WTI $39.51 -55c, Brent $41.80 -34c, Diff $2.29 +89c, NG $2.73 -4c
The oil price had as many friends as it needed yesterday but still ended down on the day. A strong start, a weak dollar, some short covering and after hours, a better than expected stock draw from the API, in crude 1.3m barrels, in gasoline 450/-. This morning the price has rallied about 50 cents, I have a feeling and I know it is shared by a number of technical analysts who read the blog, that we might be in for a fairly decent rally from around here.
Longer term readers of the blog will remember how much I liked Soco, a company with such success and so much cash is hard not to like. After some management shenanigans and peculiar geographical locations, some of which still remain, the core of the company is still looking in pretty good nick. Production is still guided to 10-11,500 boe/d after a very modest fall from last year and at TGT they are talking to partners about further development drilling. Plenty of cash still with more to come, a clean balance sheet with no debt, good cash flow and operating costs of $10 and still falling, whats not to like? The company will pay a decent dividend and probably a special at the end of this year, how many companies in the sector will do that, maybe it’s a Congo thang.
After a very long search for a new CEO, Lamprell have alighted on Chris McDonald recently of Petrofac and formerly of Halliburton/KBR, no surprise there then. He will succeed the brilliant Jim Moffat who’s only Achilles heel is his irreplacability but i’m sure that he will use his short period of consultancy to pass on pearls of wisdom. Life is hard for Lamprell at the moment, made better by the overhang of a good order book last year but new contracts will be needed in the second half to avoid a nasty crunch.
Yesterday I did a TipTV interview with SDX Energy CEO Paul Welch, as usual on these discussions the resulting 15/20 minutes revealed interesting facts about a company usually only known by senior management. Such was the case here and SDX is an Egyptian play with high margin producing assets with real scale-ability. After its introduction to Aim and a raise of £11m it is set fair to grow and is profitable at oil prices down to $15. Worth watching the interview on the link below.
TipTV CEO Interview: New injection of funds aimed at increasing production – SDX Energy
I notice that Rob Pinchbeck has left the board ‘with immediate effect’ and has been replaced by Mike McTighe who becomes non-executive deputy Chairman. It is sad to see Rob leaving as I have always considered him to be one of the soundest advisors in the industry and an all round great guy. I wish him all the very best having crossed swords many times over the years.
It’s the third test of the season against Pakistan at Edgebaston today and England replace injured Stokes with Steve Finn, surely the last chance saloon for him. The series is 1-1 with 2 to play so at last a competitive series.
Finally after the traumas of Gibraltar Celtic should progress through to the third qualifying round of the Champions League should the beat FC Astana tonight. If they do, they might face Dundalk who are in that draw with them for the first time.