Leucrotta announced second quarter financial and operating results which were in line to slightly behind GMPFE and consensus expectations (AFFO $0.01 vs. GMPFE $0.01 vs. consensus $0.01). Leucrotta invested ~$3 mm in the quarter, surpassing both GMPFE and consensus estimates of $0.00 mm and $1.65 mm, with the lion’s share of the expenditure being directed towards an infrastructure acquisition in the Two Rivers operating area. We have taken capex down in both 2019e and 2020e as management conveys conservation of capital and the preservation of a positive working capital position.
Companies: Leucrotta Exploration, Inc.
Leucrotta announced 1Q19 results which were in line with both GMPFE and consensus expectations (FFO $0.02 vs. GMPFE $0.02 vs. consensus $0.02) in what was a relatively quiet quarter operationally.
Leucrotta provided an update regarding its 8-22 (B08-22-081-14W6) Upper Montney test well at Mica.
Leucrotta announced its 2018 reserve results, which is similar to prior years. Conversion of resource to tangible production and cash flow continues to be secondary to preservation/expansion of large resource footprint, and the careful delineation of acreage position. As such, PDP based performance measures are underwhelming, undeveloped 1P/2P categories are better, though will still trial its peers to a degree in some efficiency aspects.
Leucrotta announced financial and operating results slightly behind our forecast, with lower liquids production, higher differentials and royalties cresting above a lower unit cash cost element which was a positive.
This morning, LXE announced the initial results of its 10-08 Upper Montney well at Two Rivers. The well was cleaned-up over a ten day period and on the last day recorded a rate of 1,842 boe/d, which included 685 b/d (42 degree light oil), 5.6 mmcf/d of natural gas (1.3% H2S) and an estimated 224 b/d of recoverable NGL’s. Management noted that the well was also producing significant water and frac fluid during the test period which was expected for the Upper Montney in the region.
LXE reported average 1Q18 production of 4,180 boe/d (27% liquids), which was comfortably ahead of the GMPFE estimate of ~3,567 boe/d which management attributed to flush production during the quarter. Production volumes were up ~10% QoQ. Cash flow of $6.4 mm ($0.03/share) was also ahead of our estimate of $3.3mm ($0.02/share) due to higher production and lower than forecasted operating costs. The company also had royalty credits that resulted in no royalties paid during 1Q18. During the quarter, LXE spent $11.5 mm net largely on DCT&E, which was in line with our forecast of $12 mm. As of quarter-end, LXE had $13.6 mm in cash and working capital and an undrawn $20 mm credit facility. Between the available working capital, credit facility and estimated 18e cash flow, LXE has enough capital to execute its 2018e capital program. Looking forward, LXE expects production in 2Q18 to be impacted by ~500 boe/d (shut-ins and maintenance) and the company reiterated its 2018 average production guidance of 3,600 boe/d (in line with GMPFE). We have updated our model to reflect the quarterly results. With an implied 26% return, we continue to have a BUY rating on Leucrotta.
LXE reported average 4Q17 production of 3,802 boe/d (34% liquids). This was in line with pre-released volumes of ~3,802 boe/d (when reserves were released) and production volumes are up ~22% QoQ. Cash flow of $4.5mm ($0.02/share) was ahead of our estimate of $3.3mm ($0.02/share) due to higher liquids production and lower than forecasted operating and transportation costs.
Reserves were up 258% y/y on a PDP basis to 4.6mmboe, 47% on a 1P basis to 15.1mmboe and 63% on a 2P basis to 37.1mmboe. Increased bookings were due to ongoing delineation drilling on its Doe/Mica Montney core area and higher per well bookings (Lower Montney Turbidite oil window moved from 650mboe to 855mboe). Based on managements stated 4Q17 production volumes of 3,802 boe/d, this represents a 1P RLI of 10.8 years and a 2P RLI of 26.7 years. We calculate 2P Future Development Costs of $167.6mm, which is ~13x Leucrotta’s 2018e estimated cash flow of $12.6mm (strip). Based off total spending this resulted in 1P FD&A costs of $19.61/boe and 2P FD&A costs of $10.67/boe, including FDC. This drives recycle ratios of 0.4x 1P and 0.8x 2P based on a 2017e cash flow netback of $8.13/boe. We have updated our model and NAV to reflect the reserve report and operations update. With an implied 47% return, we continue to have a BUY rating on Leucrotta.
