The Oil Man: Amerisur, Petrofac, Plexus, Genel

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The Oil Man: Amerisur, Petrofac, Plexus, Genel
WTI $53.99 +23c, Brent $57.10 +21c, Diff -$3.11 -2c, NG $3.29 +1c

The oil price was steady enough last week, a pretty good performance under all circumstances. It battled with a strong dollar, probably likely to be made stronger, as the non farm payroll numbers were low-field, but wage growth indicated some heat in the US economy that will likely be treated by rate rise anti-inflammatory treatment.

Add to that a modest growth of four oil rigs to 529 and a bearish reading from NYMEX that, in WTI, money managers had cut their net exposure, and you have a reasonable week.

Expect the bears to start whinging about quotas not being adhered to any time soon, but we have already had three of the biggest exporters cutting output and raising prices, which is not a bad start.

Remember that Russia is a good example of a country that can't turn on and off like the Saudis can.

Amerisur Resources

An update from Amerisur's (AMER) Platanillo-24 infill well, which is located at the most northern developed lobe of the field.

Again drilled under time and budget (under $2 million [£1.6 million]), the well logged the reservoir section and has initially indicated the presence of 67.5 feet of gross oil and 38 feet of net oil in the U sands formation, with 14 feet and 8 feet respectively found in the T sands.

There were no N sands here, as expected, and it will be developed for commercial production from the U sands into Pas 3N.

Meanwhile the rig heads north to Pad 2N to drill the Platanillo-22 appraisal well, subject to some local social protests.

Continued good progress here and eventually more for the OBA pipeline for exports.

Petrofac

Petrofac (PFC) has announced a $600 million contract at Salalah LPG. The gig, which will last 36 months, is a lump-sum contract for the liquefied petroleum gas (LPG) unit and other facilities, such as storage and jetty capacity.

Having had an indifferent run last year I am expecting some contracts to materialise, although after a recent meeting with the new CFO I am not running before walking and some contracts will have been lost permanently.

The mood at PFC has undoubtedly changed for the better, but Mr Cochran is pursuing a relentless war on costs, although my suggestion of taking money off the table across the board at IES wasn't part of the plan.

I don't expect any major change in strategy; PFC is hunkering down and the group should pick up more orders soon, cash generation should remain positive and dividends do after all have to be paid, indeed, delivery is most important and, if growth can't be found, the value for shareholders can always be paid back…

Sundry

Plexus (POS) has announced a four year framework agreement with Centrica (CNA) in the Northern North Sea; it already supplies these but this makes the arrangements more solid.

Even Genel (GENL) has come to the party with what looks like a half decent discovery at Tawke - 3,800 barrels per day at the Peshkabir-2 well.

Aminex (AEX) has told us, for some reason, that drilling continues in Tanzania…

And Chariot (CHAR) has seen the ENI (ENI) deal being ratified, which is good, but news already mostly in the price. Whilst I am full of admiration for Larry and his team, I am beginning to think that, with nothing to drill at all this year, it may be dead money.

And Trinity (TRIN) has slipped the chains of those darned lenders and I am very much looking forward to welcoming Bruce and the team back into action.

And finally…

It was FA Cup weekend and few shocks; fielding a weakened team and drawing or losing does not constitute a shock, so the Cherries and the HubCap Stealers have no hiding place.

Most of the top teams are in the hat this evening, including the Foxes, who beat the Toffees, and Hull City Tigers, who beat the Swans, while the Canaries got a good draw against the Saints…

The ITV coverage of racing is taking us back to the dark ages and, furthermore, when it relegates racing to ITV4 - having had it on normal ITV initially - it shows just where racing fans are being placed. If you had it on the planner, you missed the show…

And thank goodness for baby Rooooooooot, who arrived at the weekend, meaning that dad Joe could jump on a plane and be ready for the first one-dayer in India on Sunday. As of now, it is Joe senior who will be up all night being sick and poorly…

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.

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