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Oil price, SDX Energy, Genel Energy And finally…

Published: 14:58 08 Apr 2019 BST

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Oil price, SDX Energy, Genel Energy And finally…

 

 

WTI $63.08 +98c, Brent $70.34 +94c, Diff -$7.26 -4c, NG $2.66 +2c

Oil price

Oil was up last week, WTI rose $2.94 and Brent firmed by $2.76, breaking the elusive close above $70 level despite the US inventory number and the rig count. The latter was up 19 units overall to 1025 and in oil by 15 to 831 which would indicate an early warning of higher US production but it’s not quite as black and white as that.

The good news overwhelmed the bad, the US jobs data showed a rise of 196/- for March possibly making the February number an oddity and of course my own favourite lead indicator, US gasoline prices continue to rise dramatically. So GDP worries are lessened and with supplies tightening significantly (usual suspects, Venezuela, Iran, Libya…) the outlook for Q2 remains quietly bullish.

SDX Energy

SDX has announced that it has an agreement to cancel its TSX-V listing by swapping UK shares for Canadian shares on a one-for-one basis. This will cut costs, give better liquidity and be more attractive for investing institutions who prefer to deal in London.

The company has also warned that the start up of South Disouq may be delayed, the mid 2019 target is based on an Early Production Facility going hand in glove with the Central Processing Facility which, believe it or not, requires separate commercial deals between all parties.  The wells are all drilled and the pipeline is connected but the discussions are taking a little longer than expected.

With the peak season for gas in the July-September window the authorities have every incentive to deliver in the best interests of the country but there are always some small points to clarify. I get the impression from the company that they are taking the hit now and flagging up a potential delay so that it does not look really bad if it was announced at the last minute which is eminently sensible.

The deal is a transformational one for the company and this delay will not alter the value to them but it is understandable that investors, who have watched the progress of the work for so long should be impatient at the hold-up.

Genel Energy

Genel has announced that Murat Özgül is to step down from the board with immediate effect and that Bill Higgs is to succeed him as CEO. Murat will stay on as a special advisor to the board reflecting the importance of his influence and help at board level for so long.

Bill Higgs is undoubtedly the best person to take over the reins and the succession process can be seen to have worked, indeed the fact that CFO Esa Ikaheimonen has also joined the board is further good news. This team, led by Bill will be the right one to take Genel up to the next level, he is not short of ambition having told me that he hoped to ‘double the size of the company in the not too distant future’. I recently interviewed Bill and have added the link below for those who may like to take another look.

With a technical problem causing the blog to be delayed this morning I can now fit in the announcement that following a bondholder meeting this morning a waiver of the dividend restriction in 2019 has been confirmed. The board has recommended a final divvi of 10c per share or $27.9m and next year will be at least $40m and split between interim and final. Accordingly a 5c payout is planned for the interim announcement in August.

Core Finance CEO interview: Bill Higgs of Genel Energy

And finally…

The boat race was won by Cambridge who also won the womens and the reserve crew races, although the light blues started well, the race which can often be over by Barnes Bridge, was very competitive.

The FA Cup Final will be between the Noisy Neighbours who are still on for the quadruple, and the Hornets who beat Wolves in a right tussle.

In the Premiership Liverpool kept the pressure on by winning 1-3 at the Saints but the Gooners were slightly blown off course by losing at the resurgent Toffees 1-0. Tonight it’s the London derby when the Irons visit Stamford Bridge.

Tiger Roll duly obliged in the Grand National and could still win again, or a Gold Cup or anything at the moment.

 

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