WTI $43.02 +$1.22, Brent $45.39 +$1.12, Diff -$2.37 -10c, NG $2.75 -2c
A decent rally yesterday but on pretty flimsy evidence, the Opec President gets on his hind legs and calls an ‘informal meeting of Opec in September to discuss the current slump in oil prices’ and people only go and believe it…The way to read it is that all participants will be in Algeria for the International Energy Forum and all of a sudden you’ve got an Opec meeting.
Some more colour on the likely oversupply of crude oil this year should come from the monthly reports from agencies EIA,Opec and the IEA this week, after blowing a bit more positive recently will they temper that optimism this time?
Amec Foster Wheeler
A big relief rally at AMFW this morning as the figures, despite being distinctly average beat the market whisper and to be frank, might have been a lot worse. The company describe them as ‘mixed’ which is fair enough, good numbers in Solar and the North Sea were offset by bad numbers in Americas Oil & Gas. Indeed with clean energy up 80% and environmental up 10% mitigating the bad bits there is cause for a degree of optimism. The loss of £429m post write-offs and impairments was expected and with modest trading profits margins were only down just under a point at 6.2%, they even paid a divvi of 7.4p albeit down 50% as the market expected. Net debt is £1084m and likely to be like that at the year end but with £500m of disposals expected that number will be substantially reduced in line with a more efficient company also driving significant cost savings as one might expect. The order book could also have been worse and sits at £6.2bn against £6.6bn this time last year and is holding up reasonably well under the circumstances, at the same time operational cash flow remains good as
The statement was hardly encouraging although again, I would expect nothing different from a new CEO assessing his asset base. The world is very challenging and capital projects are being delayed or cancelled so there is only one thing to do, go for a strategic, organisational and cost review and snappy. Some things are already under way such as the highly respected John Pearson has moved over to the US, I rate him very highly. The review is scheduled to be completed by ‘the autumn’ and I am led to believe that it will be ‘evolution rather than revolution’ but either way be a proper shake up so wait for the leaves to fall off the trees and see what he comes up with. Amec is in a difficult space along with many other worldwide but is addressing the problems and should come out ok.
Range has announced that the LD-1 development well has spudded in Trinidad on the Morne Diablo field and with a TD of around 2,500′ should only take a couple of weeks. It is encouraging to see the well programme going ahead as per the company’s plan and with new rigs being approved all the time the outlook is bright. Indeed the two wells 250 and 251 are hoped to be brought onto production in Q3 of this year after current production testing. The company still has plans for three more wells this year, one at Morne Diablo, one at Beach Marcelle and an exploration well on the Guayaguayare block.
The company has announced that the take up of the open offer was just 13.7% with the balance placed by the underwriters, fortunately the major placing was so oversubscribed that there were plenty of willing takers of the rump. The £4.2m raised from the open offer adds to the £62m raised in the placing and leaves Faroe with a strong balance sheet and ready to take advantage of any opportunities should they arise. FPM remains a solid member of the bucket list and although off the years peak is still showing a 50% gain from the lows earlier in the year.
After the year that they have had all Circle needed was an earthquake at Kenitra which has damaged the ONHYM pipeline and cut their gas production to 70% of capacity. The company say that this is a temporary issue and should be resolved before long. What next, pestilence?
The GB team won two bronze medals yesterday, Ed Ling a Somerset farmer won bronze in the shooting and Daley and Goodfellow did the same in the diving. We are exactly at the same point as London 2012 after three days and bear in mind that no team has ever beaten the total they got after hosting the games.
A couple of big signings heading for Manchester, Stones goes to the noisy neighbours, eventually and Paul Pogba returns to Old Trafford for plenty more than he left…