WTI $48.16 -3c, Brent $48.81 -12c, Diff $0.65 -9c, NG $2.04 +4c
The oil price will end up on the week but with a whimper not a bang. Yesterday the continued strength of the greenback kept the wrappers on the price although continued bad news on production, particularly from Nigeria made for a late in the day rally.
Interestingly a lot of the company news yesterday and today is beginning to look a lot like capitulation time in the sector. With the FMC/Technip story, the Oil Search/InterOil/Total deal and AEP, GKP and Circle indicating bad news we might just be near an inflection point and remember all that private equity money trying to find a home in the sector, can you think of any deals they have done yet?
The company comment this morning on the strategic review process in which ‘a number of indicative proposals’ are in the process of being evaluated and that every possible outcome is still in the mix. They say that work is continuing to conclude the SRP ‘as expediently as possible’. Last time they said that the IFC were happy to wait until the process was complete, this indicates that that moment may not be far away. Rather uncomfortably, the company say that they now consider that the debt of $77.5m which includes the fully drawn down RBL, means that there will be little or no value attributed to equity holders. This all seems rather terminal but if the company can find a home for any of its assets, some of which are genuinely good quality, all may not be lost. It should be remembered that they are dealing with a lender that allegedly sold out its Petroceltic debt for 30 cents in the dollar…
According to Upstream Online this morning American Energy Partners, the vehicle used by the late Aubrey McClendon is to close down with ‘serious debt issues’.
Also on the debt front, GKP has rolled over the standstill agreement with the Ad hoc committee of its bondholders with an extension date of 31st May although it hasn’t paid the April coupon yet by my reckoning.
And in a smart deal announced overnight, Oil Search has made an agreed bid for InterOil which includes an MOU with Total for a back to back farm-out of its Papua LNG project. I listened to some of the conference call and the argument for the deal seems pretty compelling.
The phrase it’s Cup Final Day doesnt seem to have the ring about it that it used to, or maybe I’m just getting old. I know that hindsight is a wonderful thing and that fans playing its a knockout and travelling on the coach to the stadium with the teams is outdated but I think the 5 o’clock kick off takes away from the ceremony! Anyway, tomorrow sees the Eagles take on the Red Devils for this year’s silverware.
So, yesterday I said that it was wet, cold and windy, all one needed for the opening test match of the summer. What I didnt include was the phrase ‘England middle order collapse’ which is equally as predictable…
Having lived in Edinburgh and observed the McMafia at close intervals it comes as no surprise that the misogynists over at Muirfield decided to prove to the world that their independence was worth more than hosting the Open Golf Championship. The only difference I would have made had I been the R&A would have used the words ‘never’ and ‘again’ in the sentence regarding hosting. I can’t wait to see what Johnny Sutton has to say about it from the Oval Office today…