AUCTUS PUBLICATIONS Bahamas Petroleum Company (BPC LN)C; Target price of 1.90p: Perseverance well and balance sheet update – The overall final cost of the Perseverance #1 well in the Bahamas is expected to be ~US$45 mm, US$10 mm above initial budget. The higher cost reflects heightened Covid-19 procedures (~+US$3 mm) and side-tracking operations related to mechanical debris in the well (~+US$7 mm). We continue to estimate that cash will drop to US$6-7 mm when all the pending bills are paid. This is enough to fund the appraisal programme in Suriname and Trinidad, including the redrill of the 11 mmbbl Saffron appraisal well. Recall that this a very material well with an unrisked value of ~1p per share (=>200% of the current share price). Our unrisked NAV for Suriname is ~0.5p per share (=>100% of the current share price). The total spend over 2021 and 2022 is estimated at US$25-40 mm. The programme remains mostly at the discretion of BPC and the exact level of spending will depend on the outcome of the Saffron #2 well and the results of the first well in Suriname. A success at Saffron #2 or in Suriname would probably open-up further debt funding and simplify ongoing discussions around a pre-pay facility. We note that Touchstone Exploration was able to secure a US$20 mm debt funding from Republic Bank in May 2020 to fund the development of its assets in Trinidad. That facility commands a fixed interest rate of 7.85% per year. On 2.4 mbbl/d in 2022 (assuming drilling success at Saffron and in Suriname), the shares would trade at EV/DACF multiples of only 2.2x. Tethys Oil (TETY SS)C; Target price of SEK85: No flow at Thameen-1 but the well results unlock further activities on the block – The Thameen-1 well on Block 49 did not flow hydrocarbons to surface on test. However log interpretation now suggests the well has encountered a gross column of ~40 m. The results far exceeds the company’s pre-drill expectations. Recall that the main risk of this well was the presence of hydrocarbons. This has now been addressed and the well opens-up a potential new hydrocarbon area. There are a few possible reasons why the well did not flow. The formation could have been damaged during drilling or the reservoir could be tight. Pending the results of drilling data interpretation, further activities could include (1) the drilling of a new well designed as a producer, (2) work over or stimulation activities (fracking) on the existing well or (3) side track/re-entry of the existing well. We note that the core business of EOG, Tethys’ 50% partner on the licence (conventional), is about development of reservoirs requiring fracking stimulation. Pending further details on the upcoming work programme, we have not changed our valuation for Thameen. The shares continue to offer a combination of (1) ~6% dividend yield that could potentially increase at current oil prices, (2) support from a share buy back programme, (3) value and (4) reserves and exploration upside. SDX Energy (SDX LN)C; Target price of £0.40: Good financial results, High impact drilling on the horizon – FY21 production guidance of 5,620-5,920 boe/d (net entitlement) with capex of US$25 26.5 mm has been reiterated. The FY21 guidance incorporates some maintenance at South Disouq and 1-2 wells to be taken offline for work-overs. The 2021 activity programme has also been confimed with (1) the Hanut exploration well in Egypt (£0.17 per share unrisked) expected to be drilled in 3Q21 and targeting 139 bcf (unrisked, 33% CoS) and (2) drilling restarting in Morocco in 2Q21 with the well test of LMS-2 expected to take place in 3Q21. The 2021 activity programme in Morocco will define the way forward for this asset. The shares continue to offer deep value. They trade at EV/DACF multiples of only 1.3x in 2021 and 0.8x in 2022. Our Core NAV is 35% above the current share price. Our Unrisked NAVs for the drilling programme in Egypt and Morocco are respectively £0.18 and £0.24 per share respectively. These represent respectively 100% and 140% of the current share price. Valeura Energy (VLU LN/VLE CN)C: Results in line with expectations – FY20 production was 650 boe/d with YE20 2P reserves of 7.8 mmboe. At YE20, the company held US$42.2 mm of net working capital surplus including the expected cash proceed from the divestment of the Turkish shallow assets. This sale transaction has received one of two key government consents in January, with only one approval outstanding before the transaction can be completed. The company continues to look for acquisitions. The shares continue to trade below cash. IN OTHER NEWS ________________________________________ AMERICAS 88 Energy (88E LN/AU): Equity transaction – 88 Energy is issuing 360 mm new shares to ELKO International at a price of $0.018 per share to raise A$6.18 mm. ELKO is one of the major contractors for the current drilling operations. Alvopetro (ALV CN): Reserves and Resources assessment in Brazil – Net 2P reserves at YE20 were estimated at 9.6 mmboe. The Gomo field is estimated to hold 3.8 mmboe contingent resources and 14.9 mmboe prospective resources. As at YE20, Alvopetro had a net working capital surplus of US$5.5 m and net debt of US$9.9 mm. Echo Energy (ECHO LN): New gas contract at higher prices in Argentina – Echo has secured new gas contracts for 6.5 mmcf/d gross sales at US$2.64/mcf. This represents a 126% increase over annual industrial contract pricing previously achieved and a 39% premium above current local spot price. Frontera Energy (FEC CN): Important step in resolving Colombian dispute - Procuraduría General de la Nación has delivered a favourable opinion on the conciliation agreement between Frontera, CENIT and Bicentenario. This represents the first of two stages of review of the conciliation agreement. If the conciliation agreement is approved by the Administrative Tribunal of Cundinamarca, the second stage of the process will be completed, and the parties will be able to complete the settlement arrangement. Maha Energy (MAHA-A SS): Well discovers new oil bearing formation in Brazil – The Tie-3 well encountered 3.1 m net pay in a new potentially productive zone at the base of the Itaparica formation. Touchstone Exploration (TXP LN/CN): FY20 results – FY20 production in Trinidad was 1,392 bbl/d. At YE20, Touchstone held net cash of US$5.4 mm. Touchstone’s primary objective remains to bring the two natural gas exploration discoveries at Ortoire onto production in 2021. Production testing operations are ongoing at Chinook-1 and Cascadura Deep-1. Drilling of Royston-1 is expected to start in 2Q21. ASIA PACIFIC Baron Oil (BOIL LN): Raising £3 mm of new equity – Baron Oil Baron is increasing its interest in the Chuditch PSC in Timor-Leste from 25% to 63.75%. This result in a 255% increase in Baron's net share of the estimated aggregate mean prospective resources for the PSC to 2,248 bcf. In