WTI $63.58 -$1.03, Brent $70.83 -90c, Diff -$7.25 +13c, NG $2.66 -4c
With oil up around 50c this morning it looks like being a comfortable week up for crude even after a down day yesterday. Trade worries between the USA and the EU are not a significant problem although the oily part of the inventory stats were worse than that in products.
Actually in global terms stocks are falling, certainly if you believe the IEA which is always taking rather a lot on trust. Having said that, they think that Opec production is down to 30.13m b/d and with a call of 30.9m in this quarter then stock overhang will dry up.
Although Russia has been rowing its own boat with regard to quota adherence even Opec had to suggest yesterday that they may have to raise quotas in the June meeting if both Iran and Venezuela continue to struggle, add Libya to that and the tightness of supply will remain.
A few words on the agreed takeover of Anadarko by Chevron announced this morning. Chevron are paying $33bn in stock and cash for the company in what they describe as a ‘strategic fit’ which saves $2bn annually in costs, is accretive to FCF and earnings after one year, Chevron are also upping their own share buy back by 25%. More after conference call which is 0830 ET but this shows again what I have been saying about oil being cheaper in the markets than drilling for it yourself…
Europa Oil & Gas
I have a request in for a meeting with EOG but thought that I would comment today, not specifically on the interim results but on an overall basis. Money wise the company is in a good place at the moment having raised £4.3m in which institutions partook and now have 33% of the company with the board holding a short 10%.
Elsewhere good news is that the company are still negotiating a farm-in for three licences with a major oil and gas company and the decision is at board level. The company’s ‘industry leading’ position offshore Ireland is slowly getting closer to delivering its estimated gross prospective resources of 6.4bn barrels of oil and 1.5 Tcf of gas and the farm-in, should it be completed will accelerate that process as will any success by CNOOC in the South Porcupine Basin.
As for Wressle it remains proof that local Government planning processes are driven by something more akin to a comedy stand up night and where nothing can be taken for granted. Having said that the development is not only important to EOG and its partners it will be a guide to further UK onshore energy delivery. More after a meeting with Hugh.
Following yesterday’s story when I noted that directors where planning to buy stock, they put their money where there mouth was. CEO Matt Idiens bought 2m shares, Chris Eadie, CFO 945,600 and future NED Tom Reynolds 731,694. As I said, one for the notebook.
This weekend’s footy revolves around the visit of Chelsea to Anfield, the crucial game for both sides right now. The Noisy Neighbours are at the Eagles whilst Spurs host the Terriers and the Hammers go to the Theatre of Dreams. The Gooners play on Monday.
Racing sees the Scottish Grand National at Ayr and the Greenham at Newbury with the flat taking over now.
In F1 it is the Chinese GP and at the moment times between all are competitive.