The 9-33 oil well was drilled and completed late last year using 51 fracs compared to the previous design of 28 fracs. The well had a reported IP30 rate of 1,351 boe/d (45%), which is 131% above type curve and well ahead of previous Lower Montney Turbidite wells. Management also stated that its 4-12 liquids-rich gas well that was completed using 49 fracs had an IP90 rate of 685 boe/d (30% liquids), which is tracking below type curve of 845 boe/d (30% liquids). This was largely attributed to a mechanical failure during completion that resulted in a material number of fracs being ineffective. Management believes only about 20 of the fracs were contributing. In 2018, the company will focus on delineation and well productivity. As a result, the company will drill 2 vertical wells to confirm Turbidite reservoir and 3 – 4 Hz wells to extend the proven productivity of the Lower Montney Turbidite play over LXE lands. As at 2017YE LXE had an estimated ~$19mm in positive working capital and an undrawn $20mm credit facility. Management expects to complete its 2018 capital program with cash flow and cash on hand. We have updated our model to reflect the operations update. With an implied 30% return we continue to have a BUY rating on LXE.
LXE reported average 3Q17 production of 3,123 boe/d (27% liquids). This was in line with pre-released volumes of ~3,000 boe/d and production volumes are up ~19% QoQ. Management continues to expect volumes to rise and forecasts 4Q17 average production of 3,600 boe/d (30% liquids) vs previous GMPFE forecasts at 3,369 boe/d (28% liquids) and the street at 3,280 boe/d. CFPS (f.d.) of $0.01/share was slightly ahead of our estimate of $0.00/share due to lower than forecasted operating and transportation costs. However, reported 3Q cash flow was in line with the street estimates of $0.01/share. During the quarter, LXE spent $16.3 mm largely on DCT&E, which was in line with our forecast of $15 mm. As at Sept 30, 2017, LXE has $29.2 mm in cash and working capital (previously stated ~$28 mm) and an undrawn $20 mm credit facility. Management estimates that it will have ~$18 mm in positive working capital at year-end (previously stated ~$20 mm) and an undrawn bank line. We have updated our model to reflect 3Q17 results and 4Q17 production guidance. With an implied 25% return, we continue to have a BUY rating on LXE.
This morning, Leucrotta released a Fall operations update focused on its ongoing Montney activity. The biggest news item from the release was an update on longer-term production data from its A8-22 Lower Montney well. This well had an IP90 rate of 838 boe/d (40% oil & liquids). Given that A8-22 has both a higher IP90 rate (type curve of 521 boe/d) and a shallower decline (IP30 was 996 boe/d), we view these results as encouraging.
3Q17 production of ~3,000 boe/d (27% liquids) is largely in line with GMPFE estimates of 2,869 boe/d (28% liquids) and the street at 2,809 boe/d (29% liquids). Currently, LXE is producing around 3,200 boe/d however, management expects volumes to rise through 4Q17.
As at September 30, 2017, the company estimates it has $28 mm in cash and working capital and an undrawn $20 mm credit facility. Management estimates that at year-end it will have ~$20mm in working capital (vs GMPFEe of $21mm) and an undrawn bank line.
We have made some minor changes to our RENAV (from $2.21/sh to $2.54/sh) to account for this morning’s press release. We still consider our NAV assumptions conservative since over time LXE will have the opportunity to: 1) lower well costs using pad drilling and 2) decrease risk through successful delineation drilling. We have also updated our model to reflect 3Q17 financial and operating results.
Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.
Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS NVA PPY PNE RRX RMP SRX SGY TOG TET ATU CKE GXE IKM LXE MQL PRQ SPE SKX TVE TVETF YO
With this publication we highlight forecast revisions associated with our commodity price update (Natural Gas Update; Crude Oil Update), reaffirming a view of commodity price recovery in 2017e. In the interim until then, 2016e Canadian oil price realizations are up ~11% in the synthetic and Edmonton Light streams, with heavy WCS crude up ~20% which is amplified by Canadian oilsands output curtailments. While 2016e Canadian natural gas prices are projected to be ~20% lower, we expect much of this effect to be mitigated by strong hedging positions this year, and remain focused on price recovery next year with very strong increases reflected in both the strip and our revised forecast. Overall, broad valuations are flat to slightly higher coming out of this exercise, with oil/ liquids levered entities observing the highest 2017e CFO uptick. We remain constructive on the space, though the market will need to look past a trough of potentially weak pricing this summer.
