Oil prices continue strong rally despite weak global demand
Companies: Canadian Overseas Petroleum Limited (XOP:CNQ)PetroTal Corp. (TAL:TSX)
Canadian Overseas Petroleum (COPL LN): US$65m Senior Credit Facility secured | Energean Oil & Gas (ENOG LN): Comprehensive trading update | TransGlobe Energy (TGL LN): FY20 production well within guidance
Companies: XOP ENOG TGL
88 Energy (88E LN): 88E names as the highest bidder for Tract 29, Alaska Canadian Overseas Petroleum (COPL LN): Further £3m placing secured Echo Energy (ECHO LN): Cooperation agreement signed with GTLI, Bolivia
Companies: 88E XOP ECHO
West Texas Intermediate (WTI) and Brent crude oil prices posted increases on the final trading day of 2020. The February WTI futures price gained 12 cents, settling at $48.52 per barrel. The light crude marker Thursday traded within a range from $47.77 to $48.58. Brent crude for March delivery finished Thursday's session at $51.80 per barrel, reflecting a 17-cent gain. Although oil prices have recovered since plunging this past spring amid steep pandemic-driven demand destruction, the benchmarks are still 20-plus percent overall for the year. By comparison, the closing WTI and Brent per-barrel prices on 2 January 2021, were $61.18 (21 percent higher) and $66.25 (22 percent higher), respectively. The price of a gallon of reformulated gasoline (RBOB) often moves in the same direction as the oil benchmarks, but such was not the case Thursday. January RBOB posted a slight loss – well under a penny – to close just below $1.41. Henry Hub natural gas futures finished higher, with the February contract adding nearly 12 cents to settle at $2.54.
Companies: XOP TAL ENOG UOG
Bahamas Petroleum Company (BPC LN)C; Target: 6.7p: Further funding secures the 2021 programme - BPC is raising US$10 mm of new equity immediately with a fund managed by Lombard Odier. The placing comprises 375 mm new shares at 2.0p per share. The investor is also issued warrants to subscribe for 93.75 mm shares at 3.0p and 93.75 mm shares at 4.0p over a period of one year. If all of these warrants were to be exercised, BPC would raise a further US$8.7 mm. BPC has also the option to raise up to a further US$5 mm on the same terms within 10 days of spudding Perseverance #1 in The Bahamas. The investor has the option to double that amount to US$10 mm. If the investor has not made an aggregate return of 115% of the placing price by the earlier of (i) 60 days after the date of spudding of BPC's Perseverance #1 well or (ii) YE21, BPC would have to make a cash payment so that the Investor's aggregate return from those new ordinary shares reach 115% of the subscription price. This new funding boosts BPC’s cash position to a minimum US$27.5 mm. This is important because it means that even if Perseverance#1 cannot immediately be drilled, the company has now enough cash resources to fund its development, appraisal and exploration program in Trinidad and Suriname. Our new Core NAV and ReNAV incorporating the US$10 mm placing are respectively 2.0-2.3p and 6.7-7.1p based on a NPV10-12.5%. Importantly even excluding the Bahamas, our Unrisked NAV for the company based on the 2021 base case activity programme in Trinidad and Suriname in 2021 is 4.6-5.1p per share. Pharos Energy (PHAR LN)C; Target £0.35: Readthrough from TransGlobe’s deal in Egypt - TransGlobe Energy has negotiated new fiscal terms in Egypt with a better cost recovery limit and higher profit share. In return TransGlobe is paying US$16 mm in cash on completion plus US$10 mm per year for five years. Since the announcement about a week ago, TransGlobe’s share price has appreciated by ~100%. While we understand that Pharos is also negotiating new terms with the Egyptian authorities for the El Fayum licence, the share price has barely moved since TransGlobe’s announcement. The situation at TransGlobe is different as it involves the restructuring of an entire