Interactive Investor

The Oil Man: Oil price, Parkmead, BP, Ithaca

10th August 2016 10:40

Malcolm Graham-Wood from interactive investor

WTI $42.77 -25c, Brent $44.98 -41c, Diff $2.21 -16c, NG $2.62 -13c

It's the middle of the summer holidays and not much is going on; results start coming through next week for UK companies. The oil price drifted; nobody believed the talk of a special meeting of OPEC and nor should they, however much Venezuela tried to bull it up.

After hours the American Petroleum Institute stats showed another build against a forecast draw, and crude is another 60-odd cents off the prices above - let's see what the Energy Information Administration brings.

Parkmead

Although almost impossible to see, and with advisors kept "close", I am still a fan of Parkmead and it is still in the bucket list. Cross Tom tends to deliver value and, although the market worries about PDL economic sensitivity and its debt, I am tended to give it the benefit of the doubt, for the time being…

Today's announcement from the company is positive: it has doubled its stake in the Polecat and Marten fields in the UK Continental Shelf and is now 100% owner and operator, after previous partners Atlantic depart the region.

Being near the aforementioned PDL makes it valuable as the hub should bring down costs substantially. Total contingent resources rise by 39% to 59.1 million barrels of oil equivalent, at next to no cost. The firm also says that Diever continues to perform above expectations and that low-cost gas production, with more on the way, gives vital cashflow.

Sundry

The Financial Times reports this morning that BP is in the process of selling one of its biggest Chinese investments, the 50% holding in the Secco petrochemical plant in Shanghai. Sinopec holds the other 50%, so don't expect many favours when it comes to an offer; analysts suggest $1-2 billion (£766 million-1.5 billion)

Ithaca Energy appears to have come to a temporary halt in moving FPF-1 from Gdansk to Stella - inclement weather is stopping it moving from Sweden through the Denmark straits - but I am reliably informed that it will be on the move by Friday.

And finally…

Another middling day for Team GB yesterday as many medal chances went west in canoes, on horses and in the gymnasium. In the pool, all is forgiven, as Siobhan-Marie O'Connor won a silver, as did the men's 4×200 relay team.

Muzza and Konta won, and the latter has a difficult ride, although Serena Williams lost yesterday. So no Serena slam, then.

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.