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Arrow Exploration (AXL CN/LN)C; Target price of £0.45 per share: Reserves increase in Colombia – Arrow has added ~0.25-0.28 mmbbl 2P and 3P reserves on the Tapir licence (to respectively 1.9 mmbbl and 3.9 mmbbl) following recent drilling results. 1P reserves have increased by 0.6 mmbbl. This reflects reserves additions in the C7A, C7B and C7 stringer sands, partially offset by a reduction at the Gacheta B (tested with 95% water cut) an
Companies: RKH RHC RHC IOG HHR DNO APA APA I3E TTE ENI ALV TAL 88E SOU ZPHR AXL PEN ALV PEN
• 2Q22 production was ~14,467 bbl/d with US$77 mm in cash at the end of June is in line with expectations.
• In early 3Q22, the company encountered barging, resulting in oil production being constrained to 5.7 mbbl/d from July 7 until July 25. PetroTal has secured approximately 420,000 bbl of export barging capacity for August plus 60,000 bbl for the Iquitos Refinery which has allowed production to increase to 19,000 bbl/d since August.
• The fact that, even in this context, PetroTal’s cash po
Companies: PetroTal Corp.
Calima Energy (CE1 AU)C; Target price of A$0.70: Production expected to bounce back in 3Q22 – June production was impacted by the gas processor’s scheduled plant turn-around in Thorsby that resulted in production being reduced by 625 boe/d for seven days. This work was anticipated and is included in the company’s budget and production guidance. At Brooks, the gas compressor at the 2-29 battery went down on 24 June. The compressor was r
Companies: SLE ALV CE1 CNE ECHO JSE PMG TAL REP RHC RHC OMV IOG DNO ALV
• 2Q22 production was ~14.5 mbbl/d. This is above the guidance of ~13.5 mbbl/d and our forecast of ~13 mbbl/d. 12.6 mbbl/d were sold through Brazil.
• Well 11H was put on production at 9,550 bbl/d over the first four production days. This is another very good well that is estimated to payout in ~90 days.
• Production averaged ~22 mbbl/d over the first few days of July, peaking at 26 mbbl/d. However production will be maintained below that level due to the ONP still being closed.
• The Company ex
Norwegian strikes push gas prices higher
Companies: PetroTal Corp. (TAL:TSX)Rex International Holding Ltd. (5WH:SES)
PetroTal (PTAL LN/TAC CN)C; Target price of £1.20 per share: 0.72 mmbbl sales will trigger a US$60 mm payment to PetroTal earlier than expected – 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/b
Companies: ZPHR RKH PPC APA APA FEC TAL IGAS HUR EQNR WEN VLE TETY
• 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
Calima Energy (CE1 AU)C; Target price of A$0.75 per share: Becoming a dividend player - Calima intends to commence a half yearly dividend programme, beginning in 2H22 with first payment in 1H23. The initial half yearly dividend has been set at A$2.5 mm (~A$0.04 per share). On an annualized basis, this represents a 4.1% yield. The company also intends to undertake a share buy back programme for up to 10% of its issued capital in any 12
Companies: TRIN NOG TAL SNM SOU PGR AOI CE1 CASP CEG ENOG ENQ EQNR IOG SYN PEN PEN
• PetroTal had already reported 1Q22 production and its cash and debt positions as at the end of March.
• Production continues to be high with 17,411 bbl/d from April 9 until April 30 and 15,714 bbl/d in May. This excludes any export through the ONP as 18 mbbl/d (16 mbbl/d previously) can now be sold through Brazil and to Iquitos. The new 2Q22 production guidance of 13.5 mbbl/d is above our expectations of 12 mbbl/d.
• The Company has successfully completed a pilot Brazilian shipment without di
ADX Energy (ADX AU)C; Target price of A$0.060 per share: Flow rate at the top end of expectations at important appraisal well - The Anshof-3 well flowed ~75 bbl/d of light oil (and no water) on test from the Eocene reservoir. This has positive implications for production, reserves and the upside case. The flow rate was at the upper end of expectations (40-80 bbl/d). The well has not been acidized yet which could boost production rate b
Companies: TAL SNM XOM TTE SEPL SHEL REP PAT OMV HUR FAR ENI EME EDR DELT DEC CEG AKRBP ADX CE1 PEN TETY EGY VLE PEN
• PetroTal has been producing ~18.2 mbbl/d over the last 10 days with priority sales going to Iquitos and Brazil thereafter. Until the ONP maintenance is completed, the Company will be managing production volumes to fit the Iquitos and Brazil sales threshold of nearly 16,000 bbl/d. We are forecasting 12 mbbl/d over 2Q22 and 16 mbbl/d in 3Q22.
• PetroTal is currently preparing to drill well 11H in early May with a late June or early July completion, at an estimated cost of US$15.6 mm. This is exp
Looking at E&P Free Cash Flow - While companies still carry hedges contracted at lower prices, we estimate our producer universe will generate ~25% FCF yield (defined as FCF/EV) in 2022 at ~US$100/bbl. At just US$70/bbl, the overall FCF yield is estimated at 15% for 2023 and >20% for 2024. Assuming US$110/bbl, this increases further to ~40% for each of 2023 and 2024. At YE24, balance sheet net cash, after paying shareholder distributio
Companies: SOU OMV VOG TGL SNM CASP BLOK SHEL REP IGAS ENI ECHO I3E CNE ALV SDX GPRK LBE ADX AXL CE1 PEN TAL PHAR TETY EGY WEN ALV PEN
The outlook for the Oil and Gas sector in early 2022 could not be more different than two years ago. At that time, oil prices had turned negative for the first time and many companies were focused on cutting costs and negotiating with their lenders to ensure survival. The very limited support from investors on the back of an exodus from the sector towards green energy complicated further the situation. Fast forward two years and the situation could not be more different. With the current Brent p
Companies: GPRK AXL ADX CE1 PEN PHAR TAL SDX EGY WEN TETY PEN
• We are increasing our target price from £0.70 to £1.20 per share on our new higher oil price assumptions.