order to fund the stake increase and the Chuditch PSC work programme until November 2022, Baron has raised £3.0 mm through a new equity issue priced at 0.05 p per share. EUROPE Eni (ENI IM) and Equinor (EQNR NO): Discovery in Norway – Vår Energi (ENI: 69.85%) and Equinor have made a new significant oil discovery in production licence 090/090I in the northern North Sea in the Blasto Main prospect (Var WI: 25%, Equinor WI: 45%). Preliminary estimates place the size of the discovery between 150 and 240 mmboe oil in place. EnQuest (ENQ LN): 4Q20 results – FY20 production was 59,116 boe/d. YE20 net debt was US$1.3 bn. Year to date February production averaged 46,635 boed/d, affected by outages, repairs and opportunistic maintenance at Magnus and Kraken, which are now complete. FY21 production guidance continues to be 46-52 mboe/d with capex of US$120 mm. Net 2P reserves at YE20 were 189 mmboe (2019: 213 mmboe). YE20 Net 2C resources are 279 mmboe (2019: 173 mmboe), up primarily as a result of the agreement to acquire 40.81% interest in the Bressay field that added 115 mmboe. Ineos Energy: Selling Norway gas assets to focus on oil - Ineos Energy is selling its hydrocarbon business (gas) in Norway to PGNiG for US$615 mm as it pivots toward oil. The assets produce 33,000 boe/d, of which 93% is gas. The portfolio includes non-operated stakes in the Alve, Marulk and Ormen Lange fields, as well as 22 offshore licenses and an 8% interest in the Nyhamna terminal. Lundin Energy (LUNE SS): Small discovery in Norway - Wildcat well 16/4-13 S drilled about 15 km south of the Edvard Grieg field encountered 3-9 mmboe recoverable hydrocarbon resources. Serinus Energy (SENX LN): FY20 results – YE20 results have been reduced to 9.6 mmboe (down 9%). FY20 production was 2,340 boe/d including 1,788 boe/d in Romania and the balance in Tunisia. YE20 production was 2,122 boe/d. At YE20, Serinus held US$6 mm in cash but had a working capital deficit of US$6.3 mm. MIDDLE EAST AND NORTH AFRICA Gulf Keystone Petroleum (GKP LN): Operations update in Kurdistan – Production at Shaikan is expected to reach 55 mbbl/d in 1Q22. FY21 gross production remains unchanged at 40,000 to 44,000 bbl/d. The remaining capex required to deliver the 55,000 bbl/d programme is estimated to be US$40-45 mm net, resulting in total FY21 capex of US$55-65 mm net. SUB-SAHARAN AFRICA ADM Energy (ADM LN): Acquisition in Nigeria – ADM is acquiring a 51% interest in KONH for US$1.3 mm. KONH owns a 70% indirect interest in a Risked Sharing Agreement for the Barracuda area of OML 141. The Risked Sharing Agreement consortium would recover 235% of the invested capex plus a 15% Net Profit Interest from the field. ADM believes that first oil of 4,000 bbl/d may be possible in 2H21 with the drilling of a new well (in addition to the four existing wells). Production could grow to 23,000 bbl/d by drilling six wells by 2026. The consideration consists in a share and cash payment of US$1.3 mm. Chariot Oil & Gas (CHAR LN): Acquisition of hybrid power business in Africa – Chariot is acquiring Africa Energy Management Platform (AEMP) for US$2 mm in shares. AEMP is a renewable and hybrid energy project developer focused on the mining sector in Africa, with an ongoing strategic partnership with Total Eren, a leading global player in renewable energy, predominantly in solar and wind. Total, has a shareholding of about 30% in Total Eren. LEKOIL (LEK LN): Operating update in Nigeria – FY20 gross production at Otakikpo was 5,062 bbl/d increasing to 5,378 bbl/d for January and February. As at 28 February 2021, LEKOIL had borrowings of US$14.7 mm and a total cash balance of US$2.1 mm, with US$1.5 mm restricted. Trade and other payables stood at US$33.2 mm as at 28 February 2021. EVENTS TO WATCH NEXT WEEK ________________________________________ 31/03/2021: Gulf Keystone Petroleum (GKP LN): 4Q20 results
Companies: TXP BPC ENQ SDX SEN TETY TETY MAHAA LUPE 88E ALV VLE FEC
AUCTUS PUBLICATIONS Bahamas Petroleum Company (BPC LN)C; Target price of 1.90p: Getting ready to start high impact drilling – The Saffron #2 well in Trinidad is expected to spud mid-May. The well is expected to add 200-300 bbl/d production and to derisk ~11 mmbbl recoverable resources. The well is expected to cost US$3 mm and generate US$1.8-2.6 mm cashflow per year. In a success case, BPC would drill 5-9 follow-on wells in 2021 to add 1.0-1.5 mbbl/d. In Suriname, drilling is expected to start at Weg Naar Zee in July 2021. Base production In Trinidad during January and February was 450-500 bbl/d. Our Core NAV and ReNAV continue to be respectively ~1.5p and 1.9p per share representing 150% and 200% upside. On 2.4 mbbl/d in 2022 (assuming drilling success at Saffron and in Suriname), the shares would trade at EV/DACF multiples of only 2.9x. Our unrisked NAVs for Saffron and Weg Naar Zee are respectively 1.01 p and 0.49 p per share representing ~150% and 80% of the current share price. SDX Energy (SDX LN)C; Target price of £0.40: Good set of results, FY21 guidance re-iterated – YE20 2P reserves were 11.1 mmboe with 2C resources of 0.9 mmboe. FY20 production had already been reported. SDX held US$10 mm in cash at YE20 with receivables stable compared to 3Q20 and payables down US$4 mm compared to the end of September. SDX has re-iterated its FY21 production guidance of 5,620-5,920 boe/d with US$25.0-25.6 mm. The high impact Hanut-1X is expected to be spudded in 3Q21. The shares continue to offer deep value. They trade at EV/DACF multiples of only 1.3x in 2021. Our Core NAV is 35% above the current share price. IN OTHER NEWS ________________________________________ AMERICAS Arrow Energy (AXL CN): Reserves update in Colombia – YE20 2P reserves were 7.0 mmboe (-3.3 mmboe vs YE19 mostly as a result of the divestment of Llanos-23). Canacol Energy (CNE CN): FY20 results – YE20 2P reserves in Colombia were 227 bcf (+10% vs YE19). 