Gibson Energy (GEI-TSX); BUY, C$30.00 ― FLASH: 4Q19 beat and 2.9% dividend bump | SECURE Energy Services(SES-TSX); BUY, C$6.00 ― Tempering 2020e EBITDA forecasts in light of commodity price deterioration
Companies: Gibson Energy Inc. (GEI:TSE)Secure Energy Services Inc. (SES:TSE)
SECURE Energy Services (SES-TSX); BUY, C$7.00
Companies: Secure Energy Services Inc.
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: CNQ AAV ATU PXX KEL RRX SPE WCP PXT SES PPL
SECURE reported adjusted EBITDAS of $8.5 mm, above our estimate of $6.4 mm, while margins in the PRD division far exceeded our estimate. 3Q16e activity has been impacted by wet weather across the WCSB, but the startup of the Kakwa FST in September 2016 will be additive for PRD volumes in 4Q16e. We expect gross margins in the PRD division to exceed 50% in upcoming quarters. We have reduced our 2016e EBITDAS to $91 mm from $97 mm while our 2017e EBITDAS is effectively unchanged at $171 mm
SECURE has announced the acquisition of its previously owned JV assets in La Glace and Judy Creek for $26.7 mm. SECURE regains 100% ownership in portions of these assets from its JV partner, Pembina Pipeline Corporation (PPL). We believe the transaction metric is roughly 5.0x to 6.0x EV/EBITDAS. SECURE’s 2016e EBITDAS has been increased by 1% in 2016e ($97 mm) and 2% in 2017e ($171 mm). The Company’s balance sheet remains in impeccable shape at 1.6x net debt/ EBITDAS in 2016e.
Impact: positive, as the company has acquired PRD assets at 5.0x to 6.0x EV/EBITDAS. It also increases the Company's exposure to the PRD business.
SECURE has announced the acquisition of PetroLama for $53.5 mm. PetroLama specializes in the physical trade, storage, terminalling and transport of crude oil and NGLs. This transaction is expected to generate EBITDAS in the range of $8 mm to $9 mm over the next 12 months, indicating an EV/EBITDAS valuation range of 5.9x to 6.7x.
We are updating our oilfield industry forecasts post the release of FirstEnergy’s new commodity price forecast for crude oil and natural gas on March 24, 2016. We have updated our 2016e Canadian well count/drilling days forecast to 3,209/37,335 from 3,800/43,325. In 2017e, we have left our forecast unchanged at 6,200 wells/70,200 days. In the U.S., our 2016e rig count forecast is now 482 (prior: 610) and 2017e is 675 (prior: 775). Data for 1Q16e came in weaker than our prior forecast anticipated
Companies: CWC ESI PD SVY TDG WRG CET PSI PHX BDI MTL SES TOT CFW FRC TCW
Secure has closed a bought deal financing for $150 mm (19.5 mm shares), which will initially be used to reduce indebtedness, but we expect will ultimately be used to execute acquisitions. Based on our estimates, SECURE’s balance sheet could easily absorb an acquisition of $50 mm of EBITDAS at anywhere from 4.0x to 6.0x EV/EBITDAS using a 75/25 (cash/equity) structure. This would put potential acquisition amounts at $200 mm to $300 mm. The above assumptions applied to our current 2017e would lead
Secure reported 4Q15 EBITDAS of $32 mm, above our es mate of $30 mm. The Company’s cost control ini a ves were par cularly impressive as EBITDAS margins of 25% surpassed our es mate of 23%. The Company has announced a 2016e capital plan of $50 mm. The capital will be used to build a full service terminal at Kakwa; a land ll expansion; two disposal wells; and addi onal tanks and risers. Roughly $10 mm has been allocated to maintenance capex. We have le our 2016e EBITDAS unchanged at $106 mm as l
In conjunction with the new oil price forecast released by FirstEnergy on February 8, 2016, we have updated our 2016e Canadian well count/drilling days forecast to 3,800/43,325 from 4,950/54,853. In 2017e, we are now forecasting wells/drilling days of 6,200/70,200 from 7,900/86,600. In the U.S., our 2016e rig count forecast is now 610 (prior: 763) and 2017e is 775 (prior: 1,063).
While a new year, a lot of our Top Ideas are old and familiar. We continue to believe the market will coalesce around low cost entities able to grow or at least maintain earnings power within a framework of capital conservation. While we continue to be optimistic surrounding elevated M&A activity, management teams and boards will be reluctant to sell at cyclical troughs, and as such do not believe the market will speculate on transactions despite some compelling asset prices reflected in equitie
Companies: CNQ AAV ARX PEY TOU CPG WCP CJ KEL PPY RRX SRX IAE PXT TLW SES ENB ENF
We have updated our 2016e WCSB drilling days forecast to ~54,900 days, which is 18% below our prior forecast and a 16% decline y/y. We are also rolling out our 2017e drilling days forecast, which is 86,600 days, or a 58% improvement from 2016e. In the context of the last 25 years, our 2017e forecast ranks 19th for active drilling days. Our 2016e U.S. rig count forecast has been reduced to 763 rigs from 888 rigs. In 2017e, we are forecasting a U.S. rig count of 1,063 rigs.
