Opinion

Oil price, Jersey Oil & Gas, EnQuest, Ithaca, Sundry-Bowleven-Solo-Gulfsands-Chariot- And finally…


Oil price

The oil price is almost the same as it was last friday, nothing is moving it at the moment almost as if it was the subject of price fixing, à la gold and silver of yore, not any tomfoolery I assure you… This week saw another set of whopping inventory increases which only seem to steady the price, indeed that is a subject worth looking at on its own. Money managers are still incredibly long and yesterday, chat out of Opec was that they are considering extending their pact with non-Opec countries and indeed possibly increasing it. They will need to do just this and then, maybe next year they might be able to make out like bandits. On that subject the only bearish stuff comes from those who worry about US production to whom I would say, dont worry your pretty little heads about it, whatever they can produce isnt enough to move a determined market…

Jersey Oil & Gas

A corporate and operational update today from one of the new members of the bucket list and all appears to be going pretty well. Statoil are close to signing a rig and services contract for the Verbier well expected to be drilled in the North Sea in the summer, JOG are carried up to $25m worth of costs here. Azinor has announced that it intends to drill the newly named ‘Partridge' (Homer) prospect on farmed-out JOG acreage later this year, success here would trigger payments of $2m for a discovery and another $2m at the time of a successful FDP. Finally JOG are committed to acquiring some producing acreage to balance their portfolio and say that the number of opportunities remains good as a number of sellers have come to the market  recently. JOG is an interesting play and still remains cheap if you bear in mind what might be when the drill bit turns at Verbier. Significant skill will be needed in trading the shares but with the underlying upside so substantial, the risk at JOG is not being involved.

EnQuest

Good news from EnQuest this morning as news from Kraken is that the FPSO has arrived and has been hooked up successfully. With delivery of first oil ontrack for Q2 this year things are beginning to look up for ENQ and it probably deserves a better reception than that given by the market this morning.

Ithaca- Alert, being sold out on the cheap…

Along the same sort of lines, Ithaca has announced that the Stella Field has started up production  albeit some time after the market had expected. Having said that, the news will be exceptionally good for the company as revenues will start to flow and debt can be paid down.

I'm sure that this is what Delek thought when it bid for the company at a modest, nay measly, 11% premium last month. Despite it being the star performer in the 2016 bucket list, as soon as the good times are in sight and meaningful rewards are offered, management and shareholders jump ship at the first sign of men from the east bearing gifts. I would like to think that those in decision making positions whether they be institutional or retail would think twice before selling out like the management have done, after all Ithaca is the original wallet warmer…

Sundry

Bowleven has issued a long list of counter points following COC's recent letter to shareholders. Having said my piece earlier I do not intend to do so again, shareholders can make their decisions between now and March 14th.

Solo raised £2m by issuing 400/- shares at 50p, a raise that had been telegraphed for some time but given that the shares have roughly doubled recently one can understand management's desire to wait!

Gulfsands also appeared with a begging bowl, theirs was to lenders who popped up with £4m. 37.3% came from Waterford, 31.4% from Blake Holdings (Richard Griffiths) and 31% from ME Investments which I think we can have an inspired guess at. I am slowly, very slowly, thinking of taking another look at GPX and am looking forward to a meeting with new MD, John Bell.

And Chariot announced a re-jig of their licences in Morocco ensuring that they retained exposure to the Kenitra permit and its possible upside. With no other commitments, CHAR will run 1,000 square kilometres of seismic which will cost about a third of what it would have been a couple of years ago. With nothing to drill at all this year CHAR has been off the radar screen but the management, who describe themselves as being ‘cautious but not conservative' deserve credit for staying in the game. With Rabat Deep to drill next year, it may be the time to revisit the watch list.

Finally, following on from the Facon announcement I did a short interview with Proactive, the link is below.

Proactive Investors Stocktube interview: Falcon Oil & Gas has “colossal” potential gas discovery

And finally…

No international rugby this weekend although the IRB are suggesting that the 6 Nations  tournament is played over 5, not 7 weeks.

Last night in the Boropa Cup St Etienne went to the Theatre of Dreams and despite playing some exciting football and sometimes the ref, came away losing 3-0. Spurs went to Gent and lost 1-0 which they shouldn't have really…

This weekend it is back to the FA Cup where a few of the minnows get their chances. The biggest could be Lincoln City at Burnley or possibly Oxford at ‘Boro but Sutton might fancy their chances against the Gooners on Monday night… Elsewhere the Noisy Neighbours are at Huddersfield, Wolves host Chelski, the Red Devils go to Blackburn, the Foxes go to the Den and there will be a tasty derby as Fulham host Spurs.



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