4Q20 production was 170.1 mmcf/d. At YE20, Canacol held US$68.3 mm in cash. Frontera Energy (FEC CN): Share buy back programme – Frontera will start a share buy programme for up to 10% of its “public float”. Pemex: Giant discovery in Mexico – Pemex has discovered a 1-2 bn bbl field in Tabasco in the southern part of the Gulf of Mexico. Tullow Oil (TLW LN): Dry hole in Suriname – The Goliathberg-Voltzberg North exploration well was dry. ASIA PACIFIC Jadestone Energy (JSE LN): Reserves update in Australia and New Zeland – YE20 2P reserves at Montara/Stag and Maari were estimated at 37.1 mmbbl and 16 mmbbl respectively with 2C contingent resources at Lemang of 19.6 mmboe. EUROPE Condor Petroleum (CPI CN): Operating update in Turkey and FY20 results – FY20 WI production in Turkey was 171 boe/d. At YE20, the company held 0.3 mmboe 2P reserves. Condor continues to discuss with the Uzbekistan authorities with regards to acquiring producing licences in the country. At YE20, Condor had C$12.3 mm in cash and no debt. Independent Oil & Gas (IOG LN): Resources increase in the UK – Following interpretation of 3D seismic, Goddard contingent resources have increased from 108 bcf to 132 bcf. The two Goddard flanks gross mid-case prospective resources have been revised to 27 bcf and 16 bcf, with geological chance of success up to 71% from 48%. Southsea has been estimated to hold gross mid-case prospective resources of 31 bcf with 48% chance of success. On the P2442 licence, the gross 2C contingent resource estimates at the Abbeydale discovery have been increased from 6 bcf to 23 bcf. The Thornbridge and Kelham prospects are estimated to hold respectively 66 bcf (32% chance of success) and 31 bcf (80% chance of success). Independent held £80.4 mm in cash at YE20 with net debt of £14.1 mm. First gas is expected in 3Q21 with Phase 1 gross capex of £306 mm. Ineos: Acquisitions in Denmark – Ineos is acquiring 61.5% WI in the Syd Arne field and a 4.8% share of the Solsort deposit from Hess for US$150 mm. Syd Arne produced 5,800 bbl/d net to Hess in 4Q20. Jersey Oil & Gas (JOG LN): Raising £15 mm of new equity – Jersey has raised £15 mm of new equity priced at £1.65 per share. The net proceeds will be utilised to fund the next phase of workstreams on the project and augment existing cash reserves during farm-out discussions. Premier Oil (PMO LN): FY20 results = FY20 production was 61.4 mboe/d (Chrysaor: 173 mboe/d) with FY21 production guidance of 61-66 mboe/d (Chrysaor: 140-155 mboe/d) reiterated. First gas at Tolmount continues to be expected in 2Q21. Premier YE20 net debt was US$2.1 bn with a forecasted combined net debt of US$2.9 bn (down from US$3.2 bn) on closing of the merger with Chrysaor at the end of March. FY21 capex is expected to be US$315 mm (Chrysaor: US$750-850 mm). At YE20, Premier held 151 mmboe of 2P reservres and 845 mmboe of 2P reserves plus 2C resources. MIDDLE EAST AND NORTH AFRICA Delek Drilling: Update in Israel – 1.53 bcf/d of gas and 2.6 mbbl/d of condensate were sold from Tamar and Leviathan in 2020. Genel Energy (GENL LN): FY20 results – FY21 Production guidance remains slightly above FY production of 31,980 bbl/d with US$150-200 mm capex. Genel will pay a final dividend of US$0.10 per share. Gulfsands Petroleum (GPX LN): Mandatory offer by Waterford Finance – Waterford now holds 52.45% of Gulfsands and is required to make a mandatory offer at a price of 4.035p per share for the shares per share it does not own. Zenith Energy (ZEN LN): Acquisition in Tunisia – Zenith is acquiring 45% WI in the Ezzaouia Concession from Candax Energy for US$0.15 mm in cash on completion and US$0.1 mm in Zenith shares. In addition, Zenith will pay a royalty of US$0.35/bbl or production capped at US$0.05 mm per year for up to 10 years. The concession currently produces 465 bbl/d. Zenith believes that production could reach 1,000 bbl/d with production optimisation and work overs. SUB-SAHARAN AFRICA Tlou Energy (TLOU LN/TOU AU): Raising equity for Bostwana CBM – Tlou has raised £2.6 m of new equity priced at 3.5 p per share for its CBM project in Bostwana. EVENTS TO WATCH NEXT WEEK ________________________________________ 25/03/2021: EnQuest (ENQ LN): 4Q20 results
Companies: GENL PMO BPC CNE FEC JSE JOG SDX TLW
AUCTUS PUBLICATIONS SDX Energy (SDX LN)C; Target price of £0.40: West Gharib contract extended by 10 years to 2031 – The increases SDX’s share of reserves in West Gharib (2.2 mmbbl at YE19), by 60%. The company plans to commence in 2Q21 a drilling programme of up to twelve wells over the next three years with the goal of growing gross production back to ~3,000bbl/d. The terms of the extension includes a commitment to drill six wells by YE22. In addition, up to six additional wells would have to be drilled if oil price remains high (>US$55-60/bbl). SDX will also have to pay a deferred signed bonus (US$1 mm net to SDX) in various regular payments by YE23. An additional contingent payment of US$1 mm (net to SDX) would have to be paid for higher oil price (US$75-85+/bbl). While the extension was expected, this is an important news for SDX that will allow the firm to progress its work programme. Overall West Gharib holds 2.3 mmbbl contingent resources upside (in addition to the 2P reserves and net to SDX) that SDX can now pursue. We value West Gharib at £0.04 per share. Tethys Oil (TETY SS)C; Target price of SEK85 per share: Block 49 exploration well encounters hydrocarbon – The exploration well Thameen-1 on Block 49 onshore the Sultanate of Oman has encountered hydrocarbon net pay in the primary target, the Hasirah Sandstone. The secondary deeper target was dry. Importantly, the company was encouraged enough by the results to decide to test the well. The results of the testing program are expected within three weeks. The primary target was the horizon offering the largest potential. The well is a play opener with follow-on upside. We currently carry gross unrisked volumes (pre-drilling) of 15 mmbbl for Thameen-1 (excluding follow-on upside) with an unrisked NAV of SEK11 per share (50% WI). The shares continue to offer a combination of (1) ~6% dividend yield that could potentially increase at current oil prices, (2) support from a share buy back programme, (3) value and (4) reserves and exploration upside. IN OTHER NEWS ________________________________________ AMERICAS Alvopetro (ALV CN): Production update in Brazil – Alvopetro's February natural gas sales averaged 12.7 mmcf/d with associated natural gas liquids sales of 99 bbl/d. Canacol Energy (CEN CN): Reserves update in Colombia – Canacol held 111.8 mmboe 2P conventional gas reserves at YE20 (+2.2% versus YE19). Gross production in February was 187 mmcf/d. The Flauta 1 exploration well did not encounter commercial gas. Frontera Energy (FEC CN): 4Q20 results and update in Colombia – 4Q20 production was 41,945 boe/d. The company held US$147 mm of net debt at YE20. At YE20, Frontera held 174 mmboe 2P reserves (YE19: 171 mmboe). On February 5, 2021, the service contract for Block 192 in Peru expired and Frontera is no longer operating on the block. FY21 production guidance has been set at 40.5-42.5 mboe/d with capex of US$200-295 mm including US$55 115 mm in Guyana. In the Corentyne block, Frontera plans to spud the Kawa-1 exploration well during 2H21. Parex Resources (PXT CN): 4Q20 results and update in Colombia – 4Q20 production was 46,642 boe/d. Parex had US$331 mm net cash at YE20. The company anticipates producing 47-49 mboe/d in 2021 with US$165 185 mm capex. Parex expects 1Q21 production to be ~46,500-47,500 boe/d. The Boranda well encountered deeper oil bearing sands in the Lisama formation which are not present in the Boranda field. Pantheon Resources (PANR LN): Technical issues at exploration well in Alsaka – Because of equipment failures and technical issues, the formation above the Kuparuk formation was damaged and