WTI $57.66 +15c, Brent $64.11 -12c, Diff -$6.45 -27c, NG $2.40 -1c
Another mixed day for oil, the US economy as shown by the NFP numbers on Friday is OK although a rate rise seems inevitable and the greenback remains firm. US gasoline prices are continuing to rise and the blended price across the states is now $2.73 a gallon up three cents on the week and heading back the the May highs. First indications of stock levels are showing another draw this week and should the API and the EIA carry that on then they might offset the 12m b/d of domestic production announced by the EIA.
With Opec+ production remaining low and the Iranians saying that they are increasing the enrichment of Uranium to 20% purity hardly likely to appease Mr Trumps’ mood, further sanctions are likely and the concomitant increase of tensions in the Gulf inevitable.
Chariot Oil & Gas
Today’s AGM statement from Chariot contains little new news but it does provide a useful analysis of quite how important the securing of the Lixus offshore licence in Morocco could be for the company. After all this is a significant gas discovery close to one of the highest priced, strongly growing gas markets worldwide and substantially re-balances the portfolio without taking away the upside.
The May CPR gives over 1 TCF of gas to the Anchois discovery and its satellites which should deliver ‘strong returns and significant cash flow’. With 75% of the asset Chariot are in a strong position and will partner up on the deal and data rooms are open and the level of interest is pleasing. Indeed, unlike farming-out a well or even a drilling campaign this exposure to the fast-growing Moroccan domestic market gives a much wider potential audience of partners which could extend to utilities and other power and infrastructure providers.
Opportunities remain in the rest of Chariot’s portfolio and their other Moroccan licences, Brazil and Namibia all carry interest from industry and should not be forgotten about. Chariot has a very healthy cash position, $19.8m at the year end and with no debt and with minimal commitments of under $1m and low G&A having reduced costs substantially over recent years. This cash position almost carries the share price on its own leaving virtually nothing in there for the exciting recent asset acquisition or the existing sizeable portfolio of high quality assets and the shares should be considered remarkably cheap.
Another RNS from INFA but not the one that all are waiting for, yet. Today they announce that they have entered into an exclusivity agreement with Meridian Holdings, a Cayman Islands Company, to facilitate the development, and an acquisition of the promoters Floating Storage Regasification and Reloading Unit Project offshore Barrow-in-Furness in the United Kingdom.
Whilst this does indeed give INFA access to the substantial demand of the UK market, and provides a potential market for gas stored in Islandmagee it looks a bit like putting the cart before the horse as the project itself is not yet funded or had FID. What is more there is little indication of how much it will cost, INFA are putting up 100m shares (of the 1.33bn in issue) and an as yet unknown cash consideration for a minority stake, assuming that they can sub out the rest. This for a company with a market cap of only £7.5m is taking a fair amount on risk I would say.
We have reached the Semi-Final stage in the CWC and today India play New Zealand at Old Trafford. Form dictates that India should win but anything can happen and I don’t think that they have used up any of their jokers yet with near perfect performances.
Would you believe it, it’s time for the Champions League first round qualifying and Celtic are away at FK Sarajevo in Bosnia and Herzegovina, never an easy tie that…