Plenty of positive sentiment out there. Here's one article where Caza gets a good write up http://www.trustnet.com/News/555678/how-to-cash-in-on-the-falling-oil-price/
Yes, Dave, it has been quite resilient up until today. I am currently out but will buy ahead of the next results when the growth from the new vessels should become apparent. Also worth pointing out that maintenance of older rigs is still required whatever the oil price and, arguably, it is more likely that rigs will be taken offline for maintenance during periods of low demand. Good for GMS.
From telegraph: Saudi Arabia's most high-profile billionaire and foreign investor, Prince Alwaleed bin Talal, has launched an extraordinary attack on the country's oil minister for allowing prices to fall. In a letter in Arabic addressed to ministers and posted on his website, Prince Alwaleed described the idea of the kingdom tolerating lower prices below $100 per barrel as potentially "catastrophic" for the economy of the desert kingdom. The letter, first reported online by the FT, is a significant attack on Saudi's highly respected 79-year-old oil minister Ali bin Ibrahim Al-Naimi who has the most powerful voice within the Organisation of Petroleum Exporting Countries (Opec). The rest of the article is here http://www.telegraph.co.uk/finance/commodities/11162744/Saudi-Prince-Alwaleed-says-falling-oil-prices-catastrophic.html
Bought a few more this morning, below 14p. Can't go on doing it forever though.
Better onshore Cheaper to buy on the stock market :)
By contrast, companies seeking oil and gas onshore, which is cheaper to exploit, or in more benign conditions offshore would fare better. Ophir Energy has the double benefit of low extraction costs and large reserves at its wells off Tanzania. Shares in the various oil service companies, such as Petrofac and John Wood Group, have fallen along with the oil price. Sanjeev Bahl, at Numis, downgraded Wood this week because of its exposure to deep water production. I tend to believe that, with both companies winning new work, any recovery in the oil price would instead provide a bounce. Finally, there comes a stage, as Mr Graham-Wood points out, when it is cheaper to buy reserves on the stock market than find them yourself. Genel has a strong position in the Kurdish region of Iraq which is unaffected by the troubles elsewhere in the region. Tullow Oil is widely seen as a bid candidate, probably for some national oil company prepared to take that long view. Ithaca Energy and Faroe Petroleum have both strengthened their finances and have the balance sheet strength to see out temporary price weakness. If that oil price starts to rise again, though, I suspect prices in the sector will rise sharply with it.
The view of Tempus in today's Times: Interesting article in today's Times by Martin Walker (Tempus): The oil price has not been this low for a sustained period since the end of 2010. The stock market has been down for four days out of five this week. This is odd, because they tend to go in different directions, a falling oil price being favourable for the global economy and aiding the markets. The reason is that both are falling for the same reasons, such as the perception of economic weakness in the eurozone and concerns over slowing in China. A price of below $90 a barrel has three significant effects on the prices of oil and oil-related stocks. To state the blindingly obvious, it depresses the profits the producers make on what they extract, and the effect is more noted in high cost regions such as the North Sea. It acts as a constraint on future investment. Most new fields have a cost per barrel at which they are not viable. They tend to adopt a benchmark of $80, though plainly this varies from project to project. Even before the recent fall, the big integrated oil companies had been cutting back on significant spending, in a move towards capital discipline. It also acts as a dampener on the always volatile prices of the exploration tiddlers, because they rely on finding bigger partners to fund the development of their discoveries. Paradoxically, as their shares fall, they become more attractive to buyers prepared to take a long view. There are reasons why the recent oil price fall might reverse. Malcolm Graham-Wood, a long-term observer of the market, points out that the Chinese have a policy of topping up their reserves by buying when the price is low. In addition, the mismatch between production and consumption is not that great. Demand for Opec oil in the first quarter is about 29 million barrels a day; present production about 31 million. It would not take much concerted action to narrow the gap. As to the effect on individual stocks, it was suggested this week that if the price falls much below $80, BP would have to cut its dividend. I am not sure. BP has cut the dividend only twice within memory, most recently after the Gulf of Mexico oil spill in 2010. It has been rebuilding, a total payment of 36.5 cents last year against 56 cents in 2009. Any further cut would be a serious humiliation. Ben van Buerden, the chief executive of Royal Dutch Shell, was on CNBC yesterday talking up the oil price over the longer term. He also indicated that Shell has projects that can be put on pause if necessary. Again, I suspect that the dividend is safe enough. As to those that might regret a long period of oil price deflation, two North Sea producers stand out. EnQuest is redeveloping the Alma and Galia fields there. Premier Oil is also exposed — though most production is in Asia — and is developing the $5.2 billion Sea Lion project in difficult waters off the Falklands. It is still seeking a partner for Sea Lion. By contra
Topped up yet again this morning. That's two days in a row. One more and I shall be fully loaded.