it has not been possible to effectively set the 4 ½ inch liner. The company has now made the decision to drill a new modestly angled sidetrack into the Kuparuk. It is estimated that the sidetrack will take 2-3 days to drill ~650 feet through the Kuparuk formation approximately 25-50 feet lateral distance from the discovery location. The delay caused by adapting the drilling plan may impact Pantheon’s ability to test all zones as effectively as planned before the end of the drilling season. Touchstone Exploration (TXP LN/CN): Reserves and operation update in Trinidad – YE20 2P reserved were 64.9 mmboe including 45.0 mmboe for Cascadura. This excludes any potential reserves from the Company's Chinook-1 and Cascadura Deep-1 wells drilled in 4Q20. At Chinook-1, two zones have been tested so far. The first test interval was in the lower sub-thrust sheet, which was a previously unknown thrust-sheet with 68 net feet of potential pay. The well recovered trace amounts of oil along with significant water. This zone is considered uneconomic. The second zone is in the Herrera formation and encountered 35 degrees API sweet oil and is being configured for an extended oil production test. Touchstone has yet to test the targeted gas bearing zones in the Chinook-1 and Cascadura Deep-1 exploration wells due to delays associated with third-party equipment. Touchtone is targeting initial gas production from Coho-1 in 2Q21. Touchstone plans to start production at Cascadura and Chinook prior to YE21. Westmount Energy (WTE LN): Uncommercial well in Guyana – The Bulletwood-1 on the Canje Block encountered quality reservoirs but non-commercial hydrocarbons. EUROPE Angus Energy (ANGS LN): Planning permission rejected in the UK – The West Sussex County Council's Planning Committee has rejected the Company's planning application for an Extended Well Test at the Balcombe Oil Field. Hurricane Energy (HUR LN): Operational delay in the UK – Given its complexity, the drilling of a second production well at Lancaster by side-tracking from the existing 205/21a-7z well into the central area of the field will not take place in 2021. The company is considering various options to drill this well in 2022 instead. Neptune Energy: FY21 guidance – FY20 production was 142.4 mboe/d. FY21 WI production guidance has been set at 140-155 mboe/d with US$700 mm capex for development and US$150 mm for exploration. MIDDLE EAST AND NORTH AFRICA ShaMaran Petroleum (SNM CN): Update in Kurdistan – 4Q20 Gross production at Atrush was 40,800 bbl/d. Atrush gross 2P reserves were estimated at 109.9 mmbbl at YE20 (108.5 mmbbl at YE19). SUB-SAHARAN AFRICA Africa Oil (AOI CN/AOI SS): 4Q20 results – Prime's 4Q20 WI production in Nigeria was 26,200 boe/d net to Africa Oil's 50% shareholding. FY21 WI production guidance has been set at 24,000-28,000 boe/d net to Africa Oil’s 50% shareholding in Prime. Prime's 2021 capital investment is expected to be US$35-$50 mm and its net debt repayment US$210-$280 mm, in each case net to Africa Oil's 50% shareholding in Prime. Prime had a cash balance of US$115.7 mm net to Africa Oil's 50% shareholding at YE20. Africa Oil's FY21 corporate budget is estimated to be ~US$18-$20 mm and includes pre-FID budget for Kenya, G&A and exploration activities. At YE20, Africa Oil held US$40 mm in cash with LT debt of US$141 mm. Orca Energy (ORC.A/B CN): Reserves update in Tanzania – At YE20, gross 2P reserves were 229 bcf. Seplat Petroleum (SEPL LN): 4Q20 results – FY20 WI production in Nigeria was 51,183 boe/d reflecting uptime at Forcados of 83%. Production losses were 9.4%. The company has declared a final dividend of US$0.05 per share for a FY20 dividend of US$0.10 per share. FY21 WI production guidance has been set at 48-55 mboe/d with capex of US$150 mm. Exports from OML 4, 38 and 51 through Escravos are now expected in 2H21. The ANOH project is expected to be completed in 1H22. At YE20, Seplat had 499 mmboe 2P reserves (509 mmboe at YE19). Seplat held net debt of US$440 mm at YE20. EVENTS TO WATCH NEXT WEEK ________________________________________ 08/03/2021: Diversified Gas and Oil (DGOC LN): 4Q20 results 09/03/2021: Cairn Energy (CNE LN): 4Q20 results 09/03/2021: Vaalco Energy (EGY US/ LN) – 4Q20 results 10/03/2021: GeoPark (GPRK US) – 4Q20 results
Companies: AOI FEC PXT SDX SEPL SNM TETY TETY TXP
AUCTUS PUBLICATIONS Bahamas Petroleum Company (BPC LN)C: Target price of 1.90p: Looking beyond the Bahamas - The Perseverance #1 well encountered oil, validating the structural model and the petroleum system, but did not encounter oil in commercial quantities. While the drilling results were disappointing for the B North prospect, the company believes that the presence of (1) oil in good reservoirs and (2) a good seal derisk the B South prospect and the C structure and could improve the profile of the assets vis-à-vis a potential farm partner. BPC is initiating a formal farm out process. With a further £2 mm drawn on the convertible facility, BPC has ~US$15 mm in cash. Following the payment of pending invoices associated with Perseverance #1, we estimate the cash will drop to US$6-7 mm, which is enough to fund the appraisal programme in Suriname and Trinidad, including the redrill of the 11 mmbbl Saffron appraisal well. This is a very material well with an unrisked value of ~1p per share. Our unrisked NAV for Suriname is ~0.5p per share. We have reduced our Core NAV from ~2p to 1.5p as we incorporate the company’s cash position and the updated share count. We treat the drawn convertible as debt. Our new ReNAV of ~1.9p excludes the Bahamas and the wells in the SW peninsula. Our new target price has been set at this level. GeoPark (GPRK US)C; Target price increased from US$20 to US$24 per share: Large reserves increase at CPO-5. Better visibility on exploration resources –The highlights of the YE20 reserves report are (1) the large increase of high value WI 2P and 3P reserves at CPO-5 in Colombia (up from respectively 9.5 mmbbl at YE19 and 14.9 mmbbl to 21.1 mmbbl (x2.2) and 50.1 mmbbl (x3.3) at YE20) and (2) the independent estimates of ~400-900 mmbbl (Pmean-P10) net unrisked prospective resource across the company’s assets in Colombia and Ecuador, confirming the large potential upside within the asset base. The large reserves increase at CPO-5 reflects a re-interpretation of the data for the Indico and Mariposa reservoirs. The 400-900 mmbbl net unrisked prospective resources include 120-270 mmbbl at CPO-5, 110-210 mmbbl on other Llanos blocks, 150-300 mmbbl in the Putumayo and 14-29 mmbbl in Ecuador. We note that the potential resources size at CPO-5 could be larger than the current net 2P reserves at Llanos-34. The reserves increase and large exploration resources at CPO-5 showcase GeoPark’s very good understanding of the geology and demonstrate the logic of the acquisition of Amerisur by GeoPark. We are increasing