Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
PW - Brent has been down the best part of a $ today, but this is also combined with BP going Ex-Dividend today - toxic twins playing with the SP. This is the point the markets re-calibrate the SP anyway as they see going Ex-Dividend as the point the dividend has left the building! Technically this actually happens on dividend payment day, the 28th March 2024.
The popular definition of a recession is usually considered to be at least two consecutive quarters of economic contraction – or ‘negative growth’ – in Gross Domestic Product (GDP).
We will not officially know whether we continued to be in or out of recession for the first quarter of 2024 until the ONS releases the appropriate data & associated announcements in mid May 2024.
The IEA do not consider that peak oil demand has already happened - see the table on demand and supply at the end of this report "Analysis and Forecast to 2026":
https://www.iea.org/reports/oil-2021
Also to add to the SP equation is the current vulnerability of BP, which is still paying for the Deepwater Horizon disaste, although this is coming to a close now. The costs of this were estimated at $65 billion in 2018. So with growth wouldn't BP be worth almost as much as Shell now!
For me the market is not going to hit anywhere near the £27.27p of the 16th October 2023, as Ex-D approaches. All the vagaries of slowing of demand, is inflation sorted, when will the first interest rate cut happen etc Heavy pre-election political influences dragging the price. Biden pushing the Permian output to the point of being a "swing" producer with up to 5.4 mbd, or the equivalent of 5-6% of daily world demand. India and China slaking their demand on cheap Russian oil. Both a demand distorter and price suppressor.
Disruption to World trade emanating from the Gulf having minimal impact on price, war all over the place again having little impact on price etc. The market is very distorted from reality at the moment. I've been waiting to trade for some time now, but have not done so & personally I am not persuaded to at the moment. I tend not to average up and down & rather if the decision looks right to me I bailout altogether.
I think Boyo's latest graph is really explicit on this. Although I think the OP will carry on strengthening, they are choppy unpredictable waters for trading as far as I am concerned. If the booby prize is receipt of another dividend I will not be unhappy for now. Good luck guys.
US Geological Survey:
The Permian Basin, America’s largest, most productive oil basin, is estimated to hold 71 billion barrels of technically recoverable oil, according to the U.S. Geological Survey.
But experts say geological estimates are constantly changing. Even if 71 billion barrels were immediately recoverable, the U.S. would consume that amount of oil in about 10 years.
On this basis. If world consumption of oil is around 100 million barrels per day, the 71 billion barrels could supply total World demand for around a couple of years. Or say 10% of World demand for 20-years. If World demand decreases over the years, this would obviously make the Permian reserves last longer.
Recent production levels of over 5.4-million-bpd makes the Permian alone a bigger producer than any OPEC member except Saudi Arabia. Permian production levels for me, are being heavily influenced politically in an election year.
Also, don't forget that this farmout is not just Deltic centric.
Dana has come in as a new major partner, buying in to the previous agreement & obviously with the full agreement of Shell. If successful, this will open & expand the possibilities of future partnerships.
Also, with the Selene project etc, Shell will have kept a "Risks Log" with any key changes likely going up to main board level. Several of the risks will have related to Deltic financing their side of the agreement, and no doubt the mitigating action necessary if Deltic say went into liquidation, or was say taken over, along with the achievement of progressive milestones.
These risks will have changed considerably with the Selene deal - even those flashing red (red, amber, green) will have likely changed status, and will be much less likely to become issues. Risks tend to become issues when they bite you hard on the a..se!
The Selene deal is a massive boost to how Deltic is seen as a prospective Partner & itsoverall status in the exploration arena.
Exactly right Jack - Selene is almost a future sacrificial lamb - it gives Deltic 2 x big partners & shows the ballpark negotiating figures, this really pressurises a better deal faster for Pensacola, and several interested investing parties in the Southern North Sea have already missed out on the Selene deal, so they might come up with a better deal.
SB - Deltic Energy retains a 25% non-operational stake in Selene. As it stands, at no further cost to them, and if nothing else changes Deltic is destined to be a producer of 25% of the oil from Selene, albeit non-operationally - Deltic has a choice whether it becomes a producer or not.
With Selene virtually all costs are covered whilst Deltic Energy retains a 25% non-operational stake. Even a sizeable $500,000 cash upfront payment. Nothing short of brilliant!
BP's results have been well-received - analysts views seem to vary between "profits plunge" on a replacement cost basis & the 4th Quarter 2023 being ahead of forecasts at $3 billion - so choose your weapon really.
A lot of soundbites like cost-cutting, choosing the highest project returns. delivering a simpler more focused and higher-value company. Maintaining the dividend & increasing buybacks to entertain shareholders. It seems to conflict with the continued strategic development of renewables though, with often low, spasmodic, unreliable profitability.
I can't help thinking that when the euphoria disappears from the results and the realities set in again: "if you do what you always do, you get what you always got!"
Occidental CEO predicts 2025 oil supply shortage:
https://oilprice.com/Latest-Energy-News/World-News/Buffett-Backed-Occidental-CEO-Says-Oil-Shortage-by-2025.html
Looks like a few shorts getting squeezed:
https://oilprice.com/Energy/Oil-Prices/US-Crude-Oil-Could-Be-Ripe-for-A-Short-Squeeze.html
I couldn't agree more! All "Property is theft!" (French: La propriété, c'est le vol!) is a slogan coined by French anarchist Pierre-Joseph Proudhon in his 1840 book What Is Property?
On this basis it puzzles me why you lot have vehicles that require fuel in the first place though! I thought even dysfunctional families provided their progeny with a decent pair of clogs! You'll be wanting a hot meal once a week next!
US charging Iran with evading oil sanctions:
https://oilprice.com/Latest-Energy-News/World-News/US-Charges-Iranian-Oil-Trafficking-Network-Over-Sanctions-Evasion.html
Boyo - the gap analysis is really stark. It appears to start to manifest itself and widen from around January 2022, so that its not a particularly recent phenomenon but becomes much more potentially serious from starting around the middle of 2023. As you say from October 2023 it accelerates to looking really serious, basket-case/ recovery play territory.
It seems the market is dictating through the share price malaise that enough is enough & a major change of strategy is needed. It is becoming increasingly less concerned whether the impetus for this is internal or external. Your graphs indicate that steadying the ship, or more of the same, are not going to be viable options.
I put a couple of dividends from Shell into BP recently & will probably develop this further.
It looks like a stray rocket might impact the OP next week! Have a good weekend.
DP - Never let anyone try to persuade you that the Information Super-Highway stretches as far as the Scottish Borders - it does not!
BadA one of the licenses is adjacent to a Shell license.
The market reaction says it all. Shell exudes confidence, consistency & belief in the future of the business. As D says the $3.5 billion buybacks are clearly paid for by an (8.5% ish increase in debt). A really bold statement that Shell believes it can outperform the cost of debt.
Also it is clear that Shell will not be slavishly tied to increasing the dividend by 15% in the final quarter each year. It will be increased when business results justify it.
This will make the BP's results on the 6th of February even more interesting & BP will for me most likely look even weaker and more vulnerable after them! Even if BP tried to emulate or simply copy Shell's business strategy, they are well over a year behind them & still without the will, leadership or Board mandate enabling a change of strategy at pace.
BP are weak and getting weaker. The weakest and most oblivious target in the sector, when several of its peers have already recently ceded their independence, they are becoming a primary target for the predators that are circling around!
My money would be on a predator announcing a hostile bid, and then Sawan coming along as a saviour with an agreed merger/takeover. Whatever else this looks like the beginning of the end of BP's independence, they have not shown a glimmer of hope that they can save themselves so far!