Malcy's Oil Report - IAE, OPHR, CAZA, SIA

Thursday, Aug 13 2015 by
Malcys Oil Report  IAE OPHR CAZA SIA

WTI $43.30 +22c, Brent $49.66 +48c, Diff $6.36 +26c, NG $2.93 +9c

Oil price

Away for a couple of days in the North West and not much has changed on the oil price front. It is that time of the month that the agencies release their data and bulls and bears select random data to suit their book. No doubt that the bulls will find the IEA stats better reading than either the EIA or Opec numbers but to be honest none look dreamy for oil companies. Best news from the bunch is the IEA being upbeat about demand numbers increasing at their quickest pace in five years with the call on Opec next year of 30.88m b/d. The EIA number for that is 29.91 which pretty much what happens to demand and supply from Iran and Libya, means further misery. They run with 2015 price estimates of $54 for Brent and $49 for WTI and for next year go with $59 and $54 respectively. Lower prices will linger longer but 2H 2016 does look better than that to me, by that time the capex cuts by the majors will be kicking in quite hard.

Given that the greenback weakened yesterday as a September rate rise is now less than a 50/50 chance, the price rise looks even more miserly and the EIA inventory stats were only slightly bullish, at a draw of 1.7m barrels it was better than the API numbers indicated and the market clutched at straws. Two refineries are either out or working well below capacity making the demand for crude fall but increasing crack spreads even higher. Whiting will be down around 60% for at least a month and the Phillips 66 Linden refinery will lose 238/- b/d for at least a fortnight. Accordingly the aforementioned crack spreads have rocketed to over $30 p/b up over $5 on the week.

Ithaca Energy

Ithaca is performing better than its industry peers but performance is nothing to write home about, unsurprising at $50 oil I hear you say. But the key point about Ithaca it should be remembered is its long term hedging policy which means that almost no other company in the sector can match its realisations at the moment. With two years of hedging giving Ithaca $70 crude until 2017, operating costs down 29% to $35 p/b coming down to $25 when Stella starts up and a Brent beak-even…

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Ithaca Energy Inc. is a North Sea oil and gas operator engaged in the appraisal and development of the United Kingdom undeveloped discoveries and the exploitation of its existing the United Kingdom producing asset portfolio. The Company has interests in three general areas within the United Kingdom sector of the North Sea: Northern North Sea, which consists of Dons, Fionn and Broom; Central North Sea, which consists of Greater Stella Area (GSA), Cook and Pierce, and Southern England consisting of Wytch Farm. The Dons Area consists of the Don Southwest, West Don and Ythan oil fields, which produce from the Brent reservoir sequence sandstones. The Wytch Farm field is an onshore/offshore Mesozoic oil field. Cook and Pierce produce through subsea wells. The Fionn oil field consists of a production well. The Broom field development consists of approximately six subsea wells, four gas lifted production wells and two water injectors. GSA has interests in a gas-condensate field. more »

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Ophir Energy plc is an upstream oil and gas exploration and production company focused on Asia and Africa. The principal activity of the Company is the development of offshore and deepwater oil and gas exploration assets. The Company's geographical segments are Africa, Asia and are head-quartered in London, United Kingdom. In Africa, the Company has interests in Equatorial Guinea, Gabon, Cote d'Ivoire, Tanzania and Kenya. In Asia, the Company has interests in Myanmar, Malaysia, Thailand and Indonesia. It holds a 50% operated interest in Mbeli and Ntinsa Blocks and a 100% operated interest in Gnondo, Manga, Nkawa and Nkouere Blocks in Gabon. It also holds a 70% operated interest in Bangkanai Block; a 70% operated interest in West Bangkanai Block, and a 100% operated interest in North East Bangkanai Block. more »

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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 »

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

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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: more »


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