WTI $53.31 +$1.32, Brent $61.32 +$1.39, Diff -$8.01 +7c, NG $2.95 +4c
Oil rallied yesterday, trade talks between the USA and China resume today amid a growing feeling that something may be done, indeed Mnuchin actually said ‘anything is possible’. On the Venezuela front the increased sanctions on PDVSA will do harm and also to US refiners who are dependent on whatever crude that they can get from the country.
Finally the weather is very cold in the US and expect to see some alteration in product levels, the API stats showed a much smaller crude build than expected but also modest increases in gasoline and distillates. EIA numbers tonight will firm up the situation.
Ophir Energy- Another one bites the dust…
The board of Ophir has agreed to a cash bid of 55p a share from Medco as widely signalled in recent weeks. Indeed the way that this has been conducted leaves one with little option to surmise that this bid, in all its guises, has been around for quite some time. It values Ophir at £390.6m and will be by scheme of arrangement which might take some time. The company comments that 55p is ‘upfront value’ for shareholders which is a bit rich as if you look at the shares going back it traded above this level for most of 1H 2018….
Anglo African Oil & Gas
AAOG have announced that the TLP-103c well at the Tilapia field in the Republic of Congo encountered hydrocarbons in the Djeno horizon. Wireline logging confirms a 12m oil column making 56m across the total identified horizons and the company are confident of further Djeno reservoir below this discovery prognosed to be in sandstone. These sands will be tested by the TLP-104 well due to the poor performance of the current rig and the condition of the topside facilities and therefore be some time off.
There is little doubt that this is a good news bad news type of discovery, undoubtedly the potential of the Djeno is good news especially if the deeper sandstone is found in large quantities with the next well. Also good news is that the current rig seems to be able to be a producer from the Mengo and shallower sands which should bring in cash flow in the shorter term. The bad news is that because of the state of the equipment, the Djeno can’t be tested or produced now and that the company do not have the cash resources at present for the topside upgrade or the new rig. That means only one thing, further recourse to shareholders whom they have only recently touched for £6m at around today’s price and probably to the tune of twice or more what they raised before. Patient shareholders will be pleased that a discovery has been made but will have to dig deep again before long but at least the well, eventually, came in…
The Premier League returned last night and the Magpies did Liverpool a huge favour by beating the Noisy Neighbours, Klopp must feel that little can stop them from winning the title now. The Gooners won last night and the Red Devils rescued a draw, just like the old days in Fergie time against Burnley.
Tonight Liverpool host the Foxes, Chelski are at the Cherries and Spurs host the Hornets at Wembley.