our Target price from US$20 to US$24 per share as we incorporate the additional reserves at CPO-5 which more than compensates for the reserves reduction at Platanillo. Panoro Energy (PEN NO)C; Target price increased from NOK23 to NOK30 per share: Moving up league – Panoro is acquiring a 14.25% WI in Ceiba/Okume (EG) and an additional 10% in Dussafu Marin (Gabon) for an initial consideration of U$140 mm. An additional contingent consideration of US$40 mm could be payable over multiple years if oil price remains high and if certain operational targets are achieved. The acquisition is transformative as it x4 the FY21 production (+6.9 mbbl/d), x3 2P reserves (+25 mmbbl), and x8 2C resources (+29 mmbbl), turning Panoro is a much more material company. Boosting Panoro’s interest Dussafu increases the company’s exposure to the 2Q21 exploration drilling programme at the Greater Hisbiscus area with the potential to add ~19 mmbbl (WI) to the 2P reserves category with an unrisked value of >NOK12 per share. The acquisition is being funded through a US$70 mm equity raise priced at NOK15.50 per share and US$90 mm of new debt (7.5% interest). The acquisition was agreed a few months ago when Brent was only ~US$45/bbl. With Brent now at >US$60/bbl the transaction has only become more accretive. Our ReNAV for the acquired assets is ~US$320 mm. When factoring the new equity issue, our Core NAV and ReNAV are increased from respectively NOK14 and NOK23 to NOK21 and NOK30 per share and our EV/DACF multiples for 2021 and 2022 are almost divided by 2. PetroTal (PTAL LN)C; Target price of £0.50 per share: US$100 mm capital programme in 2021 - PetroTal is confirming a US$100 mm capex programme in 2021 to produce an average of 11.8 mbbl/d in 2021, exiting 2021 at 18.6 mbbl/d. 4Q21 production is expected to be 16.6 mbbl/d, increasing from 9.2 mbbl/d in 1H21. We have adjusted our FY21 production estimates to reflect the company’s latest guidance. Our FY21 operating cash flow estimate of ~US$90 mm reflects US$52.5/bbl for Brent. At US$57.5/bbl and 15.3 mbbl/d production in 2022, we forecast FY22 operating cash flow of US$170 mm, which represents 90% of the company’s current market cap. At a Brent price of ~US$65/bbl, FY21e and FY22e operating cash flow would jump to respectively ~US$150 mm and ~US185 mm. At the current share price, EV/DACF multiples are only 2.7x in 2021 and 0.8x in 2022. At US$65/bbl, our Core NAV would be £0.68 per share and EV/DACF multiples would only be 1.3x for 2021 and 0.4x in 2022. For each US$5/bbl increase in Brent price, our Core NAV increases by ~£0.10 per share. IN OTHER NEWS ________________________________________ AMERICAS Frontera Energy (FEC CN): Exploration update in Guyana – A total of 32 prospects on the Corentyne block and the Demerara block have been estimated to hold 6,089 mmboe unrisked prospective resources net to Frontera. The fluid content considered for the prospects is mainly oil (64%), natural gas (28%) and the remainder condensate (8%). The first prospect (Kawa-1) is expected to be drilled in 1H21. Pantheon Resources (PANR LN): Drilling results in Alaska – The Talitha #A well has encountered oil in all the target horizons. Four distinct oil-bearing zones have been identified. The current plan is to test the Shelf Margin Deltaic, Basin Floor Fan (two separate zones) and the Kuparuk zones. Testing all zones is critical to determine ultimate commerciality. Royal Dutch Shell (RDSA/B LN): Selling Canadian assets – Shell is selling its Duvernay shale light oil position in Alberta to Crescent Point Energy for a total consideration of US$707 mm. The consideration is comprised of US$550 mm in cash and 50 million Crescent Point shares (valued at US$157 mm) . The transaction includes the transfer of approximately 450,000 net acres in the Fox Creek (Kaybob) and Rocky Mountain House (Willesden Green) areas, along with related infrastructure, currently producing around 30,000 boe/d. EUROPE ENI (ENI IM): 4Q20 results – ENI reported adjusted net profit of EUR66 mm for the period with 1,713 mboe/d production. ENI held 6.9 bn boe of proven reserves at YE20, representing a replacement ratio of 43%. Repsol (REP SM): 4Q20 results – Respol reported 4Q20 adjusted net earnings of EUR0.4 bn with production of 628 mboe/d and FY20 capex of US$10 bn. Repsol is also launching a share buy back programme for 2.58% of its share capital. MIDDLE EAST AND NORTH AFRICA DNO (DNO NO): Reserves update in Kurdistan and Norway – YE20 Tawke license gross 2P reserves stood at 394 mmbbl (400 mmbbl at YE19) and 3P reserves at 605 MMbbls (641 MMbbls in 2019). At YE20 the Baeshiqa license in Kurdistan held 2C resources of 43 mmbbl. WI 2P reserves in Norway were 64 mmboe at YE20. The Company’s North Sea 2C resources totalled 120 mmboe. Genel Energy (GENL LN): Reserves update in Kurdistan – YE20 WI 2P reserves were 117.2 mmbbl (YE19: 123.8 mmbbl) with 143.4 mmbbl 2C contingent resources (YE19: 152 mmbbl). Gross 2P reserves on the Tawke field were 245 mmbbl while Peshkabir held 125 mmbbl. Taq Taq and Sarta were estimated to hold respectively 33 mmbbl and 34 mmbbl gross 2P reserves at YE20. Sarta continues to be estimated to also hold 258 mmbbl gross 2C contingent resources. Gulf Keystone (GKP LN): Reserves update in Kurdistan – YE20 gross 2P reserves at Shaikan were 505 mmbbl (YE19: 578 mmbbl) with 2C contingent resources of 293 mmbbl (YE19: 239 mmbbl). The 2P Triassic and Cretaceous reserves of 47 mmbbl were reclassified as gross 2C contingent resources. ShaMaran Petroleum (SNM CN): Reserves update in Kurdistan – YE20 gross 2P reserves at Atrush were 109.9 mmbbl (YE19: 108.5 mmbbl). FY21 gross production guidance has been set at 39-44 mbbl/d with gross capex of US$53.2 mm. SUB-SAHARAN AFRICA BWE Energy (BWE NO): 4Q20 results – 4Q20 gross production at Dussafu in Gabon was 13.5 mbbl/d. FY21 gross production is expected to be 14.8-15.9 mbbl/d. BWE held US$120.6 mm in cash at YE20. FAR (FAR AU): Indicative offer from Lukoil – Lukoil has made a non binding conditional offer to acquire 100% FAR at A2.2c per share in cash. The Lukoil proposal values FAR at A$220 mm. FAR is in default to cash calls in Senegal amounting to US$44 mm. FAR has until mid July 2021 to remedy the defaults. PetroNor E&P (PNOR NO): Equity raise and acquisition in Congo – PetroNor is raising US$50-60 mm of new equity including US$32-42 mm in cash and the balance through the issue of equity as in-kind consideration for the acquisition of Symero. As a result of the acquisition and a court ruling in Congo related to parts of MGI indirect share in the PNGF Sud licence, PetroNor’s net interest in PNGF Sud increases from 10.5% to 16.83%. Net production from PNGF Sud will increase from 2,385 bbl/d to 3,850 bbl/d and YE20 net 2P oil reserves from 9.9 mmbbl to 15.9 mmbbl. EVENTS TO WATCH NEXT WEEK ________________________________________ 22/02/2021: Kosmos Energy (KOS LN/US) – 4Q20 results 22/02/2021: President Energy (PPC LN) – 4Q20 results 25/02/2021: Panoro Energy (PEN NO) – 4Q20 results
