Oil price, Rockhopper/Premier, Petrofac, Pantheon, Bahamas Petroleum And finally…

WTI $67.83 -3c, Brent $74.73 -5c, Diff -$6.90 -2c, NG $2.96 +1c

Oil price

With this morning’s 50+cent rally oil will end up having quite a good week, it needed to as a combination of world events have kept the lid on prices up til now. The interesting thing is whether the rise has been at all sparked by a return to the fray by the speculative money managers who have in the last few weeks been reducing NSL.

The inventory stats this week deserve if a bit late, a mention. The EIA reported a 5.8m draw in stocks which helped sentiment but there was more behind the basic numbers. With refinery utilisation rates staying up at a 20 year high of 98.1% it was sort of inevitable that crude would be drawn but the product numbers took some understanding. Gasoline actually built 1.2m barrels when a draw was expected and whilst the distillates build of 1m barrels was expected it should be watched. I say that because although this weekend is the late summer bank holiday in the UK, the US holiday, Labor Day is next week on the 3rd of September which of course signals the end of the driving season. At this stage refiner’s thoughts start turning to winter with maintenance and preparing for heating on their minds…

Rockhopper/Premier

My read across from the PMO meeting yesterday which I attended.  Tony Durrant was pretty clear that now Catcher is up and running and Tolmount sanctioned, Sea Lion is the next big operated project.  The supply chain is sorted so now on to the project finance.  In response to questions asked in the room Tony confirmed that Premier are planning on working with banks and the export credit agencies over the next 3-6 months to get that financing sorted, he also confirmed that once that financing is in place Premier has the funds from cash flow to pay the rest, so things continue to look pretty good for Sea Lion.

Both shares have performed very well this year and appear to be pausing for breath whilst the financing is completed. Premier is off its recent peak of 135p at 124p at the moment and RKH is at 38p having seen 44p recently. Both seem to have plenty of upside especially since it now looks like FID is not far away.

Petrofac

Who will rid me of this turbulent asset is a phrase that had Henry 11 been around at PFC he would have uttered, the answer is Ithaca Energy. Who would have thought that this once flagship asset would be sold off in the oil equivalent of a car boot sale with Dyas also getting out whilst there is still a bid on the table. PFC gets a total of a potential $292m for its stake in the GSA and the fated FPF although with $28m being held back for field performance I wouldn’t be standing on one leg waiting for that wallet warmer…

Great news for PFC as they continue getting rid of assets now surplus to requirements although they will have an impairment charge of $55m to take and of course this doesn’t complete until Q1 2019 so plenty of time for it to go pear shaped.

Pantheon

Pantheon has appointed Professor Dr Eric van Oort as a technical consultant to the company  who say that he is the best thing since sliced bread although he does have a near perfect CV for this work. PANR also announce that tree clearing is underway ahead of completion of the gas gathering line for VOS#1 which is on schedule to start in October 2018.

The company also announce that a farm-out is underway for the company’s Polk and Tyler County assets which is made more necessary following the acquisition of the assets and operatorship from Bobby Gray’s estate currently completing. They say that they are offering both a WI in the fields and the operatorship if required in return for funding of the drilling operations. The outcome of this sale will ultimately determine Pantheon’s future which deserves to be good as they have had a great deal of potential discounted by awful operational performance and the bad luck of losing Bobby Gray at such a crucial time.

Bahamas Petroleum

BPC has announced the ‘cessation’ of its agreement and that the major oil company ‘will not extend the exclusive nature of the negotiations after August 31st 2018’. Accordingly the company has resorted to ‘asset based discussions’ and ‘non-asset based financing discussions’ using Macquarie Bank as their advisor.

This is clearly a near fatal blow to the company as although they received $1m of exclusivity payments during the process, the fact that a major oil company has seen the books and walked away must deter others. When I met with the company recently they were still optimistic, indeed I wrote that ‘ I suspect that the deal will be rolled over for another couple of months’, how wrong was I?

What now? Ten days ago I wrote ‘ whilst the upside is huge there is undoubtedly a possibility of a major disappointment which should enter all calculations’, with the latter happening things have clearly got to change. BPC has a market cap of £35m this morning after a fall of a short 70% and any deal that they could do would likely dilute shareholders even more, this is surely the last chance saloon. Macquarie Bank are about to earn their fee…

Link

As I was away this week the link to Mondays Podcast didn’t make the cut, here it is in case you missed it.

VOX Markets podcast: Malcy on Premier Oil, Trinity Exploration & Production, Faroe Petroleum, SDX Energy, Independent Oil & Gas and Falcon Oil & Gas

No link but as always this weekend is a landmark for me as 39 years ago I started my life in the oil and gas industry by starting at Wood Mackenzie in Queen Street, Edinburgh, what  a joy it has been.

And finally…

It’s a big weekend for sport although the ECB have managed to have squeezed five tests into six weeks without fitting in the Bank Holiday weekend for cricket fans. Sometimes I think that their incompetence is limitless.

The T20 QF’s are on each night and yesterday Lancashire easily saw off Kent and go to finals day.

The Boropa Cup continues and Burnley had a fiery encounter at Olympiakos running out losing 3-1 so plenty of work to do next Thursday. Celtic drew away and Rangers won 1-0.

This weekend the Premiership has recently promoted Wolves as lambs to the Noisy Neighbours’ slaughter whilst the HubCap Stealers go to the Seagulls and the Gooners host the Hammers in another London derby. Chelski are at the Magpies and on Monday night Spurs are at Old Trafford where they must be as confident as ever after the Red Devils awful start to the season.

There is racing everywhere as one might expect with meetings at York, Goodwood, Newmarket just to name three and this week at York from what I have seen has been amazing, it took hiring Frankie Dettori to get Mark Johnstone his record…

And of course motor racing is back with the F1 Belgian GP kicking off the second half of the season and the MotoGP arrives at Silverstone this weekend. Despite Marquez’s comfortable lead in the Championship he is unlikely to be taking it easy and Lorenzo is in great aggressive form.

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