Monday 9 March 2015

Morning Mumble: Victoria Oil & Gas and...

Good Morning,

Why the need for so much, VOG's RNS today should have read:

GDC-ENEO Pipeline Installation and Genset Update, Cameroon:

  • Gaz du Cameroun completes all pipeline and metering installation to Bassa and Logbaba power plants ahead of schedule, meeting all contractual obligations
  • Pipeline now "gassed up" and completion certificates issued
  • Twenty two Gensets with a combined capacity of 28.6MW arrived at Douala port and cleared customs - sixteen of these (20.8 MW) now onsite at Bassa power station and six (7.8MW) at Logbaba power station
  • Seventeen Gensets (22.1 MW) scheduled to arrive in Douala on March 15 2015
  • Combined total 50.7MW.
  • Target date for commissioning of both plants (50MW) remains end March 2015
Instead you can read the full announcement here. The EMC view on VOG is unchanged, VOG's asset is good, the management needs overhauling including investor relations and market updates.


Antofagasta (ANTO) have protests at Los Pelambres by the locals (doesn't bode well for sentiment). The drought in Chile (the alleged caused of the protect) has been significant, impacting not only on the locals, but also mining with no exceptions to sector including Copper and Iodine (Inc, Sociedad Quimica y Minera (SQM)). 


Los Pelambres production is not insignificant (2013 figures), but has suffered grade declines (industry issues for larger operators). One assumes ANTO have got a plan B if air travel is impacted. With the corruption in Chile being far from exclusive to petroleum, expect more discontent. See: SQM announcement. 

With GLEN's confidence in copper already being shown to be wrong, on Friday (afternoon there's a surprise) with POET's day in full swing GLEN's William Macaulay flogged 53,756,571 shares at a price per share of GBP2.8174. Confidence? With that in mind short-term traders have elected to punish the stock. 

Sylvania Platinum (SLP), the once upon a dog of mine until I woke up to the realities of shorting has been awarded the PGM Mining Rights and Iron ore rights. Save for the former, SLP transfer all of the iron, vanadium and heavy minerals to Ironveld (IRON). Long short-term and long-term on both, there's a finance update from IRON and a dividend announcement anticipated on SLP. One won't get too excited. The dividend announcement by the PGM mining rights already risk the dividend. Will save the other commentary on this for another day.

The common-sense question of the day goes to Alecto (ALO) and Desert Gold Ventures Inc. (TSX.V: DAU) whom have entered a Co-operation Agreement between their two assets. Why the two entities don't just merge and remove an entire level of corporate admin and expenses it beyond me! Small beer, but a combined entity has a better chance...

This morning various analysts picking up on the thermal coal issues, it would be wise to start considering a floor to pricing, at least in the short-term. Over to South Africa to fire the first shot. 

Both WTI and Brent Crude slipped just below a vital level of support, $49.56/bbl. and $59.39/bbl. respectively, expect some balancing around these levels and ignore the support levels for now. There's a healthy level of demand around these price with modest fluctuations not likely to see too much pain (read as downside) for the producers. 

There's some more reliable gossip around about Ithaca Energy (IAE) and Gulf Keystone (GKP), the former getting some coverage of being a good recovery play with lesser risks and the latter having some serious interest. GKP's price I'm led to believe is the sticking point with the management 'unable to recommend or back the alleged offer price.' Sounds like a very low ball offer, one hopes GKP haven't been got by the short and curlies! 

With various items afoot at the moment, it’s a short one! 

Atb Fraser
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8 comments:

  1. Anonymous9 March 2015 at 09:08

    Fraser- Hi- mixed attention this morning as England attempt to sail past Bangladesh's 275 in Adelaide on the radio, champagne and razor blades lined up for either outcome. And if they win its the mighty Afghanistan for the England minnows next...

    Re VOG- they seem to have tidied up delivery of their part of the power stations contracts, so perhaps the fiasco of the slipshod river pipeline crossing from 2014 is behind them now. The share consolidation didn't help much either but fair value is now 78p here so a bit to play for, with management being the main reason for the discount. Some news re bottled gas later in the year??

    Re GKP- why pay a quid when 60p is a possibility here? And if they don't tie up a deal in the next few months, having formally put themselves on display, then the debt payments start to cause issues and a AFR type spiral is possible, esp if the export market doesn't get normalized payments in that time. So, to quote a Dragon--- Im out (and staying out)-- there are some many cheap oilers with cash in hand my exposure will stay away from speculative positions at least for now.

    Cheers. The Leggie

    ReplyDelete
    Replies
    1. Erractic Market Coverage by Fraser9 March 2015 at 10:29

      Agree on the possibility Leggie, better for GKP to sell themselves to other parties than hand the keys to GKP bond holders.

      Delete
    2. Anonymous9 March 2015 at 11:26

      Leggie,
      What cheap oilers with cash in hand are you thinking of, if you don't mind my asking?
      Tony

      Delete
    3. Anonymous9 March 2015 at 15:29

      Tony- To name 2 - Cairn (CNE) are full of cash ($870m at 12/14) which is v high compared with their mkt cap of £1.1bn. They have an India tax case hanging over them but some great assets so look cheap from here.
      Bowleven (BLVN) are on the verge of getting $170m in cash as part of their $250m deal to sell 2/3rds of their Etinde stake. This leaves a 20% stake (poss value $125m based on the current deal, the cash plus some nice assets and the mkt cap is £103m, which reflects the general malaise in the junior oil mkt at present.

      Hope that helps. Im long both of the above, but have them v high on my Add list.

      Cheers. The Leggie

      Delete
    4. Anonymous9 March 2015 at 16:58

      Thanks Leggie.
      Yes, I've been looking at BLVN, but is there any chance that the Lukoil/NA deal could fall through at this stage? I realise I don't have long to take the plunge, but if the monies fail to materialise, BLVN is royally screwed and that's playing on my mind.
      Tony

      Delete
  2. Anonymous9 March 2015 at 09:15

    Fraser,
    Where on earth does this "reliable" gossip re GKP come from? Are you sure you're not merely looking at the SP and inferring that any potential offer would be derisory?
    All I can deduce from the past week is that the market clearly knows nothing and is being ultra cautious.
    Regards,
    Tony

    ReplyDelete
    Replies
    1. Erractic Market Coverage by Fraser9 March 2015 at 10:32

      Morning Tony, more to the point, the SP is inferring that the offer would be derisory based on common-sense. The Gossip came via a morning catch up, as always you/I'd be a fool to trade on rumour.

      Your statement about the past week, the market knows nothing couldn't be further from the facts, ultra cautious yes. Given Afren was punished time and time again. GKP need those sales revenues and currently it isn't getting them. This of course will change, but when?

      Atb Fraser

      Delete
    2. Anonymous9 March 2015 at 11:27

      Thanks for your reply Fraser

      Delete

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