Leigh Creek Energy (ASX: LCK) - Oil & Gas - South Australia

Full Research Report can be accessed on www.independentresearch.com.au INITIAL 2P GAS RESERVES OF 1,153 PJ BOOKED Recent years have seen Eastern Australian natural gas prices more than triple to around A$10/GJ, as well as expecteions that posing a major threat to industries, particularly chemical manufacturers, that rely on natural gas as a feedstock. This provides an ideal opportunity for Leigh Creek Energy Limited (“Leigh Creek” or “the Company”), which is concentrating activities on t

Leigh Creek Energy - Termination of coverage

Edison Investment Research is terminating coverage on Leigh Creek Energy (LCK). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.

Leigh Creek Energy - First gas at LCEP pre-commercial demonstration

Leigh Creek Energy (LCK) has announced first syngas at the Leigh Creek Energy Project (LCEP) pre-commercial demonstration (PCD). Successful gas flows provide initial validation of LCK’s in-situ coal gasification (ISG) process and the ability to operate in a safe manner while abiding by local environmental legislation. We expect to further de-risk our A$0.34/share valuation (down from A$0.38 after incorporating recent equity placings) on delivery of sustained flow rates over the 60- to 90-day ope

Leigh Creek Energy - Environmental approvals de-risk LCEP

Leigh Creek Energy (LCK) has received statement of environmental objectives (SEO) approval for the pre-commercial demonstration (PCD) phase of the Leigh Creek Energy Project (LCEP) and important de-risking milestone ahead of commencing process well drilling, plant construction and operation. LCK will now submit activity notifications (ANs) to advise the regulator of specific activities to be carried out under the SEO. Accordingly, we de-risk our valuation for LCEP from a 20% commercial chance of

Leigh Creek Energy - Increased visibility on pre-commercial demo

Leigh Creek Energy’s pre-commercial demonstration (PCD) continues to show progress, with funding now in place from China New Energy (CNE) and major construction contracts awarded and fabrication underway. The third and final tranche of funding of A$12.5m is due to settle after a shareholder vote later this quarter while regulatory approvals remain on the critical path in order for LCK to meet a late 2017 first gas target. Our RENAV remains at $0.26/share post equity dilution. We continue to risk

Leigh Creek Energy - Fully capitalised for pre-commercial demo

On 31 March 2017, Leigh Creek Energy (LCK) announced that it had raised A$21.85m of new equity; net proceeds are to be used to fund the company’s pre-commercial ISG demonstration project. A new cornerstone investor has also been added to LCK’s shareholder register, China New Energy, a Hong Kong-based company with a mix of assets in China including steel mills, gas fired power stations and coal mines. Our RENAV falls from $0.31/share to $0.26/share to reflect the equity dilution but importantly,

South Australian energy prospect

Leigh Creek Energy (LCK) offers investors an option over the in-situ gasification (ISG) of an underground coal resource in the state of South Australia (SA). Recent power blackouts in SA have highlighted the need for more baseload power generation capacity, while high electricity prices incentivise the monetisation of 2,964PJ of 2C ISG gas resource at the Leigh Creek Energy Project (LCEP). The development of LCEP is not without risk and uncertainty at this stage; however, if LCK is able to attra

Oil & Gas - Cavendish sector note

88 Energy, Falcon Oil & Gas, Trinity Exploration & Production, Plexus Holdings, Baron Oil, Harbour Energy, EnQuest, Capricorn Energy, Arrow Exploration, Southern Energy, Serinus Energy, SDX Energy, Panoro Energy, Eco (Atlantic) Oil & Gas, OKEA ASA, Equinor Source: FactSet, weekly change 27/11/23-1/12/23 Oil extended declines, closing out a sixth straight weekly drop, as the OPEC+ output cuts announced Thursday failed to dispel the market’s gloom over swelling global supplies. West Texas Intermed