portfolio of licences. The new terms that Pharos is aiming to secure are therefore likely to be different. Pending further details on the outcome of Pharos’ discussions, we are exploring the impact on Pharos valuation if, hypothetically, El Fayum’s terms were amended to match those secured by TransGlobe. Increasing cost recovery limits from 30% to a hypothetical 40% of revenue and contractor profit sharing from 15-18% to 30%, while paying the same cash amounts as TransGlobe, would boost our Core NAV for Pharos with only two rigs in Egypt by ~50% from £0.19-0.24 per share to £0.29-0.36 per share (NPV12.5-15%) and our ReNAV by ~30% from £0.35-0.41 per share to £0.48-0.55 per share. Importantly, even the one rig case in Egypt becomes attractive. Assuming four rigs in Egypt, our Core NAV under the TransGlobe terms would be almost £0.50-0.57 per share. PetroTal (PTAL LN/TAL CN)C; Target: £0.45: Gran Tierra (GTE LN/CN) selling large stake in the company – Gran Tierra is selling 218,012,500 shares in PetroTal (26.7% of PetroTal’s share capital) to Remus Horizons for £21.7 mm (~£0.10 per share). Upon closing the Transaction, Gran Tierra will own 28,087,500 PetroTal Shares, representing approximately 3.44% of the issued and outstanding PetroTal Shares. Tethys Oil (TETY SS)C; Target £0.35: Changing gear - Tethys is operator on Blocks 49, 56 and 58 in Oman. We anticipate more activities on all these Blocks in 2021. The results of the Thameen well on Block 49 (our estimates: ~15 mmbbl gross resources – Unrisked NAV of SEK9 per share) are expected in 1Q21. The involvement of EOG Resources as 50% partner on Block 49 highlights the quality and the materiality of the asset. EOG is a major player in unconventionals. Their interest in exploring the potential presence of such a play on the licence adds a further material dimension to the Tethys story. Block 56 straddles the eastern flank of the South Oman Salt Basin and the Tertiary Basin. Multiple leads associated with the proven play on the adjacent Block 6 have already been identified on 2D seismic. At Block 58, which straddles the western flank of the South Oman Salt Basin and the Western Deformation Front, a number of undrilled leads have already been identified based on Tethys’ work. The firm is to launch a share buy back programme for up to US$5 mm until early February. Thereafter the programme could be extended. We read this as a positive sign for further shareholder distributions. The current share price represents EV/DACF multiples of only 2.3x for 2021 and 1.0x for 2022 and the core dividend implies >4% yield. AMERICAS Canadian Overseas Petroleum (COPL LN): Acquiring US assets – Canadian Overseas is acquiring Atomic Oil & Gas for a consideration of US$54 mm consisting of assumed debt, cash and shares. Atomic's assets are located in the Powder River Basin in the State of Wyoming, where it holds operated interests in 52,258 acres (gross) of contiguous leasehold including the Barron Flats Shannon Miscible Flood Unit (57.7% WI) and the Cole Creek Unit (66.7%) that are producing light oil and hold 24.7 mmboe of net 2P reserves. Current gross production of 1,400 bbl/d is expected to rise to 5,000 bbl/d in 2022 and ~7,000 bbl/d in 2026. The consideration includes (1) US$1 mm deposit, (2) US$8 mm (debt financed) for 15% WI in Atomic’s leasehold interests, (3) US$26 mm of assumed debt on closing, (4) US$15 mm of additional debt and cash on closing and (5) US$4 mm in shares. The 2P case assumes US$40 mm development costs in 2021, ~US$27 mm in 2022 and ~US$41 mm in 2023. Maha Energy (MAHA-A SS): Disappointing well results and production guidance downgrade in Brazil – The Tartaruga Maha-1 well test results indicate a lower than expected oil production rate. Two zones were tight and did not flow while a third zone only flowed limited amount of oil. The last zone flowed fluid with a very high water cut. Covid-19 is also causing delays