• While we have taken a conservative view on 1Q22 production given the social unrest, December production exit rate at Bretana in Peru is expected to stand at ~21.5 mbbl/d. This represents twice the production level achieved in 4Q21. Given the scale of the company’s reserves and resources, this could increase further to ~27 mbbl/d by YE24 with further drilling.
• Given the regressive natu
Vaalco Energy (EGY LN/CN)C; Target price increased from £4.80 per share to £5.30 per share: Very large reserves increase – YE21 SEC proved reserves were 11.2 mmbbl, up 250% compared to YE20 (3.2 mmbbl). This large increase reflects (1) a 5 mmbbl addition associated with improved well performance, field-life extension related to cost savings from the replacement Floating, Storage and Offloading vessel, and the addition of proved undevel
Companies: SEPL KOS SOU PGR FEC PXT I3E IGAS EOG ENI SQZ TTE SHEL SAVE AOI XOM OMV TAL CHAR BP/ EGY CE1 MAHAA
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Companies: Sylvania Platinum Ltd.
West Newton update
Companies: Union Jack Oil Plc
H1 2022 Results
Companies: IOG PLC
Wressle reserves and resources report
A typically strong operational performance at Kounrad and materially higher realised zinc prices at Sasa versus the year-ago period helped CAML overcome industry-common cost inflation pressure to post a 16% increase in EBITDA and widen its margin to an impressive 63%. This in turn has given the group confidence to declare a record interim dividend of 10p, which annualised puts CAML on a compelling yield of 9%. Despite increasing metals markets volatility and the potential for further inflationar
Companies: Central Asia Metals Plc
Alternative Resource Capital
Longboat Energy (LBE LN)C; Target price of £1.25 per share: Copernicus is dry - The Copernicus exploration well on licence PL1017 was dry. The well failed to encounter any effective reservoir. This was a high risk well. Drilling was much quicker than anticipated. As a result, the cost of the well was materially under budget, suggesting that the balance sheet of the company could be stronger than our current assumption. We reduce our ta
Companies: UKOG UJO TLW SQZ SOU SNM RBD XOP COP COP DELT EQNR EQNR I3E IGAS LBE PHAR ZPHR
H1 2022 results and farm out update
Companies: Jersey Oil & Gas PLC
Central Asia Metals (CAML LN) reported record H1 results on the back of robust production and higher commodity prices. H1 2022 net revenue of US$114m was up 13% YoY, EBITDA of US$75m was up 16% YoY and the EBITDA margin increased 2pp to 63%. An FX gain of US$7m, combined with the reductions in interest payments from debt reduction and higher profits meant net income was up 72% YoY to US$53m. With capex this year weighted to H2, the company’s free cash flow metric was up 7% YoY to US$52m enabling
Falcon's Beetaloo JV partner, Origin Energy has announced its intention to exit all of its upstream exploration permits as part of a strategic decision to focus on cleaner energy and customer solutions. As part of this strategy, Origin has agreed to divest 100% of its interest in the Beetaloo Basin to a JV of Tamboran Resources and Bryan Sheffield for an upfront consideration of A$60m and a 5.5% royalty on future production from Origin's 77.5% working interest. At US$60m the upfront consideratio
Companies: Falcon Oil & Gas Ltd.
H1 was a mixed half for Bushveld, the continuing strong performance of Vametco offset by unexpected challenges associated with the commissioning and subsequent ramp up of Kiln 3 at Vanchem. The latter has prompted the group to reduce full-year group production guidance (with unit cost expectations increased somewhat), though we still expect positive EBITDA for the full-year and H2 capex and debt repayment obligations look adequately covered. The year-exit production rate target of 5,000-5,400t p
Companies: Bushveld Minerals Limited
Condor Gold (“CNR”) has announced completion of the La India Open Pit Feasibility Study (“FS”), an important milestone as CNR advances the project towards development. The headline results show a post-tax IRR of 23% and NPV of US$87m using a gold price of US$1,600/oz and 5% WACC. Initial capital expenditure is estimated at US$105m and all-in sustaining costs of US$1,039/oz for annual average output of 82kozpa gold for the first 6 years of an 8.4 year mine life. The FS provides a solid base again
Companies: Condor Gold plc
Hannam & Partners
Companies: Scotgold Resources Limited
Trinity has announced that the first two wells in its fully funded onshore six well drilling campaign have come in on prognosis, confirming Trinity%u2019s pre-drill models and expectations. Both wells are currently on production test, with all four low angle wells to be drilled as part of the campaign to be onstream before the end of 2022. It is expected that in aggregate, these four wells will contribute to an increase of 200-250bopd. Production is expected to continue to increase into Q1/23, s
Companies: Trinity Exploration & Production Plc
I3 Energy announced that it has commenced operations for the drilling of the Serenity appraisal well in the North Sea and that actual drilling operations are expected to occur later this week with the programme expected to last 30 days.
Companies: i3 Energy Plc