Canyon is upgrading eleven 2,500 hp pumps (27,500 hp) or 11% of its existing pressure pumping capacity to become 3,000 hp pumps. This new pump design is expected to lower Canyon’s cost structure due to greater durability and lower labour requirements. We believe a significant portion of Canyon’s fleet is capable of undergoing these upgrades. This would improve Canyon’s gross margins, but quantitatively addressing this is challenging at this juncture. We have only made modest changes to our est
Companies: Canyon Services Group
WCSB pressure pumping supply and demand is poised to benefit from an increase in stages per well and proppant per well. We believe this could cause supply and demand to tighten more quickly than anticipated in an activity recovery. Higher service intensity has been particularly evident in the Montney and Duvernay, where stages per well have generated a 2012-1Q16 CAGR of 23% and 44%, respectively, and a proppant per well CAGR of 39% and 62%. Our investment bias is towards Trican given it is the l
Companies: CFW FRC TCW
Canyon reported 2Q16 EBITDAS of -$14 mm, marginally below our forecasted loss of -$12 mm. The quarter was negatively impacted by a bad debt expense of $4 mm which was tied to a company that has now filed for CCAA. Management suggested that 6,500 wells completed in Canada would utilize all of the 2.0 mm hp available in Western Canada. We would agree with the assessment based on our sensitivity modelling of HP demand. There are a number of bottlenecks that may limit pressure pumping capacity addit
Canyon reported 1Q16 revenue of $71 mm, below our estimate of $78 mm. Adjusted EBITDAS was a loss of $2.0 mm, roughly in line with our loss of $3 mm
Impact: We expect the stock to trade in line with the market as results were largely in line.
We are updating our oilfield industry forecasts post the release of FirstEnergy’s new commodity price forecast for crude oil and natural gas on March 24, 2016. We have updated our 2016e Canadian well count/drilling days forecast to 3,209/37,335 from 3,800/43,325. In 2017e, we have left our forecast unchanged at 6,200 wells/70,200 days. In the U.S., our 2016e rig count forecast is now 482 (prior: 610) and 2017e is 675 (prior: 775). Data for 1Q16e came in weaker than our prior forecast anticipated
Companies: CWC ESI PD SVY TDG WRG CET PSI PHX BDI MTL SES TOT CFW FRC TCW
Canyon has closed its bought deal financing which involved the issuance of 15.8 mm shares at an offer price of $4.00/share for gross proceeds of $63.3 mm. We expect the proceeds will be used to reduce indebtedness. Previously, we had estimated Canyon’s 2016e and 2017e net debt positions at $93 mm and $92 mm, respectively, which has now been lowered to $33 mm and $33 mm. We still expect the Company will violate its covenants in 4Q16e. We have lowered our 2016 estimates to reflect industry activi
Canyon reported 4Q15 EBITDAS of $8 mm, ahead of our es mate of $6 mm due to higher pressure pumping revenue. The Company has amended its credit facilities and we believe it has ample room to do so again if required. This is an event we expect to occur. Canyon has eliminated its dividend, which results in a reduction of annual cash outflows by $8 mm. We have lowered our 2016e EBITDAS to a loss of $4 mm, from positive a $9 mm. In 2017e, we are now forecas ng EBITDAS of $28 mm (prior: $50 mm).
In conjunction with the new oil price forecast released by FirstEnergy on February 8, 2016, we have updated our 2016e Canadian well count/drilling days forecast to 3,800/43,325 from 4,950/54,853. In 2017e, we are now forecasting wells/drilling days of 6,200/70,200 from 7,900/86,600. In the U.S., our 2016e rig count forecast is now 610 (prior: 763) and 2017e is 775 (prior: 1,063).
We have updated our 2016e WCSB drilling days forecast to ~54,900 days, which is 18% below our prior forecast and a 16% decline y/y. We are also rolling out our 2017e drilling days forecast, which is 86,600 days, or a 58% improvement from 2016e. In the context of the last 25 years, our 2017e forecast ranks 19th for active drilling days. Our 2016e U.S. rig count forecast has been reduced to 763 rigs from 888 rigs. In 2017e, we are forecasting a U.S. rig count of 1,063 rigs.
