WTI $44.83 +39c, Brent $47.26 -37c, Diff -$2.43 -14c, NG $2.72 -8c
The agreement at the G20 meeting between Russia and Saudi Arabia was worth the paper it wasnt written on and those who believe that any lasting agreement can be achieved in Algiers later this month should apply for a reality check. Interestingly after the Russians had said that they would welcome an Opec production freeze (they would, wouldnt they) the Saudi’s countered by saying that it was not the only option. Like they know how they can increase the oil price without taking 2m b/d off their spigots. Actually they might, as they were seen scurrying away from the meeting rubbing a little gold jar…..
It is difficult to conclude from the statement quite who got the better end of the deal by which Solo doesnt exercise its option to buy another 1.25% WI in Kiliwani North from Aminex who remain with 54.575% of the asset. Let’s just say it benefits both companies although, having raised money recently, I suspect Aminex might have got the better of it. I like both these companies who apart from sharing this asset have interesting other fishes to fry. Notably for Jay and team at Aminex they can now concentrate on appraisal and development of a fully funded drilling programme in the Ruvuma Basin.
Catching up with the Hunting results from Monday and a glance at the share price chart would make you wonder whether the figures you were seeing and the picture you were looking at were the same company. Deep into service company recession with halved revenues and operational losses, passed dividends and tricky conversations with bankers and the shares have nearly doubled from the January low and just passed the June high for the year. It’s the mirage effect of seeing the pick-up just on the horizon and yet still not meeting it. Brokers with sell notes need not apply here, the market can see the future and with a hugely reduced cost base and, ironically, a strong balance sheet give optimal hope.
The figures were awful, a bigger than expected loss and understandably margins crashed and with revenues halved EPS losses substantial. However…CFO Peter Rose has been very busy and the financials and debt position are in surprisingly good nick, inventory has been attacked with a vengeance, capital spend has withered, costs are down across the board leading to a reduction in working capital and cash is king. Even the banking terms are relatively unscathed, the revolver is down to $200m and with other facilities should mean that Hunting get by, I even heard that should all go well they can drop back to previous covenants…
The presentation was downbeat but pragmatic by Hunting standards, apart from the financials Dennis only spoke to one slide and took questions. The underlying industry statistics still show that by 2020 at current rates of depletion and a modest increase in demand the oil boot returns to the other foot, survivors when the market turns should be in the box seats. That ‘when’ is still a tentative statement, assuming it does and pricing is at all realistic then the survivors will do well, that is assuming that you have some stock left on the shelves to sell and the banks have not grown any more teeth. The share price says that it will, my confidence in Hunting has remained intact but not without the odd faint moment, that recovery better come soon….
Red T Energy
I interviewed Scott McGregor, CEO of RedT Energy Storage on TipTV yesterday, the company is most interesting and the link to our chat is here.
I have also done a number of brief interviews in the last few days for IGTV, covering the Oil market and the Bucket list and they are also below.
Muzza plays Nishikori in the Quarter Finals of the US Open this evening, Djoko has made his S/F against Monfils after Tsonga retired making three matches which either havent started or finished for him in the tournament.
The final game of the Pakistan tour is tonight as the T20 game concludes the process. At the moment players are trying to decide whether or not they should tour Bangladesh this autumn, England reckon it’s safe enough but not pressing players if they dont want to go.
Last night Marcus Rashford scored a hat-trick on debut for England under 21’s which I suppose justifies playing that game and not the grown-ups, its the Manchester derby on Saturday….
The long awaited rematch between Fury and Klitschko has been announced for 29th October, who will blink first this time I wonder?
And the Paralympics start tonight in Rio, in London I was lucky enough to be at one of the big athletic nights which was truly memorable.