Advantage Oil & Gas Ltd. (AAV) Reports Third Quarter Results Slightly Behind Expectations Due to TCPL Restrictions, Beats Cost Bogeys by 9%, Offers Strong Middle Montney IPs | Bonavista Energy Corporation (BNP) Reports Third Quarter Results, Reduces Dividend, Unveils Conservative 2016e Guidance Aimed at Balance Sheet Preservation | Crescent Point Energy Corp. (CPG) 3Q15 Results In Line, Waterflood and Service Cost Deflation Recognition Highlight Operational Update | Crew Energy Inc. (CR) Reports
Companies: BNP CPG CR PWT RRX TET PRE FRC PHX PSI SES
Canadian Natural Gas Markets: Canadian Natural Gas Price Differentials - Weird, Wonky and Why | Oilsands Project Update – July 2015 | Penn West Petroleum Ltd. (PWT) Announces Sale of Non-Operated Working Interest in Weyburn Unit | SECURE Energy Services Inc. (SES): Screening Attractively on Almost All Metrics
Companies: Penn West Petroleum (PWT:TSE)Secure Energy Services Inc. (SES:TSE)
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Phoenix copper today provides an update on its ground geophysical survey over the Red Star prospect near its Empire copper project in Idaho. The Red Star skarn mineralisation (lead and silver ± copper, zinc) is associated with magnetite; the survey just undertaken was to better understand the distribution and orientation of magnetite to find potential mineralisation and to inform the location and direction of a further drilling programme.
Companies: Phoenix Copper Ltd. (United Kingdom)
We are initiating coverage of VAST Resources (VAST), which has wholly-owned Baita Plai and Manaila polymetallic mines plus an interest in two exploration projects, all located in Romania. At this stage, Baita Plai is the main driver for our valuation as it is currently being ramped up to 14kt per month. As such, we expect Baita Plai’s Cu eq output to reach c 2.4ktpa in FY23F followed by 3.3ktpa in FY24F. This, coupled with Manaila’s potential re-start of an additional 3ktpa of Cu eq over the sho
Companies: Vast Resources plc
With the recent acquisition of producing assets in the US, Canadian Overseas Petroleum (COPL) has started a new chapter in its existence and has already transformed its value proposition to investors. Following the recent operational developments, we are already seeing potential for a significant additional value accretion in the next 12 months, not only from the producing Barron Flats Unit (BFU), but from several other opportunities as well. The potentially better-than- expected production ramp
Companies: Canadian Overseas Petroleum Limited
Diversified Energy Company (DEC) has announced a fourth acquisition within the Company's Central Region, acquiring a portfolio of upstream assets and related infrastructure from Tapstone Energy Holdings LLC and its related party, KL CHK SPV LLC. Oaktree Capital will co-invest in the acquisition, representing Oaktree's third co-investment since May this year. Importantly, Oaktree's participation provides important third-party validation whilst also affording Diversified additional liquidity and l
Companies: Diversified Energy Company PLC
The results of the recent Extended Well Test (EWT) programme at the West Newton project site located within UK onshore licence PEDL183 (UJO: 16.665%) have confirmed that the WNA-1, WNA-2 and WNB-1z wells represent significant hydrocarbon discoveries within the Kirkham Abbey formation. In this regard, the operator has issued updated best estimate in-place hydrocarbons volumes for the wider licence area and will now sanction several external studies which will encompass a range of potential reserv
Companies: Union Jack Oil Plc
West Newton A-2 flow test and resource update
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Gymshark has started to put together plans for a stock market listing according to City A.M. The company hit a £1bn valuation just over a year ago and boasts customers in more than 130 countries. Gymshark was founded by teenager Ben Francis in 2012 in his parents’ garage with products that appeal to Gen Z consumers. Timing TBA
Rubix Group Holdings, the market leading pan-European distributor of industrial main
Companies: ZOO CUSN ECHO IDEA PURP TEK
Based on the success of the Talitha #A well result, we are upgrading our fair value estimate for Pantheon Resources to 172p (from under review; and from a pre-drill fair value estimate of 89p). We believe that the Talitha #A result confirmed the presence of multiple oil-bearing conventional oil reservoirs that have success-case potentials of elephantine scale. Our valuation reflects only the potential of Pantheon Resources' prime assets for which resource estimates have been provided; namely, Th
Companies: Pantheon Resources plc
Falcon Oil & Gas has announced the completion of the drilling of the Velkerri 76 appraisal well to a total vertical depth of 2,129m. Preliminary evaluation of the well is very encouraging and has confirmed the presence of four prospective intervals within the Amungee Member, proving both the continuation and the uniformity of the regionally extensive Amungee Member across the Beetaloo Sub-Basin. Analysis of the mud gas data taken during drilling has evidenced that the Amungee Member at the Velke
Companies: Falcon Oil & Gas Ltd.
Companies: Thungela Resources Limited
• 3Q21 production was 9,508 bbl/d in line with our expectations (9,500 bbl/d).
• From October 1 to October 11, production averaged 14,218 bbl/d, down from 15,131 bbl/d over the last 7 day of September and from 15,494 bbl/d over the ten-day average ended September 27. The reduction was due to a ~5.4% downtime and week on week fluctuations.
• Well 8H continues to perform extremely well with 7,485 bbl/d in 4Q21 to date (minimal decline compared to 7,700 bbl/d in average of the first 30 days of oper
Companies: PetroTal Corp.
H1 2021 results
Companies: Hurricane Energy Plc
EQTEC have just announced that it will be investing an additional £2.1m in the North Fork project In California to increase its equity from 10% to 49%. This forms part of EQTEC's wider strategy of ownership in projects to accelerate their development, both in terms of capital and expertise.
Companies: EQTEC PLC
EQTEC have signed an agreement for the proposed acquisition of a 5MW project in Drama, Greece. The plant will produce 5MW of energy from locally sourced forestry waste.
A resilient, low-cost production base, combined with a rising oil price, has helped underpin high levels of cash generation during Q3/21, laying the foundations for Trinity to accelerate investment and in-turn achieve longer-term production growth. Initial results from the continued interpretation of the onshore 3D seismic data have proved very encouraging, with several, potentially meaningful, new plays and leads already identified. Trinity expects to finalise an onshore drilling programme duri
Companies: Trinity Exploration & Production Plc