The Oil Man: BP, Rockhopper, Premier
2nd February 2016 11:06
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WTI $31.62 -$2.00, Brent $34.69 -5c, Diff $3.07 -$1.95, NG $2.15 -15c
As per the blog yesterday, the oil market came to its senses somewhat and got back to fundamentals. So: poor Chinese data, increased activity from Iran and doubts about a non-OPEC meeting taking place hit crude prices.
BP
turn to produce fourth-quarter and final year numbers today, which were entirely predictable. The loss was $2.2 billion (£1.5 billion) after the also-predictable huge list of charges for impairments to upstream assets, restructuring charges and the final bill for Macondo.
The year was down 51%, roughly in line as the crude price did its worst, but downstream made hay. The dividend was maintained, also as expected, although at a far higher rate than this company should be paying - echoes of a reckless increase by this board in happier times.
This and the significantly weaker position in this volatile market mean that other majors are preferred investments for the brave. The board are preparing for life after Bo Diddley, with Lamar McKay appointed deputy CEO and Bernard Looney as head of upstream.
Rockhopper, Premier
I noticed that yesterday served notice to for breach of material obligations relating to the Eirik Raude rig, currently being used in the North Falkland Basin.
The rig is, at the moment, working on the abandonment of the Isobel well and was then intended to drill the Chatham prospect. This will go ahead if the parties can agree on solving the problems but, should that not happen, there must be some doubt about drilling Chatham. I doubt if the problems are serious enough to cause any issues with plugging and abandoning the existing wells, or we would have had more details.
Should this situation arise, I suspect it is not the end of the world for Premier and ; with such a successful drilling season almost at an end, Chatham would only marginally add to the sum knowledge and, of course, not drilling it would conserve quite a bit of cash, which is no bad thing in this environment.
The parties win both ways: either the problems are sorted and Chatham goes ahead, or they save cash and press ahead with Sea Lion.
Sundry
report a contract worth £0.9 million for in Malaysia, a small step back after a miserable week which included a substantial profit warning.
Erratum - many readers were quick to spot a major league error yesterday when I heaped opprobrium on Tony Durrant and the team at Premier instead of the intended approbation.
I blamed the spell check and my incompetent proofreading, but merely meant to say that they had done a good job in the circumstances and should have stuck to plain English…
And finally…
All football today and the biggest non-surprise of all time was the announcement that Pep Guardiola is to take over from Manuel Pellegrini at the Noisy Neighbours in June.
On transfer deadline day it was pretty quiet; Everton signed Niasse from Lokomotiv Moscow and Stoke splashed out £18.3 million for Porto's Imbula - neither of whom, I have to admit, I have ever heard of.
A big slate of Premiership games tonight, the pick of which is very much the Foxes taking on the HubCap Stealers. There is a claret and blue derby as Villa visit the Happy Hammers and the Gooners host the Saints, whilst Man Who v. Stoke will hardly keep the fans warm…
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