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Raging River Exploration has agreed to acquire all of the outstanding shares and debt of Rock Energy for total consideration of $109 mm or $0.89/sh in an all-share deal. Through the deal, Rock shareholders gain exposure to a material, high quality Viking footprint within a better capitalized entity. As such, we have moved our ranking to Tender and our target price to $1.09/sh.
Companies: Rock Energy
Rock reported first quarter results that markedly fell short of our expectations, exhibiting a culmination of negative financial characteristics that severely depressed cash flow generation in the period
Given cash flow that came in below our forecast due to higher than expected cash costs and
depressed price realizations.
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
Rock reported fourth quarter production and operating results short of forecast in part due to unscheduled shut-ins that have continued into 1Q16e within a weak pricing environment and Rock’s election to conserve capital, forgoing workovers. There is no update surrounding its strategic alternatives process, which remains ongoing. 1Q16 production is currently running below our prior expectation and we have adjusted our forecast accordingly on its election to not pursue workover or other drilling/
Impact: Slightly negative. Production in 4Q15 was below our thinking and 1Q16 production is trending over 10% below our prior estimate.
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
Rock reported 2015 year-end reserves that are not meaningfully different from its last update in December, though subsequent capital efficiency measures (F&D, FD&A, recycle ratios) are good and eclipse that of any year in the past 5 years. While not explicitly referenced, our 2016e forecast is coming down on anticipated 1Q16e production levels of 3,320 boe/d which is ~13% below that of our prior view,
as Rock focuses on capital conservation. With a commodity price update occurring within the ne
Impact: Slightly negative. The credit facility with ATB provided for $10 mm of additional liquidity relative to Rock's existing facility. We estimate that Rock will remain below the $65 mm available on its current facility through 2016e (on strip pricing). Recall, the Company is currently engaged in a strategic alternatives process, which was announced December 15, 2015.
Rock Energy provided an updated reserve report highlighted by y/y reserve growth per share of 15% on a 1P basis and 19% on a 2P basis,
while achieving an all-in 2P FD&A (incl. FDC) of $17.62 per boe, which compares favorably to prior years. The reserve book grew to 17.2 mmboe from 12.5 mmboe 2P, supported by: (1) significantly higher Viking reserve bookings; (2) an expansion of the Mantario pool via step-out drilling; and (3) recognition of an increased recovery factor for the Company’s Mantari
Impact: Positive, as Rock has remained consistently undervalued relative to its peer group and we expect incremental value could be unlocked through a strategic alternatives process.
“Worse? How could they get any worse? Take a look around you, Ellen. We’re at the threshold of hell”. These are the words spoken by Clark Gris-wold in the holiday classic “Christmas Vacation”, and seem aptly suited for the general sentiment in the Canadian energy space at the moment as we roll out a summary of our regular forecast revisions extending from our most recent crude oil and natural gas price forecast update.
Companies: AAV ARX BTE BNP ERF POU PEY PGF PSK PWT TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PNE RRX RMP SRX SGY TET TNZ BXO CKE GXE IKM ROAOF MQL RE SPE SKX TVE TVETF YGR YO CPG
Impact: Slightly positive, as despite given the minor reduction to the credit facilities, with a new lead lender and largely affirmed borrowing capacity, we estimate Rock will stay well within this facility through 2016e on strip pricing and prior capital investment assumptions which will remove a potential uncertainty in the market.
Baytex Energy Corp. (BTE): 3Q15 Analysis, Upgrading to Outperform | Bonterra Energy Corp. (BNE) Announces Third Quarter 2015 Results, Reaffirms Sustainability Measures | Ember Resources Inc.: Update, Introduction of 2017e Estimates | Encana Corporation (ECA) 3Q15 Update | Rock Energy Inc. (RE) Reports Third Quarter Results, Provides Preliminary 2016 Guidance
Companies: BTE BNE ECA RMP RE FORZ TXP WZR TCW ENB
Impact: Negative, despite a strong quarter of operations, retrenched 2015 guidance and a lower than forecast 2016 outlook will result in downward revisions to our forecast.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Rock Energy.
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Forecast and valuation update
Companies: IOG PLC
Companies: Savannah Energy 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
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
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
RCS-1 flow testing results
Companies: Arrow Exploration Corp.
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
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
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
• 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
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Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or req
Companies: TRB CWR CCS DMTR EMAN GTC JSE KIBO MDZ SYM
Savannah, which operates the Barroso lithium mine project in Portugal, reports today the results of its locked cycle test to determine optimal flotation reagents to confirm lithium recoveries and spodumene concentrate grades. Savannah is aiming for a 5.5%Li2O concentrate grade with a near 80% recovery. The reported work confirms that these should be possible and that in larger scale, bulk testing these parameters may improve. The work also highlights that there are still optimisations to be h
Companies: Savannah Resources Plc
• The RCS-1 well was flow tested at oil rates of up 1,872 bbl/d (936 bbl/d net to Arrow) of 30 API crude from the C7B sands.
• The zone was tested for 33 hours at an average oil rate of 1,076 bbl/d (538 bbl/d net to Arrow) with no formation water. Production will start next week at ~1,000 bbl/d (500 bbl/d net) in order to minimize water cut. We understand that the zone has the potential to produce 2,000-3,000 bbl/d of oil.
• This is again above our expectations (~800 bbl/d).
• The shallower C7