WTI $43.44 -$1.22, Brent $43.63 -$1.74, Diff $0.19 -52c, NG $2.10 n/c
With the Canadian situation still very much under review the bears had the better of things yesterday despite the amount of Canadian crude off the market rising to nearly 1m b/d. A combination of factors helped the price down, the weathermen forecast cooler weather with lighter winds and the possibility of rain to ease the trauma, whilst first looks at the infrastructure showed around 90% of the sites unharmed.
Meanwhile two comments from Iran might have been more helpful to the bulls, Oil Minister Bijan Namdar Langaneh said that exports would reach 2m b/d this month whilst the MD of NIOC suggested that the country ‘may talk about limits to production in 1-2 months’, ie they must be close to short term capacity……
The Gemscape numbers and Reuters predictions suggest further stock builds this week so no respite, despite Canada on the stocks front helping out a little although this situation should be watched carefully. When the full effect of the Canadian loss of production and therefore exports, start to get into the inventory data there will be draws, if this coincides with the start of the driving season we might rally again, just a thought…
Sound has announced that it has signed HoT’s for a bond programme and refinancing with Greenberry which is an affiliate of Continental under common ownership by the compelling Marco Fumugalli. The deal provides additional funding for the company’s growth strategy and also simplifies its corporate debt structure. In detail there are 5 year bonds with a par value of €28.8m with a 5% coupon issued at a 32% discount to par, secured on Sound’s Italian assets. In addition there are 70m warrants with an exercise price of 30p for 5 years.
Overall this gives Sound another €6m of cash for its growth strategy, repays the €7m Nervesa RBL and also the existing Greenberry loan. (The £1m loan from Chairman Simon Davies remains in place until July 2017) This seems to be a generally smart move, rather typical of the company and its supportive backers, it tidies up the debt position whilst adding to the potential spend and increases the net length of the debt. Expect further corporate activity activity and maybe even the addition of another geography…
Chariot Oil & Gas
Chariot has announced in a corporate update that it is taking the knife to its London office and a good part of its board. Whilst the saving of another $1.5m is laudable and the company rightly says that it must protect those at the ‘rock face’ it rather smacks to me of going into a care and maintenance stance. With few commitments, the focus is admirably on cash and although messrs Trojan and Bodecott are being despatched as Non-execs, Matthew Taylor loses his position as Technical Executive Director but remains as a consultant. Without the Rabat Deep operatorship it seems that further farm-outs are expected although quite how that would leave the company i’m not sure. I have been a big fan of the company’s Lazarus like revival under Larry Bottomley but I think that the jury may be out for a while following this announcement.
Northern Petroleum in an update say that net average oil production has been 449 bopd until mid April although trucking was suspended for a while as normal. Rainbow’s costs are $20-25 with variable operating costs of $4-10 a barrel if over 4oo bopd.
Caza has announced that as from today its shares have been cancelled and the shares de-listed.
The Invictus Games is under way in the US and watching these athletes is truly inspirational.
It seems that Burnley left Joey Barton off the list for Championship medals as he didnt receive one, maybe they thought they were for good behaviour?
Boleyn Ground 1904-2016
Tonight sees the final home game at Upton Park for the happy Hammers who entertain the Red Devils in a game that actually matters which is a bit of a shame. There wont be a dry eye in the house and even Man Who fans shouldn’t despair if the Irons turn on the flair and come away with a win… Well it’s easy to write……..