Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $51.65 +65c, Brent $60.20 +23c, Diff -$8.55 -42c, NG $4.41 -14c
A small rally yesterday followed by a larger one this morning. Yesterday there was slightly better news on the US/Sino trade front with better vibes from the White House. With Libya now looking to be 400,000 b/d adrift after the shutting down of the El Sharara field there will be some physical disruption in the market.
This morning's rally is down to the API inventory stats which showed a draw of 10.2m barrels of crude oil against guesses of 3.2m and also a surprise draw in gasoline of 2.5m. While the STEO from the EIA was hardly inspiring for bulls, containing as it did higher forecasts for US domestic production, it did remind markets that with still little addition to infrastructure it could be a good deal worse.
Frontera has announced that it has signed a term sheet with a New York based fund for a loan of up to $60m for operations in Block 12 in Georgia in 2019. Initially for up to $45m, of which $20m is expected to be used to pay down existing debt, the loan is over five years at rates of between 8-11%. This seems a pretty good move, the finance is going to accelerate the work programme on the Taribani field and with other recent announcements mean that financiers and other leading oil companies are taking Frontera very seriously.
Solo has announced that it has signed a conditional SPA for its entire 30% stake in PEDL 331 on the Isle of Wight to UKOG for £350,000. Of the proceeds £90,450 will be in cash with the rest in UKOG shares. Disposal of the non-core asset is in line with the strategy of ‘new Solo' as it monetises its asset base whilst strengthening the balance sheet.
There was no blog yesterday for technical reasons mostly due to the incompetence of South Western Railways… I was unable to mention that Fiona MacAulay is moving from her CEO position to that of a NED at the end of 2018. The board has appointed Martin Hull, the CFO as new MD and he will be supported until the end of March by FM and of course the Non Executive Chairman. The company has been lucky to have her at the wheel in its initial move into South America and she leaves with all good wishes, Martin Hull is an extremely impressive MD who has considerable experience and should carry the mantle very well.
Reabold put out an announcement as well yesterday but seemed to go under the wires, so to speak. A corporate update just confirmed that Corallian was starting its two well programme this month at Wick and then Colter. The company is also raising money for its Curlew A well in 2H 19 and RBD is taking its corner. With Danube drilling Parta in Q1 next year it will be a busy time for RBD but in California rain has stopped play at the Monroe Swell so West Brentwood goes first. Over at Rathlin the West Newton A drilling is slated for Q1 2019 giving another reason for shareholders to be on the edge of their seats after Christmas.
Spurs and Liverpool made it into the Champions League last 16.
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