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Despite a seasonally quiet quarter for drilling operations, Whitecap impressed on the operational front with production of 70,611 boe/d 4% ahead of the consensus estimate while spending of ~$27 mm came in 30% lower than the “street” at $38.6 mm. With AFFO of $176 mm or $0.42/sh overlaying analyst estimates, the company delivered $114 mm of FCF in the period through an all-in cash use to cash flow ratio of 56%. Activity levels are slated to pick up significantly with 66% (~$300 mm) of its 2019e c
Companies: Whitecap Resources Inc.
Production of 75,529 boe/d and cash flow of $206.8 mm or $0.49/sh were both marginally ahead of expectations by 1%-2%. Whitecap’s performance was generated from less E&D spending than expected at $115 mm (GMP FE - $146 mm) which led to FCF generation of ~$58 mm in the period, bringing its D/CF ratio down to 1.6x. NCIB activity continued in 3Q18 with 1.0 mm shares purchased at an average price of $8.17/sh, bringing its total to ~3.0 mm shares ytd. We believe the NCIB continues to be one of the ke
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
In the latest corporate presentation, Management has updated its preliminary 2017e outlook where anticipated capital spending has increased from $205 mm to $300 mm. Average annual volume guidance under this accelerated view increases by 6% to 57,000 boe/d. This move continues to be funded well inside of organic cash flow generation with a proforma cash use to cash flow ratio of 83% (82% under the forward strip) while the balance sheet remains solid at 1.5x D/CF (2017e trailing). We are reaffir
Whitecap’s production topped FirstEnergy and Management guidance by 5%, and ideally spawn from capital spending that was 25% lower than anticipated. Commensurate cash flow was also 8% ahead of expectations with the help of production outperformance (particularly on the liquids front). While exit 2016e production guidance of 51,000 boe/d has been maintained, solid current volumes proforma the Husky asset deal and an active drilling campaign in 2H16e mean the Company appears on track to outperform
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
WHITECAP RESOURCES INC (WCP CN)
Whitecap’s 1Q16 production of 43,000 boe/d was inline with our forecast and Company projections. Cash flow generation of $67.9 mm or $0.22 per share marginally outpaced FirstEnergy and consensus forecasts that were both $0.21 per share. Volumes and cash flow markers were achieved on spending that was 9% lower than anticipated. The Company continued its cost cutting initiatives with production expenses now ducking below the $10.00/boe level, which leaves it in the running for lowest cost operator
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
Whitecap has increased its 2016e capital program to $148 mm (previously $70 mm) with the incremental spending coming in 2H16 and being funded by a 38% dividend reduction to $0.28 per share annually. The Company also offered a 2017e preliminary outlook that includes $150 mm of spending to achieve average production of 41,500 boe/d. While the net effect dividend cut and capex increase on 2016e total cash use to cash flow is negligible, the effect on 2017e valuation, sustainability and leverage cha
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
A Boundary Lake consolidating acquisition was finalized before the end of 2015, adding ~1,700 boe/d and 11.5 mmboe of 2P reserves. The $93.4 mm purchase price was funded through the recently announced, and successfully closed, $95 mm equity financing. 2016e guidance was revised higher to 38,800 boe/d on an unchanged capital program of $70 mm. Current production is well ahead of this at 44,000 boe/d. 4Q15 results reveal zero surprises with production, cash flow and spending all in line with both
Reserves grew 2%, 8%, and 7% per share on a PDP, 1P and 2P basis, respectively. While FD&A costs were largely attached to its acquisition of Beaumont Energy, organic F&D additions this year came in at an impressive $12.57/boe PDP or $6.97/boe 2P. Our updated CNAV analysis shows normalized y/y growth of 23%. Our RENAV methodology continues to support a compelling return profile well in excess of
current trading levels, particularly when evaluating the underpinning assets on a risk-adjusted basis
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
This publication serves to recap the chaotic changes that have happened since original 2016e budgets were disseminated, plus provide clarity on the names we believe will thrive, survive, or those that will be challenged to remain in this group for much longer.
Companies: ARX CJ CPG PEY WCP VET BNP BNE ERF SGY
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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