WTI $37.41 +12c, Brent $39.99 +20c, Diff -$2.58 +8c, NG $1.82 n/c

Oil price

Oil held steady yesterday when on some occasions it would have panicked at the missing of an Opec+ gathering. Talk was that the big cheeses were going round to find the miscreants on the cheating front in order to have a pat meeting at which agreement would be reached and after they had seen Baghdad all was finished. So it seems that there are two virtual meetings tomorrow, Opec at 2pm and Opec+ at 4pm both CET. Oil is up around 50-80 cents as I write.

Premier Oil

In what looks like a holding statement this morning Premier has announced that it has reduced the cost of the BP acquisition to $210m and more importantly has had their abandonment costs reduced to $240m from $600m (pre-tax). Also decisions are ongoing with a subset of creditors to waive covenants and provide continued access to revolver facilities which will then be put to the full group.

However the big BUT is that they have had to settle with ARCM on a portion of their huge short of the company and have done this by buying them off to the tune of 82.2m shares issued at c.26.69p per share. Whilst this money will go towards the cost of buying the BP assets it must have been done through gritted teeth, even Dick Turpin had the decency to wear a mask….I have always had enormous respect for Messrs Durrant and Rose, this has increased out of all proportion after what they have had to go through on behalf of their shareholders recently….

IGas Energy

AGM statement this morning from IGas who have managed successfully to shut-in higher cost production and run a tight ship so far this year. Despite having made significant cost savings already they are ‘undertaking an in-depth review of G&A costs’ to trim some more and this is a credit to the company.

Meanwhile cash at the end of 31 May was £2.2m and net debt was £10.8m with good oil price and currency hedges in place the balance sheet remains protected. Whilst this cash figure is lower than than expected due to the sudden nature of the oil price fall the improved RBL gives it more than enough headroom to operate efficiently and I am expecting the better 2H to protect the downside.

Getech

2019 results today from Getech which we can take as read, it’s the here and now that we should be looking at. They announce forward sales up a healthy 46% to £2.4m (1.7m) and the order book up 48% to £3.1m which interestingly unwinds mainly in 2020.

The cost base is down 16% on 2018 and since then costs down 26% and the company say that they retain ‘further flexibility’ on this matter. No doubt that is keeping the company competitive but the here and now is going to be pretty tight or as the company themselves put it, ‘challenging.’ The company logged in a useful Q1 2020 and revenue, new sales and profitability were all ahead of Q1 2019, and year-to-date there have been no negative order-book revisions which is a good start.

As for the quarter to date, ‘as might be expected, April and May have been quieter in terms of new sales closed but we have remained busy across a wide range of sales conversations’ which can only be expected. I am confident that the company will deliver the goods but it is important that the order book is topped up otherwise the 2021 outlook might be a bit bare…