What's going on this morning?
Hope you managed to get out ok, this is a nightmare.
This is doing well. Well done to those that held on when the sp was becalmed earlier this year. Sadly, I lost my patience and sold :(
Some might say they have played a blinder if you accept the Moroccan oil story.
From today's market report: Malcolm Graham-Wood was bristling. It takes a lot to startle the stock market veteran, founder of HydroCarbon Capital and blogger on matters gas and oil. Tangiers Petroleum managed to do it. This is the AIM explorer that raised £4.3 million in February 2012 to prospect off Australia, where it is also listed, and Morocco by selling new shares to Britons, Americans and Australians at 33p through Old Park Lane Capital and Shore Capital. Back then, Tangiers was valued at north of £32 million. No longer. In August, shares that had drifted inexorably lower for more than two years lost nearly two thirds of their value on the day Tangiers said that it had plugged and abandoned its TAO-1 exploration well off Morocco. Among those nursing singed digits was Simon Cawkwell, the professional investor better known as Evil Knievel, who owned 400,000 shares that tanked by 64.9 per cent to 2¾p. Two days later, trading in those shares was suspended. Interim results were delayed and have yet to be produced. The suspension endures. Then yesterday, Perth-based Tangiers made a statement to the market through the London stock exchange’s regulatory news service, RNS. It is proposing a capital raising of $1.2 million by issuing 200 million new shares at $0.006 a share, for “working capital and the assessment of new ventures”. Mr Graham-Wood was decidedly unimpressed. “I have seen some outrageous statements in 35 years looking at energy companies but this really does take the biscuit,” he railed. “Tangiers’ policy of betting the ranch on one high-risk exploration well has been questionable at best. “The thought that anyone would be interested in throwing good money after bad is totally absurd, but if anyone does think of investing they should also invest in the famous flying pigs company which will return more and is probably better managed . . .” RFC Ambrian, Tangiers’ adviser on the new issue in London, did not respond to calls. Mr Cawkwell will not be subscribing.
Comment today: The company has said this morning that the delayed accounts will be lodged with the market after Wednesday’s announcement regarding funding obligations for the TAO-1 well. Given that they were carried and that the well completed early I am still struggling to think of what can have happened in this case, roll on Wednesday…
What's happening here? Is there bad news from Poland?
Don't know much about the personalities involved here but the loss of the company secretary at a time that some major financial issues are in debate (the well costs) seems like bad news to me.
Nice post, testpack3. I hope you don't mind but I have reproduced it over on the SLE thread.
It's certainly stuck in a tight range. I suppose many Institutional investors will want to see the first results since the company listed before taking the plunge. Hopefully next week we will see a further increase in profits and strong cash generation to allow a first dividend to be paid. This would confirm the bullish outlook of the floatation document and hopefully generate some renewed interest by long term investors. With new vessels on the way and strong demand for GMS's services, earnings should increase nicely over the next few years. GLA.
8 sep is a Monday. Makes it easier to release news to two markets 9 hours apart. Don't think there is much more to it, stockraiser.