Companies: ARX CPG ERF TOU POU CJ PPY SRX LXE
Leucrotta’s first quarter results came in as expected, with little to no new operational information embedded in the release. Recall, during the period the Company announced encouraging results from its 8-22 light oil well at Mica along with a successful liquids-rich delineation well at East Doe, both in the Lower Montney turbidite play. With no material changes to our forecast, we have maintained both our Outperform ranking and target price of $2.00 per share.
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Trinity has proven the sustainability and resilience of the Company's business model, increasing both production and cash despite significant challenges in 2020. FY20 average production volumes increased 7% on 2019 to 3,226bopd despite no new drilling activity in 2020. Cash at 31 December 2020 was US$20.2m, a 27% YoY increase – driven by strong operating cash flow, and achieved despite a 36% reduction in average oil price realisations versus 2019. Average production volumes in Q4/20 increased by 2% on Q3/20 to 3,206bopd, with Trinity offsetting natural production declines through its rigorous approach to production management. Post-period, the Trinidad and Tobago Government lifted the threshold for the imposition of SPT for small onshore producers from US$50/bbl to US$75/bbl in 2021 and 2022, providing a considerable boost to Trinity's cash generation potential. With a high number of growth initiatives underway across the energy spectrum, Trinity is well positioned to broaden its portfolio and create further value as it looks to further scale the business. We increase our price target to 34p (from 32p), almost 3x the current share price and reiterate our BUY recommendation.
Companies: Trinity Exploration & Production Plc
Shanta Gold (AIM: SHG), the East Africa-focused gold producer has, this morning, released a production and operational update for Q4 2020 and, last week, a group-wide reserves and resources update. Overall, it was a robust quarter leading to FY20 gold production of 82,978 oz bang in line with 2020 production guidance (80-85koz, Tamesis est. 83.3koz) – the third year in a row they have hit unchanged guidance which is especially impressive in the face of the pandemic. They have also increased net reserves. It was another very busy quarter for the company at the corporate level too with a successful equity raise to fund drilling and technical studies at the exciting West Kenya Project.
Companies: Shanta Gold Limited
Gas composition data from the Kyalla 117 well has confirmed the presence of liquids-rich gas within the Lower Kyalla Shale, with less than 1% CO2. Analysis of the Kyalla 117 well has shown that the gas stream contains c65% methane gas, with c33% being other liquid gases such as ethane and butane. The analysis also supports the view that the Kyalla gas stream will have elevated LPG and condensate yields. Operations are scheduled to recommence at Kyalla 117 at the beginning of the dry season in Q2/21 and will initially focus on flowing back sufficient hydraulic fracture stimulation water to allow the Kyalla 117 well to flow continually without assistance.
Companies: Falcon Oil & Gas Ltd.
Panoro Energy (PEN NO)C; Target Price: NOK23.00: BW Energy (BWE NO) provides update in Gabon – BW indicated that 4Q20 gross production from the Tortue field was ~13,500 bbl/d, as an 11 day downtime took place in October for the annual maintenance program and to comply with Gabonese production allocations to meet OPEC quotas. A drilling contract for one development well (DTM-7H) and one exploration well has been recently awarded. There is also the option for another exploration well subject to the results of the drilling campaign.
Pharos Energy (PHAR LN)C; Target Price: £0.40: Raising US$11.7 mm of new equity – Pharos has raised US$11.7 mm of new equity price at 19.25 p per share. The proceeds will be invested in Egypt to arrest production decline and boost production ahead of securing a farm in partner.
IN OTHER NEWS
ExxonMobil (XOM US): Dry hole in Guyana – The Hassa wildcat on the Stabroek block was dry.
Gran Tierra Energy (GTE LN/CN): Transaction to divest shares in PetroTal terminated – Gran Tierra, has terminated the purchase agreement with Remus Horizons regarding the proposed sale of 218,012,500 common shares in the capital of PetroTal. In a separate announcement Gran Tierra reported that 109 mm shares with private purchasers for US$14.8 mm
Kosmos Energy (KOS US/LN): Discovery in the US Gulf of Mexico – The Winterfell well on the Green Canyon Block 944 encountered ~26 meters of net oil pay in two intervals in the sub-salt Upper Miocene. The well de-risks prospectivity in several neighbouring blocks held by Kosmos, with approximately 100 mmbbl of gross potential within Kosmos' acreage position.
Pantheon Resources (PANR LN): Acquisition of acreage in Alaska - Pantheon Resources is acquiring 10.8% WI in each of the 16 leases in the 44,463 acre Talitha Unit from Otto Energy. The consideration consists of 14,272,592 shares of Pantheon. Upon completion of the acquisition, Pantheon will own a 100% WI in the Talitha Unit.
