The Oil Man: Tullow, Cairn, Cape, Velocys
17th January 2017 11:57
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WTI $52.39 +2c, Brent $55.66 -20c, Diff -$3.27 +19c, NG $3.50 +8c
The above prices are slightly skewed, as the US was shut for Martin Luther King Jr. day. I suspect that tomorrow will rearrange the order of things.
I remain sceptical about bulls and bears sticking to their view; yesterday the Saudis said that after the May meeting the quotas may not need to be rolled over as "the market should have re-balanced by then" especially as they are over-cutting to make up for the likes of Libya.
Cue whooping and shouting - but no, the bears immediately went off saying that the game was over and the end was nigh. You pays your money and takes your choice.
Dav-oh starts today and all those people paying 30 grand each for the privilege can't be wrong, can they? They didn't expect Brexit or Trump and so far haven't managed to fix the world in any way, shape or form.
They have said that you could put the richest 8 people in the world in a golf buggy and they would be worth the same as 50% of the rest of the world, but do nothing about it - shame.
Tullow
A nice discovery from today at Erut-1 in Kenya, where the oil column was 100-125 metres, which is indeed impressive. The well was to test the structural trap at the northern limit of the South Lokichar basin and de-risks multiple prospects.
With Kenya looking better, the farm-out to (right this time) in Uganda looks smarter and smarter.
Cairn Energy
A pre-close update from today, but very little to add.
The third phase of drilling in Senegal is about to start, with SNE-5 and -6 to be drilled at the southern end of the structure in an attempt to provide connectivity and deliverability. After that, the selection process for the next wells takes place.
Kraken plods on, with first oil due in second-quarter 2017, and Catcher also looks likely to be onstream second-half 2017. Here, capital expenditure is $1.6 billion (£1.3 billion), which is $600 million less than originally estimated.
With $335 million of cash and the reserves-based lending undrawn, all looks good - but, after UK development expenditure of $170 million this year, plus exploration and appraisal of $125 million, those receivables will be handy.
The arbitration re: CIL continues and, with some big cheques to write, I'm sure the firm wishes it could access some of that cash pile.
Cape
Same old, same old , repeatedly delivering the goods and not always being appreciated…
Today it announces a contract for the Saudi Aramco Jazan refinery in Saudi Arabia, as well as the scope of the contract with Daewoo on the same project being increased.
Whilst the legal matters do, I understand, hang over them, the company cannot be accused of slowing the rate of growth in the business proper, and the market should be more appreciative.
Velocys
The company announce a strategic alliance with Morimatsu Heavy Industry today, which is intended to reduce the costs of the smaller-scale GTL plants.
MHI will be the preferred supplier of module engineering and fabrication services for all plants.
I have a meeting in the book with David Pummell, the Velocys CEO, and look forward to a proper catch-up then.
And finally…
Wins this morning down under for Konta, Watson and Edmund, with Sir Andy to come.
Valtteri Bottas signs for Mercedes on a one year contract, hoping to be "equal with Lewis please" and asking for the ability to race each other with no rules…
And, of course, it is FA Cup replay week; several tonight, including Wimbledon v. Sutton, the Eagles v. Bolton and of course Lincoln v. the Tractor Boys…
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