Oil price, iog, Cairn, Union Jack – And finally…

WTI $58.41 +40c, Brent $64.27 +62c, Diff -$5.86 +22c, NG $2.47 +6c

Oil price

Another up day yesterday  although that was by no means certain trading hours early on. On the plus side President Trump said that we are in the ‘final throes’ in reaching an agreement with China so maybe 15th December may go alright…

The API stats were indifferent, the teenage scribblers got their numbers wrong as they usually do and the stock build of 3.6m barrels was about 3.2m more than they expected. Distillates built a huge 4.4m but you only have to keep an eye on the weather to get that one right. Interestingly today the prices are stable so no panic going on ahead of the EIA numbers later and with Thanksgiving tomorrow prices are usually high wide and handsome in other markets.

iog

A big day for newly named iog yesterday, no I haven’t lost the capital I on my computer the new Monica avoids confusion apparently. They also announced some management changes with Rupert Newall being made CFO  and going on the board whilst James Chance takes over his portfolio as Head of Corporate Finance and IR.

Of more importance was the analysts presentation which was well attended and well received. The updated presentation, now available on the website  is aimed at defining the delivery of the Core development with partner CER, part of Berkshire Hathaway Energy and with the exception of the decision on Harvey by CER all is ready to rumble.

They are now fully funded to develop the 6 gas fields totalling 421 Bcfe which will deliver peak annual production of 140 MMcfe/d with incremental appraisal opportunities via the ‘efficient hub strategy’ which to be fair has always been an iog concept. Overall the company were able to point out that the Core development delivers ‘strong returns and significant cash flow’ with, importantly a very low carbon footprint. Over to the company now with rebooted management team and an exciting project to deliver.

Cairn Energy

Cairn has announced that it has sold its remaining Norwegian assets to Solveig for $100m +/- which delivers a reduction in commitment exploration and development capex of c.$100m. Gives Longboat an idea of prices in the market at least…

Union Jack Oil

Union Jack has raised £5m at  0.15p/share for drilling 2 appraisal wells at West Newton and other high impact work programmes. With the recent high of 26p just think what the raise might have been done at if it hadn’t been telegraphed all round the market, some short closing going on here methinks…Whatever, the strategy it doesnt take away from the massive value at West Newton for UJO and Reabold.

And finally…

Last night saw Spurs come back from 0-2 down to beat Olympiakos 4-2 and keep the Humble one happy. The Noisy Neighbours drew 1-1 with Shakhtar Donetsk.

Tonight sees Valencia v Chelski and Liverpool v Napoli.

And sincere apologies, I mixed up my Blades and my Owls, unforgivable as my nephew is a Blades season ticket holder…

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2 comments on “Oil price, iog, Cairn, Union Jack – And finally…
  1. Robin Davies says:

    A little while ago you commented that Amerisur was being bought/sold on the cheap. I am/was a holder and a bit disappointed at the outcome but the problem with it (as with President which I was in) is they are one-country companies and that country is in Latin America. Colombia although it has better free market credentials than (say) Argentina is not fully clear of its turbulent past and has had some fallout from Venezuela-so I am not surprised that investors are unenthusiatic. A more suitable subject for criticism is Reabold (which I am in). I do not have all the figures to hand but my recollection is the shares shot up to 130 or so then sank back slightly then sank back a lot more when they had the usual massively discounted placing to their pals in the City giving the latter a whacking profit and their shareholders a shafting. It is hardly surprising that shareholder loyalty is in short supply. I am staying in because I think they have a good model of investing in a spread of projects.
    I have gone back into Sound as the shares at 4-5p must be cheap with cash coming in of around that plus the carry and the potential upside from the sale of their Eastern Morocco assets. I just hope the directors do not waste the money. Best wishes, Robin Davies

    • Malcy says:

      Hi Robin, the thing about markets when you put a company up for sale is that the process should be pretty efficient, I still think that Amerisur went out too cheaply but the board took the best price offered I guess, not more to say. I dont share your views on Reabold, i like the model and Stephen and Sacha are doing a great job there! As for Sound, you are right to go back, the market hasn’t understood the deal at all. You get 55m cash and 55m carry and are paid to first gas and you still have 23% to own unless the buyer takes the 9% option in which case you get more cash. You will be paid a divvi when the cash tranches come in, you have skin in the asset and when the gas comes you own a royalty which should be traded as such, people have forgotten what royalty units are i think!
      Anyway, enough from me!.
      Kind regards
      Malcy

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