Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $61.36 -68c, Brent $64.95 -54c, Diff -$3.59 +14c, NG $2.78 +5c
As I mentioned yesterday crude oil was marked back first thing and never recovered, probably ahead of an uncertain week of inventory stats. At this time of year analysts are usually over optimistic as they miscalculate the effect of refinery maintenance so lets see what the API and EIA say before getting carried away.
Full year results from Cairn this morning which contain no great surprises, nor should they in this era of constant updates from companies. The statement is primarily about Senegal and so it should be as so much is going on there at the moment. Much work is under way with tenders out for the FPSO and subsea infrastructure and the FEED is set to commence 2H 2018. Change of operatorship is now scheduled for 2H as well which has presumably been pushed back until after the arbitration case has been settled.
The exploitation plan is set for submission in 2H 2018, to be followed by the FID. First oil is still aimed at 2021-2023 which is a wide range but clearly dependent upon various unknowns. Cash is only $68m although the potential RBL pot is very substantial but may be needed given the development expenditure required for Catcher and Kraken, Senegal and the exploration budget. Having said that and given the potential substantial increase in revenues to come the financial position is strong. I shall not bang on about it much more but I still believe that a partial sale of Senegal was, and probably still is, a live and wise option for Cairn as they look at the bills running through to first oil, potentially still five years away. Nevertheless Cairn is in a strong position, in charge of its own destiny, financially sound and with a portfolio of exciting prospects.
Last night the Noisy Neighbours went one stage closer to claiming the title with a 0-2 win at the Potters who are not that safe at the moment. Tonight Sevilla visit the Theatre of Dreams in what should be a proper, old fashioned night of European Cup football.
But most of all today sees the start of the Cheltenham festival and for the first time in heavy conditions so none of these lightweights trotting up with the sun on their backs…With 250,000 visitors and £350m to be wagered, never mind all that Guiness that won't drink itself punters headed for the course will have a great time.
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