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Forte Oil’s Profit Rises to N7bn

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Forte Oil

Forte Oil Plc has recorded a profit before tax of N7.01bn in the 2015 full year audited result, representing an increase of 17 per cent over the N6.01bn made in the previous year.

The firm stated that its revenue, however, declined to N124.62bn in the 2015 fiscal period compared to N170.13bn in the same period in 2014.

Profit after income tax also increased by 30 per cent to N5.79bn compared to N4.46bn in the same period in 2014, with earnings per share increasing by 86.8 per cent to N4.11 compared to N2.20 in the previous year.

The firm said in a statement, “The increase in PPE of 19 per cent is attributable to the N9.6bn paid so far for the major overhaul of Forte Oil’s 414MW Geregu power plant aimed at optimising and increasing its generation capacity from 414MW to 435MW, with an estimated completion date for H1, 2016.

“Forte Oil witnessed an increase in capacity utilisation at the Geregu power plant; however, margins reduced from 58 per cent to 42 per cent due to increase in gas costs caused by exchange rate fluctuations.”

According to the firm, Geregu Power Plc has also declared a dividend of N2.50bn to be paid to all shareholders upon ratification of at the company’s Annual General Meeting.

It added that the company’s growth in profit was attributable to the significant increase recorded in the sales of energy in the power generation segment as well as Premium Motor Spirit, Automotive Gas Oil, Aviation Turbine Kerosene and the production of chemicals, lubricants and greases.

The firm said the result was a feat in the history of the Nigerian Stock Exchange, adding that it had also set a precedent by filing approved results 30 days after the year end ahead of the regulatory deadline of 90 days.

“The board of directors has also proposed a cash dividend of N4.50bn, which will be paid to all shareholders upon the ratification of the proposal at its forthcoming Annual General Meeting,” it added.

The Group Executive Director, Finance and Risk Management, Forte Oil Plc, Mr. Julius Omodayo-Owotuga, was quoted as saying that the decline in revenue by 27 per cent was as a result of the reduction in the pump prices for most petroleum products, largely driven by the decline in crude oil prices.

He said, “In addition, the company also decided to manage its foreign exchange and subsidy exposure by reducing the importation of petroleum products for the year 2015.

“Other incomes increased by 190 per cent due to income from investment in securities held to maturity, freight income from the 100 trucks acquired the previous financial year, and sale of investment property. The increase in administrative expenses is a result of our decision to exit dollar-denominated loans and convert the same to naira at the prevailing exchange rates.”

Punch

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

Oil Prices News: Oil Gains Following Drops in US Crude Inventories

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markets energies crude oil

Oil Prices Gain Following Drops in US Crude Inventories and OPEC High Compliance Level

Global oil prices extended their 2 percent gains on Thursday after data showed U.S crude oil inventories declined last week.

The price of Brent crude oil, against which Nigerian oil is measured, gained 0.2 percent or 7 cents to $43.39 a barrel as at 12:10 pm Nigerian time. While the U.S. West Texas Intermediate (WTI) crude appreciated by 8 cent or 0.2 percent to $41.12 barrels.

Oil prices extended their three days gain after the American Petroleum Institute said the U.S crude inventories declined by 5.4 million barrels in the week ended October 9.

The report released after the market closed on Wednesday revealed that distillate stockpiles, which include diesel and heating oil, declined by 3.9 million barrels. Those stated drawdowns almost double analysts’ projections for the week.

Much of the fall is due to the effects of Hurricane Delta shuttering U.S. production in the Gulf of Mexico, and as such, will be a transitory effect,” said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.

“Therefore, I am not getting too excited that a turn of direction is upon markets, although both contracts are approaching important technical resistance regions.”

Also, the report that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, referred to as OPEC+ attained 102 percent compliance level with their oil production cuts agreements bolstered global oil outlook. Suggesting that demands for the commodity are likely not growing and could drag down prices in few weeks, especially when one factor in the reopening of Libya’s Sharara oil field, workers returning to operation in Norway and the Gulf of Mexico.

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Oil Prices Gain on Tuesday Despite Expected Surge in Global Oil Supplies

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Oil

Oil Prices Rise Despite Expected Surge in Global Oil Supplies

Oil prices gained on Tuesday despite Libya opening Sharara oil field for production, labour in Norway reaching an agreement with oil firms to return back to work and oil workers in the U.S returning to the Gulf of Mexico region after the Hurrican Delta.

Brent crude oil, against which Nigerian oil price is measured, gained 1.77 percent to $42.46 per barrel as at 11:15 am Nigerian time on Tuesday.

While the US West Texas Intermediate (WTI) crude oil gained 2 percent to close at $40.22 per barrel.

The improvement in prices was after oil prices plunged as much as 3 percent on Monday following a resolution reached by Libyan rebels and government to commence oil production at the nation’s largest oil field, Sharara Oil Field.

This coupled with labour agreement with oil firms in Norway was expected to boost global oil supplies and eventually weighed on prices and disrupt OPEC+ production cuts strategy.

However, prices surged after Nancy Pelosi said she would commence talks on $1.8 trillion stimulus package following President Trump’s return to the White House after he was rushed to hospital following a positive COVID-19 test.

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Joe Biden Win Could Boost Oil Prices, Says Goldman Sachs

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Oil price

Oil Prices to Surge Once Joe Biden Wins -Goldman Sachs

Goldman Sachs, one of the world’s largest investment banks, has said Joe Biden win could boost global oil prices despite weak global economic outlook and COVID-19 negative impacts on the world’s growth.

The investment bank, however, remains bullish on both oil and gas prices regardless of the election outcome in November.

The bank sees oil and gas demand rising enough in 2021 to supersede election results but explained that Biden win could bolster prices by making production more expensive and more regulated for producers in the U.S.

In a note written by the bank’s commodities team on Sunday, it said “We do not expect the upcoming U.S. elections to derail our bullish forecasts for oil and gas prices, with a Blue Wave likely to be in fact a positive catalyst.”

“Headwinds to U.S. oil and gas production would rise further under a Joe Biden administration, even if the candidate has struck a centrist tone.”

Goldman Sachs explained that if incumbent, Trump, is re-elected with pro-oil and gas policies in place that “its impact would likely remain modest at best,” Goldman’s analysts wrote, “given the more powerful shift in investor focus to incorporate ESG metrics and the associated corporate capex re-allocation away from fossil fuels.”

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