WTI $57.06 +7c, Brent $64.64 -19c, Diff $7.58 -26c, NG $2.52 +3c

Oil price

A short blog this morning as I have an AGM to deal with but rest assured that all the announcements will be dealt with tomorrow.

The oil price is still subdued at this level, traders tell me that buyers are standing off a touch waiting to see if the price comes back with oversupply the biggest worry at the moment. The API inventory stats would appear to confirm this as they showed another increase in stocks, this time 4.2m barrels, again more than the market had expected.

The situation in Saudi Arabia is also causing a little concern after the King sacked the Crown Prince, Foreign Minister and the CEO of Saudi Aramco. Until we find out who the new chief is and whether Naimi is to be replaced this should just be a small red flag over the situation.

Sound Oil - A smart move

Sound yesterday followed its results with the announcement of a raise of £12m via equity and warrants. I will discuss this in more detail after the company holds its conference call but with exciting plans for growth via acquisition of assets and a strategic partnership to and a decent rise in the share price this move seems eminently sensible. Continental have clearly found European institutions prepared to follow them in and this confidence in the company and the management is extremely encouraging.

The plan to become a mid cap Mediterranean oil and gas business is very much under way and a good deal more can be expected. The share price came back slightly towards the placing price but interestingly stayed above it and shareholders can participate in the open offer which is also available to them. The funding has been done at a 3 1/2 year high for the share price, at modest dilution for a company that has doubled its reserves and leaves the company with £28m in the bank with which to carry out its plans for growth.

Amerisur

Just enough time to point out that due to higher oil prices, cost reductions and increasing efficiencies Amerisur has been able to reactivate Pad 3N which adds 1,300 b/d to production. This also increases operational netback to $29 from $24, which is most encouraging. The sell-off of Amerisur recently was way overdone and since then canny investors have picked up cheap stock and pushed…

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