WTI $44.89 +82c, Brent $46.15 +57c, Diff -$1.26 -25c, NG $2.82 +5c
‘Twas the Hilary effect across most markets yesterday as the FBI revealed the results of its speed reading competition and commodities and equities rallied ahead of today’s election. Apart from that news was thin on the ground, the EIA announced that US production reached a record in April last year, 9.42m b/d was the highest since 1972 but is already falling, the August 2016 figure was down to 8.74m b/d. Import figures from China were bearish with the October number down 12.9% and product exports up. Last weeks CFTC numbers also showed money managers taking flight with long positions being cut and shorts increasing. Finally, Dong has decided to pull out of oil and gas altogether in order to concentrate on renewables, stand by for some asset deals…
Bowleven announced prelims today but that is not why they are in the bucket list, Etinde is. And at Etinde, operator NewAge is continuing to evaluate its development options including the key plans for the off-take, from what I gather it is a close run thing between providing domestic gas and an FLNG project. Once these decisions have been made, BLVN is carried for $40m worth of carry over two wells plus a final $25m payout. With existing cash of $99m and no debt or commitments this puts the company in an extremely strong position, indeed the shares trade at a discount to said cash.
With Bomono ongoing, although I suspect hardly core, BLVN is well placed to take advantage pretty much whatever happens. The worry for shareholders has been the delay on Etinde which I can understand, the Operator seems in no hurry and whilst I am highly confident that it is a huge oil and liquids discovery, the delay is not helpful. Now, whilst I have continued to call this stock a ‘slow burner’, I can understand why management gets stick on a recurring basis which is overall not exactly fair, they took a large amount of cash off the table at the top of the market and although the asset under different hands has taken longer than expected to develop I am convinced that it will repay many-fold in due course. A great deal of patience is required with BLVN but from its strong financial position and a carried position in a top class asset that patience will be strongly rewarded.
San Leon announce this morning that it has settled all its disputes with Avobone and is left with a bill of €23.3m plus interest to pay by December 2017. This will be a bitter pill to swallow but the medicine is sugar coated owing to the Nigerian success in recent months. It appears that that is ring fenced and that distributions from Nigeria will not be affected.
This evening I am sure that I, like many, many people will gather in the City at the celebration of the life of Charlie McQueen who died a little while ago. If CJJM touched your life, as he did with many people in and out of the square mile it was not something to be forgotten. Forever loyal to Wood Mackenzie and all those who worked there, and in its later incarnations, he was generous, kind and unfailingly courteous, as a colleague or a client ‘Charlie’ was a friend which is about as high an accolade that I can offer.
Quiet on the sporting front as dreaded international weeks can be we can look ahead to the first test against India which starts tomorrow morning. England have decided to blood the young Lancastrian opener Hasseeb Hameed whilst patience has been lost with Gary Ballance and young Duckett slips into the No 4 slot. England are firm second favourites for this series against the world No1 side so expect little and you won’t be disappointed…