Posted by Malcolm Graham-Wood - Malcy's Blog
There are going to be a lot of weeks like this so get used to it! The Grand Old Duke of York would be proud of the ups and downs of the oil market mainly on the whim or rumour whirling around. Yesterday the good news was provided by the Saudis and the Russians who said that they were already increasing prices and cutting back production, mainly to Asian buyers but the strikes in the Niger Delta also steadied the ship. The EIA inventory stats were a mixed bag, crude rose by 4.1m barrels, higher than expected but products rose even more, record refinery runs were responsible for that with utilisation rates being the highest since September indicating strong demand, I hope…
In what looked like a hastily prepared statement put out late yesterday, SDX announced that it ‘noted' speculation concerning a potential acquisition and a ‘material equity raise'. It has confirmed that it has entered into a non-binding agreement with Circle Oil for the acquisition of their Egyptian and Moroccan assets, subject to a fund raise. Clearly some on the roadshow has not understood the meaning of the phrase ‘you are now an insider' and leaked the info.
All is not lost for SDX as this looks like a potentially very interesting deal, bought free and clear of debt, Circle has assets that would fit particularly well, especially those in Egypt. The onshore Morocco assets have needed a good shake-up and with Sound having made out so well and some signs of life at Gulfsands with John Bell having been recently appointed as MD this could be a very good deal for SDX. Obviously we will need to see how the next few days go but I am aware that the institutions are supportive and my inbox here and on Twitter shows that the retail investors are keen as well. As this moment in time I would give the benefit of the doubt to SDX, a company that is very much on the short list for the new bucket list.
An operational update from IAE this morning, all will be revealed in the results but most things are going well here as one might expect. Production last year beat the guidance and this year is 19-22/- although Stella might improve that. Not in the short term as the start up has been delayed again but only to February but that makes no difference. The good news is that Harrier is now under way, a cheap development as it also uses FPF-1 and the GSA infrastructure. Opex is down 30% at $18 pb and net debt is falling too, this will only get better when the FPF-1 finally gets up and running. Still a top stock in the bucket list and a certainty to stay there, amongst the best in show.
Another very pleasing, well managed company, Faroe is also set fair for another good year I suspect. Dazzler has become Boné and is a high impact well that will be genius if it comes in, the company has also announced that a Brasse appraisal well is imminent. 2017 is set to be a ‘significant year for Faroe with a full program of exploration, appraisal, infill and early stage development' set to keep investors happy and wealthy…
Prems has also issued a trading statement, like London buses they all come along at the same time. Very little has changed for PMO though, we still wait for the debt talks to conclude but operationally things are going pretty well. Production beat the guidance although Solan looks like a walking disaster zone with production still ‘disappointing'. Catcher is still on target and Tolmount is up for approval soon just leaving Sea Lion to handle. At these industry prices Sea Lion should be profitable and as I have said before, other major projects around the world are now getting sanctioned, given how big this is for PMO they should be doing the same, although I know they will say that the bankers might say differently. Overall, Premier is looking in decent shape and subject to a lot of yeses, nos and maybes should stay with us…
Another to add to the update list for today and not much new here either, I am seeing the company soon so will update then. Fortuna is ‘on schedule' for FID 1H 2017 but I am not convinced that Ophir will have much skin in that game when it comes onstream. Funnily enough, I imagine due to a printing error there was no CEO or Chairman's statement in my RNS, how peculiar…
I may be wrong but I never thought that Wressle was a doubt on planning grounds, it is not a frac job as far as I am aware and so I need to chat to some of the participants before I say any more!
Very briefly but the Saints could have done a lot of damage to the HubCap Stealers last night but won only 1-0 on the night after missing many chances.
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