Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $68.99 +40c, Brent $78.09 -9c, Diff -$9.10 -49c, NG $2.77 -5c
Although Brent lost ground on Friday and WTI rose it was the European marker that won out on the week with a gain of $1.26, 2 cents more than WTI. There is not much to add to my Friday piece except that Opec Secretary General Barkando, talking to Bloomberg at the weekend said that oil demand was ‘robust' which is spot on. The $64,000 question is ‘when oil demand weakens next spring will Opec+ go back to Nov '16 levels to defend the current price range?' Between now and then there are countless meetings and with Iran already shouting the odds not all of them will be simple.
Frontera are having some problems with Yorkville it seems over method of payment. As I thought I saw it FRR had the option of paying monthly by cash in order not to issue more shares into the market, at least that's what I wrote back then. It seems that unsurprisingly they were shocked to get a conversion notice in respect of 82m shares for August and 94m shares for September payment. In addition there is now a default notice been issued and total closing payment is expected.
The situation seems to revolve around whether FRR are entitled to pay with cash or whether Yorkville can demand shares, at present it looks to be one for the lawyers although I would have thought that it was pretty much in black and white. This does highlight the problem that has been rife in the sector for some years that borrowing money from operations that take shares in return leaves companies wide open to crippling dilution and should be avoided at all costs.
On the upside for FRR the recent RNS showed that these are exciting times at Block 12 in Georgia with distinct possibilities on the farm-out front with technical due diligence being done at the moment. If either were to result in a successful deal then the upside for Frontera is considerable.
At last the site survey at Wick is complete and things can start to progress, the well is now expected to spud in Q4 this year. This is an important well for all the participants and having only recently spoken to both Steve's about it confidence is very high.
On another note RBD has hired two new non-executive directors, Marcos Mozetic and former M&G fund manager Mike Felton which if nothing else should improve Stephen and Sachin's tennis a great deal.
Soco has announced that it has added a new $125m RBL facility secured against its Vietnam producing assets with another uncommitted $125m on an accordion basis. Whilst this is pretty run of the mill financing it would be nice to think that Jann and Mike may be closing in on a deal of some sort…..
That weekend of sport really was top notch with great performances across the board.
Chelski and the HubCap Stealers justifiably keep their 100% record and remain top of the Prem, the Noisy Neighbours put the Cottagers to the sword and are third. The Hornets lost at home to the Red Devils but remain fourth.
Lewis won in Singapore although had a fright when involved with scrapping slower cars who didnt let him through and Max nearly squeezed through.
And the Triple G versus Canelo fight was quite brilliant it is impossible to see how two out of three judges could get to a win for Canelo…
And full marks to Worcestershire who won the T20 Finals day and beat two outstanding sides on the day.
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