Q2: Chemicals, refining softens the H2 outlook

Adjusted operating income missed the consensus by 7% and was down by 60% yoy, driven by lower-than-expected results in the Chemicals business. Cash flow from operations was weak but positive after a €600m working capital release but was still down 50% yoy and 92% qoq. No details were forthcoming concerning the Borouge/Boreais merger with ADNOC. Oil prices above $80/bbl will be supportive, Q3 product spreads could result in higher refining but the chemicals outlook does not look that supportive.

Auctus on Friday - 28/07/2023

AUCTUS PUBLICATIONS ________________________________________ Arrow Exploration (AXL LN/CN)C; target price of £0.50 per share: CN-2 flows at up to 1 mbbl/d. Focusing on developping the Ubaque at Carrizales Norte - The Carrizales Norte-2 well (CN-2) encountered 60’ of net pay in the Ubaque formation. The well has been put on production in the Ubaque with initial flow rates of 1,012 barrels of fluid per day. The water cut stabilized at 3% and the oil gravity is 13.6 API. The CN-2 well is currently

AUCTUS ON FRIDAY - 14/07/2023

AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; target price of A$0.10 per share: Securing additional loan to prepare for drilling – ADX is issuing A$1.5 mm of loan notes with a term of 18 months. A$1.0 mm of the loan notes carry an interest rate of 8% per annum with 30 mm options with an exercise price of A$0.01 per share and 30 mm options with an exercise price of A$0.014 per share. The balance of the loan notes carry an interest rate of 12% per annum with 2

Borealis-Borouge merger strained by potential governance and a regulatory quagmire but catalysts still exist

If they materialise, the talks between OMV and ADNOC concerning the merger of Borealis and Borouge could create a $30bn chemicals giant and pave the way for further growth based on both market expansion and product diversification. OMV could own around c.38% of the new entity with a value of around €12.7bn. Furthermore, the merged entity will reinforce the integration and simplification of operations and could also allow for further growth in the petrochemicals sector with acquisitions and asset

Auctus on Friday - 16/06/2023

AUCTUS PUBLICATIONS ________________________________________ Criterium Energy (CEQ CN)C; target price of C$0.95 per share: Transformational acquisition in Indonesia – Criterium is delivering on its plans by acquiring Mont D’Or Petroleum with long life and high netback production of 1,050 bbl/d and 4.7 mmbbl 2P reserves across 2 PSCs in Indonesia (Tungkal in South Sumatra and West Salawati in Southwest Papua). With important spare capacity in existing infrastructure and very low drilling costs (U

Q1: Solid cash flow before melting margins

OMV posted above-consensus results with an adjusted EBIT of €2.1bn (-10% qoq), supported by the refining and core energy business while chemicals continued its lower performance due to weak margins and declining demand. The operating cash flow excl. working capital was strong at €2bn, facilitating further deleveraging. With gearing at 2%, OMV enjoys a healthy balance sheet that will enable a maintained competitive dividend and the company to capitalize on a potential acquisition.

Auctus on Friday - 28/04/2023

AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C: Target price of A$0.100 per share: 1Q23 update – 1Q23 production in Austria was 299 boe/d. The company held A$3.41 mm in cash at the end of March. Criterium Energy (CEQ CN)C: On track for near term acquisition – The FY22 financials were in line with our expectations. The company held C$3.7 mm in cash at YE22. Criterium has also filed the notice of intention to file a short form prospectus. This could be an indica

Auctus on Friday - 21/04/2023

AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C: Target price of A$0.100 per share: Competent person report confirms the materiality of the Welchau pospect – The Welchau prospect has been estimated to hold between 365 bcfe and 1,128 bcfe of prospective resources by Gaffney, Cline & Associates (GCA) with a mid-case at 645 bcfe including 10.1 mmbbl of condensate. While this is below the 807 bcfe mid-case estimated by ADX, the fact that the lower end of the GCA ran

Auctus on Friday - 14/04/2023

AUCTUS PUBLICATIONS ________________________________________ Arrow Exploration (AXL LN)C: Target price of £0.45 per share: Reaching 2,635 bbl/d without Capella. High cash position – The RCE-5 well flowed 680 bbl/d (340 bbl/d net to Arrow) of oil over the last 24 hours. The well is heavily choked (17/168) and is still unloading completion fluid (12% water cut). As witnessed at the other RCE wells, production is expected to increase as the well stabilizes. Initial production at RCE-5 is above expe

Auctus on Friday - 03/03/2023

AUCTUS PUBLICATIONS ________________________________________ Arrow Exploration (AXL LN/CN) C; Target price of A$0.50 per share: Good well results in Colombia – The RCE-3 well flowed naturally at rates equivalent to 2,000 bbl/d gross for four hours after unloading kill fluid. Over the last 24 hours, the well has produced at a rate of 968 bbl/d with 0% water cut. This is a very good result and compares with expectations of 600-800 bbl/d. The fact there is no water being produced at that the well i

Q4 profits drained by weak chemicals, gas trading

Softening market environment, inventory effects, and operational issues hamstrung the operating results in the chemicals business, dropping 73% in Q4 FY2022 on a quarterly basis. The record annual profits and operating cash flow, however, enabled OMV to announce a record high dividend in the company’s history to maintain investor confidence and benefit from the all-time-high results. After a turbulent year, FY2023 should stage another similar show across businesses.