Predator Oil & Gas (PRD LN): Operation update in Trinidad – The Pilot CO2 EOR results support pre-injection desktop production plateau forecasts of 243 -547 bbl/d from the Herrera #2 Sand. The CO2 sequestration potential is confirmed. At WTI oil price of US$50/bbl, projected EBITDA net-backs for the P50 and P10 pre-Pilot CO2 EOR production profiles at plateau production are estimated to be in the range US$15 – 25/bbl.
Trinity Exploration & Production (TRIN LN): Operating update in Trinidad – 4Q20 production was 3,206 bbl/d. Trinity held net cash of US$17.5 mm at YE20.
Westmount Energy (WTE LN): Acquiring further interest in Guyana explorer – Westmount has purchased 287,500 common shares in JHI for an aggregate cost of C$718,750. Westmount holds a total of 5,651,270 shares in JHI, representing ~7.7% of the issued common shares in JHI. Drilling operations at the first well in the Canje drilling campaign, Bulletwood-1, are ongoing, with completion of the well anticipated around mid to late February. Additional Canje drilling will follow-on in 1H21.
Aker BP (AKERBP NO): Trading update in Norway – Aker BP produced 223.1 mboe/d in 4Q20. FY20 capex was US$1.3 bn, exploration spend was US$246 mm and abandonment spend was US$178 mm. YE20 net debt was US$3.6 bn.
Cairn Energy (CNE LN): Trading update – FY20 net production at Catcher and Kraken was just over 21,000 bbl/d, in line with guidance. FY20 cash capex was US$160 mm. FY21 net production is estimated to be 16,000 – 19,000 bbl/d with capex of US$85 mm (including US$10 mm at Kraken and Catcher). At YE20 Cairn held US$570 mm in cash with no drawn debt. In 2021, Cairn is planning to drill an exploration well on Block 10 in Mexico and there is an optional drilling opportunity for an appraisal well of the Saasken discovery (Cairn 15% WI). In the UK, Cairn will participate in the Shell-operated Jaws exploration well on P2380 (Cairn 50% WI). In Côte d’Ivoire, Cairn has assumed Operatorship (90% WI) in blocks CI-301 and CI-302 from Tullow which has exited both licences. The JV has exited blocks CI-518, CI-519, CI-521 and CI-522 effective end December 2020.
ExxonMobil (XOM US): Progress at selling UK assets – Media reports indicated that ExxonMobil has entered exclusive discussions with HitecVision/NEO Energy with regards to the divestment of Central and Norther North Sea assets.
Repsol (REP SM): Trading update – 4Q20 production was 628 mboe/d.
Norway: Exploration licence award – Norway has awarded 61 licences to 30 companies. Equinor, Aker BP, Lundin Energy, DNO, Neptune Energy, Wintershall DEA, OKEA Energy, Var Energy and Spirit Energy were awarded interests in respectively 17, 10, 19, 10, 6, 16, 4, 10 and 3 licences.
Serica Energy (SQZ LN): Operating update in the UK North Sea – Estimated FY20 net production from Serica's interests in Bruce, Keith, Rhum (BKR) and Erskine averaged 23,800 boe/d. With regards to the R3 operations, the removal of the 2005 completion is taking longer than anticipated due largely to the unexpectedly poor condition of the equipment being recovered from the well. As a result, R3 operations are now expected to continue into March 2021.
Union Jack Oil (UJO LN): Further acquisition of interests in UK asset – Union Jack Union is acquiring a 15% interest in PEDL253, containing the Biscathorpe project from Humber Oil & Gas, increasing its interest to 45%. The consideration consists of £0.5 mm in cash plus a contingent payment of £0.5 mm.
FORMER SOVIET UNION
JKX Oil & Gas (JKX LN): Operating update in Ukraine and Russia – FY20 production was 10,238 boe/d including 5,389 boe/d in Russia and the balance in Ukraine. JKX held US$24.5 mm in cash at YE20. IG146 was completed to the Devonian in Ignativske (Ukraine) and encountered 2.6 m of net hydrocarbon bearing thickness. After initially testing of the IG146 well at an oil rate of 497 bbl/dd and a gas rate of ~200 boe/d in November the rate declined and the well is currently producing 35 boe/d.
