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We are discontinuing coverage on Pengrowth Energy due to a reallocation of resources. Accordingly, all prior research ratings, price targets, and earnings estimates must no longer be relied upon.
Companies: Pengrowth Energy
Second quarter results were in line to slightly ahead of both our estimates and the consensus. With continued success in terms of cost reductions, Management has reduced operating cost guidance for the year, which will lead to increased financial flexibility to help manage 2017 debt maturities. Given the pullback in commodity prices, Management noted the potential for covenant violations in 2H17 should current strip pricing playout, which could weigh on the stock over the near-term. Despite posi
Impact - slightly positive given second quarter results that were in line to slightly ahead of expectations, while operating cost guidance for the year has been reduced leading to increased financial flexibility exiting the year
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 rev
Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK TOU VET WCP BNE CJ CR DEE JOY KEL LTS NVA PPY PNE RRX RMP SGY TET TNZ CKE GXE IKM MQL PRQ SPE SKX TVE TVETF YO
Impact: Neutral. As anticipated, Phase II of Pengrowth's Lindbergh project has received EPEA approval which allows for annual average production above the Phase I nameplate capacity of 12,500 bbl/d.
Pengrowth’s first quarter financial results were in line with the consensus estimates, although came in ahead of our cash flow estimate as a result of royalties and operating costs that were lower than we had forecast. Management reiterated its 2016e capital expenditure and expense guidance, although has trimmed production guidance by ~3,000 boe/d at the midpoint largely due to minor disposition activity in the first quarter. Notable was a $173 mm decrease in total debt compared to year-end aide
Pengrowth reported first quarter results including production of 62,056 boe/d that was in line with our 62,658 boe/d estimate along with the consensus estimate of 62,298 boe/d. The reported cash flow of $106.2 mm or $0.19 per diluted share was also in line with consensus ($0.19 per share), although ahead of our estimate of $94.8 mm or $0.17 per diluted share as a result of lower royalties and operating costs than we had forecast.
With this publication we briefly summarize our projections for 1Q16e quarterly results for the Junior E&P (Intermediate, Mid & Small Cap) segments of our coverage universe
Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PSK TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PNE RRX RMP SGY TET TNZ CKE GXE IKM ROAOF MQL RE SPE SKX TVE TVETF YGR YO
With this publication we highlight various metrics and statistics forthcoming from yearend reserve books for our Domestic E&P coverage universe (Integrateds, Large Cap, Oilsands, Intermediate, Mid Cap, and Small Cap). Similar charts for YE2014 reserves can be found in our Statistical Package dated April 7, 2015.
Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PWT TXP VET WCP BNE CJ KEL LTS LRE NVA PPY PNE RRX RMP SGY TET TNZ BXO CKE GXE IKM MQL SKX TVE TVETF YGR YO
Impact - neutral given the size of the transaction, the proceeds of which are already included in our forecast.
Pengrowth’s year-end financial results came in as expected and within Management’s previously announced guidance range. Management reiterated its 2016e guidance that was previously provided at the Company’s annual investor day in late January as detailed in our Facts dated January 22, 2016. Recall, at that time the Company also announced the suspension of its dividend. Year-end reserves were down in the PDP and 1P categories, reflecting disposition activity and the impact of economic factors, al
Impact - neutral with year-end financial and operating results and reserves largely in line with expectations, while there was no changes to Management's previously announced guidance
With this publication we highlight forecast revisions associated with our crude oil commodity price update. Concurrent within a dynamic time for E&Ps, some of which have already begun the process of 2016 capital budget downdrafts, revised estimates attempt to directionally capture a shift towards capital conservation, though severely weakened futures curves have influenced our thinking for the better part of 6 months anyway. We expect further capital investment reductions forthcoming from E&Ps i
Companies: AAV ARX BNP CPG ERF POU PEY SPE SGY TVE TOU VET GXE KEL NVA PPY BTE PGF PSK PWT WCP BNE CJ CR DEE JOY LTS LRE PNE RRX RMP TET TNZ BXO CKE IKM ROAOF MQL RE SKX TVETF YGR YO
Pengrowth ended 2015 with production in line with expectations on slightly lower than anticipated capital spending. In light of current commodity prices, Management has eliminated the quarterly dividend, which will save the Company ~$22 mm annually, although will likely lead to near-term pressure on the stock. Efforts continue on the Company’s $600 mm non-core asset sales process, with $263 mm closed in 2015 and another ~$40 mm expected to close in 1Q16e. Formal 2016e guidance will see $60-$70 m
Impact: Neutral to slightly negative given elimination of the dividend and scaled back operations, although in light of current commodity prices and the Company's debt position we view this as a prudent move to ensure the longer term sustainability of the business.
