WTI $44.76 -65c, Brent $46.25 -51c, Diff -$1.49 +14c, NG $2.70 -10c

Oil price

Traders reported an up and down type of day yesterday with currency movements and world markets influencing crude oil prices. News of Opec’s June production being up by 300/- b/d didnt help and the market dipped near the close with a selling order on the bell. Inventory stats this week will be more than usually important as we stay near recent lows but this morning Brent has rallied by a dollar and WTI by 83 cents.

Amerisur Resources

An update from AMER this morning as Mr Wardle gets stuck into the drilling programme now fully funded. In the Putumayo Basin the Platanillo-8 well looks pretty good, oil has been found in the Upper U, Lower U and T sands and not in the N sands as their model dictated. With excellent reservoir quality they will now test the 14′ of net pay in the T sands and then put it on long term test to support the declaration of commerciality. This well was drilled ahead of schedule, 15 days instead of forecast 10, and came in at $3.5m which was a significant saving compared to expectations pre-drill, this is a material plus to the economics and how much JW can get stuck into. Weather conditions are proving a nightmare for the completion of the OBA which is still imminent. Elsewhere there are discussions going on at Coati, seismic at Put-12 and there are two back-to back wells on CPO-5 to keep things on the go. Although further testing is needed this is a good announcement but the market is clearly waiting for the magic words on the OBA….

Premier Oil

A trading and operations update from Premier today but whatever I write I know that the profits of doom will be on my case about the debt situation. Now I am aware, as is the management, that the debt is an issue but I do still feel that on the operational side Premier is continuing to deliver the goods. Production at 61/- boe/d was good in the first half and has hit 80/- on recent days so the full year will be at or above the top end of recent guidance of 65-70/- boe/d. Solan is ramping up (I will get hassle about this no doubt), Catcher is on schedule to be live in 2H 2017 and Opex is $16 pb, 14% below budget although currency does help a bit. That net debt I mentioned is $2.6bn, flat on 1Q but discussions to alter covenants and maturities continue. Elsewhere, operations appear to be sound enough and the carrot of being free cash flow positive at current prices later this year added to falling capex should be enough to silence the critics but somehow I doubt it. Never mind, it’s in the bucket list for a reason, from a low of 19p in January to the current level of 72p is an outstanding return even taking into account the oil price and with Sea Lion looking most interesting at this cost base and the EON assets delivering well, that has proved to be a smart move. I am happy to stay positive fully aware of the risks and will stand by for the incoming later…

Sundry

Amec Foster Wheeler has announced that it has won two long term major service contracts from Repsol Sinopec in the North Sea. Decent enough as they are for three years plus two one year extensions so worth winning.

A useful update from Providence Resources who have provided a technical update on their Schlumberger collaboration project and specifically the Newgrange prospect Offshore Ireland. What I found most interesting was that they say that the costs of a well here next year would be around $22.5m, at prices like that offshore Ireland will surely be back in vogue like it was before…

And finally…

You couldnt believe it, only two days after having played the Euro 2016 Final we are back to Champions League football. Tonight Celtic, and their new manager Brendan Rodgers start the process off with a trip to the Lincoln Red Imps of Gibraltar, it must be an early effort to win manager of the month but in Scotland they all count and of course most of their players have had the summer off…

For England it is choosing a new manager and at the moment the favourite is Big Sam Allardyce leading the bookies lists…