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We are discontinuing research coverage of Spartan Energy, as the stock has been delisted following its recently approved acquisition by Vermilion Energy. All prior production and financial estimates, as well as research ratings and target prices, must no longer be relied upon.
Companies: Spartan Energy
Management reported annual production of 22,200 boe/d, which is largely in line with our estimates of 22,125 boe/d and represents y/y PPS growth of 17%. This results in 4Q17 production of 22,636 boe/d, which is relatively flat QoQ but slightly ahead of our estimates of 22,340 boe/d. The company reported quarterly adjusted funds flow from operations of $65 mm ($0.35/sh dil), which was significantly ahead of our estimates of $57 mm ($0.31/sh dil) and consensus at ~$0.31/share. We don’t have the fu
Spartan plans for 2018 E&D spending of $183 million plus $22 million for discretionary spending on waterflood and seismic initiatives. The 2018 drilling program calls for 140 net development oil wells including 64 net open-hole wells, 29 net Ratcliffe wells, 30 net frac’d Midale, and the remaining to the Viking light oil play. Management expects this to result in average annual production of 23,400 boe/d and an exit rate of 25,000 boe/d, representing growth of 6% YoY and 11% exit to exit. Averag
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 TNZ PXX KEL RRX SPE WCP PXT SES PPL
3Q17 production of 22,630 boe/d was slightly ahead of our GMP FEestimate of 21,750 boe/d and the street estimate of 21,730 boe/d.
Quarterly cash flow of $41.1 mm ($0.22/sh dil) was in line with ourestimates of $40.1 mm ($0.22/share dil) and consensus of $0.21/share.
Production costs in the quarter were down 6% QoQ and were 5% belowour estimates ($17.28/boe vs GMPFE estimates of $18.15/boe). This is due to the fact that production costs were elevated in 2Q17 so it was positive to see the
Impact: Neutral. Spartan's 2Q16 financial results were consistent with our outlook on all key figures and inline with consensus cash flow estimates.
Impact: Neutral. Spartan's most recent acquisition continues to consolidate its land position at its key properties and build inventory in SE Saskatchewan at reasonable metrics. The Company's updated 2016e capital budget of $68 mm is cautiously below our prior view (FCC was $80 mm) and is expected to generate annual production of 10,700 boe/d (FCC was 11,000 boe/d) which will likely result in a minor reduction to our proforma production and cash flow outlook. Although we expect this acquisition
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: Positive. Spartan continues to capitalize on the low in the commodity cycle further consolidating its land base in SE Saskatchewan, adding low decline production and bolstering its well inventory at attractive metrics. We expect the Company balance sheet will continue to screen as flexible with ~$100 mm forecast to be drawn on its recently renewed and unchanged $150 mm credit facility following these transactions.
Spartan is acquiring, privateco, Wyatt Oil + Gas Inc. for $77 mm through an all-share transaction which includes the assumption of $42 mm of debt. The deal adds 1,330 boe/d, 14.6 mm 2P reserves, 45 net sections of land and 177 drilling locations in southeast Saskatchewan which are proximal to Spartan’s existing core operations. Given our revised estimates point to 10% per share accretion on a CFPS basis while 2017e/2016e PPS share growth (debt-adjusted) jumps to 13%, we are increasing our target
Impact: Positive. The deal brings in production and a stable of drilling locations proximal to Spartan's current assets at a reasonable valuation. This marks the Company's first significant acquisition in ~2 years.
Spartan delivered 1Q16 results that were in line on a cash flow basis, however ahead on a production basis. Spending was modestly higher than anticipated.
Neutral to slightly positive with production ~5% ahead of expectations (on higher capital spending) while cash flow overlaid our estimates. Higher 1Q16 production and mild spring break-up conditions could have positive implications for estimates for 2Q16e and beyond.
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
After coming off restriction following our participation in Spartan’s $96 mm equity financing wherein the Company issued 39.9 mm shares at $2.41 per share, we summarize the Company’s 4Q15 results, 2015 reserves and 2016 capital guidance. Fourth quarter results beat both our production and cash flow estimates while the Company posted single digit 1P and 2P basis F&D costs in a relatively quiet and organic year of operations, aided by a y/y reduction in FDC. A conservative 1H16e budget of $18 - $
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Forecast and valuation update
Companies: IOG 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.
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 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
Completion of commissioning of Kiln 3 at Vanchem last month keeps Bushveld on track to end 2022 with a sustainable production run rate of 5,000-5,400t V pa, a solid platform from which to refocus on longer-term growth. Fully utilising the vast array of processing infrastructure at Vanchem to treat feed from an expanded mining and ore concentration operation at Vametco makes a lot of sense given the fixed component of costs at the former and the large mineral resource at the latter. Bushveld’s re
Companies: Bushveld Minerals Limited
Companies: Touchstone Exploration Inc
Companies: D4T4 NTQ FEN IOG PMG SAV SCE
We have updated our valuation for SolGold (“SOLG”) following the filing of the Cascabel PFS technical report. The changes result in a US$3.6bn NPV8% and 22% IRR (immediately pre-capex) at US$8,500/t Cu and US$1,850/oz Au, driving a modest cut in our target to 85p/sh (Jun’23E) from 101p. Nonetheless, we view this as a solid base case, with tangible potential upside through: inclusion of the open-pit Tandayama-America (“TAM”) deposit 3km away; additional caves and throughput capacity to capture th
Companies: SolGold Plc
Hannam & Partners
Savannah, today provides an update on the EIA process for the development of the Barroso Lithium Project in Portugal. The Agência Portuguesa do Ambiente (APA) – Portugal's environmental regulator – has contacted Savannah and both have agreed to continue the EIA evaluation process under ‘Article 16' of the law which regulates Environmental Impact Assessments in Portugal. This voluntary process will allow Savannah to work with the entities that make up APA's Evaluation Committee to amend element
Companies: Savannah Resources Plc
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