in the company’s 4Q20 Brazilian well completions programme. Therefore, the Company expects the FY20 average production to be ~3,250 boe/d (previous guidance of 3,700 - 4,000 boe/d). ASIA PACIFIC Advance Energy (ADV LN): Acquiring assets in Timor-Leste – Advance Energy is acquiring up to 50% WI in the Buffalo oil field offshore Timor-Leste from Carnarvon Energy for a consideration of up to US$20 mm in cash. Buffalo has produced 21 mmbbl over 5 years in the early 2000s. The cash consideration will be applied to funding the drilling of the B-10 appraisal well and to appraise the contingent oil resource of 31.1 mmbbl with the intention for drilling to take place in late 2021. In the event Advance raises less than US$20 mm, but more than US$10m, Advance will acquire a lower interest in Buffalo. Advance’s equity level is 2.5% per US$1 mm contributed to the project. EUROPE ADX Energy (ADX AU)C: Raising new equity – ADX is raising A$1.3 mm of new equity priced at A$0.006 per share. In addition, new investors are offered an option for every two placement shares to acquire an additional share in the company at a strike price of A$0.008 per share (expiry date of 15/06/2021). ADX is also offering a share purchase plan for up to A$1.0 mm allowing shareholders to invest on the same terms as the placement. Hurricane Energy (HUR LN): Operational update in the UK North Sea - The 205/21a-6 well is currently producing at ~12,300 bbl/d on artificial lift with a ~23% water cut. In early November 2020, the Company decided to limit production to approximately 12,000 bbl/d for reservoir evaluation and management purposes and aims to maintain production around this level in the near-term. Hurricane could re-enter and side-track the existing 205/21a-7z well to boost production capacity in 2021. Development costs are currently estimated at ~US$60 mm. Water injection is also considered for 2022 with an estimated cost of US$75 mm for the programme. At as the end of November Hurricane held US$87 mm in net free cash. The company has appointed advisors to discuss funding options with parties including the holders of its convertible bonds. Jersey Oil & Gas (JOG LN): Update on prospectivity in the UK – Jersey has matured four prospects to drill-ready status: Verbier Deep, Cortina NE (J64), Wengen (P2170) and Zermatt (P2497) with aggregate P50 prospective resources of 222 mmboe. Individual probabilities of geological success range from 16 to 30%. Subject to funding, a drilling campaign is planned from 2022. OKEA (OKEA NO): Acquiring Norway assets – OKEA is acquiring 40% WI in the PL972 licence including the Vette oil discovery (30-50 mmboe) from Repsol. Premier Oil (PMO LN): Operations and Corporate update – Chrysaor’s 2P reserves and 2C contingent resources have been respectively estimated at 491 mmboe and 388 mmboe. Premier’s production averaged 61.2 mboe/d from January to November and Premier reiterated it FY20 guidance of 61‐64 mboe/d. Premier expects FY21 production to be in the range of 61-66 mboe/d as new production from Tolmount (due on-stream in 2Q21) offsets natural decline and maintenance shutdowns deferred from 2020. Catcher oil production has been restored to rates >60 mbbl/d following a seven day unplanned outage in mid-November. In early December, production from the Solan field was shut in following the failure of the emergency generator. FY21 capex is estimated at ~US$275 mm. Net debt at the end of November was US$2.06 bn. Chrysaor’s production averaged 174 mboe/d from January to November and Chrysaor forecasts FY20 production of 174 mboe/d with 140-155 mboe/d in 2021. Capex in 2020 and 2021 is estimated at respectively US$718 mm and US$750-850 mm. Serica Energy (SQZ LN): Operations update in the UK North Sea – During the most recent three-month period, net production from Bruce, Keith and Rhum and Erskine has averaged 26,300 boe/d. Offshore operations on the R3 Intervention