The Oil Man: OPEC deal, Northern Petroleum, Frontera

WTI $49.44 +$4.21, Brent $50.47 +$4.09, Diff -$1.03 -12c, NG $3.35 +4c

So, the organisation got it together roughly as expected - but is this an early Christmas present or trouble by Easter?

As with any OPEC agreement, particularly those burnished with gilt, the proof of the pudding is in the eating: will they deliver on the agreement reached yesterday after an unusually long meeting?

The 1.2 million barrels per day (b/d) is at the top end of expectations and individual countries are much as expected. Iran has actually had its reference production level increased to 3.975 million b/d, which they may not achieve, but Iraq has taken a cut - which shows more than a bit of willing.

With the Saudis taking their 500/- cut it is clear that they have led by example, possibly influenced by the head of corporate finance and his warnings about needing a stable background for the Aramco float.

The stated aim for the price is somewhere in the $55-60 range.

Whatever the last two years has done for the industry, it has re-balanced their costs to such an extent that, for many exploration and production companies, that price means revenue and profit; for the majors the dividends are safe for the time being.

The Energy Information Administration inventory stats put a thin layer of icing on the cake: the draw of 884/- was better than the whisper of a 678/- build and, whilst inventories in products built, particularly in distillates, the market breathed a sigh of relief all round.

Northern Petroleum

It has to be said: I'm sure a number of people weren't sure they would be writing so positively about Northern; it has definitely been on the "critical" list for a little while.

So it was very pleasing to see yesterday that it has introduced a strategic investor in the form of H2P, which is investing in the asset portfolio and providing much-needed financial and technical support.

NOP is raising £5.1 million at 3.5p, which is a 12% premium, plus a small open offer of a one-for-seven at the same price.

This is exactly the sort of deal that NOP should be doing and the buyer is taking a piece of some of the less desirable assets as well - just to show that you have to kiss a few frogs en route…

Frontera Resources

After two years of not being able to meet with Frontera, despite many blog readers insisting I remain keen, and having had my latest meeting cancelled recently, I finally got a conference call earlier this week.

I spoke with Steve Nicandros, who I suspect has been protected from reptiles like me by investor relations for all this time.

It is far too early to try and judge the company on one call and, if you look at the share price, maybe too late to make something of the assets - but I was actually quite impressed.

Block 12 in Georgia looks to have a number of interesting prospects but I will have to suspend judgement on Moldova for a while. Early days yet, as I say, but it certainly goes on the watchlist, despite it being only an £8 million market cap.

And finally...

Jose Mourinho should "get lost" a bit more often, as his hiding place was not discovered and the Red Devils went through four-one against the Hammers.

They will meet Hull City Tigers in the semi-finals; the other one is the HubCap Stealers against the Saints, who knocked out the Gooners.

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.