WTI $52.36 +$2.58, Brent $61.44 +$2.72, Diff -$9.08 +14c, NG $2.98 +2c
The oil price has had a good run, up nearly 20% since the low on December 28th or thereabouts and due to a combination of Opec+ production cuts and ongoing trade talks. This morning it takes a breather, off about a dollar but both grades remain above their crucial ‘big figures’.
The above havent changed but the EIA inventory stats were again mixed last night, overall the bears had it small time, crude drew but at 1.7m, less than forecast and the API number. Products, which I continue to argue are difficult to read at this time of the year, did rise, gasoline by 8.1m which was higher than the API number and distillates by 10.6m which was marginally above the API data. I will worry about the distillates number if there isnt a cold snap which is about as likely as Lord Lucan appearing on the board of Angus Energy…
The Premier updates continue to please and today is no exception. All the boxes are being ticked, starting with production which came in at 80.5 kboepd up 7% y/y and a group record. With November and December averaging 92/- b/d and Catcher doing a gross number of 66/- b/d the year ended well. Guidance for 2019 is 75/- b/d which seems cautious but they do lose a short 10/- b/d from disposals and the 97% uptime can hardly be maintained for ever.
So to the debt, which remains high but is coming down faster than expected, at year end it was $2.33bn which was down $390m on 2017 and below guidance of $2.4bn. The Tolmount Main gas project received sanction in the period and the platform is already under construction. With the Tolmount East appraisal well to be drilled in ‘mid 2019’ first gas is still on track for Q4 2020. In Mexico the Zama appraisal well is drilling now, it is at the top of the reservoir looking for the oil water contact (OWC) and then will checkout the deeper exploration prospect before testing the sidetrack, expect a result soon followed by Zama-3 in March.
Elsewhere the Sea Lion project financing continues, LOI’s to contractors have been converted to contracts, a good deal of the environmental, fiscal and admin paperwork is ‘far advanced’. Paperwork is being prepared for the lenders and given that the UK Government has potential exposure too one can understand that they have a lot on their plate at the moment.
This is a good operational announcement ahead of the figures on March 7th where the full presentation will be made. The debt reduction is welcome and more than expected, I like the hedging programme and the pulling in of cash to cut the borrowings. Despite that it is continuing with Tolmount, Zama and even Sea Lion to add to the existing good quality portfolio which gives confidence for the future.
A brief comment on MATD this morning as I have a meeting with CEO Mike Buck in the book for next week where I hope to get chapter and verse. Talking post well analyses after two high profile dusters is brave but demonstrates a deal of optimism for the remaining programme. In block V they like the light oil from the drilling fluid in the dry holes and they like the Taats Basin especially the Raptor and will next drill Fox or Raptor. In Block XX they have mapped the Heron, Gazelle and Antelope prospects and with Heron being deemed to be an extension to the Petro China discovery it becomes an appraisal well. Apart from that it will be more exploration and the high risk/reward that goes with that…More next week.
When I read the Angus announcement I thought that I was in some parallel universe, I’ve heard a lot of pony in my near 40 years in the sector but this takes the bacon. Ex Chairman, who left for a good reason as I remember, trying to sack CEO and replace him with Lord Lucan and Adam Habib which immediately prompted the resignation of Rob Shepherd (which is a very telling indeed). As for the financing and the £3m facility the less said about that the better. What a total shambles, whatever the quality of the asset this looks like being as close to uninvestable as it gets, your call…
I wouldn’t normally comment on Non-Exec or broking appointments but the announcement that AEX has appointed Linda Beal as an independent NED is encouraging for shareholders and provides much needed backbone to the board. I don’t comment on broker quality as such but the addition of a good city and oil industry name as an advisor can also only help the process for the company. All they need to do now is to fill the Chairman role, I’m sure that the usual headhunters are on the case…
The disruption on the M6 last night prevented most of the Burton fans from getting to the first leg of the Haribo Cup semi-final and quite a good thing too. When they are at home for the second leg I hope that they are singing that old football song, we’re going to win 10-9, we’re going to win 10-9…..
Black Friday took the sparkle out of Christmas for retailers, Sophos shares cut by a quarter after slump in demand
Kodal Minerals said it is on track to complete a Mineral Resource estimate update to include all drilling results to date. The project is attracting the attention of investors and off-take partners interested in securing a long-term supply of lithium.
SP Angel morning look at commodities and miners, featuring: Bushveld Minerals* (BMN LN) BUY – Target Price 87p – China to better enforce vanadium compliance Cornish Lithium (Private Company) – Completion of further funding round Ironveld (IRON LN) – Vanadium ore bulk sample delivered to potential off-taker Kodal Minerals* (KOD LN) – Bougouni drilling results LSC Lithium (LSC CN) – LSC Lithium enters definitive arrangement agreement to be acquired by Pluspetrol Rio Tinto (RIO LN) – Q4 and 2018 production results highlight copper Shanta Gold (SHG LN) – $325k worth of convertibles bought back Vast Resources (VAST LN) – $5.5m Mercuria Tranche B update
Ladbrokes and Coral shops ‘in terminal decline’ as online gambling thrives, £1 shopping centre reveals retail crisis
Five financial stories, trending today in a 70 second podcast, including: A shopping centre has been put up for auction with a starting price of £1 in a move underlining the crisis facing retail landlords. Columbia Threadneedle Investments, the large City fund manager, is selling the Postings Centre in Kirkcaldy, Fife, on behalf of a pension fund.