Project have been slower than had been anticipated due to poor weather conditions and a technical problem with rig equipment. As a result, rig operations will not be completed before late January 2021. FORMER SOVIET UNION Equinor (EQNR NO): Acquiring oil projects in Russia – Equinor is acquiring a 49% stake in Krasgeonats from Rosneft for US$550 mm. Krasgeonats holds 12 exploration and production licenses for areas with conventional resources located in Eastern Siberia. MIDDLE EAST AND NORTH AFRICA Chariot Oil & Gas (CHAR LN): Licence award in Morocco – Chariot has been awarded a 75% interest in the Rissana licence. Rissana (approximate area 8,476km2) will completely surround the offshore boundaries of Chariot’s existing Lixus Offshore Licence (approximate area 2,390km2), which contains the Anchois Gas Discovery, as well as covering the most prospective northern areas of the previously held Mohammedia Offshore Licence and Kenitra Offshore Licence. Gulf Keystone Petroleum (GKP LN): Operational update in Kurdistan – The PF-1 is now operating at its current maximum processing capacity of ~27.5 mbbl/d. Debottlenecking activities at PF-1 remain on-track to further increase production capacity to >30 mbbl/d during 1Q21. Gross Shaikan production is currently at ~42,000 bbl/d, ~20% above the November 2020 average rate. FY20 gross production is expected to be at, or slightly above, 36 mbbl/d, the top end of the guidance range. As at 14 December 2020, the company had a cash balance of US$142 mm. SUB-SAHARAN AFRICA Africa Oil (AOI SS/CN): Dividend from Prime – Africa Oil has received a net dividend payment from Prime (Nigeria) of US$37.5 mm. Cairn Energy (CNE LN): Completing divestment of Senegal – Cairn has received US$525 mm in cash for the divestment of its assets in Senegal to Woodside Petroleum. As indicated previously the company will return US$250 mm to its shareholders through a £0.32 per share special dividend. FAR (FAR AU): Non-binding offer to buy the company – FAR has received a conditional non-binding indicative proposal from Remus Horizons to acquire the company for A$0.021 per share in cash. LEKOIL (LEK LN): Operational update in Nigeria - Gross production at Otakikpo for July to November was 4,519 bbl/d with FY20 guidance of 5,150 bbl/d. Production is 20% lower than during 1H20 due to bad weather, maintenance works and OPEC restrictions. As at 30 November, LEKOIL has an outstanding balance of external interest-bearing loans and borrowings of approximately US$15.7 mm and a total cash balance of US$1.6 mm. Trade and other payables stood at US$28.4 mm. The company has also extended the duration of a US$1.9 mm loan to its CEO by one year to December 2021.
Companies: SQZ PMO AOI BPC CNE XOP GTE HUR JOG MAHAA TAL PHAR TETY TETY
Tower Resources* (TRP LN): Tower and New Age enter second exploration period, South Africa | Canadian Overseas Petroleum (COPL LN): Transformational acquisition agreed
Companies: Tower Resources plc (TRP:LON)Canadian Overseas Petroleum Limited (XOP:CNQ)
88 Energy (88 LN/AU)/Premier Oil (PMO LN): Drilling update in Alaska | Eco (Atlantic) Oil & Gas (ECO LN/EOG CN): Update in Guyana | Maha Energy (MAHA-A SS): Acquisition in USA and production update | Parex Resources (PXT CN): Low capex programme and production update in Colombia | Total (FP FP): Significant discovery in Suriname | Aker BP (AKERBP NO): Small discovery on Norway | BP (BP LN): 1Q20 update and capex reduction | Providence Resources (PVR LN): US$3 mm equity raise | RockRose Energy (RRE LN): FY19 results, guidance revision | Royal Dutch Shell (RDSA/B LN): 1Q20 update | Valeura Energy (VLE CN/VLU LN) : Update in Turkey | Caspian Sunrise (CASP LN): Production update in Kazakhstan | JKX Oil & Gas (JKX LN): FY19 results | Nostrum Oil & Gas (NOG LN): Corporate update in Kazakhstan | Energean Oil & Gas (ENEOG LN): Progress at Edison E&P acquisition | Payment from Kurdistan received | TransGlobe Energy (TGL LN/CN): Operating update in Egypt | United Oil & Gas (UOG LN): Update in Egypt | Aker Energy: Postponing development in Ghana | Canadian Overseas Petroleum (COPL LN/XOP CN): US$63 mm legal claims by Essar against ShoreCan | Tullow Oil (TLW LN): RBL redetermination in line, no further principal repayment until 2021 and further capex reduction
