TRAVEL COMMITMENTS THIS WEEK MEAN BLOGGING WILL BE INTERMITTENT
Last week saw the demise of legendary human resources memo writer – and not quite to legendary oil man – “Tiger” Mike Davis. Longer term readers of this blog will recall a goodly number of quotes of the day in this blog sourced from his famous 1970s instructions to his (no doubt long suffering) employees which had a certain je ne sais quoi air of non political correctness about then. (We finish this blog with another one).
Tiger Mike was perhaps more successful in his love life than his drilling efforts – when aged in his 20s he famously graduated from a job driving round a ~70 year oil widow to being her husband and CEO of Tiger Oil.
Bizarrely his name came up earlier this year in the micro-cap end of the Australian oil and gas sector, when a company he controlled was said to have made a takeover offer to ASX listed American Patriot Oil and Gas (whose share price rose on the news, although no deal ever happened for whatever reason…….).
These are the sort of characters we want in our industry – come on young folks – shape up and show those namby/pamby renewable energy geeks what you are made of!
The markets on Friday continued to suck on OPEC’s latest heroin hit – rising another 1-2% on the news earlier in the week that “someone” within OPEC would make some production cuts. Brent finished at US$50.19 and WTI at US$48.24. The week’s performance was strong – gains of 8-9% – however the monthly gains for September were weaker at ~4%.
We can only continue to conclude that US$50 oil continues to be the “anti-goldilocks” price that dosen’t pay enough to allow the industry to invest in the future – but pays enough to induce rig count, etc, and hence cap prices.
The BHI weekly rig count numbers issued on Friday confirmed this thesis – gains of 7 oil rigs and 4 gas rigs. OPEC’s latest wheeze is too soon to be the causal factor here – but a month of declining inventories could have done the trick.
Henry Hub slid on Friday to close at US$2.91 – down 2% on the day (but up 3% for the month).
LNG and international gas
We have increasingly been speculating that Mozambique could be one of the “five out of a hundred” LNG projects that could receive FID in the next few years. However, late last week the country’s Oil Minister was sacked without any public reason – which normally would not induce confidence.
Governments, fracking, etc
We noted last week that a first cargo of US sourced ethane (produced from “there could be gas in my water tap process – didn’t you see the movie?” – of “fracking”) had arrived at a refinery in Scotland. None of the ruling Scottish National Party Ministers managed to attend the event – apparently they were too busy.
This compares to their eagerness to attend excruciatingly embarrassing events in the past few years when these sons of the socialist soil slobberingly welcomed one Mr Donald Trump after he invested a few dollars (no doubt of “other people’s money”) in a golf course development in the country….
Company news – Armour Energy (AJQ)
Micro-cap AJQ recently announced the departure of its CEO in rather abrupt tones. The company continues to rely for its financial survival on related party loans from a company associated with its Chairman, which could well cause some discomfort in the Board room.
Quote of the day
As noted above, from Mike Davis to the employees of Tiger Oil in 1977, a pre “casual day” view of workplace clothing policies:
“On days you have to work and you think you should be off, you wear slouchy dress attire. That will not occur in the future. You will wear proper dress attire to work always. Also all employees should have the proper attitude to coincide with proper dress, especially on those days when you’re working and think you should be off.”