WTI $69.85 +94c, Brent $79.03 +98c, Diff -$9.18 +4c, NG $2.93 +12c
The oil price is staying at the top end of the recent range ahead of the Opec+ meeting on Sunday. As usual, even though this is an interim chat everyone has something to say to place their bets, so to speak. The Saudis have said that they are ‘happy’ with oil over $80 and if the meeting doesnt formally increase production that is the likely outcome.
Having said that those who can increase production are likely to do so although we are entering the tightest part of the year. To add spice to the debate, if any were needed, Russian Oil Minister Novak has suggested that whilst $70-80 is about right at the moment, without US sanctions on Iran $50 is a more accurate price, clearly suggesting that US policy is actually putting the price up not Opec+….
The API reported a build of 1.25m barrels last night when the goon squad were guessing a draw but hey, what a +/- sign between analysts? Gasoline and distillates both drew around 1.5m b’s which sounds about right but be aware there is some quite sizeable refinery maintenance coming up in the next few weeks.
Nothing particularly surprising in the Rockhopper results today although I would say things look like they might be hotting up a touch in the Falklands, particularly on the operational front. For the starter, the small stuff, a good well in Egypt and a big reduction in the receivables, not hugely exciting but clearly good news and the Italian arbitration now only 5 months away which could be pretty meaningful.
For the main course, Sea Lion, where momentum is building as is the size of the project team and with pre sanction activity ramping up things must be looking positive, contractors are signed up, FEED awards being made and negotiations with the FIG who are happy with progress. So nothing is changing operationally as gradually all the boxes are being ticked which pretty much leaves the project financing which seems to be progressing as hoped. I expect that with oil at current levels thus creating a pretty solid set of economics, project sanction in mid 2019 is still a very realistic probability.
FRR have added to their RNS from Monday as they are getting significant ‘market enquiries’ not to mention chaos on social media with regard to dealings in their shares. Today’s announcement says ‘to clarify’ that on 28th, 29th, 30th August and the 3rd September YA II PN ‘arbitrarily’ sold 82m ordinary shares that were not authorised, issued or admitted to trading by the company.
Investigations continue into possible unauthorised dealings in the shares and so we are not to expect any further comment until FRR has taken legal advice and from its advisors. It remains a mystery that something like this can happen but now we will have to wait and see how it could have occurred.
News yesterday from i3 where the potential partner who was under an exclusivity agreement is unable to deliver on key assurances within the 90 days as agreed. Now, there is no reason why it will not do so, I am assured that it is nothing to do with the assets, it is not a technical problem nor brinkmanship from either party. At this stage I suspect that i3 pretty much had to let them become -no longer exclusive- in order to give them an opportunity to speak to other potential partners and to avoid project drift.
i3 continues to press ahead with all the necessary processes for the FDP of Liberator and as it says in the announcement don’t see this delay as an impediment to that. Having said that the company must be very confident of cutting a deal as at a conference in London last week CEO Neil Carson confirmed that the company would not need to raise any money in the foreseeable future, let’s hope not.
United Oil & Gas
Another piece of news from yesterday was the raise by UOG of £3m gross in an oversubscribed conditional placing at 5.5p with warrants attached on a 3 for 4 basis excersisable at 8p. The funds are to be used for ‘projects in Europe, the Caribbean, Latin America and Africa’ but more specifically what the company call ‘value-driving’ activity expected in the coming months at Colter and in Jamaica.
I recently met with UOG CEO Brian Larkin and was impressed by the portfolio which includes a commercial gas discovery in Italy which is going through the permitting process as well as two blocks in the North Sea and an option to farm-in to the Acle prospect. With the company fully funded for its share of current commitments across the portfolio I think it is well worth keeping an eye on.
This week’s VoxMarkets Podcast from Monday morning is below, plenty to talk about as usual.
Liverpool really could be the real deal this year especially after an extremely impressive performance against PSG last night where they scored late on to win 3-2. Spurs were not so fortunate losing 2-1 against Inter.
Tonight the Noisy Neighbours entertain Lyon whilst the Red Devils go to Bern to play Young Boys on their plastic pitch…