Advantage Oil & Gas Ltd. (AAV) Reports Third Quarter Results Slightly Behind Expectations Due to TCPL Restrictions, Beats Cost Bogeys by 9%, Offers Strong Middle Montney IPs | Bonavista Energy Corporation (BNP) Reports Third Quarter Results, Reduces Dividend, Unveils Conservative 2016e Guidance Aimed at Balance Sheet Preservation | Crescent Point Energy Corp. (CPG) 3Q15 Results In Line, Waterflood and Service Cost Deflation Recognition Highlight Operational Update | Crew Energy Inc. (CR) Reports
Companies: BNP CPG CR PWT RRX TET PRE FRC PHX PSI SES
Impact: Expect stock to trade higher on EBITDAS beat
Crew Energy Inc. (CR) Announces $50 Million Disposition and Provides Operations Update | Canyon Services Group Inc. (FRC) Announces Acquisition and Reduces Dividend by 60%
Companies: Crew Energy Inc. (CR:TSE)Canyon Services Group (FRC:TSE)
Canyon has announced a complementary fluid hauling acquisition for $9.5 mm. The P/Book multiple for this transaction was 0.8x and we estimate payback will be less than four years. We estimate EBITDAS contribution of $2.5 mm to $3.0 mm in 2016e, or payback of 3 to 4 years.
Our estimates have only undergone moderate changes.
We have only made modest changes to our 2015 estimates, with the signifi cant increase in EBITDAS (new: $27 mm, prior: $18 mm) resulting
from the incorporation of 2Q15 results. In 2016e, our outlook and estimates are largely unchanged. We continue to rate the stock as an Outperform with a $9.00/share target price.
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Companies: Sylvania Platinum Ltd.
Yesterday’s positive trading update confirmed that recent momentum at HRMS, Hargreaves’ German JV, has continued into the early months of the new year. It is already clear that FY’22 results will be materially ahead of previous expectations (66% PBT upgrade). Moreover, FY’21 results will be even better than anticipated (18% PBT upgrade), reflecting the current strength of commodity market conditions. Our new forecasts prudently assume that these conditions normalise during FY’22 with no lasting
Companies: Hargreaves Services plc
Hargreaves’ FY21 results confirm a period of material profit growth and cash generation. It has been a transformational period, in which all direct coal related activities ceased, HRMS profits surged and net debt was eliminated. As expected, the first 12p additional dividend has been proposed (total FY21 DPS 19.2p) and we expect this to recur for a further three years, at least. As we wrote in our recent detailed note, Hargreaves has been wholly repositioned and now has genuine momentum. The sha
Despite an ongoing state of emergency in Trinidad, Trinity has once again delivered a strong operational and financial performance in Q2/21. Production levels have remained broadly flat quarter-on-quarter at 3,047bopd (Q1/21: 3,107bopd), despite no new wells being drilled since 2019 and notwithstanding the constrained COVID-19 related restrictions. This strong production performance, combined with strict cost controls helped Trinity maintain a low operating break-even of US$27.8/bbl in H1/21, wi
Companies: Trinity Exploration & Production Plc
GeoPark (GPRK US) C: Target of US$26 per share: 2Q21 update - 2Q21 production of 36,489 boe/d was in line with previous indications. 2Q21 oil production at Llanos-34 and CPO-5 was respectively 24,515 bbl/d and 3,445 bbl/d. Production is now 38-39 mboe/d as previously reported with CPO-5 generating approx. 3,900 bbl/d net to GeoPark. 2H21 production is expected to be 39-42 mboe/d resulting in FY21 production of 38-40 mboe/d from 41-43
Companies: JKX PHAR AKRBP AKERBP FEC GPRK GPRK TAL
Yet again, Rio managed to maintain its dividend extravagance. Although, besides mighty iron ore, the exceptional H1 results were partly also driven by aluminium and copper – where normalcy is gathering momentum. With key divisions moving in the right direction, and balance sheet flexibility being put to good use, i.e. rewarding shareholders and pursuing growth – this time via a greenfield lithium investment, Rio remains a promising large-cap mining play. Further re-rating may materialise if gove
Companies: Rio Tinto plc
South Harz Potash is expected to start drilling its first of two planned confirmation holes at Ohmgebirge in Q4/CY21. The Company has submitted supplementary detailed information to regional mining authorities to support the final step in the permitting process.
