Opinion

Oil Price, Reabold, DGO, Lekoil, and Finally…


WTI $50.93 -52c, Brent $58.71 -80c, Diff -$7.78 -28c, NG $4.61 -3c

Oil Price

Friday was listless, no news had started to come out of G20 so no positions were taken as a result. All is different this morning though as risk is being taken off in most markets. This is for two reasons, firstly there was a better meeting between President Trump and the Chinese delegation than had been expected, resulting in a 90 day postponement of the latest tariff increases and optimism for the future.

Secondly the rapturous greeting between Putin and MbS was significant if not in its warmth but in reminding the world that the Saudi/Russian axis is very much still in play. Later in the weekend word came from Russia that a cut at the Opec+ meeting was likely although quite how much is uncertain, assuming we find out that is. As I write Brent is up$2.39 and WTI +$2.24.

Reabold Resources

Reabold has completed the acquisition of 37.08% of Rathlin Energy, this was conditional on Connaught settling its liabilities and the farm-out of PEDL 183 to Union Jack and Humber Oil & Gas. The next few months are going to be most exciting for RBD with the drill bit spinning all over the world. They will drill the West Newton gas discovery appraisal as above, the Parta appraisal, more in California as well as the long awaited Wick and Colter wells, busy boys Stephen and Sachin will be…

Diversified Gas & Oil

A financial update from DGO this morning in which they say that their results are going to be ‘materially ahead' of current market expectations. This is due to acquisitions such as Core as well as ‘asset integration and associated operating efficiencies'. Now this is just fine and whilst the market expect benefits from the asset integrations, of which there are many I'm not sure that there are any current market expectations to be ‘materially ahead' of.

I like the DGO model and it gives investors a unique and low beta way of investing in the oil & gas sector in addition to paying a dividend into the bargain. The shares have not suffered as badly as most in the recent sector carnage and should be treated as low risk exposure but to say that out of the blue things are looking materially better than expected is a tad disingenuous…

Lekoil

One of the advantages of Africa Oil Week was that I was invited to meet with Lekan Akinyanmi the CEO of Lekoil something I had been trying to do for some time. I hope to be commenting on the company a bit more in the future after a good run through its history and up to date model.

The news from the company is somewhat less attractive as they continue to try and gain consent for the increased stake in the OPL 310 licence which has been dragging on somewhat despite the company ticking all the required exploration and appraisal boxes. It looks like the best way is go for a court hearing on January 9th at which some sort of closure may be achieved, maybe not best to expect anything too soon…

And Finally...

For those of us watching at 5am on Sunday the big fight was definitely reminiscent of the better heavyweight bouts of the past, it had it all, including a highly questionable decision from a judge who gave the first five rounds to Beyonce although some claim that the ref might have stopped the fight thinking that Fury was out cold…

In the Prem the eye-catcher was the North London Derby which provided plenty of spills and thrills and very un Wenger like the Gooners seemed to enjoy it and won 4-2.  Liverpool beat the Toffees with a 96th minute goal and in the other Derby Chelksi beat the Cottagers 2-0. With the Noisy Neighbours beating the Cherries 3-1 and the Red Devils coming back from 2-0 down to draw at the Saints not enough to save Mark Hughes from being sacked this morning….

Buveur D'Air went past Samcro as if it was a tree in the Fighting Fifth even though the Gordon Elliot wonder horse had been backed off the boards…


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