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Companies: Savannah Energy Plc
Forecast and valuation update
Companies: IOG PLC
We are increasing our fair value estimate for Pantheon Resources to 208p, from under review (previously 184p). The change reflects what we believe was an unambiguously positive winter drilling campaign. This full note details the background analysis to the change in estimate of fair value, which includes a valuation table and an assessment of the forthcoming Alkaid#2 well.
Companies: Pantheon Resources plc
With several opportunistic but timely acquisitions in 2021, coupled with the recent surge in the oil price, Zenith Energy has, in our view, completely transformed itself and its value proposition to investors. While for various reasons it has not been easy for the market to fully recognise and reward this transformation, we expect 1) doubling production, 2) further strengthening of its balance sheet and 3) becoming Free Cash Flow (FCF) generative this year, will make it difficult for the market
Companies: Zenith Energy Ltd.
Alternative Resource Capital
Chariot has signed a front-end engineering and design (FEED) agreement with Schlumberger and Subsea 7 (the Subsea Integration Alliance) for the Anchois gas development project. Chariot and the Subsea Integration Alliance will adopt a “one team” integrated and collaborative approach to fast-track first gas from Anchois to maximise the return on investment for all stakeholders. The scope of work covers all the development's offshore elements including well completions and subsea production systems
Companies: Chariot Limited
AfriTin Mining (“ATM”) has announced another record-breaking quarter from Uis Phase 1. Tin production increased 13% QoQ to 152t for the three months to May (Q1 FY’23), supported by record recoveries, which along with cost initiatives drove a 16% improvement in All-In Sustaining Costs. The strong performance continues to support growth projects including incorporation of petalite lithium and tantalum by-products, upon which AfriTin recently announced positive drilling and metallurgical test work
Companies: AfriTin Mining Ltd.
Hannam & Partners
EQTEC has reached a key milestone in its Southport energy from waste project with the appointment of Anaergia as EPC and O&M partner. This is a complex project using multiple waste treatment solutions and we see EQTEC’s inclusion as a demonstration that it’s technology can combine with these to create an optimal outcome.
Companies: EQTEC PLC
RCS-1 flow testing results
Companies: Arrow Exploration Corp.
Trinity has announced the commencement of its highly anticipated onshore drilling campaign. The Company's fully funded, six well drilling programme will target an aggregate 450-1,100mmbbls of reserves at a cost of US$14-17m. In addition to drilling four “conventional” low angle wells, Trinity will also drill one horizontal well and one deeper appraisal well, with both the horizontal and deeper appraisal wells having the potential to deliver substantially higher production and economic returns ve
Companies: Trinity Exploration & Production Plc
Wentworth has announced a positive operational update ahead of its AGM to be held later today. Daily production year-to-date (YTD) has averaged 92.2MMscf/d, a c15% YoY increase (2021: 79.9MMscf/d) and ahead of Wentworth's 2022 guidance of 75-85MMscf/d. As noted previously, the strong performance of the Mnazi Bay asset YTD has allowed Wentworth to increase its total dividend distribution in respect of 2021 to 1.7p per share, a yield of c7.1%. Mnazi Bay continues to supply Tanzania with half of th
Companies: Wentworth Resources PLC
• Section II of the Northern Peruvian Pipeline has been temporary re-opened.
• As a result, 0.72 mmbbl of PetroTal’s Bretana oil has been tendered at the Bayovar port by Petroperu for the July lifting. This oil previously entered the pipeline in late 2020 for which PetroTal was paid just ~US$45/bbl at the time.
• PetroTal will receive the difference between this price and the price at which Petroperu will sell the oil in July (~US$120/bbl), generating over US$60 mm of price adjustment true-up r
Companies: PetroTal Corp.
Wentworth has announced the acquisition of a 25% non-operated working interest in the Ruvuma PSA from Scirocco Energy for an initial consideration of US$3m plus contingent payments of up to US$13m. The consideration is structured to ensure that the majority is only paid in a success case, providing Wentworth with a low-cost entry point into a high growth opportunity. The transaction has the potential to nearly double the Company's production by 2026 and add over 190Bcf of 2P reserves on a Final
• 2022 YTD gross production was 92 mmcf/d, ahead of our expectations of 89 mmcf/d for 1H22.
• The FY22 production guidance remains unchanged at 75-85 mmcf/d. It looks very conservative in our view.
• The company currently holds US$26 mm in cash and no debt. This is in line with our expectations.
• TPDC continues to be current with regards to receivables.
• We re-iterate our target price of £0.45 per share.
Steady growth and dividend
Our Core NAV for the company based on its 2P reserves only i