Opinion

Oil price, Premier Oil, Thalassa, Ophir, Providence Resources, Sundry-Shell-SDX-Egdon etc-Range Resources-AMFW- And finally…


Oil price

The EIA inventory stats followed the API numbers and reported a healthy draw of 7.6m barrels as predicted here but not by the goons on the Street who had crayoned in 2.3m barrels. Mixed news though with production still high, Libya up again and the KSA slightly exceeding quotas, (but only as predictable summer demand for power kicked in) and the Opec report trimming next year's demand figure by 60/- b/d.

Premier Oil

I would have liked to have been in Pimlico yesterday as Tony Durrant and team celebrated the coming in of the Zuma-1 well offshore Mexico yesterday, reasons to be cheerful, part one and maybe more. Even Woodmac have confirmed that it may even be world class, although the last thing PMO want just now is another discovery with associated costs although it is a nice problem to have. It may just kick them into selling or farming-out something, maybe Tolmount could go, it was after all an unexpected gift to receive.

Today's trading update therefore has rather a spring in it's step with production of 82,100 boe/d ahead of guidance of 75/- which itself surely must be revised up after the summer maintenance programme. So, operationally, as has been the case for the last 18 months, things are in pretty good nick, even Catcher looks to still be on time for first oil this year although it is refreshing to see that Solan is still a basket case. The refinancing is just waiting final technicals and will complete by the end of this month which should give the team the chance to get on with the job in hand at last. That should mean FEED on Tolmount and may be farm-out, ditto Sea Lion, Mexico looks genuinely exciting all that remains is to get a bit of cash in on one or two of these projects to keep the bank manager off their backs. A bucket list stock that is at long last repaying a bit of faith put in it…

Thalassa 

You get it straight from Duncan Soukup and today's release is no different, the offer from a third party for WGP was just ‘not of sufficient value' and so they have terminated discussions. In what seems to have been a bit of a waste of time, the bidder clearly showed more petticoat and no knickers in coming back with a less than tantalising offer and was swiftly despatched by DS. Saying that the current share price, with its lack of liquidity has a gap between it and the board's assessment of its intrinsic value he has doubled the share buy back to £4m.

Ophir Energy

I was also out for the OPHR operational and trading update yesterday which made poor reading. Missing the production guidance shouldnt happen but they came in at 11.3kboe/d well below expectations of 12.5 and have now reduced future guidance from 13.5 to 12/-. Cash is now $130m and at year end will be $85m also at the bottom of forecast range and the Fortuna FID seems to have slipped to 2H of this year. The cost cutting recently announced will save a net $10-12m although market cap has fallen substantially since Bill Higgs was fired leaving only two executive directors on the board. On the plus side after a poor first half they have new finance with a $250m RBL and $100m accordian and 2H should look better especially as they have significantly lowered expectations.

Providence Resources

PVR announced yesterday that it had spudded 53/6 in the South Porcupine basin and at long last the drilling of Druid and Drombeg is under way. A recent deal has meant that Total are closely watching this well as they have paid $27m for an option to 35% after the well is drilled. PVR have done very well to keep proper skin in the game whilst taking in a decent slug of cash yet for them, upside should it be successful will still be huge and will be an exciting summer for all concerned.

The company announced today that they have been granted a two year extension on Barryroe with various work going on, this is getting pretty tedious, excuse me if I am not more excited by it but it's been a long wait with many promises…

Sundry

Shell has finally bitten the Corrib bullet and is selling up and going home, this is of particular interest to the many former Enterprise Oil readers who all claim to have discovered it back in 1996. Quite how this has got this far I dont know but most will probably wish the Canadian pensioners who have bought it the very best of luck…

Over at SDX Energy it is good to see Paul Welch, CEO and a non-exec buying 85/- and 12,500 shares respectively in the market, another good reason to trust that things are going well for this company…

Egdon and partners have announced with no great surprise that they are appealing against the recent planning turn down at Wressle, all this huge cost all round is totally unnecessary but the process has to be gone through and it seems that the Councillors in Lincolnshire have money to burn…

Range Resources has announced that it is terminating its ADR programme which given the small amount of trade is probably a very sensible way of saving quite a lot of money…

And has the Wood Group/AMFW deal been dealt a blow? Yesterday AMFW announced that the SFO were opening an investigation into the company as per Petrofac but that it didn't think that it would affect the deal. WG are already looking into things at their end and this may at best hold the deal up a while.

Core Finance TV interview with Dr Robert Trice, CEO of Hurricane Energy.

After all the recent goings on at Hurricane, yesterday I took some time out to interview CEO Robert Trice, you can watch it on this link…

Core Finance interview: Dr Robert Trice, CEO of Hurricane Energy

And finally…

Well the almost inevitable happened yesterday as Muzza's hips decided that enough was enough, just after that it was Djoko's elbow putting two of the top four seeds out of the competition. Today it is the turn of JoKo to fly the flag which is now almost British as she takes on Venus in the semi finals.

The T2o season is back on and Hampshire beat Sussex last night in a high scoring game where pints of beer were hit by sixes left right and centre. I'm off to Lords tonight to see Surrey play Middlesex where anything might happen…


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