Oil price, Far, Echo. And finally…
WTI $50.83 +20c, Brent $54.38 +8c, Diff -$3.55 -12c, NG $2.73 +1c
Oil is finishing a good week on a strong note, as I write WTI has decisively broken through $51 and Brent is $55.31. This should come as no surprise as whilst the short term GDP and thus demand is still unconvincing the longer term does look a lot better. This was what I drew from the Opec+ discussions earlier in the week, the Saudis are taking some short term pain but since they started talking and acting with long term confidence they are 10 bucks a barrel better off, I could live with a short term output hit for that. Finally here the UK continues to set the vaccine trend and has approved the Moderna vaccine with 17m doses contracted.
Also with President Trump grudgingly conceding overnight Joe Biden will be in charge in 12 days time. I’m not going to go into the reasons again as to how anti fossil fuels he is, but suffice it to say that as a result of his domestic policies it is suggested that as much as 25% of domestic production might fall and that could be over 2m b/d lost which will be filled by imports. Remember that US drivers travel 3 billion miles a month and of the 280m cars out there 279m run on gasoline…The KSA may not be so mug punters after all…
Far update this morning on the Remus proposal and the Woodside sale. FAR cautions that ‘the Remus Proposal is not a legally binding offer, there is no certainty that the Remus Proposal will necessarily eventuate, and the Remus Proposal terms are uncertain at this stage. Accordingly, care needs to be used in assessing the Remus Proposal at this time. The Remus Proposal is conditional on the Woodside Sale not occurring’.
Remus is presently finalising the funding arrangements in advance of making the proposed offer and the only internal and regulatory approval required to proceed with the offer is the final approval of the Remus Board and final review and confirmation of documentation.
Encouragingly from Far’s point of view Remus is ‘presently satisfied that it will not need to undertake any further due diligence on FAR, FIRB approval is not required and any offer made will not be conditional on FIRB approval. Finally, any proposed offer is expected to be subject to a requirement that Remus achieves a controlling interest in FAR together with other customary conditions’.
Far has unsurprisingly further postponed the shareholder meeting to approve the Woodside deal from 21st of January to 18th February to look at the Remus proposal and of course to look at any further details with regards to the Woodside proposal.
Given these balls being in the air, and to ensure all possible boxes are correctly ticked, FAR advises that ‘it is in the process of paying the RSSD project November 2020 cash call (US$8.96 million plus interest) and the December 2020 cash call (US$6.48 million plus interest). Following these payments, FAR’s cash position is approximately US$10.3 million’.
Exciting times for Far right now and given their more than significant involvement in the discovery in Senegal it would be more than equitable if this deal was to come off. Even more given that the company were so close to raising the ante last year to remain in the asset and of course the rest of the Far portfolio.
Having talked about Far, investors should continue to do their homework on Remus Petroleum who have now announced their presence in the sector twice in recent weeks. Having taken a 26.7% stake in PetroTal it now looks to be bidding for a substantial asset in Africa, one which readers know that I am extremely keen on. My spies tell me that those of us who follow the sector should indeed watch this space very carefully, the management wreaks of high quality and experience and I think that there are more deals in various stages of completion that will mean that we should get to know Remus as their ambition is not be dismissed lightly.
Echo has signed a cooperation agreement with GTC International a majority owned subsidiary of the Bolivian company UruboCorp focussed on energy production and supply in Bolivia and with interests in both the hydrocarbon and renewables sectors.
Echo has existing long-term relationships in Bolivia, has been represented on the Bolivian Hydrocarbon and Energy Chamber and the country remains a key focus of the Company’s Latin American growth strategy. Given the current business environment in Bolivia, the Echo Board believes that there is a window of opportunity to pursue business development opportunities across the energy sector, including potentially renewables, and the relationship now formed with GTLI under the Cooperation Agreement is expected to further strengthen the Company’s local relationships and will provide the Company with access to advantaged additional origination opportunities and valuable local insight.
Martin Hull, Chief Executive Officer of Echo Energy, commented:
“I’m delighted that we have signed this important Cooperation Agreement with GTLI, a leading Bolivian energy company which has a highly skilled team and an attractive portfolio of business interests in the Bolivian energy sector. The framework now in place under the Cooperation Agreement will enable the Company and GTLI to combine their respective skillsets taking the best of both to work together to seek to originate and execute transactions across the energy sector in Bolivia at a point in time where we see significant and potentially highly commercial opportunity in-country.”
It’s the 3rd Round of the FA Cup this weekend with all the fun and games that this involves. A selection of the most interesting ties includes, Villa v Liverpool, Wolves v the Eagles from the Prem, Wayne Rooney’s Rams are at Chorley and Spurs visit Marine. Chelski host the Shrimps, Leeds go to Crawley, Newport host the Seagulls and the Baggies may not fancy a visit to the Tangerines. A mighty West London derby as the Super Hoops entertain the Cottagers whilst Rotherham go to the Toffees , the Foxes make the short journey to the Potteries, Boreham Wood host Millwall and Pompey are at Bristol City, good luck Andy…
If weather permits it’s the Welsh Grand National at Chepstow and a card at Kempton.
Finally there are some very decent fixtures in the rugby Premiership.