MIDDLE EAST AND NORTH AFRICA
Apex International Energy: Discoveries in Egypt – The SEMZ-1X well discovered Bahariya oil with 17 feet of indicated pay and and tested at a rate of 100 bbl/d. The well will be fracced to maximize flow rate. The SEMZ-11X well encountered 65 feet of oil pay in the Cretaceous sandstones of the Bahariya and Abu Roash G formations. Testing of the Bahariya resulted in a peak rate of 2,100 bbl/d of oil and no water.
DNO (DNO NO): Operating update – FY20 WI production was 95,100 boe/d including 17,300 boe/d in Norwar and the balance in Kurdistan. FY20 capex was US$515 mm increasing to US$700 mm in 2021. DNO held US$475 mm in cash at YE20. The KRG has put a plan in place to make payments towards DNO’s arrears (US$259 mm) such that if Brent prices exceed US$50/bbl in any month, the incremental revenue will be shared 50 50 between the KRG and the Tawke license partners.
Energean (ENOG LN): Trading update – FY20 pro forma WI production was ~48.3 mboe/d with pro forma capital expenditure (including exploration expenditure) of US$558 mm. FY21 production is expected to be 35.0 40.0 mboe/d with capex of US$515 – 590 mm,
Genel Energy (GENL LN): Operating update in Kurdistan – Gross operated production from the Tawke licence averaged 110,300 bbl/d in 2020, about evenly split between the Tawke and Peshkabir fields. FY20 production at Taq Taq was 9,670 bbl/d with a production rate of 8 mbbl/d at YE20. Sarta produced 520 bbl/d. The Sarta-3 well has produced at an average of ~5,500 bbl/d so far in 2021. Production from Sarta-2 is now expected in February. The 2021 appraisal drilling campaign is targeting a material portion of the 250 mmbbl of existing contingent resources, and prospective resources, in Jurassic formations. The Qara Dagh 2 well is expected to be spudded in 1Q21. FY21 WI Production is expected to be slightly above FY20 (31,980 bbl/d) with capex of US$150-200 mm. Genel held US$354 mm in cash (net cash of US$10 mm) at YE20. The KRG has submitted a reconciliation model for repayment of the receivable relating to the US$159 mm in unpaid invoices, whereby for each cent above a monthly dated Brent average of US$50/bbl, 0.5 cent per working interest barrel shall be paid towards monies owed.
TransGlobe Energy (TGL LN): Operating update – Production averaged 12.4 mboe/d (including 11,178 boe/d in Egypt) in 4Q20 and 13.5 mboe/d during FY20. At YE20, TransGlobe held >US$30 mm in cash and had no net debt.
BW Energy (BWE NO): Equity raise – BWE has raised US$75 mm of new equity priced at NOK27 per share, representing a 9.5% discount to the previous day close. The net proceeds will be used for capital investments in the Dussafu licence in Gabon, development of the Maromba discovery in Brazil, new ventures and for other general corporate purposes.
Total (FP FP) and Royal Dutch Shell (RDSA/B LN): Divestments in Nigeria – Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, have been sold to TNOG Oil and Gas for a consideration of US$533 mm net to Shell (30% WI) and US$180 mm net to Total (10%).
EVENTS TO WATCH NEXT WEEK
27/01/2021: Tullow Oil (TLW LN) – Trading update
28/01/2021: Lundin Energy (LUNE SS) – 4Q20 results
Companies: AKERBP CNE DNO ENOG XOM GENL GTE JKX KOS PEN TAL PHAR REP RDSA SQZ FP TGL
Foresight Group , the award-winning infrastructure and private equity investment manager to IPO on the Main Market (premium). The Offer will primarily comprise a sale of shares by existing shareholders (c.80% of the Offer) with a smaller offering of new shares (c.20% of the Offer) to be issued by the Company. Details TBA. Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5 million by way of private placement of new Common Shares (the "Fundraising") to advance the United Downs copper-tin project. The Company expects that Admission will become effective in February 2021. The Company's Common Shares will continue to be listed and trade on the TSX-V in Canada. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: TYM W7L BEG CRPR EUZ IRR CMCL FARN KETL AUG
Anglo Asian Mining* (AAZ LN) – STRONG BUY – Update on Restored Contract Areas
Chaarat Gold* (CGH LN) – Kapan production beats guidance and delivers $19m EBITDA
Sunstone Metals (STM AU) – Drilling results from the Espiritu gold-silver prospect in Ecuador
Tertiary Minerals* (TYM LN) – Sale of data on Finnish project
Versarien* (VRS LN) – Interim results
W Resources (WRES LN) – La Parilla Q4 production
Companies: AAZ CGH WRES TYM VRS STM
Companies: AAZ AAU CNR GLEN RIO TSG CCZ IRR
Jubilee put out an intraday press release yesterday updating on the performance in the first half (ending Dec 2020) of the FY 2021. Once again Jubilee delivers; significantly increased revenues and profits from its chrome and PGM division in South Africa and a small, but important, contribution from Zambia. Notably this improvement isn't just from commodity price performance; rather increased production, productivity, throughput, renegotiated contracts and all set alongside the strong performance of commodity prices –rhodium, palladium and platinum. We see this as still only the start for Jubilee as we look forward to the first copper oxide concentrates from the Roan project in Zambia to the Sable Refinery – where the Roan plant is currently under construction. Once again we are struck by the speed at which Jubilee moves to advance its projects and, with its South African cash engine showing no signs of slowing down. Jubilee can choose to move its wider ambitions in Zambia forward from internally generated cash flow. On the back of the strong performance we put our forecasts under review.
