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We are discontinuing coverage on Raging River Exploration Inc. due to its acquisition by Baytex Energy Corp.1 (BUY, $8.00/sh target price). Accordingly, all prior research ratings, price targets, and earnings estimates must no longer be relied upon.
Companies: Raging River Exploration
The stocks on the GMP FirstEnergy Best Ideas List represent our highest conviction BUY recommendations with an expected return of 20% or more over the next 12 months. The investment thesis for each name on the list is laid out in this report.
Companies: 0UG9 TNZ PXX CNQ KEL PXT PPL RRX SES WCP SPE
Raging River reported second quarter financial and operating results that were in line with our estimates, highlighted by positive earnings generation in the period, illustrative of a highly economic top line revenue and enviable cost structure, coupled with affirmation of a disciplined acquisition strategy since inception. There are essentially zero changes to our forward outlook. We reiterate a $13.50/sh 12-month target price and Outperform ranking.
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: ARX 0UG9 TNZ BTE BNP BNE CJ CKE 0UR7 CR DEE ERF GXE IKM JOY KEL MQL NVA PPY POU PGF PWT PMT PRQ 0VCO PNE PSK RMP RRX SKX SGY TVE TOU TVETF VET WCP YO TET SPE LTS
An increased 2016 budget prompts slight boost to production estimates, despite a modestly trailing 2Q16 production figure. Consolidation of land at Forgan is positive and consistent with Corporate aggregation strategy, further expanding the Viking footprint.
Impact: Neutral. 2Q16 production slightly trailed both FirstEnergy and consensus estimates, however, a modestly increased 2016 budget should bring annual production volumes above our prior expectations.
Raging River has entered into an agreement to acquire Rock Energy in an all share deal valued at $109 mm (inclusive of $67 mm in debt).
Through this transaction, the Company adds 2,550 boe/d (95% oil), of which 1,950 bbl/d is outside Raging River’s core Viking asset base and producing from Rock’s heavy oil assets primarily at Mantario. Our proforma forecast portrays the transaction as 8% accretive to 2017e CFPS all
while maintaining the Company’s balance sheet flexibility and strong productio
Impact: Positive. The corporate acquisition of Rock Energy adds another layer of high quality, light oil Viking inventory at Kerrobert complementary to Raging River's existing position. While the market may be initially uncertain of the heavy oil barrels acquired from the Mantario pool, we view this as an opportunistic transaction at a low in the commodity cycle that may ultimately reside only temporary at Raging River. Further, tax pools of $208 mm will aid in reducing the Company's payable cas
Raging River reported first quarter financial and operating results that were in line to slightly below forecast, principally a function of its election to delay completion activity until 2Q16e on confirmation of crude oil price recovery.
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: ARX 0UG9 TNZ BTE BNP BNE CJ CKE 0UR7 CR DEE ERF GXE IKM JOY KEL ROAOF MQL NVA PPY POU PGF PMT 0VCO PNE PSK RMP RRX SKX SGY TVE TOU TVETF VET WCP YGR YO RE/ TET SPE LRE LTS
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: ARX 0UG9 TNZ BTE BNP BNE BXO CJ CKE 0UR7 ERF GXE IKM KEL MQL NVA PPY POU PGF PWT PMT 0VCO RMP RRX SKX SGY TVE TXP TVETF VET WCP YGR YO TET LRE LTS PNE
Following our participatoon in Raging River’s $108.1 mm equity financing, issuing 12.5 mm share at $8.65 per share, we summarize the Company’s 4Q15 financial and operating results, which we view as in line with our prior estimates. Overall, incorporating 4Q15 results into our estimates along with the recently closed financing, we see our general outlook unchanged, absent some minor changes to pricing, costs and the signi cant reduction to net debt which has improved Raging River’s 2016e debt to
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: ARX 0UG9 TNZ BTE BNP BNE BXO CJ CKE 0UR7 CR DEE ERF GXE IKM JOY KEL ROAOF MQL NVA PPY POU PGF PWT PMT 0VCO PNE PSK RMP RRX SKX SGY TVE TOU TVETF VET WCP YGR YO RE/ TET SPE LRE LTS
Raging River’s reserve book coming out of 2015 is reflective of another year of predictable, efficient capital allocation. With capital outlays entirely discretionary, the Company is moving to a lower capex program for 2016e to $150-$160 mm, though a growth target of 16,500 boe/d is not materially different from its prior assertion (-3%). The Company continues to have the best balance sheet in its peer group far and away. An updated NAV continues to support a valuation level offering decent posi
Impact: Positive. While a reduced capital investment outlook will likely induce downward revisions to our production and cash flow estimates, the decreased spending will also offer an improved financial position, which when coupled with stronger implied capital reinvestment efficiencies, should prove to be net positive for the stock on a risk adjusted basis, given the current environment.
