WTI (Sep) $84.46 +$5.20, Brent (Sep) $90.74 +$6.65, Diff -$6.28 +$1.45.
USNG (Sep)* $2.72 -2c, UKNG (Aug) 144.0p +2.32p, TTF (Sep) €59.685 +€1.15.
*Denotes expiry of August contract.
Oil price
Iran poked the bear and presumably isn’t surprised that the US has restarted attacking their installations as President Trump saying ‘we will give them a beating’. Iran attacked a number of US bases and proxies also attacked with drones a US tanker in the Mediterranean port of Damietta .
Qatar managed to get an LNG ship through the Strait of Hormuz and a few other tankers got through but not many and I’d wager not many are getting through today. Russia has extended the diesel export ban and product prices, as I have been mentioning a great deal lately, are still running ahead of crude.
To add insult to injury all those commentators who crowed so loudly last week when the EIA inventories showed a build were eating their words last night. The EIA reported a draw of some 7.167m barrels against the spotty youths best guess of -1.3m.
Reabold Resources/ Union Jack Oil
Reabold has announced that, further to the publication of the offer document in connection with the recommended all share offer by Reabold for the entire issued and to be issued share capital of Union Jack Oil plc, it has published a video addressed specifically to shareholders of Union Jack.
The video is available to view on Reabold’s website and can be accessed here: [https://reabold.com/offer-for-union-jack].
I have watched this video and its message is compelling. The reasons for the offer are plain to see, the metrics work for both sets of shareholders, I would suggest that there are a number of key positives but clearly led by the significant cost cutting and synergies that will be achieved by putting both businesses together.
This is led by eliminating duplicated costs often associated with putting two Aim listed stocks together, these obviously include directors salaries, duplicated listing costs and associated advisors as well as offices and on-site facilities.
Looking at the combination there is little doubt about the strategic fit and particularly at the shared asset at West Newton but also combining the UK onshore portfolio that would put together not only assets which would deliver much needed scale but also cash flow and the growth at West Newton.
There will clearly be portfolio amalgamation but I would be interested to see how the combination of the US assets might work, putting together the currently non-core assets at Reabold with the really interesting programme being done by UJO in conjunction with Reach in Oklahoma and potentially beyond which gives interesting diversification from UK Government policy.
Financially, in addition to the above, the video gives an indication that there is a potential for tax optimisation and ability to use tax losses across the portfolio. UJO has already outlined that it isn’t funded for upcoming work programmes which puts assets at risk but Reabold is well financed with a recent raise, at no discount and support from substantial investors gives a strong balance sheet.
Finally, as noted in the video, UJO shareholders have been told that if the threshold is reached then the company will declare the bid accepted and will trigger removal of the quote for UJO leaving them as minority holders in an unlisted/untraded entity.
And finally…
Eddie Howe has been sacked and leaves as manager of the Magpies ‘with immediate effect’. Typically in modern footy, good managers are summarily dismissed as and when investors with no knowledge of the game decide that they have had enough and of course they have that prerogative. But you might think that the club are about to appoint one of the top notch managers around following the World Cup. But no, the favourite to succeed Howe is one Matthias Jaissle (me neither) who currently is coach at Saudi side Al-Ahli (me neither) so is bound to be a big hit at St James’ Park on embarrassingly obscene wages…Nothing like pleasing the locals!
And also in a new, grossly overpaid job in sport is Stephen Fleming who has been appointed as head coach of the England test team. Along with Joe Root, reappointed for at least the third time to the job as captain it’s another new team at Lords, quite how Rob Key has kept his job throughout all this after the drunken tour in the winters and with the disciplinary disaster in the Kings Road is anyones guess.
Oh, and with nothing to do you might expect Fleming to be reporting to St Johns Wood first thing this morning but of course not…He’s been given a long holiday, indeed is going to miss the 3 tests against Pakistan which start next month and will start his also massively remunerated job ahead of the winter tour of South Africa in December, yes December…. You couldn’t make it up but of course with the ECB anything can happen and usually does.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. The writer may or may not hold investments in the companies under discussion.