Companies: BPC DNO ENI FAR FEC GPRK PEN PANR TAL REP RDSA SNM
Panoro Energy (PEN NO)c; Target price of NOK23.00: Revisiting Gabon - BW Energy provided an update on Dussafu with FY20 production guidance expectation marginally below previous guidance (14.25 mbbl/d versus 15 16 mbbl/d) due to COVID-19 restrictions and OPEC+ quotas. This results in FY20 opex expected to be US$19/bbl which is slightly above the previous guidance of US$17-18/bbl. The drilling of DTM-7H, and the tie-in of DTM-6H and -7H, has been deferred to mid-2021 with first oil expected in 3Q21 and our estimate of the timing of the field production ramp-up has been delayed by one quarter. BWE continues to expect production from the Dussafu area to reach >30 mbbl/d in 2023 and ~40 mbbl/d in 2024. The Hibiscus development is expected to offer 15% IRR at
Companies: TGL 88E FEC JSE LUNE NOG PANR TAL TETY TETY AOI ENOG PEN SDX EGY
GeoPark (GPRK US)C; Target price of US$20.00: Re-instating dividend and up to 10% Buy back - FY21 production guidance has been set at 40-42 mboe/d excluding any contribution from exploration/appraisal with US$100-120 mm capex at US$40-45/bbl. This includes US$95-115 mm in Colombia (US$30-35 mm for exploration/appraisal) and US$4-5 mm in Ecuador. FY21 operating net back is guided at US$210-280 mm. 3-4 exploration wells will be drilled at CPO-5, some of which will test the continuity of the Guadalupe play encountered on Llanos-34 into CPO-5. The initial results of the Indico-2 well already look promising with more details expected imminently.1-2 exploration wells could be drilled in Ecuador in 2H21/early 2022. The company is re-instating its quarterly dividend set at US$0.0206 per share representing ~1.1% annual yield. An exceptional dividend of the same amount will be paid in 4Q20. GeoPark is also launching a share buyback programme for up to 10% of the issued shares. With shareholder distributions now re-instated, the very attractive investment profile of GeoPark (with production growth, material exploration upside, balance sheet strength and shareholder distribution) has been completely restored to what it was pre COVID-19 while oil prices continue to oscillate around US$40/bbl. This showcases the resilience of GeoPark’s assets and business model. The shares trade at ~60% discount to our Core NAV and ~40% discount to our 2P NAV of ~US$11 per share. Our unrisked NAV for the 2021 drilling programme is ~US$9.00 per share, which represents over 100% of the current share price. Most importantly, and contrary to most peers, the programme is diversified across multiple wells and relatively low risk. Tethys Oil (TETY SS)C; Target price of SEK75.00: Adding near term exploration – The 3Q20 financials were inconsequential with negative working capital movements to be recovered in 4Q20. The company held US$48 mm in cash at the end of the period; which is in line with our expectations. The 4Q20 capex at Block 3 & 4 is likely to be similar to 3Q20 capex (U$6.5 mm), which is lower than what we were anticipating (US$10 mm). The main near term focus continues to be the upcoming drilling of the Thameen prospect on Block 49. Our unrisked NAV for the Thameen prospect, assuming 15 mmbbl resources, is SEK17 per share (~50% of the current share price). The Anan-1 well on blocks 3 & 4), to be drilled in 4Q20, is a near field exploration well for which we are not carrying any value yet. It is relatively low risk but could have a small positive impact on the company reserves. The current share price represents EV/DACF multiples of only 1.8x for 2020 and 1.7x for 2021 and the core dividend implies>5% yield. Our target price of SEK75 per share has been set close to our ReNAV. IN OTHER NEWS ________________________________________ AMERICAS Frontera Energy (FEC CN): 3Q20 results – 3Q20 production in Colombia was 43,202 boe/d. The company held US$421 mm in cash (including US$162 mm in restricted cash) with debt of US$557 mm at the end of September. Working capital at the end of September was negative (-US$79 mm). i3 Energy (I3E LN): Production update in Canada – Group production from the Gain and Toscana’s assets during October averaged 9,407 boe/d (61% gas, 39% liquids). A first dividend is expected to be declared and paid in 1Q21 with up to 30% of cashflow being distributed. The company anticipates that the dividend yield will be >10% on an annual basis. Maha Energy (MAHA-A SS): Production update in Brazil and resources update in Oman – Production in October was 2,971 boe/d. The award of Block 70 in Oman to Maha has now been approved by the authorities. The Block is estimated to hold 1 mmbbl of 2P reserves and 22 mmbbl of 2C contingent resources of heavy oil. Parex Resources (PXT CN): 3Q20 results – 3Q20 production in Colombia was 44,305 boe/d. 4Q20 production is expected to be 45,500-47,500 boe/d with US$35-45 mm capex. At Aguas Blancas, the rates of the AB-11 and AB-24 exploration wells did not meet minimum thresholds to warrant the development of the Southern Aguas Blancas area at current oil pricing. In 2021, Parex expects to produce 47,000-49,000 boe/d with US$165-$185 mm capex. The 2021 share buyback programme is budgeted at $155 million at US$45/bbl with YE21 working capital forecasted at US$335 mm (YE20e: US$330 mm). Touchstone Exploration (TXL LN/CN): Raising new equity – Touchstone is raising US$30 mm of new equity priced at £0.95 per share. The proceeds will be used for the Cascadura surface facility development, the testing of Chinook-1 and the drilling of the Chonook-1 and the Royston exploration wells. EUROPE Independent Oil & Gas (IOG LN): Update in the UK North Sea – Phase 1 of the SNS core project is on schedule for first gas in 3Q21 with drilling due to start in 1Q21. MIDDLE EAST AND NORTH AFRICA ShaMaran Petroleum (SNM CN): 3Q20 results – 3Q20 gross production at Atrush was 46.1 mbbl/d. FY20 gross production guidance remains 44-50 mbbl/d At the end of September, the company held US$29.9 mm in working capital. SUB-SAHARAN AFRICA Africa Oil (AOI SS/CN) & Impact Oil & Gas: Transactions in South Africa – Impact Africa is farming-out of a 50% WI and in the Transkei & Algoa exploration right, offshore South Africa to Shell. Shell has also been granted the option to acquire an additional 5% working interest should the joint venture elect to move into the Third Renewal Period, which is expected to be approximately 2024. Impact is acquiring 90% WI of Area 2 from Silver Wave Energy. Being immediately east and adjacent to Impact’s Transkei & Algoa Blocks, Area 2 compliments Impact’s existing position by extending the entire length of the ultra-deep-water part of the Transkei margin. Together, the Transkei & Algoa Blocks and Area 2 cover over 124,000 km2, with plays extending