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Last week we attended a site visit to i3’s assets in central Alberta in Canada – the company’s largest producing area. We were left with a favourable impression of the magnitude of the company’s operations in the region, of the professional operational running of these, and of the overall level of opportunity in this well-established oil and gas province.
Companies: i3 Energy Plc
Good news for Reabold, which is set to receive £5.2m of the second tranche payment from Shell imminently for the Victory gas field it acquired last year. The final £4.4m payment is due once the development approval for the field is received from the NSTA in the coming months. These funds will allow RBD to progress its two onshore gas developments in the UK and Italy and consider further distributions to shareholders. Partner funding of these projects remains an issue, but RBD’s risk/reward profi
Companies: Reabold Resources plc
88 Energy, Falcon Oil & Gas, Trinity Exploration & Production, Plexus Holdings, Baron Oil, Harbour Energy, EnQuest, Capricorn Energy, Arrow Exploration, Southern Energy, Serinus Energy, SDX Energy, Panoro Energy, Eco (Atlantic) Oil & Gas, OKEA ASA, Equinor Source: FactSet, weekly change 27/11/23-1/12/23 Oil extended declines, closing out a sixth straight weekly drop, as the OPEC+ output cuts announced Thursday failed to dispel the market’s gloom over swelling global supplies. West Texas Intermed
Companies: BOIL POS TRIN 88E
Cameroon: Ready for the Rig
Companies: Tower Resources plc
On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit
Companies: Pan African Resources PLC
Companies: HHR CLBS SND
We have been roadshowing Trident Royalties all week during which time the company released an announcement that they have entered into a commitment letter with BMO and CIBC for a new $40m revolving credit facility (RCF), with the potential to increase the facility to $60m via an accordion feature. The proceeds from the $40m are going to be used to repay the existing secured debt facility of $40m with Macquire in Q1 next year.
Companies: Trident Royalties Plc
Baron has been granted a further six-month extension to the Chuditch PSC. The end of Contract Year Two will now be 18 June 2024, at which time Baron will need to make a decision on entering Year Three. In the Third and final phase of the PSC, a final investment decision (FID) will be required on an appraisal well targeting the Chuditch discovery (Chuditch-2). Baron continues to make good progress in its discussions with potential funding partners, having previously announced that it is in “advan
Companies: Baron Oil Plc
Hartshead has secured a funding solution with partner Rockrose Energy to fund 100% of the Phase I development costs. Under the agreement, Hartshead has the option to exchange an additional 20% licence interest for an uncapped free carry, thereby covering the total cost of the Phase I development project (financing backstop). Importantly, Hartshead maintains at its election the option not to proceed with the RockRose financing solution, and introduce other financing solutions (eg project debt, pr
Companies: Hartshead Resources NL
Companies: EVN AYM SOLG SAV CNR RBW ATM GSCU CGH
Southern Energy delivered solid 3Q results with the focus of attention now turned towards the completion of 4 drilled uncompleted wells (“DUCs”). We see our investment thesis for Southern Energy – premised on the scale, location, quality, deliverability, low-cost nature of the company's Gwinville gas field in Mississippi, USA – very much strengthening based on our structural commodity price outlook and our growing confidence in the highly prolific Gwinville gas field, sharpening our interest in
Companies: Southern Energy Corp.
Companies: PNRL AYM RIO THR WSBN GMET TGR
Companies: GAL RIO AAU POW BMN GEM EMPR
The front of this note takes a look at the UK oil and gas sector, why domestic production is advantageous, what the main political parties think, and what could happen going forward. The latter part contains a review of the companies in our coverage – some that are UK centric, which give exposure to the note’s wider theme, and others that are focused elsewhere.
Companies: TLOU PTAL HTG ENW ITM BLVN RKH HBR UJO GMS JOG MATD CEG GENL AXL
Andrada Mining (“Andrada”; “ATM”) has produced its first laboratory scale high-grade spodumene concentrate from mineralised pegmatite at Lithium Ridge (ML133). The material was sourced from the drill core of three holes through two separate pegmatite ore bodies drilled earlier this year. The weighted average feed grade was 1.69% Li2O (15.2% Spodumene), with a 76% Li2O recovery, producing a 6.8% Li2O high-grade spodumene concentrate suitable for lithium carbonate production. A second drill progra
Companies: Andrada Mining Limited
Hannam & Partners