Vaalco Energy (EGY US/LN)C; Target price of £4.20: Completing the acquisition of stake in Etame – Vaalco has now completed the acquisition of Sasol 27.8% working interest in the Etame Marin block offshore Gabon, increasing the Vaalco’s total working interest to 58.8%. The company paid US$29.6 million in cash to Sasol, taking into account the agreed upon transaction price of US$44 mm, the deposit already paid and post-effective date adjustments, with a future contingent payment of up to US$5 mm. The final payment is marginally lower than we anticipated and probably reflects the high oil price in January so far in 1Q21.
Panoro Energy (PEN NO)C; Target price of NOK30 per share: Confirming guidance and high impact newsflow – The 4Q financial headlines did not include any surprises with Tunisia production increasing to 4,500 bbl/d (gross).
FY21 production guidance has been set at >9 mboe/d (we assume 9.5 mboe/d) with US$42 mm capex (including US$6 mm for Tunisia, US$5 mm for South Africa exploration, US$10 mm for EG and the balance for Gabon) plus US$5 mm for the Salloum well in Tunisia. The high impact Hibiscus exploration well in Gabon is expected to be spudded in April 2021 with results in May. Our unrisked NAV for this well is >NOK12 per share (>50% of current share price). There are only 1-2 liftings per year in EG, each one is very large (0.95 mmbbl per lifting). One of these liftings is taking place in 1Q21 with production from July 2020 allocated to Panoro but sold at the currently high price. The next one will be in 4Q21 or 1Q22.
PetroTal (PTAL LN)C; Target price up from £0.50 to £0.60 per share on increased reserves - YE20 1P, 2P and 3P reserves were respectively 22.3 mmbbl (+4% vs YE19), 51.0 mmbbl (+7%) and 106.1 mmbbl (+25%). The YE20 estimates are net of 2.1 mmbbl production in 2020, implying a 5.4 mmbbl upwards revision for the 2P reserves compared to previous estimates. The 1P and 2P reserves increase reflect a reserves replacement ratio of respectively 38% and 157%. As we anticipated, the reserves increase is the result of higher recovery factor assumptions, reflecting the performance of the wells to date. The new 2P and 3P cases assume recovery factors of respectively 15% (+1.4%) and 17% (+2.4%). Our new 2P NAV is £0.37 per share (£0.34 per share previously), which represents >2x the current share price. Our new ReNAV incorporating the increase in reserves is £0.59 per share (£0.52 per share previously). We have set our new target price at this level. We are increasing our target price from £0.50 to £0.60 per share.
IN OTHER NEWS
88 Energy (88E LN/U): Prospective resources update in Alaska – The total prospective resources associated with project Peregrine are estimated at 1.6 bn boe.
Echo Energy (ECHO LN): Operational update in Argentina – FY20 net production from Santa Cruz Sur was 1,966 boe/d. The company will now upgrade and debottleneck the existing liquids pipelines to bring the remaining volumes previously shut in in 2Q20 back online and restore net liquid production of 336 - 420 bbl/d.
Exxon Mobil (XOM US): Selling North sea assets – Exxon Mobil is selling most of its non-operated upstream assets in the U.K. central and northern North Sea to NEO Energy for >US$ 1bn. There may be additional contingent considerations of ~ US$300 mm. The acquisition adds ~ 40,000 boe/d production and > 140 mm boe of reserves. The portfolio to be acquired consists of 21 assets, including 14 fields. This includes 50% WI in the Gannett cluster, 4.38% in Elgin-Franklin and 44%-72% in the Shearwater area.
Galp: 4Q20 results – 4Q20 production was 122.8 mboe/d including 109.8 mboe/d in Brazil and 13.1 mbbl/d in Angola. The company held 2P reserves of 700 mmboe at YE20 (-6% versus YE19) while YE20 2C resources were 1.7 bn boe. FY21 production guidance has been set at 125-135 mboe/d.