Pan African Resources - Valuation up 22.2% with new gold price forecasts

On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit

Morning Note – 4 December 2023

Hartshead Resources - Fully Funded Solution

Hartshead has secured a funding solution with partner Rockrose Energy to fund 100% of the Phase I development costs. Under the agreement, Hartshead has the option to exchange an additional 20% licence interest for an uncapped free carry, thereby covering the total cost of the Phase I development project (financing backstop). Importantly, Hartshead maintains at its election the option not to proceed with the RockRose financing solution, and introduce other financing solutions (eg project debt, pr

New Debt Facility – Lowering TRR Cost of Capital

We have been roadshowing Trident Royalties all week during which time the company released an announcement that they have entered into a commitment letter with BMO and CIBC for a new $40m revolving credit facility (RCF), with the potential to increase the facility to $60m via an accordion feature. The proceeds from the $40m are going to be used to repay the existing secured debt facility of $40m with Macquire in Q1 next year.

Southern Energy - 3Q Results and Comprehensive Update Note

Southern Energy delivered solid 3Q results with the focus of attention now turned towards the completion of 4 drilled uncompleted wells (“DUCs”). We see our investment thesis for Southern Energy – premised on the scale, location, quality, deliverability, low-cost nature of the company's Gwinville gas field in Mississippi, USA – very much strengthening based on our structural commodity price outlook and our growing confidence in the highly prolific Gwinville gas field, sharpening our interest in

Oil & Gas - Cavendish sector note

Jersey Oil & Gas, Serica Energy, Trinity Exploration & Production, Longboat Energy, Ithaca Energy, Neptune Energy, Pantheon Resources, Nostrum Oil & Gas, Kufpec, ORLEN.

SP Angel Morning View: Gold powers through $2,100/oz on outlook for Fed rate cuts

Diversified Energy Company - Delivering Consistent and Reliable Results

DEC’s Q3/23 trading update was in line with expectations as the company continued to deliver despite further commodity price headwinds. The Q3/23 Adjusted EBITDA margin of 52% (H1/23: 52%) reflects the quality of DEC’s asset base and its ability to efficiently manage every aspect of its operations. Average net daily production in Q3/23 was 134Mboepd (H1/23: 142Mboepd), with exit rate production of 134.4Mboepd. DEC has maintained its dividend at US$0.04375 per share. Since its IPO in 2017, DEC ha

Thor Energy - High-Grade Uranium Intercepts at Groundhog Prospect

Thor today announces the final downhole gamma results for the reverse circulation drill programme undertaken at the Wedding Bell and Radium Mountain projects in the USA. Downhole gamma readings are a commonly used proxy for physical uranium assays.

Jersey Oil & Gas - Delivering zero-capex barrels

Last week, JOG successfully secured its second GBA farmout, locking in a path to delivering zero-capex barrels. The surprisingly muted share price response to the farm-out leaves JOG trading at an unjustifiably large discount to our valuation. With a material fully funded development project under its belt and a clean balance sheet, JOG presents a very low-cost way to access high quality development barrels for investors and potential acquirers alike. If the threat of M&A does not narrow JOG’s v

Sound Energy* (SOU LN) - Debt project funding offer received

Sound Energy* (SOU LN) - Flash note - Debt project funding offer received

DEC Q3 Trading Update & US Listing

DEC reported strong Q3 results with production in line while 9m EBITDA of $423m is equal to 80% of DCe FY23 $528m; it has also announced a US listing.

Strong second half trading

Oil & Gas - Cavendish sector note

Oil surged the most in two weeks after Israel’s military said it was “expanding ground activity” in Gaza this evening, reviving concerns about the conflict spreading more broadly.   The announcement from the Israeli Defence Forces pushed West Texas Intermediate to settle above $85 a barrel after a volatile session that saw prices whipsawed by developments in the Middle East conflict. The drumbeat of geopolitical headlines that buffeted oil prices on Friday continued a trend that has driven oil