Companies: 88E AKERBP BP/ CASP XOP DNO ENOG GENL GKP JKX MAHAA NOG PMO PXT PRP RDSA RRE TGL TLW UOG VLE
Bahamas Petroleum (BPC LN) (not covered): Exploration drilling progress in the Bahamas | PetroTal (PTAL LN): BUY, £0.45; Conversion of water disposal well to oil producer in Peru | Regal Petroleum (RPT LN) (not covered): Reserves & resources update in Ukraine | Canadian Overseas Petroleum (COPL LN/XOP CN) (not covered): Equity placing
Companies: BPC TAL ENW XOP
PetroTal (PTAL): Production | Well Bahamas Petroleum (BPC): Operational Update | Canadian Overseas Petroleum (COPL): Placing | Mosman Oil & Gas* (MSMN): Farmout Update
Companies: TAL BPC XOP MSMN
Ascent Resources (AST LN) (not covered): Permitting update | Parkmead Group (PMG LN) (not covered): Results for 6 months ended 31 Dec 2018 | JKX Oil & Gas (JKX LN) (not covered): FY18 results | Savannah Petroleum (SAVP LN) (not covered): Seven Energy transaction completion delayed | Tullow Oil (TLW LN); REDUCE, £2.00: Drilling update in Guyana
Companies: PMG JKX XOP SAVE TLW
Research Tree provides access to ongoing research coverage, media content and regulatory news on Canadian Overseas Petroleum Limited. We currently have 4 research reports from 1 professional analysts.
Shanta Gold (AIM: SHG), the East Africa-focused gold producer has, this morning, released its full year results for 2020. The company previously announced production and operational figures for 2020 alongside group-wide reserves and resources update. As such the figures reported today are in line with our forecasts down to EBITDA level, but generally better than expected elsewhere– see Fig 1. Overall it has clearly been a strong year financially with revenue, EBITDA and EPS up by 31%, 34% and 270% respectively from the previous year. The company has also kept to its promise of a maiden dividend with 0.10p per share payable in April as part of a semi-annual programme.
Companies: Shanta Gold Limited
tinyBuild— a leading video games publisher and developer with global operations. tinyBuild's strategic focus is in creating longlasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC. Due mid-March. AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7m by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard). Has raised £13M in an oversubscribed placing. £25m mkt cap. Due 26 Feb. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Team PLC announced their plans for an AIM IPO. Team owns Theta Enhanced Asset Management Ltd, trading as Team Asset Management. This is a Jersey-based active fund manager providing discretionary and advisory portfolio management services to private clients, trusts and charities. Assets under management were GBP291m in November, up from GBP140m in December 2019 . The Company is seeking to raise no less than £5m. The Placing will be priced on a pre-money valuation for the Company of £7m. Targeting March Admission. Virgin Wines UK Plc has out their plans for an AIM IPO. Virgin Wines is a direct-to-consumer online wine retailer that sells products to retail customers in the UK through two subscription schemes and a pay-as-you-go offering. The Group also sells a range of beers and spirits and operates a B2B sales channel for corporates. Anticipated mkt cap £110m. Raising £13m in new money and vendor sale of £34.9m . Due 2nd March. Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance. According to media reports, Deliveroo, are expecting to release their IPO plans on 8th March. The company raised more than $180m in January with a valuation of more than $7bn.
