In today’s briefing:
- SK Innovation Announces a Merger With SK IET (Before New Regulation Kicks In)
- Copper: LME Cash-3M Spread Eases, COPX Sees Outflows and HCL’s 6% OFS Begins
- Orphaned Royalty Shell Trading at 50% Discount Amid Strategic Review and Messy Accounting Challenges
- Southern Energy Corp. (SOUC LN/SOU CN): 2Q26 in line. Williamsburg well result still expected in September
- Morning Market Notes: Oil Prices Are Telling One Story, Our Energy Equities May Be Telling Another
- Oil futures: Crude slides lower, muted reaction to new Iran sanctions
- Occidental Petroleum’s $3 Billion Cash Flow Quarter — Is Deleveraging Finally Paying Off?
- RIO: MEIA Received at Condestable; FID Anticipated in H2
- Serica Energy Plc (AIM: SQZ): Gearing-Up for a Busy 2027-2028 Programme
- What’s News in Amsterdam – 25 August (Shell | Unilever/MICC | PostNL/InPost | TomTom | Triodos Bank)
SK Innovation Announces a Merger With SK IET (Before New Regulation Kicks In)
- On 25 August, SK Innovation (096770 KS) announced a merger with SK IE Technology (361610 KS) (SK IET).
- I believe this will have a negative impact on SK Innovation and a neutral impact on SK IET.
- The biggest concern is the fact that SK IET has been generating continued net losses in the past several years and this could negatively impact SK Innovations’ financial structure.
Copper: LME Cash-3M Spread Eases, COPX Sees Outflows and HCL’s 6% OFS Begins
- LME cash-to-3M copper spread has eased sharply, but tight nearby supply and concentrated positioning keep the market vulnerable to renewed squeezes.
- Copper options show a firmer upside tilt as CVOL and skew rise, while call-heavy positioning contrasts with cautious managed-money positioning.
- The Government of India’s HCL OFS offers up to 6% stake at INR 514, with non-retail bidding opening Tuesday (25/Aug) and retail bidding Wednesday (26/Aug).
Orphaned Royalty Shell Trading at 50% Discount Amid Strategic Review and Messy Accounting Challenges
- The company trades at a 50% discount to its royalty-based asset value, with royalty receivables covering market cap.
- The strategic review aims to unlock royalty asset value, potentially increasing share price, with minimal employees remaining.
- A large fund with a substantial stake is aligned to realize value, influencing the strategic review process.
Southern Energy Corp. (SOUC LN/SOU CN): 2Q26 in line. Williamsburg well result still expected in September
- • 2Q26 production averaged 1,743 boe/d, broadly in line with expectations.
- • The transportation dispute that has shut in ~400 boe/d from the Mechanicsburg and Greens Creek fields continues.
- We continue to assume a resolution by end‑3Q26, with production resuming in 4Q26.
Morning Market Notes: Oil Prices Are Telling One Story, Our Energy Equities May Be Telling Another
- The oil market continued its selloff under the belief that a return to the negotiating table is likely, but again, we will believe it when we see it.
- • Our energy equities may be telling a bit different story, however, generally holding up better than the commodity thus far.
- While the prompt NYMEX crude oil contract remains in our “no-man’s land,” we are buyers in December if October falls below $80.00 per barrel toward our $75.00 per barrel trough.
Oil futures: Crude slides lower, muted reaction to new Iran sanctions
- Crude oil futures retreated for a second session on Tuesday amid a relatively calm reaction to the latest round of US sanctions on Iran, although regional tensions remain high.
- Oct26 ICE Brent futures were 3.9% lower at $88.53/b (2030 BST), while Oct26 NYMEX WTI was at $82.24/b , down 3.3% versus Monday’s settle.
- The US Treasury Department has broadened the list of entities and tankers sanctioned by Washington as part of Operation Economic Outcast, which plans to isolate Tehran from the global financial system.
Occidental Petroleum’s $3 Billion Cash Flow Quarter — Is Deleveraging Finally Paying Off?
- Occidental Petroleum Corporation’s second quarter 2026 results demonstrated operational and financial progress, underscoring the company’s pursuit of sustainable cash flow growth driven by capital discipline, cost efficiency, and resource optimization.
- Production averaged 1.43 million barrels of oil equivalent (BOE) per day, surpassing guidance, predominantly due to strong performance in U.S. onshore assets such as the Permian Basin and the Gulf of America.
- However, international volumes were somewhat hindered by geopolitical disruptions in the Middle East.
RIO: MEIA Received at Condestable; FID Anticipated in H2
- RIO received approval of its Modified Environmental Impact Study (MEIA) at Condestable on August 21st, concluding a 14-month process.
- The approval permits an increase in throughput to 10Ktpd from the current 8.4Ktpd and extends the environmentally approved mine life by a further decade.
- It also authorizes a dry-stack tailings facility with initial permitted capacity of ~43Mt, designed for staged expansions to 170Mt.
Serica Energy Plc (AIM: SQZ): Gearing-Up for a Busy 2027-2028 Programme
- We forecast production rising from 44.7 mboe/d in 1H26 to more than 60 mboe/d in 4Q26, driven by completion of the SNS acquisition.
- Crucially, this adds over 10 mboe/d of high‑value UK natural gas at a time of seasonally stronger pricing.
- We expect a very active 2027–2028 drilling programme; we estimate capex of ~US$420 million in 2027 and ~US$500 mm in 2028.
What’s News in Amsterdam – 25 August (Shell | Unilever/MICC | PostNL/InPost | TomTom | Triodos Bank)
- In this edition: • Shell | attracts healthy appetite for its US Chemicals assets • Unilever/MICC | Ben & Jerry’s dispute remains an overhang • PostNL/InPost | MyPup targets 1,000 indoor APMs by YE27 • TomTom | Traffic selected by Cofiroute • Triodos Bank | CEO Belgium leaves to join PMC’s ExCo
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