow water exploration acreage in the Niger Delta Basin offshore Cameroon. The combination of an active work programme and reasonable value may make SDX worth a look if and when it appears in London…

Petroceltic

Things are not looking to good for PCI as it appears that a good part of its ‘highly supportive’ banking syndicate has sold them down the river for a few pieces of silver. I am looking forward to finding out which banks decided to sell $232.5m worth of debt for a few quid but i’m sure they wont sleep easily tonight, actually they probably will…It looks like that WV, now armed with debt that it can convert into equity, will be making an early appointment with the Examiner in order to restructure the company on its own terms. At this stage I am beginning to think that despite all the hard work the rug may be being pulled out from under them after all. Watch this space…

Sundry

Petrofac has won the contract as Duty holder for the Anasuria complex in the North Sea from Hibiscus and Peng Petroleum. Added to normal duties PFC has added responsibility for wells and pipelines where it can add value.

And BP have had such a good year that the remuneration committee decide to increase his pay by 20% to $19.6m, now they can say that not only is the dividend sacrosanct but so is the board’s pay…

Below is a link to an interview I have just done with Marcus Ashworth, Chief Market Strategist for Haitong Securities where we have a relaxed chat about the oil industry.

https://www.malcysblog.com/2016/03/3187/

And finally…

In the Boropa Cup last night Spurs went down 0-3 at Borussia Dortmund whilst the HubCap Stealers saw off Man Who 2-0 at Anfield, it might have been more…

This weekend sees the quarter finals of the FA Cup, the Royals play the Eagles, Chelski go to the Toffees, the Gooners host the Hornets and the happy Hammers go to the Theatre of Nightmares.

There are a few Prem games as Villa host Spurs, the Noisy Neighbours go to the Canaries and the Cherries entertain the Swans.

Much more fun than all that will be the penultimate 6 Nations fixtures and whilst Ireland v Italy and Scotland v France will be fun to watch the game at Headquarters where the Welsh are the visitors will be for the hardened fans only…