WTI $43.18 -$1.00, Brent $44.53 -$1.27, Diff $1.35 -$1.82 (WTI expiry) NG $2.07 n/c
Who woulda guessed, five days after the Doha disaster the oil price, despite falling yesterday, is likely to end up the best part of five bucks up on the week? This morning the new June WTI contract is around $44 and Brent is dead on $45, this is despite a strong greenback and handbags about production levels from Russia, Saudi Arabia and Libya. All those countries have said that they will up their production but may not be able to deliver. Most experts tell me that not only is Russia flat out already but the sanctions that prohibit US service companies from assisting their further growth remain in place thus holding or even eroding production. The Saudis could of course ramp up production but with summer approaching unless they do, domestic demand for power generation will take away valuable export barrels. As for Libya it is indeed the dark horse here but I remain unconvinced that there is an imminent increase in supplies available at least in the short term. Finally the team over at the Vampire Squids have said that oil prices must fall in the short term and dont forget that they have a $20 low to achieve…
A number of things to report from AMER this morning led by their announcement that they have spudded the Jaguareté-1 well in the San Pedro block in Eastern Paraguay. With a prospective resource of 106m barrels of oil being looked for and 334m in the block,this is a high risk, high reward old fashioned exploration wildcat in a new basin which could be a game changer. The good thing is that with lower costs and an incredibly efficient team the company think that the well will cost only $9m and be finished in around 40 days. Elsewhere with April drawing to a close the OBA is apparently still going very well and will be operative very soon.
It should be noted that the company’s report and accounts have been issued recently and they do show a considerable move in the right direction in a number of key areas. Firstly it is a proper, full set of accounts which major shareholders have been waiting for, secondly it seems that the board has taken on board some comments from last year regarding corporate governance standards which they say are now in a ‘positive direction of travel’. Stephen Foss is now the senior independent non-executive Director and there are therefore now three independent NED’s. The Remcom and the Audit committee are now fully independent and the former has independent advisors for assessing remuneration. As part of this there are no more share-based incentives to NED’s and any left in place have been relinquished. As a result of these moves, which the company are the first to agree are only part of a process, a god deal of box-ticking has been done to achieve best practice in corporate governance.
Overall it is an exciting time for AMER, the well in Paraguay which could be transformational as well as a good drilling campaign in Columbia through the year which should bear fruit and of course the OBA which changes the economics on a massive scale. Very much still part of the bucket list despite the 70% rise this year and 40% since I published in February.
1Q figures from SLB last night and they just about delivered. EPS at 40 cents beat the whisper by one cent and revenue was $6.5bn in the quarter which missed but only slightly. The dividend was confirmed at 50 cents which gives SLB a yield of 2.5%. The company say that the continued drop in activity combined with ‘persistent pricing pressure’ is making life hard in the short term which is still deteriorating in the current quarter but that they remain optimistic about the medium term outlook helped by their ‘unmatched ability to generate cash’.
It hasn’t been the best few days for Providence Resources but they have today shown some upside at the Druid and Drombeg prospects after the recent collaboration with Schlumberger. They quote mean in-place resources of 5,095 bbls and suggest that being vertically stacked only one well should be needed for evaluation and with costs down so much it might even be done for around $85m gross.
Bowleven has announced that it has been granted a one year extension to its Bomono licence onshore Cameroon. Still in the bucket list for huge value in Etinde despite being late but plenty of cash for the patient.
And Andes Energia has announced February production of 3,538 b/d in Argentina and Colombia, although I havent seen the company lately, and hope to on their next visit I remain extremely positive about the company for its unrivaled portfolio particularly in the Vaca Muerta.
Finally I spent some time over at TipTV yesterday talking through the bucket list, the interview which is also on the website can be viewed here.
Another big weekend coming up, its the rugby European Champions Cup semi finals with Sarries v Wasps and the Tigers v Racing 92.
It is also semi finals weekend in the FA Cup, tomorrow sees the Toffees take on the Red Devils and on Sunday the Hornets face the Eagles.
In the Prem it’s business as usual, at the top the Foxes host the Swans, the Noisy Neighbours host the Potters and Spurs again play on Monday night against the Baggies. In the top v bottom the Gooners go to the Maccams and the Magpies go to Anfield while the Canaries dont get a game due to the FA Cup.
And of course it’s the London Marathon on Sunday and yet again I cant believe how generous everybody has been.
This year my daughter Holly and some friends are running in memory of a close friend who died last spring. They are hoping to raise money for the Anthony Nolan trust which is a brilliant charity. I know you all get many requests at this time of year but if you have a few coppers to spare it would be much appreciated. Link is below with all the details, thank you very much.