Monthly Archives: January 2015

Riverstone Energy.

The Riverstone Energy Investment Company [] is listed on the London Stock Exchange.
A £690m investment fund, that is focussed on energy and power-focused private investments. Founded in 2000. Riverstone conducts buyout and growth capital investments in the exploration and production, midstream, oilfield services, power and renewable sectors of the energy industry.


Its top ten holdings make up 59% of the investments

Canadian Non-Operated Resources
CanEra III
Castex Energy
Eagle Energy Exploration
Fieldwood Energy
Liberty Resources II
Origo Exploration
Riverstone Credit Opportunities
Rock Oil Holdings
Sierra Oil and Gas

The BP Energy Outlook

As global energy demand continues to be on an upward trajectory, that growth is relatively slow in depressed markets of Europe, future growth is being driven by emerging economies – led by China and India – according to the latest edition of the BP Energy Outlook 2035.


What BP reveals is that global energy consumption is expected to rise by 41% from 2012 to 2035 – compared to 52% over the last twenty years and 30% over the last ten. 95% of the growth in demand is expected to come from the emerging economies, while energy use in the advanced economies of North America, Europe and Asia as a group is expected to grow only very slowly – and begin to decline in the later years of the forecast period.

The major use of fossil fuels are now converging, with oil, natural gas and coal each expected to make up around 27% of the total mix by 2035 and the remaining share coming from nuclear, hydroelectricity and renewables. Amongst fossil fuels, gas is growing fastest, increasingly being used as a cleaner alternative to coal for power generation as well as in other sectors.

Malaysia Oil Production.

The name Petronas is the state owned Malaysian Oil giant, that we see as the major sponsor of the UK’s Lewis Hamilton


Petronas is a giant.


One just has to look at Malaysia’s oil production. Today the south east Asian nation produces 657,000 barrels of crude oil a day.

With crude oil at $48 a barrel which equates to £31.73 a barrel.

657,000 barrels of crude oil x £31.73 = £20,846,610

That is £20million a day from Malaysia’s crude reserves.

However, with the falling price of crude oil, countries like Malaysia whose economy is quite dependent on oil exports as a source of income, the falling price of the commodity, means its income stream is falling.

Money, get away
Get a good job with more pay and your O.K.
Money it’s a gas
Grab that cash with both hands and make a stash
New car, caviar, four star daydream,
Think I’ll buy me a football team
Money get back
I’m all right Jack keep your hands off my stack.
Money it’s a hit
Don’t give me that do goody good bullshit
I’m in the hi-fidelity first class traveling set
And I think I need a Lear jet
Money it’s a crime
Share it fairly but don’t take a slice of my pie
Money so they say
Is the root of all evil today
But if you ask for a rise it’s no surprise that they’re
giving none away

“HuHuh! I was in the right!”
“Yes, absolutely in the right!”
“I certainly was in the right!”
“You was definitely in the right. That geezer was cruising for a bruising!”
“Why does anyone do anything?”
“I don’t know, I was really drunk at the time!”
“I was just telling him, he couldn’t get into number 2. He was asking
why he wasn’t coming up on freely, after I was yelling and
screaming and telling him why he wasn’t coming up on freely.
It came as a heavy blow, but we sorted the matter out”


The Aberforth Smaller Companies Investment Trust.

The Aberforth Smaller Companies Investment Trust is a £1bn investment fund that specialises in the small companies domain.


It was launched, and floated on the London Stock Exchange, on 10 December 1990, managed by Aberforth parters,



1 JD Sports Fashion £40,013,000 3.5% of the fund (Retailing – sports goods & clothing)
2 QinetiQ Group £32,300,000 2.8% (R&D and consulting services)
3 Vesuvius 3£0,316,000 2.7% (Metal flow engineering)
4 FirstGroup £28,204,000 2.5% (Bus & rail operator)
5 RPC Group £28,073,000 2.5% of the fund (Plastic packaging)
6 St. Modwen Properties £27,942,000 2.5% of the fund (Property – investment & development)
7 e2v technologies £27,624,000 2.4% of the fund (Electronic components & subsystems)
8 Shanks Group £26,532,000 2.3% of the fund (Waste services)
9 Spirit Pub Company £24,972,000 2.2% of the fund (Managed pub operator)
10 Flybe Group £24,856,000 2.2% of the fund (Airline)

Top Ten Investments are worth £290,832,000 which equtes to 25.6% of the whole fund.

What is interesting is that the management team are major holders in the fund, so have a vest interest in the success of the fund, and also the fund yields 2.2% to investors.

The rebuke of high-frequency traders

The bond and stock market for a long time has allowed companies, investment funds and individuals to raise money on the world’s capital markets. This investment mechanism that has allowed the creation of jobs and prosperity.

Now the on-set of high frequency trading, buying and selling shares in micro seconds has been best described by Charlie Munger, vice chairman of Warren Buffett’s Berkshire Hathaway as “bunch of rats admitted to a granary”


These high frequency traders are effectively abusing the market, entering a market for self-gain, and actually delivering very little for the market. Yes perhaps liquidity is added, but it seems incredible to think owning a share in a company for a few seconds adds any intrinsic value or brings any benefit to the company whose shares are being traded.

A great quote from Jurassic Park, “just because you could, you never asked if you should“, and this is the question that has to be asked in the capital markets where these high frequency traders are legal and able to use technology to make money, but are actually damaging the real abilities of the market to raise funds and generate investment.

Ecofin Water & Power Opportunities plc

The Ecofin Water & Power Opportunities plc is an investment trust listed on the London Stock Exchange


An investment vehicle that is primarily invested in the equity and equity-related securities of utility and utility-related companies. It’s top 10 investments are:

Lonestar Resources USA Energy 7.8% of the fund
Williams Companies US Energy 4.0% of the fund
NextEra Energy US Power 3.9% of the fund
E.ON Germany Power 3.6% of the fund
General Electric US Infrastructure 3.5% of the fund
SSE UK Power 3.1% of the fund
Exelon US Power 2.5% of the fund
National Grid UK Power/Regulated 2.5% of the fund
NRG Energy US Power 2.4% of the fund
Union Pacific US Infrastructure 2.4% of the fund

The top 10 holdings make up 35% of the total investment fund.

The yield is over 4%.

UK HM Government December 2014 borrowings…

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties. Another deficit month, thus to bridge the gap, needs to borrow on the bond market.

In December 2014, the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement.

There were “only” 3 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office ( to raise cash for HM Treasury :-

11-Dec-2014  0¾% Index-linked Treasury Gilt 2034 £812.370 million
09-Dec-2014 3½% Treasury Gilt 2045 £1,924.985 million
02-Dec-2014 2% Treasury Gilt 2020 £3,750.000 million

When you add the cash raised:-

∑(£812.370 million + £1,924.985 million + £3,750.000 million) = £6,487.36 Million

£6,487.36 Million = £6.487 Billion

On another way of looking at it, is in the 31 days in December, HM Government borrowed:-

£209 million each day for the 31 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature 2020, 2034 and 2045. All long term borrowings, we are mortgaging our futures, but at least “we are in it together…..

Investment in 2015

With the dawn of the new year, one has to look at the bigger picture. Investment is a waiting game, and a brilliant quote from Warren Buffett of Berkshire Hathaway:-

Games are won by players who focus on the playing field –- not by those whose eyes are glued to the scoreboard

What Warren Buffett is effectively saying, is to focus on the long term, and not the short term fluctuations of the share price movements.