WTI $46.59 +53c, Brent $49.56 +76c, Diff $2.97 +23c, NG $2.32 +6c
Oil price
Oil prices ended the week and the month up, without blowing the doors off. WTI was up $1.99 on the week and $1.50 for the month, Brent slightly less well at $1.57 and $1.15 respectively. Markets appear slightly more risk-on without being over comfortable but equities are rarely good in October. On Friday the rig count showed another useful fall, down by 12 overall to 775 and by 16 in oil to 578 units which is still meaningful.
Less good stats have set the market back a bit this morning, the latest Chinese manufacturing sector PMI contracted for the third straight month and the non-manufacturing number was weaker than expected as well. Adding to the gloomy feel was the Russian data, October broke the post Soviet era production record for the fourth month this year at 10.776m b/d, exports were 5.42m b/d. Later in the week there is more data, Super Thursday in the UK and of course non-farm payrolls in the US on Friday.
Ithaca Energy
Ithaca remains one of the strongest plays in the UK E&P sector and today’s announcement that it has successfully completed its semi-annual RBL facilities review is positive despite having had its capacity reduced to $515m from $650m. The market has marked the stock down which is probably a bit harsh, as although the banks’ price deck is lower, Ithaca is in a stronger position than most competitors. Indeed, CFO Graham Forbes ‘reconfirms the solid funding head room’ of the business of around $125m and with de-leveraging continuing to bite things can only get better. Peak leverage of $800m in early 2015 is now already down to $690m and with production starting from the Greater Stella Area in 2Q 2016 Petrofac willing, the balance sheet will improve. Add to that the recent investment of $66m by Delek, the sale of the Norwegian interests and lower opex and capex costs you can come up with a very robust state of affairs indeed. I recently met with Les Thomas and Graham Forbes and remain highly impressed by the management of the company and am confident that few competitors are so strongly placed not just to weather the current storm but to emerge in a position of some strength.
Ophir Energy
Ophir announces that its exploration well G4/50-10 well on the Soy Siam prospect is dry…
