Oil price, Hurricane Energy, DGO And finally…

WTI $62.10 -36c, Brent $69.40 +9c, Diff -$7.30 +45c, NG $2.64 -3c

Oil price

The oil price will likely end the week up slightly, yesterday Brent rose on the back of the clashes in Libya and WTI eased on the back of higher than expected inventory data. Economic news gets a little better but there is still no deal yet between the USA and China but optimism remains.

Hurricane Energy

I didn’t write about the Hurricane results last week, partly as they were of little consequence and partly as I was hoping to interview Dr Trice this week. That interview took place yesterday and was a real gem, the link is below but we managed to talk about all the prescient current issues, obviously the situation at Lancaster where first oil is still very much on schedule and budget and of course the carried drilling programme in the Greater Warwick area which is not far away. These are exciting times at Hurricane which comes over strongly in Dr Trice’s demeanour.

CORE Finance CEO Interview: Dr Robert Trice of Hurricane Energy

 

Diversified Gas & Oil 

I havent had a chance to comment on the DGO acquisition and placing last week but it was significant enough to make a comment albeit a bit late. Views on DGO can vary as it is a  model that has not been exported here much before but clearing away the detritus it looks like it should be a successful if not wildly risky investment proposal.

The acquisition last week, another $400m so again not to be sniffed at, brought 107 wells in unconventional, late life shale gas wells which are accretive to FCF and importantly already have the decline factored in so are great for those who worry about where the dividends will come from. The deal was part financed by yet another equity raise which the market, again seemed to be more than happy to participate in, bringing in $234m at a pretty modest discount.

DGO will after this have 90/- boepd which takes them up to the ‘top tier’ of London listed producers and be able to guaranty the 16c of divvi, as a high yielder the company has attracted a very strong cast of supporters but the company should not be confused with an exploration play, virtuous yes, high beta no which is why they like it so much.

And finally…

A busy weekend of sport, after a day already at Aintree the Grand National tomorrow will get the nation out to the bookies, will 4-1 favourite Tiger Roll win twice in a row?

Football-wise it’s the FA Cup semi finals with the Noisy Neighbours taking on the Seagulls and the Hornets against Wolves. In the Prem, of the leaders only Liverpool and the Gooners play at the weekend, the Saints welcome Liverpool tonight and the Toffees entertain Arsenal on Sunday.

And today sees the start of cricket’s County Championship with Surrey defending their title but with many strong squads it will be a long summer.

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