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The Oil Man: Oil price, Tullow, Wood Group, President
By Malcolm Graham-Wood | Wed, 11th January 2017 - 12:49
Another down day, as one might expect; this process is going to take some time and it wouldn't be normal if a combination of greedy hedgies and short term ambulance chasers didn't knock the market some days.
The last couple of days have been all about Iraq and the extent to which it is cheating on its quota; to be fair it was obvious from the start that there would be an element of floutage and if this hasn't been built in by the Saudis then I'm the Shah of Persia…
The American Petroleum Institute stats came out after the close and the 1.5 million build was only slightly over the 1.2 million guess; gasoline was in line at 1.7 million but distillates were much higher than forecast at 5.5 million barrels.
First the good news, I like the Uganda deal with Eni (ENI) which takes away a lump of capital expenditure and probably speeds up the process. It does, however, take away from the potential upside for the portfolio.
Indeed, most of the trading statement continues with downsizing the portfolio one way or another.
This is not in the plan, as Jubilee is outwith their control and admittedly being paid for by the insurance Johnnies, and TEN has come to a halt at 23,600 barrels per day net until the ITLOS ruling, which may come in fourth-quarter of this year.
In fact, during the conference call the future of the Kenya investment was questioned; it looks as if the asset is on fast track to salesville.
Tullow (TLW) went into the bucket list this time last year and was in my view one of the braver calls, however it has more than doubled since then - not bad for a £3 billion market cap stock - but I am not so convinced that it will happen again. The jury is out.
Tullow also announced some management changes, which gave the long term signal that Aidan has decided to call it a day - albeit in two years' time.
The excellent Paul McDade moves up to CEO and that means that Aidan will be Non-Executive Chairman for two years; words you never thought you would hear together, Aidan Heavey and Non-Executive….
Wood Group (WG.) has managed to extend by another five years, with possible extensions, their framework deal with Aramco.
President (PPC) has announced that it has contracted a rig for the Puesto Guardian programme, it will be mobilised in February and be underway in March. The company reaffirms its production target of 1,200 barrels per day by the end of the summer 2017, as forecast in the recent raise.
The Red Devils beat the Hull City Tigers two-nil last night in the Clueless Cup and the Saints take on the HubCap Stealers tonight.
FIFA has announced that, in future, anyone who pays the joining fee can turn up for the World Cup. This works with their existing policy of auctioning off the Finals to the highest bidder, wherever it happens to be.
Mr Infantino is certainly living up to his name and the leopard that is FIFA ain't changing its spots as it pursues the quest for ever more money for the beautiful game…
Talking about selling off the family silver, it seems the Jockey Club also needs a bit of a wallet warmer, as it has decided to sell off Kempton Park to Redrow (RDW) for a housing estate.
Mind you, living in Mon Repose, "King George Avenue" does have a sort of ring about it…
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.