The Oil Man: Oil price, Gulf Keystone, Circle Oil
20th May 2016 12:32
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WTI $48.16 -3c, Brent $48.81 -12c, Diff $0.65 -9c, NG $2.04 +4c
The oil price will end up on the week, but with a whimper, not a bang. Yesterday the continued strength of the greenback kept the wrappers on the price, although continued bad news on production, particularly from Nigeria, made for a late-in-the-day rally.
Interestingly a lot of the company news yesterday and today is beginning to look a lot like capitulation time in the sector.
With the / story, the Oil Search// deal and , and indicating bad news, we might just be near an inflection point and remember - all that private equity money trying to find a home in the sector, can you think of any deals they have done yet?
Circle Oil
The company comments this morning on the strategic review process, in which "a number of indicative proposals" are in the process of being evaluated, and that every possible outcome is still in the mix.
It says work is continuing to conclude the SRP "as expediently as possible". Last time they said that the International Finance Corporation was happy to wait until the process was complete; this indicates that that moment may not be far away.
Rather uncomfortably, the company says that it now considers that the debt of $77.5 million, which includes the fully drawn down Resource Based Lending, means there will be little or no value attributed to equity holders.
This all seems rather terminal - but if the company can find a home for any of its assets, some of which are genuinely good quality, all may not be lost. It should be remembered that they are dealing with a lender that allegedly sold out its debt for 30 cents in the dollar…
Sundry
According to Upstream Online this morning, American Energy Partners, the vehicle used by the late Aubrey McClendon, is to close down with "serious debt issues".
Also on the debt front, GKP has rolled over the standstill agreement with the ad hoc committee of its bondholders, with an extension date of 31 May - although it hasn't paid the April coupon yet, by my reckoning.
And, in a smart deal announced overnight, Oil Search has made an agreed bid for InterOil which includes a Memorandum of Understanding with Total for a back-to-back farm-out of its Papua Liquefied Natural Gas project.
I listened to some of the conference call and the argument for the deal seems pretty compelling.
And finally…
The phrase "it's cup final day" doesn't seem to have the ring about it that it used to, or maybe I'm just getting old. I know that hindsight is a wonderful thing - and that fans playing It's a Knockout and travelling on the coach to the stadium with the teams is outdated - but I think the 5pm kick off takes away from the ceremony!
Anyway, tomorrow sees the Eagles take on the Red Devils for this year's silverware.
So, yesterday I said that it was wet, cold and windy, all one needed for the opening test match of the summer. What I didn't include was the phrase "England middle order collapse", which is equally predictable…
Having lived in Edinburgh and observed the McMafia at close intervals, it comes as no surprise to me that the misogynists over at Muirfield decided to prove to the world that their independence was worth more than hosting the Open Golf Championship.
The only difference I would have made, had I been the R&A, would have used the words "never" and "again" in the sentence regarding hosting. I can't wait to see what Johnny Sutton has to say about it from the Oval Office today…
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