across both blocks. Africa Oil holds 31.10% of Impact. Attis Oil & Gas (AOGL LN): Becoming a Helium business – Attis is merging with Helium One. Attis shareholder will be issued 1 Helium One share for every 236 Attis shares. The merger values Attis at £1.76 mm, and Helium at £6.0 mm. Helium One has Helium exploration assets in Tanzania. Helium One will be admitted to AIM in December subject to minimum fundraise of £5 mm. BWE Energy (BWE NO): Update in Gabon – 3Q20 production at Dussafu was 15,449 bbl/d. Production cost (excluding royalties) was US$19.6/bbl. This includes approximately US$2 mm of additional costs related to the COVID-19 pandemic in the quarter. BWE has also acquired two jack-up drilling rigs for US$14.5 mm for the development of Hibiscus. A jack-up conversion is expected to reduce gross capital investments by ~US$100 mm compared to previous development plan. Vaalco Energy (EGY US/LN): 3Q20 results – 3Q20 production in Gabon was 5,064 bbl/d. Vaalco held US$42 mm in cash (and no debt) at the end of September. 4Q20 WI production is expected to be between 5,300 bbl/d and 5,750 bbl/d. EVENTS TO WATCH NEXT WEEK ________________________________________ 09/11/2020: Kosmos Energy (KOS US/LN) – 3Q20 results
Companies: EGY AOI FEC GPRK I3E MAHAA PXT SNM TETY TETY TXP
GeoPark (GRPK US)C; Target price US$20: Cash tax reduction and high impact drilling– The only item of interest in the 2Q20 financials was the fact that GeoPark did not pay any cash tax in 2Q20 (we were carrying a payment of US$40 mm). This explains why the cash balance at the end of June was so much higher than we expected at the time of the 2Q20 operating update in July). This also reflects important positive changes in Colombia. First, US$20-25 mm cash taxes in 2020 have been deferred to 2021 leaving only US$15-20 mm due in 2H20. In addition, Colombia is accelerating the reimbursement of income tax credits. GeoPark has already collected US$15 mm in July that will offset the remaining 2H20 cash tax. Overall in 2020, the company could potentially obtain a total refund of US$25 mm of income tax (out of which US$15 mm is firm and collected in July) plus US$15-20 mm of VAT. The key wells to focus on in 2H20 will be the 1-2 wells to be drilled at CPO-5 (GeoPark WI: 30%). While these wells are expected to increase production, they will also allow the company to start derisking the exploration upside associated with the block. The first well will be a development/appraisal well in Indico where the oil water contact has not been encountered yet. The second well is an exploration well at Aguila targeting the same play concept. The share price continues to trade at ~45% discount to our Core NAV of ~US$19 per share. Overall there could be 350-700 mmboe gross prospective resources across its Llanos blocks (including CPO-5). Our target price of US$20 per share reflects our ReNAV and attributes only ~US$1 per share to exploration. It represents over 100% upside to the current levels. IN OTHER NEWS ________________________________________ AMERICAS Frontera Energy (FEC CN): 2Q20 results | Gran Tierra (GTE LN/US/CN): 2Q20 results | i3 Energy (I3E LN): Acquisition of Canadian assets and £30 mm funding | Maha Energy (MAHA-A SS): Production update in Brazil | Parex Resources (PXT CN): 2Q20 results ASIA PACIFIC Pharos Energy (PHAR LN): Licence extension in Vietnam and RBL confirmation EUROPE bp (BP LN): 2Q20 results and change of strategy | Hurricane Energy (HUR LN): Technical update in the UK | Neptune Energy: Discovery in Norway | Spirit Energy: Dry hole in Norway MIDDLE EAST AND NORTH AFRICA Genel Energy (GENL LN): 1H20 results SUB-SAHARAN AFRICA Kosmos Energy (KOS US/LN): 2Q20 results | San Leon Energy (SLE LN): Acquires 10% Interest In new Nigerian oil export system | Vaalco Energy (EGY LN/US): 2Q20 results EVENTS TO WATCH NEXT WEEK ________________________________________ 10/08/2020: Diversified Gas & Oil (DGOC LN) – 2Q20 results 11/08/2020: JKX Oil & Gas (JKX LN) – 2Q20 results 13/08/2020: Africa oil (AOI CN/SS) – 2Q20 results
Companies: BP/ FEC GENL GPRK I3E PXT PHAR HUR KOS MAHAA EGY
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Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. 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. 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.
Companies: GOOD FIH SRT NFC RFX ARCM ACRL EQLS ORPH VRS
CAML’s Q1 2021 production rates of copper, zinc and lead were down slightly versus Q1 2020, but we believe output of all three metals remains on course to meet group guidance for 2021. The latter is in-line with production levels over recent years, which if achieved we believe would result in material earnings (and potentially dividend) growth this year given the rally in base metals prices over recent months relative to 2020 average levels. Our 2021 forecasts would put CAML on an EV/EBITDA multiple of under 5x and a compelling dividend yield of over 6%, the latter conservatively assuming a free cash flow pay-out ratio below that used to set the 2020 dividend. Given our estimates assume zinc and lead prices broadly in-line with current pricing levels and a copper price assumption that is some way below current spot, we believe the risks to our 2021 estimates lie to the upside.
Companies: Central Asia Metals Plc
The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are familiar. The belief that the roll-out of the vaccine and some relaxation of lockdown limitations will lead to a significant economic recovery, compared to the collapse seen in the first half of 2020, due to lockdowns. Indeed, the recent economic picture is becoming more optimistic than previous expectations. According to the ONS, the economy grew a little more than initially estimated in Q4 last year. This means GDP for 2020 as a whole contracted by 9.8%, revised up marginally but still the worst contraction on record. Markets, in general, have focused upon the potential scope and extent of the recovery. The sectors and stocks that have outperformed have been seen as ‘recovery’ plays with a rotation from stocks seen as ‘lockdown’ winners into those set to benefit from the ‘unlocking of society’ and/or exposed to the consumer. We expect 2021 will continue to be a “stock-picker’s” market. The sharp increase in the household savings ratio in Q4 highlights the scope for a recovery driven by expenditure. As further lockdown limitations are lifted, evidence of this growth will help to underpin the more optimistic outlook for Q2 and beyond.
Companies: AMYT ARBB BPC BAG BVC BEG BONH BLVN BRSD CML CWK CRPR EYE ECHO FDM FAR FA/ GPH GSF HUW INSE JDG KAPE KP2 MACF MPAC MNZS NESF NBI OTMP OBD PREM QFI RUA SCS SEN SOS SUR TON TOU TXP TGL TCN UEM VLS WYN
NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. 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. 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.
