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New City Energy weathers oil price falls well

New City Energy reports that, over the six months ended 31 March 2016, its net asset value in total return
terms was slightly down at -1.0% (they say, as the portfolio was defensively positioned). The ordinary share price (total return) was down by 0.1%, ending the period at a discount of 28.1%.

The chairman says, given the price of WTI (West Texas Intermediate) fell a further 18.7% from US$45.48 per barrel at the end of September 2015 to US$36.94 at the end of March 2016, the investment managers have done a good job in ensuring the fund has weathered the storms affecting the energy sector.

The managers’ report has very little information on the drivers of performance. They do say though that the fund holds an Antares convertible bond which went into administration in April. The investment is a holder of acreage in the Permian Basin in Texas. While they are of the view that the Company will receive the full nominal value back for the bonds, as we believe the Company’s core assets exceed the bond, they have reduced the investment carrying value to 73% of the nominal value to reflect the timing uncertainty of this process.

NCE : New City Energy weathers oil price falls well

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