Today’s Blog – Tuesday 20th December 2016

Blogs may be short and/or sporadic this week – its Christmas!


As noted last week, ’tis the season of Christmas lunches (aside – we are doing our duty again today on that front…).  One lunch which this blog spoke at last week was the South Australian Branch of the Petroleum Exploration Society of Australia’s (PESA) annual shindig.

It was refreshing to note from this function that various high quality productivity measures are being revived – ones that have occasionally withered in the industry in recent years.  These included:

  • No waste of smart diners’ time telling them what fire alarms sound like.
  • No conflation of the appropriate dealings with aboriginal issues in the field with an awkward “welcome” in the city.
  • Lubricating thought processes, conversation and idea exchanges through the liberal application of ethanol.
  • A speech that kept listeners awake through occasionally expressing a real opinion.

Perhaps productivity is not just about issues such as how much suppliers can be temporarily screwed down or how much sand can be put into an ever longer lateral….

Commodity prices

Crude trading was fairly flat yesterday in the absence of any  meaningful “numbers” or “events”.  Brent closed at US$54.79 and WTI at US$51.90.

Henry Hub was also flat at US$3.40.

LNG and international gas

Turkish media has reported that the country’s first LNG receiving unit – a FSRU – will commence deliveries next week.  Another FSRU in the country is being planned.

A friendship with Putin only goes so far when he supplies most of your gas.

Company news – FAR Ltd

BP recently announced a large deal in FAR’s West African stamping ground – a farm-in to assets held by NYSE listed Kosmos Enegy in Mauritania and Senegal.  The deal appeared to be gas rather than oil driven – but would otherwise given some succour to FAR shareholders that their boat may eventually come in.

Company news – APA Group and AGL

Gas infrastructure company APA announced a new pipeline deal with AGL this morning.  It emphasised how flexible it was – clearly playing to political and regulatory audiences as well as the investment community.

No doubt APA would be just as lovely and flexible when dealing with a small industrial or E&P junior.

Company news – American Patriot (AOW)

Onshore US focused junior explorer AOW today confounded a tradition of Aussie E&P companies going over to the US and being done over by the “good old boys” in the US oil patch.  It pulled out of a deal after finding undisclosed liabilities and reservers over estimations.  Who would have thought that of their otherwise charming proposed vendors!

Quote of the day

Another one from The Onion’s top quotes of 2016:

“I’m going to do all the awful things I’m talking about on this campaign.  Listen to me – you’re not listening.  All those terrible things that you’re all saying  I might not do when I’m President?  I’m going to do them. And a bunch of worse stuff, too.  Are you paying attention to this?  I will 100 percent do every one of them. They are really, actually going to  happen”. – Donald Trump




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