The Oil Man: Oil price, Bowleven, San Leon Energy
8th November 2016 12:39
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WTI $44.89 +82c, Brent $46.15 +57c, Diff -$1.26 -25c, NG $2.82 +5c
'Twas the Hillary 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 Energy Information Administration announced that US production reached a record in April last year; 9.42 million barrels per day (b/d) was the highest since 1972, but is already falling and the August 2016 figure was down to 8.74 million b/d.
Import figures from China were bearish with the October number down 12.9% and product exports up.
Last week's Commodity Futures Trading Commission numbers also showed money managers taking flight, with long positions being cut and shorts increasing.
Finally, 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 a floating liquefied natural gas project.
Once these decisions have been made, BLVN is carried for $40 million (£32 million) worth of carry over two wells, plus a final $25 million payout. With existing cash of $99 million 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 of 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
announces this morning that it has settled all its disputes with Avobone and is left with a bill of €23.3 million (£20.8 million) 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.
Charles McQueen
This evening I am sure many, many people will, like me, 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 as I can offer.
And finally…
Quiet on the sporting front, as dreaded international weeks can be, but 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 number four slot.
England are firm second favourites for this series against the world number one side - so expect little and you won't be disappointed…
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.