WTI $40.65 n/c market closed, Brent $42.80 +83c, Diff -$2.15 -34c, NG $1.68 -5c
By Malcolm Graham-Wood
Little to add after Friday’s holiday but crude oil has kicked on this morning after equity markets rise again partly on the back of better economic news such as the manufacturing growth in China. Also Aramco has raised the selling prices to clients in Asia by $1 pb for August shipments, keeping sales in check.
Viaro Energy Limited has made a recommended cash offer of 1,850p per share for each share of RockRose Energy, a premium of 64% to Friday’s close and 91% to the 3 month VWAP. Viaro Energy is a UK registered company, headquartered in London and is a wholly owned subsidiary of Viaro, a physical energy trading group with global commodities trading activities and interests in energy sector support services and upstream asset development.
The bid also represents a multiple of some 42x on the original investment made only five years ago and somewhat justifies the board’s decision to accept the bid. It also means that the strategy of buying producing acreage in the UKCS and aggressively building the business has been proved correct.
Viaro state in their document that their target of 100,000 b/d of production and they have taken all of the executive management, with the exception of Chairman Andrew Austin in order to progress the development of the business.
Andrew Austin, Executive Chairman of RockRose, said:
“After careful reflection, the Board of RockRose has concluded that accepting this offer is firmly in the best interests of our shareholders. It has been an exciting journey since RockRose was founded five years ago. However, for the benefit of all stakeholders, now is the time to move on and allow RockRose to continue to flourish with new backers.”
Dr. Roger Tucker, Non-executive Chairman of Viaro Energy, said:
“I’m also extremely pleased that our cash offer for RockRose has been recommended by the Board. In my long career in the industry I have had the pleasure of working with numerous companies and RockRose’s people, assets and working practice are among the best I’ve seen. I’m delighted that RockRose’s senior management will be joining us for the journey ahead. Personally, I’m also pleased to be returning to the UKCS, an area I know very well, to work alongside this first-class team to deliver our growth plans in the region.”
I think that it is an understandable decision for Andrew Austin and his board to accept this bid, it is undoubtedly very fair and a decent hedge against another fall in the oil price which, however positive it looks now, may be not so clever at the end of the year. Finally I would suggest that this is not the last the market will see of Mr Austin…
In an Eastern Morocco update this morning Sound announce the successful renegotiation of the terms of the Anoual Exploration Permit which aligns the work programme commitments on the permits. This is consistent with Sound’s ‘continued pursuit’ to unlock the exploration potential of the Eastern Morocco basin, with the expected phasing of the Company’s recently announced Tendrara Production Concession Phase 1 development plan.
Mohammed Seghiri, Sound Energy’s COO, commented:
“Despite the challenges caused by the COVID-19 restrictions, I am delighted to have re-aligned our committed exploration work programme at the Anoual Exploration Permit in Eastern Morocco so it dovetails more efficiently with the proposed phasing of our Phase 1 Development Plan at the Tendrara Production Concession in a manner that underscores both our confidence in the potential of the basin as a future significant gas producing province and our ability to deploy capital judiciously across the portfolio.“
This another smart move by Sound who are fully aware of their commitments and also the exciting potential of the permitted acreage in the portfolio, it is good to see continued and constructive and successful dialogue with ONHYM.
In Austria the Grand Prix, which had in early stages looked like it may turn into a procession was actually highly exciting. Although Bottas won and Leclerc was second it was the buzz generated by both Norris who took third and Albon who had he been a bit more circumspect might have taken Hamilton who got relegated to 4th after their collision.
In the Prem Liverpool beat Villa, the Saints beat the Noisy Neighbours, the Foxes saw off the Eagles 3-0, the Cherries lost 5-2 at the Theatre of Dreams, the Gooners went to Wolves and won, not easy and Chelski beat the Hornets 3-0 and with the Canaries losing to the Seagulls at home we seem to have our first candidate for the drop.
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