The Oil Man: Range, Petrofac, Sound, Lamprell
31st August 2016 11:36
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WTI $46.35 -63c, Brent $48.37 -89c, Diff -$2.02 -26c, NG $2.83 -7c
Time flies, as they say; it was 37 years ago this week that I started with the mighty firm of Wood Mackenzie, getting off the overnight sleeper and making my way to Queen Street in Edinburgh. With that sort of start in an oil team filled with talented, fun people, life in the oil industry was great and I was lucky that I never looked back!
The oil price has drifted off in the last couple of days, with the strong dollar post-Mrs Yellen's speech at Jackson Hole providing strength and with little pushing on the oil price itself. Even the American Petroleum Institute stats last night couldn't excite the market and a build of 942/- barrels was pretty much in line with expectations.
Sound Energy
is not letting the grass grow under its feet and, following last week's spud announcement, today it says it has reached the first casing point at the Tendrara TE-7 well.
Until this well is complete, further evaluation is on hold - but, with so much potential good news in the pipeline, Sound and its shares are remaining firmly strong.
Petrofac
I was at the meeting yesterday morning, which went very well, as might be expected with a pretty good set of figures to talk to. The numbers beat the whisper and the company are maintaining their guidance of matching analysts expectations of $440 million (£335 million) for the full year.
The order book is as good as can be expected, but with a very healthy bid pipeline I expect more work later this year and next, mainly from the Middle East and the CIS.
PFC is undoubtedly one of the best placed in the services sector and is definitely one of my lead picks at the moment.
Lamprell
I really need a chat with big Jim before I can add much to the process, after highly disappointing announcement which seemed to spread over the long weekend, whether you were in the advisory loop or not.
Readers know that I abhor companies sneaking out bad news when they think that no one is watching - funny that good news is rarely, if ever served up at 6pm on a Friday night…
After building so many of the same sort of rigs, one might have thought that it was like shelling peas and not easy to cut $25 million on revenue and $35 million on profit - but not so here, I see.
More later but it is difficult to remain too optimistic when this is happening, more orders needed as well.
Range Resources
keeps delivering and yesterday it announced that the third development well, this one on the Morne Diablo field, had encountered 40 feet of net oil pay, would continue with perforation and go onto testing in September.
With the other two producers coming on nicely, all is going according to plan in Trinidad by the sounds of it.
Sundry
has announced this morning that it has launched its open offer to shareholders to raise $25 million at 0.8314p. This will be worth watching and, although it comes into the "shutting the stable door" category, should also be taken up, if only for insurance purposes.
has announced that Senergy has been appointed for the Druid programme, which is extremely important in next year's calendar. The well costs have fallen again, today it is down from $46 million to $35 million, gross which could never have been though possible even when it was first mooted.
Barryroe and other farm-outs are still more important to get done, but this is further good news for the redoubtable Tony O'Reilly and team.
And finally...
There should be a bit to say after today's transfer deadline day is ended, but quite why they wait until the last knockings is anyone's guess.
The cricket yesterday was sublime and yet again showed that, on their day, England can match anyone in the white ball game at the moment. To see 444 runs scored in quick time was incredible; shame it was a work day!
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