The Oil Man: Oil price, Sound Energy, Chariot

WTI $43.44 -$1.22, Brent $43.63 -$1.74, Diff $0.19 -52c, NG $2.10 n/c

With the Canadian situation still very much under review, the bears had the better of things yesterday, despite the amount of Canadian crude off the market rising to nearly 1 million barrels per day (b/d). A combination of factors helped the price down: the weathermen forecast cooler weather with lighter winds and the possibility of rain to ease the trauma, whilst first looks at the infrastructure showed around 90% of the sites unharmed.

Meanwhile, two comments from Iran might have been more helpful to the bulls: oil minister Bijan Namdar Langaneh said that exports would reach 2 million b/d this month, whilst the MD of National Iranian Oil Company suggested the country "may talk about limits to production in 1-2 months" - i.e. they must be close to short-term capacity...

The Genscape numbers and Reuters predictions suggest further stock builds this week, so no respite, despite Canada helping out a little on the stocks front - although this situation should be watched carefully.

When the full effect of the Canadian loss of production - and therefore exports - starts to get into the inventory data, there will be draws; if this coincides with the start of the driving season we might rally again; just a thought…

Sound Energy

Sound has announced that it has signed Heads of Terms for a bond programme and refinancing with Greenberry, which is an affiliate of Continental under common ownership by the compelling Marco Fumugalli.

The deal provides additional funding for the company's growth strategy and also simplifies its corporate debt structure. In detail: there are five year bonds with a par value of €28.8 million (£22.7 million) with a 5% coupon issued at a 32% discount to par, secured on Sound's Italian assets. In addition, there are 70 million warrants with an exercise price of 30p for five years.

Overall, this gives Sound another €6 million of cash for its growth strategy, repays the €7 million Nervesa Resource Based Lending and also the existing Greenberry loan (the £1 million loan from Chairman Simon Davies remains in place until July 2017).

This seems to be a generally smart move, rather typical of the company and its supportive backers; it tidies up the debt position whilst adding to the potential spend and increases the net length of the debt. Expect further corporate activity activity and maybe even the addition of another geography…

Chariot Oil & Gas

Chariot has announced in a corporate update that it is taking the knife to its London office and a good part of its board.

Whilst the saving of another $1.5 million (£1 million) is laudable and the company rightly says it must protect those at the "rock face", it rather smacks to me of going into a "care-and-maintenance" stance.

With few commitments, the focus is - admirably - on cash and, although messrs Trojan and Bodecott are being despatched as non-execs, Matthew Taylor loses his position as technical executive director but remains as a consultant.

Without the Rabat Deep operatorship, it seems that further farm-outs are expected - although quite how that would leave the company I'm not sure.

I have been a big fan of the company's Lazarus-like revival under Larry Bottomley, but I think the jury may be out for a while following this announcement.

Sundry

Northern Petroleum, in an update, say that net average oil production has been 449 barrels of oil per day (bopd) until mid-April, although trucking was suspended for a while as normal. Rainbow's costs are $20-25, with variable operating costs of $4-10 a barrel if over 400 bopd.

Caza has announced that, as from today, its shares have been cancelled and de-listed.

And finally…

The Invictus Games is underway in the US and watching these athletes is truly inspirational.

It seems that Burnley left Joey Barton off the list for Championship medals as he didn't receive one; maybe they thought they were for good behaviour?

Boleyn Ground 1904-2016

Tonight sees the final home game at Upton Park for the happy Hammers, who entertain the Red Devils in a game that actually matters - which is a bit of a shame.

There won't be a dry eye in the house and even Man Who fans shouldn't despair if the Irons turn on the flair and come away with a win - well, it's easy to write...

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.