(MENAFN- ProactiveInvestors) WTI $48.24 +$3.71 Brent $52.99 +$3.86 Diff $4.75 +15c NG $2.69 -3c
Oil price
Well Houston we have some activity in the oil price. Without any change in the fundamentals apart perhaps from the rig-count the oil price is off to the races. On Friday the price was up sharply as you can see above after the survey showed a fall of 94 oil rigs down to 1543 the biggest weekly fall since 1987 and now down 242 rigs year on year. In addition my close traders tell me that this combined with some serious shorts being covered on the last trading day of the month led to part of the rise.
This morning in Asia crude actually lost over a dollar in early trade but all of a sudden buyers have come in and we have literally seen a $3 reversal for example Brent rallied from $51.64 or lower to now be trading at $54.69. Chartists are very excited here as Brent has moved above the Kijun resistance level of $53.08 and the Kijun/Tenkan is now narrow and a crossover is imminent. This would give support at $53.08 and at $51.60 whilst resistance is on the chart at $56.99. Now these are only charts you understand but they are as worthy straws to clutch at as anything else…
Other stories around include the call for strikes at oil refineries by the US Steelworkers Union the increased military activity around Kirkuk in Iraq and the too close to call general election in Nigeria which starts on February 14th.
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In its trading update this morning Amerisur has announced that it is to ‘optimise’ production by cutting back to 4500 b/d this will be produced from pads 5 and 9 which are the cheapest cost for delivery reasons at around $12 per barrel. There will be some modest production from other pads which go to Rio Loro but only to keep those options open to the company as costs for these are nearer $23pb. On the call this morning the mood was upbeat and in the statement production is envisaged to be nearer 8200 by the year end this is primarily due to the pipeline or the ‘Ecuadorian interconnector’ as it more formally known. I have been writing about it for a while and although it is now not due to be ready until 2H 2015 and way over the original budget I am told that it is all for a good reason to do with the engineering scope being beefed up and going parallel with the Victor Hugo field creating oil independence. The pipeline will now cost $18m which is much higher than original estimates but the savings it will make as I wrote in my report after seeing John Wardle will still be substantial.
Amerisur is cutting costs this year as $27m of exploration and development expenditure is delayed but there are still a number of Platanillo wells to look forward to although the Paraguay drill bit will probably not be spinning this year. The company has only modest commitments and so ‘there is no one breathing down our neck’ as JW puts it and with a strong balance sheet plenty of cash and no debt to go with current cash generation Amerisur remains one of the stronger players in the sector and thoroughly deserves its place in the bucket list…
Falklands stocks
Confirmation this morning that the Eirik Raude rig is mobilised and will be ready to drill in the Falklands in early March. Although the final order of prospects has yet to be finally agreed it appears that the Northern Basin will go first with a possible order being Zebedee Isobel deep Jayne East Chatham followed by a move South for maybe two wells. This could of course change dependent on results etc but expect interest in Rockhopper Premier and FOGL at the very least during the summer.
Sefton Resources ()
If you want a really good laugh on a cold February morning I can heartily recommend that you take a read of the statement released today by Sefton it brought tears to my eyes…
Apparently Daniel Levi has decided to turn it around and when the transfer window closes tonight he will leap across to Sefton starting tomorrow in a move to use the company as a vehicle to ‘be a consolidator of assets in the USA and Asia’. I will be very interested to see what the bank manager thinks about this although its interests apparently will be ‘aligned’ with those of management and shareholders. On the subject of management the company say that a CEO and CFO have been lined up and are ready to go my how exciting can it get The new management will be ‘leveraging off the multiple available distressed targets which represent a significant opportunity for acquisition’. The question that springs to mind is what with after all the Bank of the West is still into Sefton for a fair bit and I am not sure the cheque book is out The company go on to say that it gives thanks to the non-executive directors without whom Sefton would be ‘another Aim oil casualty’ with which I concur if by that he means working ones wot-sits off without being paid any cash. Finally in a rallying call to whoever might be listening Mr Levi says ‘Sefton can be saved and we can snatch victory from the jaws of defeat…shareholders have had a torrid time which is now coming to an end’ all he needed was to sound just a tiny bit more Churchillian………
Sundry
On Friday afternoon Chevron produced results which beat the whisper but that didn’t really matter it was all about cost cutting and they have cut their 2015 budget by 13% to $35bn. Apparently its all about flexibility but in an interesting piece of ‘blog-speak’ the Chairman said that ‘every announcement of capital spending cuts brings the rebound in the oil price sooner’. That certainly ticks our boxes round at malcysblog towers…
You can add another 84% to the price today but that still leaves it below 10p hands up who thought you could ever say that… On Friday the company had a double whammy of having the potential bid by Seplat yet again extended by the very amenable Takeover Panel and those charming people who own the bonds also gave them an extension of 30 days before they have to cough up $50m. Maybe they will be going down o see those nice people at Bank of the West…
Genel () has announced that the delightful and notably urbane Julian Metherell is to step down as CFO in April he will surely be missed particularly by those who ‘got’ him as it were. To replace him Genel have gone to the JP Morgan factory where they produce oil industry executives just like fly halves in Wales used to…
Hunting () has added a couple of new independent non-executive Directors today with the appointment of Annell Bay and John Glick to the Board.
And Egdon () has sold some of its non-core assets for a ‘nominal amount’ thus streamlining the portfolio somewhat.
Results this afternoon from Exxon () and tomorrow from () and BG () which will keep us on our toes and at the latter Helge Lund hasn’t even arrived yet…
And finally…
The weekends footy wasn’t brimming with excitement as Chelski and the Noisy Neighbours played out a draw which keeps everybody happy I suppose. Utd stay 3rd after beating Leicester and avoiding an embarrassing double while the Gooners put 5 past Villa who now havent scored in over 10 hours of league football. With the Saints losing at home to the Swans and the HubCap Stealers beating the Hammers the top half of the table is not as much fun as the bottom where you could perm from about 7 for possible relegation.
In the cricket I watched one ball tuning in as Captain Morgan strolled to the wicket with England at about 30 for 3. One ball later he was walking back to the pav having left a straight one from Mitchell Johnson and my interest had been deflated. A rum choice Captain Morgan I always thought…….
So I switched over to the tennis and saw two sets of brilliant play and with Muzza breaking Djoko at the beginning of the third all was to play for. For the record he lost 12 out of the next 13 games and his temper to boot…
The New England Patriots are the 2015 Super Bowl Champions after an incredible game against the Seahawks in Arizona. The Pats were 10 points down heading into the fourth quarter but MVP Tom held his nerve having previously thrown two interceptions in the game. found Julian Edelman with just over two minutes remaining. This allowed Russell Wilson one final opportunity to take on the Pats defence. However with 20 seconds remaining and on the 1 yard line Wilson opted against giving the ball to Marshawn Lynch and instead threw an interception straight into the hands of rookie Malcolm Butler. That play will surely go down as one of the worst decisions in NFL history….Many congratulations to the -Belichick partnership that has now won their 4th Super Bowl.
And even more finally I am going to ask for those of you who are personal friends of mine to bear with me once again. My lovely wife Netty having promised never to do it ever again has been persuaded to run the London Marathon in April to raise money for the Lords Taverners an incredible charity. If you would like to donate please drop me a line or go to her Just Giving page on this link. http://uk.virginmoneygiving.com/AnnetteGraham-Wood
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