WTI $41.76 -41c, Brent $44.18 -51c, Diff $2.42 -10c, NG $2.04 +3c
The blog has been absent for a couple of days, much more on why in upcoming issues but the visit to Gdansk to see Ithaca’s FPF-1 was in that respect a resounding success and most impressive. Travelling by Wizz Air was a resounding failure ending up with sitting around at Gdansk airport for 11 hours without a word of explanation, more of that later also…
The oil price was probably getting carried away with itself ahead of Doha on Sunday but dont rule out further hefty enthusiasm from those who are long. The fall yesterday, which has continued this morning was down to a couple of things and poor but not irretrievable inventory numbers. First the Saudi’s made it plain that any production cut was ‘out of the question’, not surprising really, they hardly want to be responsible for the reincarnation of oil profitable at $50. Secondly, the Russian Oil Minister said that the Doha meeting/agreement will be ‘loosely formed with few detailed commitments’, no surprise there either although he could have added that all will cheat as soon as is practicable as there will be no enforcement.
On the more bullish side the Opec report, at a swift glance, showed that non-Opec production was falling more than previously expected and the headline is similar in the IEA monthly whereby it suggests that the fall in shale will wipe a lot off stocks. My own view is well known, add this to the 400bn of capex cuts by the majors and the market might start looking very squeezy indeed in the not too distant….
To those inventory stats, the build of 6.6m barrels of crude was way higher than the scribblers guesses of 1.9m but the market didnt take it so badly, as the gasoline number was a draw of 4.2m against the whisper of only 1.4, overall still a big add to stocks.
As slightly predicted in the blog previously, Far has taken advantage of a good well result and a strong market by raising A$60m at 8.5c. I think that this is eminently sensible and the company is now fully funded until the full extent of the commercialisation is understood, likely to be early 2017. Far remains an outstandingly cheap way to play the world class discoveries in Senegal.
Cape has announced a contract on Teeside with Conoco Phillips and whilst not specified as to value it is for five years and likely to be a useful add to the backlog.
As also mentioned earlier in the week BP appear intent on driving a coach and horses through best practice on executive pay. No one minds a fair pay cheque but twenty million sovs when you have just made a huge loss and laid off a quarter of your work force, you’re having a laugh at the expense of your shareholders…
On the subject of boards as we almost were, it seems like the pruning shears have been out at Premier as the Chairman has decided to reduce its size reflecting current industry malaise. One executive director has paid the price and two non-execs have also received the order of the Spanish Elbow.
Whilst I was away a few things came out, I will try to cover in next day or so. Results from Rockhopper were very much in line with expectations, the main focus was on what a good year it was. Decent discoveries at Zebedee and Isobel deep managed to significantly increase the booked reserves and the Sea Lion development is progressing well. Like a number of companies out there this could be a perfect scenario as the lowest costs for many years are being taken advantage of. The Greater Med strategy is working well and production is building nicely up to 700 boe/d now. Finally RKH has cash of $110m, plenty to keep it going and the stock remains a key long term player in the bucket list.
Finally for now, Hunting had its trading statement at the AGM yesterday and was also very much in line with one delivered at the results last month. Trading is still weak, about 50% down on this time last year reflecting the dramatic fall in the rig count. As with other service companies, costs are strongly down and all being well Hunting will be well placed for recovery as and when…
I see that the Noisy Neighbours are in the Champions League semis where they wont be facing Barca who went out to Athletico last night. Its a shame that there were no tv’s for our 11 hour ordeal in Gdansk airport as we might have had something to do…Tonight its the second leg of the HubCap Stealers against B Dortmund and at Anfield they will really fancy their chances of progressing.
And it will be Man Who v the Toffees in the other FA Cup semi final.
And they did it, the Golden State Warriors kept it together long enough to win the 73rd game and take the record, elsewhere it was farewell to Kobe Bryant who bowed out last night.