Auctus on Friday - 03/02/2023

AUCTUS PUBLICATIONS ________________________________________ Arrow Exploration (AXL LN)C: Target price of £0.45 per share: On track for a very busy 2023 – Arrow is about to embark on a 10 well drilling programme that could add between 2,800 and 4,800 boe/d net production (before decline and in a success case) to the existing constrained production base of ~1,800 boe/d. Over January, production was ~1,800 boe/d with short term outages due to weather at Ombu and Pepper. This compares with produc

Auctus on Friday - 13/01/2023

AUCTUS PUBLICATIONS ________________________________________ Calima Energy (CE1 AU)C: Target price of A$0.60 per share: New wells deliver flow rates above expectations – The three new Sunburst wells (Gemini #10, #11 and #12) drilled in 4Q22 are now on production and on average are achieving IP30 rates 35% higher than forecast. The three wells are currently producing 420 boe/d gross (370 boe/d net). This compares with IP30 production of 120 boe/d gross for a type well. The Pisces #6 and #7 wells

Getting a strong shareholder with ADNOC

Abu Dhabi National Oil Company’s acquisition of Mubadala Investment’s 24.9% stake in OMV could bring valuable opportunities for OMV as the two companies have benefited from joint investments in chemicals as well as upstream oil and gas production and have common goals to expand valuable chemicals investments.

E&P to the rescue of an eventful Q3, special dividend to protect against downside

OMV delivered two positive surprises in the Q3: a good consensus beat and an attractive special dividend of €2.25 per share for the 2022 financial year to close the pay-out gap with its peers. We expect this generous dividend policy to protect the shares from downside pressure. However for the stock to remain attractive for next year, a margin improvement will be key.

LIBERUM: Trident Royalties: Mexican standoff

Chariot Limited (AIM: CHAR): Imminent partner in Morocco

• The US$2.7 mm cash position at the end of June is in line with our expectations. • Although inflation across the industry and rig availability had complicated and delayed the finalization of a farm-in agreement for Anchois in Morocco, negotiations on partnering are in the final stages. A partner could be announced very soon. • Progress has been made across the portfolio. Onshore Morocco, permitting is under way with drilling now expected to start in early 2024 with up to four wells. Prospects

LIBERUM: Trident Royalties: Benefitting from rising rate environment

LIBERUM: Trident Royalties*: Utah lithium royalty acquisition

Interim Results

Diversified reported strong interim results, with production that was marginally below our estimate more than outweighed by tight cost control to deliver EBITDA ahead of our forecast; we broadly retain our FY23 estimates.

Pantheon Resources - Positive Outlook for Pantheon Resources

We believe that the outlook for Pantheon Resources is significantly improving.

Touchstone Exploration+ (TXP, House Stock at 68p) - Cascadura production update

Central Asia Metals: H1 2023 Interim Results

Central Asia Metals (CAML LN) results in H1 2023 follow a record prior comparable period, with the swing between the two primarily due to commodity price performance. H1 2023 net revenue of US$93.6m was down 18% YoY, EBITDA of US$48.9m was down 35% YoY. COGS was up 9.8% YoY given global inflationary pressures. Other charges on the P&L were minimal particularly now CAML is debt free. Owing to the timing of tax charges and some unfavourable working capital movements which we expect to be resolved

Touchstone Exploration+ (TXP, House Stock at 62p) - Cash generation and scale in Trinidad to the fore

Bushveld Minerals: H1 results; progress at Vanchem post period end

Bushveld Minerals (“BMN”) has released its results for H1 2023 having already released production of 1,784t at a weighted average cash cost of US$26.6/kgV, with H1 sales of 2,096tV through destocking during the period. Revenue for the period was US$78.4m, with adj EBITDA of US$10.3m and attributable NPAT of -US$14m. The company finished H1 with US$3.7m of cash and US$90.7m of debt. We expect H2 production of 1,992tV, split between 925tV from Vanchem and 1,067tV from Vametco, bringing full year p

LIBERUM: Shanta Gold: Solid beat at interims

Interim results

Bushveld delivered as robust a financial performance as could reasonably be expected in H1 2023 given the operational challenges faced. We are encouraged by the reported progress made at both Vametco and Vanchem since, and vanadium price aside (current prices are soft, and pose a downside risk if they do not recover in-line with our assumptions) we think Bushveld is broadly on course to meet our full-year estimates. But given its stressed balance sheet, concluding the refinancing of its c.US$45m

Chariot - Anchois Partnering in Final Stages

The partnering process at Anchois is now close to a conclusion, with farm-out negotiations in their final stages. The FEED phase of the Anchois gas development was completed in March, with Chariot continuing to make progress across all the Anchois technical and commercial workstreams. Post period, Chariot added the synergistic, low-cost, low-risk Loukos Onshore licence. Loukos Onshore contains several near-term drilling opportunities, which, if successful could lead to fast-tracked gas productio

Value anomaly despite resilient trading

CMD - still plenty of growth potential