Malcy's Oil Report - CNE, SIA, GKP, RDSA, TTA, HTG

Thursday, Mar 12 2015 by
5
Malcys Oil Report  CNE SIA GKP RDSA TTA HTG

WTI $48.17 -12c, Brent $57.54 +$1.15, Diff $9.37 +$1.27, NG $2.82 +9c

Oil price

Brent performed better than WTI yesterday as markets worried about the EIA inventory stats due out after the close. In the end they were poor, reporting another stock build of 4.5m barrels not echoing the small but important draw from the API the day before. What was most interesting about the stats was that they came with a fall in imports and an increase of 1.2% in refinery utilisation which is almost impossible to do, I smell something afoot here and it's not 12 inches…

Nasdaq have launched a new futures commodity market for oil, natural gas and US power as they see the CME and ICE taking almost dominant market share in an area where volatility and thus trade is on the up.

Cairn Energy

The market got the news late yesterday that India had landed a $1.6bn fine on Cairn after a long period of discussion regarding their tax affairs. Unfortunately I couldn't get on the 5.30 conference call but I imagine that it was fairly predictable, albeit more than irritating. I have to admit that I have called this one wrong, not on the fantastic Senegal play and its potential massive impact for Cairn but in under-estimating the impact of the attitude of the Indian Government for which I am mighty hacked off. In my defence I didn't see India acting like a tin-pot dictatorship in a 1970's African state but clearly they have decided to forgo any further inbound investment in oil and gas or any other industry, and there were we thinking that Modi was going to change the world – he certainly has done that.

As a result of this Cairn are clearly not able to sell any more of its Cairn India stake which slightly takes away its capital strength which was one of my cornerstones, but all is not lost and provided the company does not buckle the value will out in the end. Still very much on the bucket list…

SOCO

SOCO has disappointed the market this morning on a number of fronts. The much smaller dividend than last year, even smaller than expected, has hit market sentiment but keeping guidance low and worse, writing down reserve numbers are more than this market can take. I had hoped to be at the analysts meeting this morning but might catch up with…

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Cairn Energy PLC (Cairn) is a United Kingdom-based independent oil and gas exploration and development company. The Company's portfolio is focused on approximately three geographical regions, such as North West Europe, the Atlantic Margin and the Mediterranean. Cairn has exploration and appraisal assets in the Atlantic Margin, North West Europe and the Mediterranean, and core development assets in the North Sea. The Company has interests in over two the United Kingdom North Sea developments, Catcher and Kraken, and a third development, Skarfjell. Cairn holds approximately 40% interest in over three contiguous blocks offshore Senegal. The Company's subsidiaries include Capricorn Oil Limited, Cairn UK Holdings Limited, Capricorn Spain Limited, Capricorn Malta Limited, Capricorn Greenland Exploration A/S, Capricorn Exploration and Development Company Limited, Capricorn Mauritania Limited, Capricorn Senegal Limited and Capricorn Ireland Limited. more »

LSE Price
202.6p
Change
0.4%
Mkt Cap (£m)
1,190
P/E (fwd)
28.0
Yield (fwd)
n/a

SOCO International plc (SOCO) is a united Kingdom-based oil and gas exploration and production company. Its segments include South East Asia and Africa. It has field development, production and exploration interests in Vietnam, and exploration and appraisal interests in the Republic of Congo and Angola. In Vietnam, It’s Block 16-1 and Block 9-2 include the Te Giac Trang and Ca Ngu Vang Fields, which are located in shallow water in the Cuu Long Basin, near the Bach Ho Field. It holds working interest in Block 16-1 and Block 9-2 through its subsidiaries, SOCO Vietnam Ltd and OPECO Vietnam Limited. SOCO holds its interests in the Marine XI Block, located offshore Congo (Brazzaville) in the shallow water Lower Congo Basin, through its subsidiary, SOCO EPC. It holds working interest in the Mer Profonde Sud Block, offshore Congo (Brazzaville) through its subsidiary, SOCO Congo BEX Limited. SOCO's subsidiary, SOCO Cabinda Limited, holds participation interests in the Cabinda North Block. more »

LSE Price
67p
Change
 
Mkt Cap (£m)
266.3
P/E (fwd)
20.6
Yield (fwd)
9.1

Gulf Keystone Petroleum Limited (Gulf Keystone) is a holding company, which is engaged in the oil and gas exploration and production. The Company operates in the Kurdistan Region of Iraq. It operates through segments, including Kurdistan Region of Iraq and United Kingdom. The Kurdistan Region of Iraq segment consists of the Shaikan, Ber Bahr blocks and the Erbil office, which provides support to the operations in Kurdistan. The United Kingdom segment provides geological, geophysical, engineering and corporate services to the Company. It operates in the Shaikan oil field. The Shaikan block is situated over 85 kilometers northwest of Erbil, covering an area of over 280 square kilometers. more »

LSE Price
232.5p
Change
-1.5%
Mkt Cap (£m)
526.9
P/E (fwd)
8.3
Yield (fwd)
4.4



  Is LON:CNE fundamentally strong or weak? Find out More »


2 Comments on this Article show/hide all

AlanJenkins2 12th Mar '15 1 of 2

Nice post,Malcy,and I've followed your blog.I think that SOCO was sensible to cut its dividend,though.

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Malcolm Graham Wood 23rd Mar '15 2 of 2
2

In reply to post #94336

Thanks Alan, maybe they gave people unrealistic expectations! I agree that except in very rare circumstances e&p companies shouldn't distribute. Malcolm

Blog: Malcy's Blog
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About Malcolm Graham Wood

Malcolm Graham Wood

Malcolm has over 30 years' experience in the Oil & Gas sector and is a widely used media source. He often appears in print and on screen, and also writes an acclaimed daily blog read by much of the resources industry as well as investors both institutional and retail.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.He started his career at Wood Mackenzie in 1979. He was an inaugural member of the No 1 Extel rated James Capel Oil & Gas team and also headed up corporate broking, acting for the Government in sales of British Gas, Britoil and other utilities. Subsequently he became Head of Equities and main board Director at Williams de Broe before moving to Teather & Greenwood. Following that, he ran his own consultancy for several years, acting for a number of quoted and private companies as well as being a board member and advisor. He has been a Director at Noble and then Westhouse Securities and has extensive contacts in the Oil & Gas sector globally. More recently Malcolm has been the lead advisor to an HSBC Zurich trust on oil, gas and energy investments as well as working with the oil team at VSA Capital.- See more at: http://www.malcysblog.com/about/#sthash.Jdn1d7dK.d... more »

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