Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $50.29 -$1.27, Brent $58.76 -$1.45, Diff -$8.47 -18c, NG $4.72 +45c
More grief in the oil markets yesterday as the concerns about the G20 meeting and next week's Opec+ meeting worry the market. Will Putin turn into a low oil price market share bully and will Trump exert so much pressure on MbS that the mighty Kingdom bows to Washington? Uncertainty is the market's worst enemy and we may have another week of concern about the destiny of the oil price…
Independent Oil & Gas
IOG has announced this morning that the core project for the two phase development at the Blythe and Vulcan hubs is now technically ready to enter the execution phase. However, due to current oil price volatility and capital market conditions, which are ‘not conducive' to delivering financing before the year end there is to be a further delay. Accordingly the company has received the OK from patient lenders LOG to use part of the Harvey loan for ‘corporate and development purposes' and will refinance the loan when Harvey comes to be drilled.
The company say that this delay will not be long and that the financing, both equity and senior debt, should go ahead early in the new year. The good news is that this project is without doubt full of merits on both an operational and strategic level and should be able to achieve funding from appropriate markets when the time comes, the bad news is that having telegraphed this the company may have built in a discount all of its own making. Given that the project does have considerable appeal and that after today's price reaction its market cap is only just north of £30m, the company itself must have attractions as a target for a corporate keen to pick up an oven ready SNS gas project with all the benefits that brings. Shareholders in IOG have been patient and rightly so, the management is doing a good job with the project and should be rewarded one way or another…
Results for Eco Atlantic are even more meaningless than usual but the statement does bring further exciting news on the Guyana front where activity is planned for next year. With the Tullow Capital Markets Day undoubtedly likely to blow more smoke up Orinduik, this project will inevitably be one of the most exciting in the sector next year. With cash at the year end of CAD$11.3m having grown to CAD$27.3m following the Total injection Eco is well placed to deliver significant value increases as the year progresses.
My cynicism of the local Council process the last time I wrote about Wressle was I'm afraid fully justified as yesterday the consortium announced that the North Lincs Council planning committee had overruled the professional planning officer and refused planning again. If ever there was an example of why these buffoons should not be put in charge of much more than road-sweeping this is surely it. Egdon and partners will surely get their permission but probably when the national authorities are put in charge but it is a shame that it should reach this state of affairs…
Later today I am joining the team at IGTV for a pre-Opec+ live TV discussion that will include a chance for viewers to ask questions of me and my fellow guest Spencer Welch from IHS Markit, here is the promo link..
Last night's Champions League footy gave Spurs a lifesaver as they beat Inter at Wembley, Liverpool lost to PSG but should still qualify.
Tonight we are back to the Boropa Cup, Chelsea host PAOK Salonika whilst the Gooners are at Vorskla Poltava…For Celtic it's a trip to Rosenborg and Rangers host Villarreal.
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