Companies: YEW IKA UPR WYN ENW BWNG TRAK DBOX HZM G4M
tinyBuild— a leading video games publisher and developer with global operations. tinyBuild's strategic focus is in creating longlasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC. Due mid-March. AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7m by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Team PLC announced their plans for an AIM IPO. Team owns Theta Enhanced Asset Management Ltd, trading as Team Asset Management. This is a Jersey-based active fund manager providing discretionary and advisory portfolio management services to private clients, trusts and charities. Assets under management were GBP291m in November, up from GBP140m in December 2019 . The Company is seeking to raise no less than £5m. The Placing will be priced on a pre-money valuation for the Company of £7m. Targeting March Admission. Virgin Wines UK Plc has out their plans for an AIM IPO. Virgin Wines is a direct-to-consumer online wine retailer that sells products to retail customers in the UK through two subscription schemes and a pay-as-you-go offering. The Group also sells a range of beers and spirits and operates a B2B sales channel for corporates. Anticipated mkt cap £110m. Raising £13m in new money and vendor sale of £34.9m . Due 2nd March. Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance. According to media reports, Deliveroo, are expecting to release their IPO plans on 8th March. The company raised more than $180m in January with a valuation of more than $7bn.
Companies: ARS ESC AQX ARTL KRS KBT GRP BOOM CNS ANIC
Anglo Asian Mining* (AAZ LN) BUY – H2/20 exploration work returns exciting results at Gedabek CA Bushveld Minerals* (BMN LN) - Strong Buy 31p – Vanadium prices rise as new demand meets tight supply Gemfields (GEM LN) – Resumption of operations at Kagem and Montepuez after a year of disrupted production and sales GoldStone Resources* (GRL LN) – Exercise of warrants raises £1.2m Power Metal Resources* (POW LN) – Portfolio update Strategic Minerals* (SML LN) – Continued access to Cobre confirmed while current copper prices boost Leigh Creek economic returns
Companies: GML AAZ BMN GRL POW SML
The Calabar power station, which accounts for the majority of Savannah’s Nigerian gas sales, has entered a new power supply agreement with the Republic of Togo, with more in discussion, raising the prospect of meaningful increases in Savannah’s gas supplies to the plant. These additional volumes will come at negligible additional cost, leveraging the bottom-line impact. The recently signed Mulak Energy gas sales agreement demonstrates this, boosting our 2022 earnings by 8% and our risked-NAV and price target by 6% to 55p/sh.
Companies: Savannah Energy Plc
Lancaster activity update
Companies: Hurricane Energy Plc
Pantheon Resources has this morning announced that the better than expected well-logs from the Kuparuk formation warranted a change in plan for the testing of that formation, namely, from an open hole test to a more rigorous cased hole test (with a 4 ½ inch liner). However, due to equipment failures and technical issues, the formation started to become damaged in its current location and as such it was not possible to set the casing string (4 ½ inch liner). Accordingly, the company has made the decision to drill a new modestly angled sidetrack in the Kuparuk formation. It is estimated that the sidetrack will take 2-3 days to drill, some 650 feet through the Kuparuk formation, which should then allow a better testing operation. As a result of the cold weather in Alaska, the drilling season may be extended into early April.
Companies: Pantheon Resources plc
UK railway privatisation, which was launched in the mid-1990s, has finally turned full circle: the Department of Transport has recently confirmed that its controversial railway franchise system will be scrapped. In this month's feature article, Nigel Hawkins, the Infrastructure analyst at Hardman & Co, examines the 25-year history of railway privatisation and chronicles its ups and its downs. The successes of railway privatisation, such as new rolling stock, are addressed, along with the many shortcomings, which included minimal vertical integration. With the winding up of the franchise system, the UK railway sector is effectively reverting to its former status as a nationalised industry, a shift started with the renationalisation of the collapsed Railtrack – later re-badged as Network Rail – in 2001.
Companies: ARBB BBGI CLIG DNL FLTA ICGT OCI PCA PIN PXC RECI SCE TRX SHED VTA YEW
Sylvania have declared a one-off windfall dividend of c.5.2 cents pers share, 27% above our estimate of 4.1 cents. We expect a final dividend at the full year results of 4 cents, giving a combined yield of 6.4% in 2021. Sitting with $67m of cash and generating $155m of FCF at spot prices (35% FCF yield), with no major capex commitments, dividends look set to rise materially going forward. Basket prices hit a new record high today of c. R65,000/oz, and whilst this would normally make some investor nervous, we believe that the fundamentals for rhodium are solid on a three year view (see here). Top pick in mining.
