Been an odd morning, there's more supply of Iron Ore out
there perhaps a lot of traders realised. With the higher quality
hematite/magnetite ore retreating significantly one can't help but wonder how
well a large well-known Iron Ore trading house is fairing!
If parties have been keeping a keen on on the numpty short
trade on iron ore, you’ll have noticed the price movement of the majors Rio
Tinto (RIO), Vale & BHP Billiton (BLT) losing some of their support along
with Fortescue Metals (FMG-ASX) being hammered more so without any good reason.
One wonders how FMG will shape up in the longer term, March
2014 Quarterly Production Report. With more than enough headroom even on an
all in basis of around $44/wmt FMG is starting to look like a buy. For myself I
shall be waiting awhile longer, to see how things pan out. FMG, are already
expanding their own shipping fleet, albeit awhile off (post 2016), it’s
certainly benefiting from a “modern” approach that has less of the archaic
dinosaur mentality of Rio. With a near 20% drop in pricing, FMG’s quarterly due
17th July will give a better indication of the companies
health, Full year due 21st August 2014.
Staring closer to home via Egypt and Sukari it’s alleged by
a number of sources that Egyptian Government is going to increase their lease
rental values twenty fold; Panic! (Sarcasm there). For Centamin, just as it
becomes confident of winning its October listed Court case, its another kick in
the proverbial for those incapable of doing basic maths.
Egypt's Mineral Resources Authority (EMRA) (also Joint
Owners of Sukari) are purported to have recommended the lease rental values
increase twenty fold. For Sukari that’s 160Km’s with a potential cost of $7000
per sq km of exploration and $1400 for producing assets. One assumes to make
interested parties get on with things…? So significantly, or not so, pending on
your viewpoint, it’s likely to impact Centamin by around $1.1M based on a
‘worst’ case scenario, or just under $3 an ounce cost this year. Nothing to be
worried about! (Source: Ahram
Online: Rental values for Egypt's mines to increase by 20,000%). With Egypt
gradually derisking, Centamin look like one of the few gold miners to hold
longer term, being barely 10% up on my purchases more recently I won’t break
out the bolly!
On to Oil, (for those slackers amongst us, there’s still a
compelling article needed regarding a certain Court Case but I suspect
I’ll be disappointed yet again!) for those following Ithaca and utilising the
more recent disappointment to buy. The only disappointment to Ithaca is/are the
timeframes which are may have further disappointment, but either way,
longer-term it bodes well for the savvy longs without short term myopia about
it doubling tomorrow. However, patience always rewards those waiting for
stability in a share price, both mentally and financially. My revisit to Afren
is a prime example of buying on weakness without the price stabilising, albeit
what’s 4 ish pence between friends?
Ian, despite welching on his obligations, was excited about
the Serica
Energy plc (SQZ's) acquisition of the Erskine Field. One hopes Serica have
got their decommissioning figures correct! As people are aware, SQZ had
disappointment with BG Group Bridge Linked Platform ("BLP")
adjacent to the BG operated Lomond field not being constructed. With all
bets now on production being directly tied in to the Lomond Platform.
Additionally, rumours tenders are all but done for a rig for Centrica’s paid
drill bit any time soon, one hopes it will underpin a change in share price for
SQZ.
The final thought goes to Asos and Supergroup, for the first
time in a long time, ASC and SGP are en par. Both ASC and SGP, for the shorters
should have contributed to a stellar year, Iron Ore significantly contributing…
Atb Fraser
Fraser- Hi- just back from Trent Bridge and a historical run chase by Notts. It doesn't get much better than today for the generally pessimistic oldies that watch at TB, some where speechless as they couldn't find anything today to grumble about :-))
ReplyDeleteRe CEY- yes- they have most of their ducks lined up now, and like MWA and CMCL they are lowly rated due to political issues, which in the case of CEY seem to be getting more stable (famous last words). Im long too and they have made some moves out of Egypt, which is good mgmt. and common sense.
Re SQZ- looks like a bargain, with BP clearly fairly desperate to simplify their assets and BP also seem to have taken on the decom costs too. Great deal for SQZ, maybe they can have some of BPs other N Sea assets at a similar cost??
Cheers. The Leggie
From: http://online.wsj.com/articles/bg-sell-stake-in-north-sea-cats-pipeline-1402989752
ReplyDeleteLONDON— BG Group BG.LN +0.20% PLC said Tuesday it would sell its 62.78% interest in the Central Area Transmission System, or CATS, gas pipeline in the U.K. North Sea, and associated infrastructure, to Antin Infrastructure Partners for up to £562 million ($954 million).
The sale is part of the natural-gas company's strategy to streamline its portfolio at a time when its core business is dogged by falling output and restrictions on sales from Egypt, one of its key gas-producing operations. Such issues led BG to report an 8% fall in first-quarter net profit earlier this year.
The company is also currently without a chief executive after Chris Finlayson resigned from the post after only 16 months in the job for "personal reasons." During his tenure, BG cut its production targets, swung to a net loss in the fourth quarter of 2013 and announced a $1.3 billion write down of its business in Egypt.
BG said the sale of its interest in the CATS pipeline and infrastructure would result in a post-tax profit of $700 million upon completion, although this figure may be partly offset by a potential impairment of the company's associated U.K. North Sea assets.
The deal, which doesn't impact BG's rights to capacity in CATS, is anticipated to close in the second half of 2014.
CATS comprises of a platform linked to the Everest oil and gas platform, a 404-kilometre subsea pipeline and an onshore gas processing terminal.
—Selina Williams contributed to this article.
Write to Ian Walker at ian.walker@wsj.com
Will this bode well for BG Group Bridge Linked Platform? Perhaps! One awaits the full transfer and how this will impact on SSE's sales shall be interesting.
Fraser- thx- yes, some shuffling of assets in the N Sea, with the majors generally looking to offload, as they see it as low impact re their global assets and this is presenting opportunities to the smaller players at v reasonable prices. I wonder how much of this is to do with the Scottish independence vote in 9/14 and the possible impact of a Yes vote. And if Yes, what will the Scottish Sporran be worth v the £, $ or Euro?? Interesting times. I will around for FTML later, if it works.... :-)) Yesterday looked like fun, with sinister parties hinted at as saboteurs.
ReplyDeleteCheers. The Leggie