WTI $48.52 +30c, Brent $50.88 -1c, Diff -£2.36 -31c, NG $2.58 -9c
Going, going, gone as the Brent price over 50 bucks went over the top in early trading this morning. I am also reminded that having not taken out the $52.51 resistance that even the chartists see a bit of a wobble. As for the non-chartists, they cant believe how the price got up here in the first place with so much negative news around in terms of plentiful supply and more on the way. As a rule they dont believe that any talks in Algeria next month can alleviate genuine oversupply with non-Opec production made worse by yet another increase in the rig count. My take on it was similar, on the 15th August, having seen statements from both the Opec Secretary General and the Saudi Minister, I wrote that the ‘machine’ was getting the price up ahead of the Algeria meeting, if all else fails you have just had 6 weeks of $5+ a barrel benefits…
The rig count showed another 10 overall to 491 and 10 also in oil to 406, although hardly price elastic longer term, the last three weeks have seen both the oil price and the rig count go up together.
A perfectly common sense deal from Egdon this morning as they pick up a 20% interest in PEDL 068 from DESS Energy for which they will pay 6 months of costs and existing abandonment liability but not further costs. This block contains the Kirkleatham gas field which is temporarily shut-in and adds 1.75 bcf of best estimate contingent and prospective conventional resources to their portfolio.
Europa Oil & Gas
Another technical update from EOG today, this one on their recently awarded licencing option 16/22 in the Padraig Basin offshore Ireland. The report suggests that there is gross mean un-risked indicative resources in the range of 300-600 mmboe which is possibly a fit with the Flemish Pass Basin. Either way, yet again EOG needs a partner, in this case to reprocess the historic 2D seismic and allow them to mature early leads into drillable prospects at comparatively low cost.
The best things about BLVN are that they are cashed up to the eyeballs and they have a potentially significant development on their hands, the bad thing is that their partners have been procrastinating for various reasons further delaying the Etinde project. As far as I am concerned, as long as investors are patient rewards will inevitably come when NewAge and Lukoil finally go ahead. In the meantime, although I have never been a huge fan of share buy-backs, what is proposed by BLVN seems extremely sensible. This will be accretive to NAV and a drop in the ocean for the treasury who will be getting another tranche of the farm-out shortly anyway. If they aren’t going to buy VOG, which they should, this is also a pretty good wheeze, shareholders should stick in BLVN for the long haul which will be worth the wait.
So, the Olympics finished and Team GB did a fair bit better than expected pretty much across the board. They say that in Olympics year the Sports personality award get more difficult, this year is no exception. Disappointing were all the empty seats but at a months wages each you cant blame the locals much, the other real let down was the standard of judging which if I read Johnny Sutton’s excellent comments correctly are amateurs dealing with professionals which should change.
The Premiership played its latest new card at the weekend that of Friday Night Football, the inaugural match saw the Red Devils see off the Saints 2-0. Elsewhere the happy Hammers played their first league game at the new London Stadium, after a few jitters and missing key players they beat the Cherries 1-0. Wins for the Noisy Neighbours, Chelski, Spurs, Hull and Everton were added to when the Boro won the Weir-Tees Derby 1-2. With Burnley seeing off the HubCap Stealers and the Foxes drawing with the Gooners the season is now truly up and running, it must be nearly time for an international break….