As a result of the delays experienced in procuring landowner and tenant approved drill sites and the competition for drill rig availability, South Harz Potash now expects drilling of the second confirmatory twin hole in Q1/CY22. The tw
Companies: South Harz Potash Ltd
Although renewable energy has been gaining increasing traction over the past decade as the costs of renewable energy generation and perhaps more importantly, energy storage have fallen, 2020 was a seminal year for transitional energy investors driven by governments seeking to “build back better” after COVID-19. The US has committed US$2.25trn largely focused on the energy transition while the EU has committed US$0.54trn with companies around the world including China committing to net zero targe
Companies: LAM FSJ TGP PRES JMAT CRPR NEXS VLX
EQTEC have just announced their Q2 Trading Update and have highlighted several key updates in their immediate pipeline. In line with our expectations, EQTEC are on track to hit our modelled revenue and EBITDA projections for 2021. Billingham has completed its concept design and progresses towards financial close.
Companies: EQTEC PLC
• 2Q21 production was 8,825 bbl/d marginally above guidance.
• While the 3WD water disposal well has now been completed, one of the booster pumps is not fully operational, constraining water injection . This in turn has constrained current field oil production to~8,800 bbl/d. (Production from the recently drilled 7D well has naturally declined from 3.5 mbbl/d to 2.5 mbbl/d outperforming the company’s expectations). The booster pump is expected to be either repaired or replaced over the next
Companies: PetroTal Corp.
Bushveld’s consolidated vanadium production increased by close to 30% in Q2 2021, underpinned by improved operational stability at Vametco following a maintenance shutdown that adversely impacted output in the preceding quarter. If maintained across the second half, current rates at both Vametco and Vanchem put the group well on course to meet its recently revised full-year production target of 3,400-3,600t. With vanadium prices having recovered strongly from last year’s lows, we are optimistic
Companies: Bushveld Minerals Limited
AfriTin* (ATM LN) –Uis mine in Namibia aiming towards doubling monthly concentrate output
Alba Mineral Resources (ALBA LN) – Identification of new gold target close to Gwynfynydd
Altus Strategies* (ALS LN) – New silver/copper licenses secured in Morocco
Cornish Lithium (PRIVATE) – DLE technology provider selected for the Pilot Plant
Greatland Gold (GGP LN) – Additional drilling results from Havieron
Piedmont Lithium (PLL US) – A presentation delivered to Gaston County officials
Companies: PLL ATM ALBA ALS GGP SRB
United Oil & Gas has provided a H1/21 operational and trading update ahead of a shareholder call at 12pm today. United continues to go from strength to strength with the Company announcing three positive well results at Abu Sennan in H1/21 – providing a material uplift to the Company's low-cost production base, whilst also demonstrating the material remaining potential within the Abu Sennan licence. United's H1/21 net working interest production averaged 2,730boepd, c14% above the Company's 2,40
Companies: United Oil & Gas Plc
Altus Strategies* (ALS LN) - La Mancha launches La Mancha Fund, a Luxembourg based long only fund dedicated primarily to gold mining.
Ariana Resources (AAU LN) – Kiziltepe production guidance maintained
Castillo Copper (CCZ LN) – Quarterly report highlights the ‘Big One' prospect
Chaarat Gold (CGH LN) – Robust Kapan production in H1/21 with Tulkubash funding completion pushed to Q3/21
Glencore (GLEN LN) – Glencore to pay $9.85m to settle zinc rigging dispute
Jervois Mining (JRV AU) – Jervoi
Companies: SO4 ALS AAU CGH GLEN POW TYM CCZ JRV LYC
The group’s AGM statement highlights a strong rebound in activity during Q1, with improved market demand, helped by new customer and project wins. Indeed, it reports revenues up >50% year on year. Progress continues with Atlas, with Spain and Holland now live. The previously flagged supply chain constraints and price pressures continue but are being mitigated by price rises. No change to forecast expectations are signalled. The shares have moderately underperformed in the quarter and offer good
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