Companies: Jubilee Metals Group PLC
Pantheon announced that it is acquiring the 10.8% of the Talitha Unit it does not already own, bringing its interest to 100% in the unit. The vendor, Otto Energy Alaska, will be provided with 14,272,592 shares in Pantheon Resources as consideration. The company continues to drill ahead with the Talitha#A well. The transaction is value accretive for Pantheon and we increase our fair value estimate to 89p from 83p. As a reminder, our fair value estimate includes 25% of our successcase valuations in respect of two of the four targets that the Talitha#A well is intended to evaluate, namely, the Talitha Brookian Shelf Margin Deltaic and the Talitha Kuparuk
Companies: Pantheon Resources plc
Today's news & views, plus announcements from RIO, EXPN, BLND, GLEN, PFD, HMSO, WG, WJG, HOTC, KAPE, QTX, BOOM
Companies: Rio Tinto plc
Antofagasta (ANTO LN) – Q4 production highlights strong quarter
BHP (BHP LN) – Record iron ore production, workforce reductions in Chile for Covid and continuing focus on copper exploration
IronRidge Resources* (IRR LN) – Call notice for exercise of warrants
Shanta Gold (SHG LN) – Reserves/Resources update replaces mined ounces
SolGold* (SOLG LN) – Nick Mather steps aside to allow search for new CEO to lead Alpala block-cave financing and development
Companies: ANTO BHP SHG SOLG IRR
Botswana Diamonds (BOD LN) – Raising £363,000
Eurasia Mining* (EUA LN) – West Kytlim Definitive Feasibility Study approved
Power Metal Resources* (POW LN) – Three highly prospective gold projects acquired in Canada
Serabi Gold* (SRB LN) – Initial drilling results from Sao Domingo
Vast Resources* (VAST LN) – Baita Plai General Manager appointment
Companies: BOD EUA POW SRB VAST
Central Asia Metals (CAML LN) has reported Q4 2020 production with 3,365t of copper taking full year output to 13,855 in line with our forecast of 13.9kt and at the top end of guidance. Q4 lead output was 7,442t meaning 29,741t over the full year, up 2% YoY and in line with our forecast of 30kt while zinc output of 5,848t took full year output to 23,815t again in line with our forecast of 24kt and up 2% YoY despite the disruption at Sasa which CAML has overcome rapidly as we expected.
Companies: Central Asia Metals Plc
Origin Energy has submitted a Notification of Discovery on the Kyalla 117 well in the Beetaloo Sub-basin, following the unassisted production of 0.4-0.6 MMscf/d of liquids-rich gas over a 17-hour period. The result follows the introduction of nitrogen to lift the fluids in the well. Longer-term measures will now be put in place to flow back sufficient hydraulic fracture fluid to allow for an extended well test during the dry season (Q2/21).
The Australian Government has unveiled its plans to accelerate the development of the Beetaloo Sub-basin through the A$224m Beetaloo Strategic Basin Plan, creating the right conditions to grow the onshore gas industry in the Northern Territories. A new A$50m Beetaloo Cooperative Drilling Programme will support A$200m of exploration activity before 30 June 2022, capped at A$7.5m per well. The Government has also committed to establishing a new A$174m Roads of Strategic Importance corridor to upgrade roads supporting the development of gas resources in and around the Beetaloo.
Valuation and forecast update
Companies: Independent Oil & Gas Plc