The Oil Man: Oil price, Chariot, Cape, Plexus

WTI $47.66 -70c, Brent $49.95 -68c, Diff -$2.29 +42c, NG $3.00 -1c

Not a good week for oil prices, WTI was down $2.14 and Brent $2.20, Friday saw disappointing data from the rig count, oil up 11 to 733 units, and the non-farm payroll was way less than expected at 138/-.

This weakened the greenback which might have given a modicum of support but better (?) news over the weekend on the geo-political front has tightened things up this morning.

It seems that the KSA, Bahrain, Egypt, the Yemen and the UAE have cut their diplomatic ties with Qatar, claiming that the country is backing IS and al Qaeda. Whether this is enough to create any meaningful grief in the area is a moot point, but will surely add to the risk there.

Finally, and again on the upside, Saudi Aramco announced yesterday that it has raised official prices to all major regions, confirming that it is still sticking to its knitting on the output front. The next few months will be interesting for Saudi exports as at this time of the year domestic demand increases dramatically…

Chariot Oil & Gas

News from Chariot this year has been remarkably thin, hunkering down with nothing to drill is the order of the day, but this announcement does at least show that Larry and what is left of his team are keeping busy.

Indeed, for a company that has been so quiet the share price performance YTD has been remarkably good, a sign of confidence in the future perhaps? Today's announcement is about the CPR on the Namilian blocks 2312 and 2412A where 3D seismic from 2016 has identified 5 structural prospects each ranging from 283-459 mmbbls of gross mean prospective resources.

With a target of drilling these of 2H 2018 nothing is imminent on the drilling front, but patient long-term investors at least know that something is going on behind the doors of 19-21 Old Bond Street…

Cape

Cape has announced two contracts this morning and accordingly says that for FY 2017 the numbers are 'materially ahead of expectations'. At the Ichthys project for JKC in Australia, the work is for insulation and coatings, whilst the other contract is for BP in the UK North Sea and is worth £150m and holds 400 jobs in place.

The latter contract has been a long time coming so may have seen some margin erosion which is also evident in the Middle East as the company gently warns for 2018. I remain extremely positive about Cape as the executive management is first rate, and the company is in a strong position and the flexibility to do well off a very low rating. Still a shame about that divi though…..

Plexus Holdings

A new, four-year contract from Maersk in the North Sea has been announced by Plexus this morning for provision of wellhead, mudline suspension systems and associated services. These will provide longer term revenue, starting next year, but are a welcome piece of good news after recent warnings about the current situation, and proves that Plexus will undoubtedly survive owing to its excellent quality and safety conscious kit.

And finally…

Well, the massive weekend of sport sort of lived up to expectations…Firstly, I have to apologise that I failed to mention the first game of the British Lions on Friday, can't imagine how that slipped through as we have had four years to think about it! As it happened it was a very poor display by the Lions and, whilst it is only game one, the excuses are already coming out. Let's hope that the adopted Welshman doesn't just pick his mates or it is tour over and the Blues on Wednesday will be no pushover…

In the Italian MotoGP, the fireworks between Yamaha team mates Valentino Rossi and Maverick Vinales were extinguished by a charging Dovisioso on a Ducati who won with Vinales in second and a superb third from 'Home boy' Danilo Petrucci.

In the Isle of Man TT Superbike race Hondas woes continued when Guy Martin crashed out on a problematic Fireblade which had already sidelined 23 times Champion John McGuinness. The race was won by Ian Hutchinson on a Tyco BMW.

In the cricket, the weather put paid to the Aussie/Kiwi game, but yesterday saw India wallop Pakistan and, with a dodgy weather forecast over the next few days, I worry about the appearance of Duckworth Lewis…

The Warriors will head to Cleveland on Thursday with a 2-0 lead in the NBA Finals thanks to another ruthless display to defeat the Cavs 132-113.

And in the Derby, which was the most open for years, not many saw the 40-1 shot Wings of Eagles swooping past Cracksman and Cliffs of Moher…

Finally, I was very sad to see that one of my blog readers and old city contact, Geoff Ho was badly injured in the London Bridge attack on Saturday night. It was, therefore, great to receive a tweet from the man himself a few minutes ago thanking all for their best wishes and that he is out of surgery and on the mend. @FinanceHog get well soon.

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.