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Surge reported 2Q19 results which were largely in line with expectations, though adjusted funds flow modestly outpaced expectations (Surge $0.16 vs. consensus $0.15/sh), as the company’s impressive $31.42/boe operating netback aided in generating $17.7 mm of FCF in excess of dividends and capex. The company closed a GORR disposition for ~214 boe/d late in the quarter, bringing in net proceeds of $29.1 mm. We were carrying this disposition in our forecast previously, so on that basis, there is li
Companies: Surge Energy Inc.
Surge reported fourth quarter financial and operating results below forecast (CFPS $0.02 vs. GMPFE at $0.03 and consensus of $0.04). Funds flows were down 81% y/y relative to 4Q17 at $32.2 mm in contrast to this period at $6.2 mm despite a 34% increase in production driven principally by a 37% and 52% reduction in Edmonton Light and WCS benchmark oil prices, respectively.
Surge reported third quarter financial and operating results that crested our outlook though in line with consensus. We previously outlined the merits of its Mount Bastion Oil & Gas acquisition ($320 mm, +5,500 boe/d) in our prior comment dated September 17th, 2018, which closed October 25th outside of 3Q18.
Surge announced that it has closed its acquisition of Mount Bastion Oil & Gas which we outlined in our prior comment dated September 17th, 2018. Encompassing $145 mm in cash and the issuance of 75.4 mm shares from treasury, the deal is worth ~$300 mm given Surge share price performance since announcement.
In late October, the company announced a $37.2 mm acquisition in the company’s core Sparky area along with a $44.5 mm convertible debenture financing. We are off restriction following the closing of the convertible debentures. GY acquired 780 boe/d (95% liquids weighted) of low decline (<15%) production offsetting its Eyehill property (see map within comment). The price paid represents a flowing barrel metric of $47,700/boe/d, a reserve value of $9.07/boe (2P) and a P/CF metric of 5.1x. This is
Surge has increased its 2016e exit production target to 13,500 boe/d in concert with its 2016e budget moving to $66 mm ($55 mm previously).
Preliminary plans for 2017e include an $85 mm capital program that is expected to generate average volumes of 13,650 boe/d with an exit rate of 14,100 boe/d, outlining a “return to growth” strategy. With our 2017e volumes and liquids weighting on the rise, paired with cash costs
coming down, our cash flow outlook increases 24% alongside an improvement in
Impact: Slightly positive, as the Company's formal 2016e exit target rate of 13,500 boe/d is up 4% over the prior view, on capital spending that increases by $11 mm to $66 mm. This sets up for positive moves required in our 2017e forecast with Management's preliminary outlook for an $85 mm capital outlay generating average volumes of 13,650 boe/d and an exit rate of 14,150 boe/d.
Surge Energy reported 2Q16 results that were slightly behind on production and well ahead on a cash flow basis due primarily to non-recurring items. Adjusting for these items brings cash flow essentially in line with our estimate. Updating for 2Q16 actuals and making adjustments to our forecast pricing and cost related inputs moving forward, we show our cash flow outlook improving by 21% and 7% in 2016e and 2017e, respectively. With positive moves to our proforma view, we are increasing our targ
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
Surge provided an operations update to the market ahead of its 2Q16 results release. Conditions within the Company’s key operating areas allowed an early start to the drilling program and, as a result, production has crested its exit rate guidance of 13,000 boe/d early. Well costs continue to trend down notably within its core Upper Shaunavon play where recent DC&T costs have dropped 20% from previous guidance and are well below our type curve assumptions. Following a normal course bank line rev
Surge’s 1Q16 production and cash flow were in line with our estimates while E&D spending came in below our forecast.
Neutral to slightly positive, Surge reported production and cash flow that were in line with our estimates on E&D spending below our forecast.
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
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: AAV ARX BTE BNP CPG ERF POU PEY PGF PWT TXP VET WCP BNE CJ KEL LTS LRE NVA PPY PNE RRX RMP SGY TET TNZ BXO CKE GXE IKM MQL SKX TVE TVETF YGR YO
Surge has chosen to cut its monthly dividend by 50%, from $0.0125 per share to $0.00625 per share ($0.075 per share annualized). Implied yield (based on the most recent closing price) is 3.5%. Revised 2016e guidance now portrays a $55 mm capital budget (previously $55 mm) that will target exit 2016e volumes in excess of 13,000 boe/d (76% liquids).Updated FirstEnergy forecast continues to frame challenging sustainability metrics with a 2016 cash use to cash flow of ratio of 213% (267% - forward
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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.
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
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
• 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
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
• 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
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