- WTI $45.42 -15c, Brent $46.49 -14c, Diff -$1.07 +1c, NG $2.70 -6c
Having started off well yesterday with good news from the Opec participants and Russia the market went into reverse when Mrs Yellen spoke suggesting December would likely be a good time for a rate rise. With that came a strong greenback and whoosh, the oil price came back and is another 50 odd cents off again this morning.
Markets hate uncertainty and today’s news from Cape on the litigation front has given a proper dose of that to which the share price had responded negatively. The company has provisions on the EL side and has increased them by £9.7m but it is the PL side of the statement that looks more open-ended. Obviously the company had to prepare for the worst but the most dire consequences such as abandoning the strategic plan and consequently the dividend is also a possibility. I have to say that the market has always known about these law suits which are claimed and counter claimed but today’s statement appears to be that much more severe than hitherto-far and has spooked the market.
On trading, it seems that overall it is ‘in line’ but better on favourable currency moves, some recovery in Asia pacific is offset by the UK and the Middle East. I hope that I can at some stage speak to the company about all this, I am a committed fan of the management and operationally all seems pretty much in line with my expectations but the tenor of the statement about the litigation seems to have taken a turn for the worse, hanging on in there…..
President has responded to press speculation about Argentinian oil prices although I am not sure that it was entirely necessary. Followers of President, as well as Andes are well aware that a well publicised part of the Macri plan is to realign oil prices with WTI. Accordingly, although this year will remain at $55 next year the two will slowly move together, and so it should be. President has said that the IRR’s are not materially impacted at approximately 150%. Indeed if there are any local marginal producers in trouble out there one might expect Mr Levine to take advantage of them…
Prelims from PMG and very much in line with expectations but no idea of production levels in a statement which remains hardly user friendly, what a surprise. The Netherlands is doing well and Tom Cross is doing plenty of deals, particularly in the PDL development increasing his position and the balance sheet is very strong. A bucket list stock but probably one that may not survive if visibility remains poor although despite that progress seems to be good…
Enteq Upstream Interims today and revenues remain ‘disappointing’ although strong management action on costs means that cash on the balance sheet has risen again. A decent contract win in Saudi Arabia is good but wont make up in 2H the disappointing revenues. Enteq seem to be doing well outside North America but are still worried about the rig count, it is rising you know…
I am writing on Sirius at the moment but am saddened to see that Simon Hawkins has left the board for medical reasons. I wish him all the very best for a speedy and full recovery.
Yesterday I did two interviews with IGTV, the first one on Opec is below
Although England managed to polish off India for 455 the signs on the pitch are not good, those runs in the bank will be crucial, 72-3 as I write.
And it’s back to the Prem in the footy with some stand-out matches. The Gooners head for the Theatre of Dreams supremely confident of a victory whilst North London rivals Spurs are equally sure of beating the Hammers at White Hart Lane. The Noisy Neighbours are down in London to visit the Eagles whilst the HubCap Stealers are down south at the Saints. With Chelski at the Boro and an interesting derby between the Maccams and the Hull City Tigers there are opportunities all over the place.
And of course rugby is international, Fiji visit Twickenham, Japan go to Wales and Scotland take on Argentina at Murrayfield while Ireland can dream about a double against the All Blacks…
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