WTI $45.11 -$2.29, Brent $46.40 -$2.40, Diff -$1.26 -11c, NG $2.78 -1c
Even the inventory figures conspired to make this topsy turvy week more unbalanced as the API draw of 6.7m barrels didnt follow through into the EIA numbers which showed a draw of only 2.2m b’s, ironically in line with the scribblers. As a result the oil price fell and although it has rallied by around 50 cents this morning will end the week down I suspect. Today’s non-farm-payrolls could create more trouble although a figure below the 180/- consensus may at least keep the lid on the dollar as tightening gets pushed further into the long grass. In the UK the effect of Brexit hit consumer confidence very hard with the steepest fall in two years being recorded. Finally with the merger in Libya meaning that at least in some quarters peace is breaking out there were rumours that the Es Sider and the Ras Lanuf terminals are being prepared for coming back onstream.
An update from Pantheon this morning as I am sure the market were feeling that a report from East Texas was due sometime soon. Nothing that much to add, the VOS#1 well in Tyler County is being prepared for fraccing operations and all permits have now been awarded. The operation is scheduled to start in early August as the fraccing crew has two jobs ahead of PANR, what does that tell you about the state of the service industry and how much it has pared back recently? The other key point about the frac job is that the company are going to do the Austin Chalk as well as the Eagleford Sandstone in this operation, being a vertical it is a no-brainer and it becomes in effect a freebie. Over at the VOBM#2H well all is progressing smoothly after a five day delay waiting for kit, this should be not far from TD and testing. Investors should look at the chart on PANR, support is strong at the 130p level and the years high is 184.75p still below my confident target of over 200p, with information to come I have no problems at the moment but wouldnt like to see that level broken for any length of time. Still very much at the top of the Bucket list plays.
I was out yesterday and unable to comment on the news that Sound put out regarding the Tendrara infrastructure. They announced that they had a non-binding Expression of Interest from partner’s OGIF who want to fund, build and operate a new pipeline from Tendrara to the GME pipeline. With the cost of the pipeline being an estimated $50m it is not surprising that the company view this ‘first’ EoI to be very helpful to the economics as it would lead to constructing the infrastructure without equity dilution. The shares have risen sharply in recent days as the news from Tendrara seemingly gets better with each release, this news can only make the asset more attractive and shareholders should sit tight and enjoy the ride.
Savannah Petroleum duly announced that they had completed the $40m placing, restored the listing of the shares and terminated the potential transaction which started it all back in January. Following my comments on Wednesday I have had a chance to have a chat with Andrew Knott and the story stacks up pretty well, indeed stacking is going to be a good word for the company as they start drilling in 2017. The operational and value adding nature of the portfolio and SAVP’s recently awarded status in-country makes a compelling and reasonably low risk, low operating cost environment and in substantial size into the bargain, one for the watch list deffo.
Tullow confirmed that the $300m convertible announced earlier in the week would be priced at $3.52 with a coupon of 6.625% at the top end of the predicted range. In addition the company announced a duster in Norway on the Rome prospect that it has now p&a’d.
And Velocys put out a brief update but yesterday which outlined that the ENVIA plant construction was ongoing and that they had a modest amount of subcontracting work in the process.
So, no sign of Germany in the Euro 2016 final as France continued their good form with a 2-0 win last night which gives them a final berth against Portugal. England fans will be able to sigh with relief as there will be an Englishman in the final albeit referee Mark Clattenburg…
It is the Wimbledon denouement and today’s semi finals see Federer playing Raonic and Muzza taking on Berdych.
And of course it is the British Grand Prix at Silverstone and Mercedes have declined to give orders not to race each other which seems sensible enough although I dont think Lewis would have been able to hear any instruction telling him to let the spoilt child through…although calling one a spoilt child doesnt narrow it down much in F1..
How do you feel about the Tullow convertible? It clearly wasn’t expected and came as a bit of a shock but do you see the market reaction as overdone?
Still lovin’ your work and always keen to hear your thoughts.
Hi there, I think it was a question of ‘if the ducks are quacking then you feed them’. I dont think that it was in the plan but they took advantage of the funding and would do so again.
Thanks for your kind comments!