Companies: Sylvania Platinum Ltd.
Today's news & views, plus announcements from MRW, BNZL, HICL, AGK, SEPL, SEIT, SDY, BGO, SHED
Companies: BGO SEIT SEPL
i3 Energy has provided an interim update the highlights of which are: • Production is exceeding expectations with lower declines than modelled resulting in stable production from November 2020 to January 2021 averaging 9,150 boe/d (41% liquids) – about 1,000 boe/d greater than expected by the forecasts of the company's competent persons' reports at the time of its relisting. • Based on the futures curves for oil & gas, the company anticipates net operating income for 2021 (revenue minus royalties, operating costs, transportation and processing) of approximately CAD $35m (US $27.6m). • Maintenance capital expenditure guidance in conjunction with the net operating income amounts to CAD$3m. • i3 Energy completed an 80 hour flow-test on a horizontal Falher well located on its Noel acreage in Northeast British Columbia. The flow test ran for a sustained period at 4,200 mcf/d (700 boe/d) on a 1/4” choke. The well is expected to be brought on production at approximately 500 boepd during the second quarter of 2021, following tie-in. This well was not included in the company's 2P reserve estimates. The result represents a materially value enhancing development. Both the net income guidance and maintenance capital guidance excludes the potential contribution of the Noel acreage. • The Company continues to progress the legal process to allow it to declare a dividend in Q1 2021. As previously disclosed, the Company aims to distribute up to 30% of free cash flow as a dividend to shareholders. • The company indicated that discussions continue with a potential farm-in partner for the Serenity discovery and terms are being negotiated. The recent strengthening in commodity prices has reinvigorated activity within i3's virtual data room, and additional parties previously contacted during early 2020 have now re-engaged with the company. The company indicated that the market will be updated if and when an agreement is reached. (see Table 1 for asset scale/value estimates in relation to the company's North Sea assets).
Companies: i3 Energy Plc
Anglo Asian Mining* (AAZ LN) – Termination of the proposed JV with Conroy Asiamet Resources (ARS LN) – £10m fundraising Beowulf Mining* (BEM LN) – 2020 results highlight progress in Kosovo and Sweden Cornish Metals* (CUSN LN) – Warrants exercised Phoenix Copper* (PXC LN) – Exercise of warrants follows recent economic update for Empire development project Scotgold Resources* (SGZ LN) – Production update and management/Board changes.
Companies: ARS CUSN AAZ BEM PXC SGZ
Today's news & views, plus announcements from RIO, TW, CRDA, TPK, PHP, MGGT, SHI, WHR
Companies: PHP RIO SHI TPK
Reverse Takeover by London Stock Exchange Group (LSEG.L) following the acquisition of Refinitiv in an all share transaction for a total enterprise value of approximately US$27 billion.
Companies: ADME ROCK ZPHR DKL VARE SMRT PTRO MHC BOO
AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7m by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this Spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Team PLC announced their plans for an AIM IPO. Team owns Theta Enhanced Asset Management Ltd, trading as Team Asset Management. This is a Jersey-based active fund manager providing discretionary and advisory portfolio management services to private clients, trusts and charities. Assets under management were GBP291m in November, up from GBP140m in December 2019 . The Company is seeking to raise no less than £5 million. The Placing will be priced on a pre-money valuation for the Company of £7m. Targeting March Admission. Virgin Wines UK Plc recently set out their plans for an AIM IPO. Virgin Wines is a direct-to-consumer online wine retailer that sells products to retail customers in the UK through two subscription schemes and a pay-as-you-go offering. The Group also sells a range of beers and spirits and operates a B2B sales channel for corporates. Deal details TBC but media reports suggest a £100m valuation. Targeting 2nd March Admission Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance. According to media reports, Deliveroo, are expecting to release their IPO plans on 8th March. The company raised more than $180m in January with a valuation of more than $7bn.
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