The Oil Man: Exxon, Hurricane, Range
9th November 2015 12:47
WTI $44.29 -91c, Brent $47.42 -56c, Diff $3.13 +35c, NG $2.37 +1c
Last week oil prices fell again; WTI was down by $2.30 and Brent was off $2.14, only just keeping within trading ranges. With the NFP numbers being well higher than expected at 271/-, unemployment down to 5% and hourly earnings up 2.5% year on year, the greenback was only going one way, weakening the oil price.
The rig count, which showed an overall decline of 4 units and 6 in oil, was unlikely to impact such strength and at the weekend economic data from China also showed the different directions the biggest two economies in the world were headed. Crude oil imports in China in October were down 5.7% on September, although this statistic is notoriously fickle and could easily reverse any time.
Other points to mention, in no particular order, are as follows: the relentless supply of oil onto the market shows no sign of abating, as confirmed (if confirmation were needed) by the article on the front page of the FT about Saudi supplies. Interestingly the journalists on the story are tagged and include the paper's Editor-in-Chief, no less, who is in Riyadh to help two other journos write one small story…
Elsewhere, this week will see all three agencies produce their monthly reports and these are unlikely to be anything but bearish, although it was interesting to see speculative activity by hedgies and the like become more optimistic on Friday.
Finally, Barry vetoes the Keystone pipeline as expected on climate change grounds (not the 250bn miles a month that Americans drive then Baz?) as well as ruling out oil exports while he was about it.
Exxon
managed to get into the "World News" part of the weekend papers as it revealed it had been subpoena-ed by New York prosecutors in a test case over alleged climate crimes.
The case centres around whether the company withheld information from investors on the financial risks of climate change and "conspired to manipulate the public debate". At its worst, some commentators are comparing the climate change issue to what the cigarette industry went through and even if it's not quite that bad, I suspect it's not the last we have heard of this kind of thing.
Hurricane Energy
has announced that its licence P1368 offshore the West of Shetlands has been subdivided into four areas - which will make life much easier, particularly when farming-out the different potential assets.
The licence now looks like this: the Central area is the Lancaster basement discovery while the Northern area is the Whirlwind basement discovery. The Southern area is the Lincoln prospect and the Southwest area contains the Strathmore Sandstone discovery.
CEO Robert Trice commented that this "provides flexibility as we progress the options to farm-down our interests in discoveries or prospects". I also see this as good news for the company; apart from making life easier on the farm-out front, it also reminds investors that Hurricane is not a one trick pony and that it has much more than just Lancaster in its portfolio.
Range Resources
has announced that it has spudded its GY 180 SE development well on its Beach Marcelle Field in Trinidad. This should help the company achieve - rather belatedly - its target of 1,000 barrels per day (b/d), but not quite yet.
It has also announced that the ship containing three new rigs has docked on the island and, subject to paperwork, should be available next year. Still a long haul for Range but it looks to be slowly getting there; I am meeting management shortly.
Sundry
, having had an investor "event" at the Shard recently, is back on the road again. I understand from my spies that another such event took place on the Riviera at the weekend. Given the fact that Continental and other European investors have a large chunk of the equity in Sound, this makes a lot of sense and my spy also revealed that the news remains very positive…
And finally…
Jürgen Klopp says he felt "lonely" at Anfield yesterday as the ground emptied well before the end, leaving the Eagles fans singing "is there a fire drill?" At least he was there, unlike the Special One, who whiled away Saturday evening in a hotel in Stoke - as one does - watching his team get turned over, again.
Reg Vardy got another for the Foxes as they beat the Hornets, the Noisy Neighbours could only manage a goalless draw against Villa under new management.
The North London derby was a draw and could have gone either way, Spurs should have added to their first goal and the Gooners might have nicked it at the end. The Red Devils saw off the Baggies, the Canaries beat the Swans and the Hammers drew with the Toffees. Elsewhere the Maccams lost by the only goal of the match against the Saints and the Magpies did the same to the Cherries.
Finally the headline in today's Daily Mirror must have got a lot of city workers excited as it read "MONK SACKED" in big letters - but the article went on to suggest it was Garry Monk of Swansea who might be for the chop. Oh well, just for a split second…
It looks like Lord Coe is going to have to eat a lot of humble pie as we suggested here some time ago; there was no way that the stories of major problems in athletics were imaginary…
Boxing news and Callum Smith gave Rocky Fielding quite a battering, whilst Carl Froch has come out of retirement in order to, ahem, earn a few more quid perhaps?
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.
Malcolm is a Founding Partner of HydroCarbon Capital, which provides independent advisory services to the Oil and Gas sector. He is a Director of the Maven Income and Growth VCT 4 PLC, a venture capital trust listed on the Premium segment of the main market of the London Stock Exchange.
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