Companies: RCN NCCL PRIM ORR AVCT TLY RENX CMCL ARO
Pantheon Resources indicated that the Talitha #A well is flaring gas from the Kuparuk section as the well cleans up. Key operational data: That gas is being flared is highly encouraging. This is an early indicator that the well's completion operations have been effective. It is also absolutely necessary for these wells to have a high gas content because it is the expansion of gas that will provide energy that will push the oil up the wellbore to the surface. It also critical that the gas has sufficient energy to “clear up” the well, which involves clearing it of relatively heavy drilling and completion fluid. The previously announced over pressure of the Kuparuk formation created drilling challenges because it was unexpected. However, that overpressure will, in our opinion, favour well productivity.
Companies: Pantheon Resources plc
AfriTin* (ATM LN) – By-product potential at the Uis tin mine Alba Mineral Resources (ALBA LN) – Phase 2 drilling underway at the Clogau St David's mine ITM Power (ITM LN) - First Green Hydrogen for Glasgow Project planned capacity doubled to 20MW
Companies: ATM ALBA ITM
2020 brought a new chapter in the corporate development of Shanta in our view. The company still produced 83koz at an AISC of US$841/oz as per guidance for the third year in the row and did it with a best-in-class safety record. However, they also resolved for growth through the commissioning of Singida and the delivery of a scoping study for the West Kenya Project. They added 14% to the capacity of the flagship NLGM operations (which we believe the market has missed), restored the balance sheet and removed the hedge book. Finally, a maiden dividend was declared. We prosecute the investment case whilst adjusting our forecasts to take into account company guidance and a gold price forecast of $1750/oz. We maintain our Target Price at 30p.
Companies: Shanta Gold Limited
Companies: ARG ADT UKOG PHAR UNG CYAN FA/ SNX VRE SHED
• FY21 production guidance has been set at 9.2-10.6 mboe/d (below our initial forecast of 11.5 mboe/d) as Pharos’ guidance assumes minimum investment in Egypt with no rig (US$8 mm vs our forecast of US$23 mm with one rig for six month) pending conclusion of the farm out. Pharos’ production guidance for Egypt is therefore only 4.0-4.4 mbbl/d vs our expectations of 5 mbbl/d. • The new fiscal terms in Egypt are expected to be ratified in 3Q21 and a farm in partner is expected to be announced in 2Q21 (with completion of the transaction in 2H21). These are key milestones triggering the return to drilling in Egypt and allowing production in Egypt to triple to 12 mbbl/d. We are very confident Pharos will secure a partner given the renewed interest of the industry for Egypt (Cairn being the latest entrant with the acquisition of onshore assets from Shell). • Once ratified the new terms are expected to be back dated to Nov. 2020, resulting in a material positive impact on Pharos balance sheet on ratification. The company has put in place a working capital facility with the National Bank of Egypt the size of which would immediately increase on ratification. At current oil price, we believe that Pharos would likely have enough financial resources to start a two rig drilling programme until the farm out transaction completes. • As we roll forward our DCF to YE21 and incorporate lower G&A (following salary reduction and ongoing head office headcount reduction), we are increasing our target price from £0.50 to £0.60 per share. More details on the FY20 results • The FY20 financials were as expected as production, cash and net debt had already been reported. • YE20 2P reserves and 2C resources were broadly in line with expectations with a large reserves increase in Egypt more than offsetting a minor reserves reduction in Vietnam on a redetermination of the share of the reserves located on Pharos’ licences (from 30.1% down to 29.6%). • Hedges for 39% of the 2H21 production have been put in place at US$50.8/bbl. • Overall the negative impact of lower production in Egypt and 2H21 hedges are offset by the very low capex. Deep value. Upside. Newsflow. Our Core NAV of £0.36 per share (£0.28 per share) reflects our view of what the company could fund with its own balance sheet once the new terms in Egypt are ratified. Securing a farm in partner would unlock £0.18 per share of value in Egypt, increasing recovery factor a further £0.11 per share. Including the contingent resources in Vietnam, our unrisked NAV for the company’s reserves plus contingent resources is >£0.80 per share. Any exploration success would be additive. Our ReNAV is £0.56 per share.
Companies: Pharos Energy PLC
The victory of Guillermo Lasso in the Ecuador elections derisks the SolGold investment case and materially increases the likelihood of a takeover bid in our view. Not only was Lasso the pro foreign direct investment candidate, which should get potential investors off the fence, but the clear win allows for a smooth transition. Combined with encouraging progress on the PFS re-scoping and exploration at Porvenir, we are lowering the discount to 20% from 30% on our valuation. This raises the price target to 44p or just 2.6 weeks of BHP’s spot FCF generation.
Companies: SolGold Plc
In the past few weeks, all the listed multi-national pharmaceutical companies have reported results for 2020, which has given us the opportunity to update our industry statistics and drug database. This report provides the first, snapshot publication of global and US rankings of the top 20 drug companies for 2020. Comparisons are made with historical data to show how different company strategies have evolved. In addition, summary analysis has been provided for the sales evolution of therapeutic biopharmaceutical drugs, which saw sales rise 5.6% to $245bn, representing 26% of the market, driven by antibody-derived drugs.
Companies: AVO ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN PXC RECI STX SCE TRX VTA YEW
EQTEC provides engineering and design services and sells its EQTEC Advanced Gasification Technology to waste-to-value operators and enterprise partners. Its solutions are proven to process a wide variety of feedstock, including municipal waste, agricultural waste, biomass and plastics, with no hazardous waste or toxic emissions. EQTEC’s solutions produce a pure high-quality synthesis gas (syngas), capable of being used for the widest applications in the creation of energy, hydrogen and biofuels The company works together with multiple parties involved in projects including developers, waste owners, building contractors and funders with a view to ultimately providing its advanced gasification technology, associated engineering & design services and O&M services.
Companies: EQTEC PLC
JOG has completed the acquisition of a 12% interest in UK licence P2170, announced in Q4. This transaction includes minimal upfront payment and raises JOG’s stake in the Verbier discovery and a number of high-impact exploration prospects to 100%, consolidating its Greater Buchan Area position and simplifying the recently launched farm-out process. This process should complete by year-end and is critical to unlocking the major upside potential that exists from the GBA development. No change to our 570p risked-NAV and price target.
Companies: Jersey Oil & Gas PLC
Today's news & views, plus announcements from AAL, BLND, JMAT, SGRO, DNLM, OSB, SNN, ASC, BGO, EMAN, PMI, SOLG
Companies: Bango plc (BGO:LON)SolGold Plc (SOLG:LON)
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran). Target Admission Date of 26 April 2021 Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange. Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Timing TBA musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April.. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. 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. 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.
Companies: ADME ELIX DEV PPC TXP THR ATM FFWD C4XD IOG