Gran Tierra Energy (GTE CN/LN): FY20 results and outlook – FY20 production in Colombia was 22,264 bbl/d. FY21 production guidance has been set at 28-30 mbbl/d with US$130-150 mm capex. Gran Tierra collected total VAT and income tax receivables of US$114 mm during 2020. At YE20, Gran Tierra held US$34.4 mm in cash and working capital surplus, a US$190 mm revolving credit facility and US$600 mm of senior notes.
i3 Energy (I3E LN): Operational update in Canada – November 2020 to January 2021 averaged 9,150 boe/d (41% liquids). The horizontal Falher formation well located on the Noel acreage in Northeast British Columbia was tested at 4,200 mcf/d on a 1/4” choke. The well is expected to be brought on production at ~500 boe/d during the 2Q21. Currently there are no booked reserves attributed to this well, or to any potential offsetting development locations.
Maha Energy (MAHA-A SS): 4Q20 results – 4Q20 production in Brazil was 2,738 boe/d. Maha held US$6.7 mm in cash at YE20.
President Energy (PPC CN): Trading update and outlook in Argentina – President’s FY20 net production was >2,700 boe/d with ~3,300 boe/d production in December. YE20 net debt was US$16 mm. FY21 production guidance has been set at 3,600-4,000 boe/d, with capex of ~ US$18 mm.
Coro Energy (CORO LN): Acquisition of renewable Energy business in Asia and equity raise – Coro Energy is acquiring Global Energy Partnership Limited (GEPL) for £0.6 mm. GEPL is an originator and developer of renewable energy projects in South East Asia. Coro has also raised £4.5 mm mm of new equity priced at 0.4p per share. Additional proceeds of up to £0.5 mm are to be raised pursuant to the Open Offer.
Jadestone Energy (JSE LN): FY21 outlook – FY21 production in Australia and New Zealand is expected to be 11.5-13.5 mbbl/d with US$85-95 mm capex.
PTT EP/Petronas: Gas discovery offshore Malaysia – The Dokong-1 wildcat exploration well in Block SK417 offshore Sarawak encountered a gas column measuring > 80 metres in the Middle to Late Miocene Cycle VI-VII reservoirs.
ENI (ENI IM): Strategy update – Production is expected to grow at an average of around 4% per year over the next four years. Upstream capex will amount to around €4.5 bn per year on average. ~55% of the 1P reserves will be gas in 2024, vs. 50% today. Unlevered IRR for renewable projects is in the range of 6-9% while the IRR of upstream projects in execution is 18%.
EnQuest (ENQ LN): Farming down UK asset – EnQuest is selling 85% WI in the Eagle discovery to Anasuria Hibiscus in return for a full carry of all costs from completion of the transaction through to first oil.
Wintershall: 4Q20 results – 4Q20 production was 654 mboe/d (FY20 production of 623 mboe/d above FY20 guidance of 610-615 boe/d). YE20 net debt was EUR5.5 bn. At YE20, Wintershall held 2P reserves of 3.6 bn boe and 2C resources of 2.1 bn boe. FY21 production guidance has been set at 620-640 mboe/d with capex of EUR1.0-1.1 bn, including EUR200-250 mm for exploration.
FORMER SOVIET UNION
Enwell Energy (ENW LN): Appraisal well results in Ukraine – The SV-25 appraisal produced at a stabilised flow rate of approximately 1.9 mmcf/d of gas and 109 bbl/d of condensate from the B-22 formation only.
Kosmos Energy (KOS LN/US): 4Q20 results – 4Q20 production was 60.2 mboe/d, including 24.3 mbbl/d in Ghana, 25.5 mbbl/d in the US GoM and 10.5 mbbl/d in EG. Kosmos exited 2020 with net debt of ~US$2 bn and available liquidity of ~US$570 mm. First gas at the Greater Tortue Ahmeyim project in Mauritania and Senegal continues to be expected in 1H23. The sale of the FPSO in 2Q21 is expected to reduce Kosmos' cash requirements to first gas by ~ US$320 mm. FY21 production guidance has been set at 53-57 mboe/d. Kosmos expects to spend ~US$225 to $275 mm in 2021, excluding Mauritania and Senegal. In Mauritania and Senegal, FY21 capex capital expenditure for Kosmos' WI is expected to ~US$350 mm. At YE20, Kosmos held 2P reserves of 480 mmbbl.
Lekoil (LEK LN): Indicative offer from Lukoil – Lekoil has received a letter from Optimum, the Operator of the OPL 310 Licence, to terminate the Cost and Revenue Sharing Agreement for OPL 310. Lekoil believes that this letter is not valid.
Orca Energy (ORC.A/B CN): Increasing dividends – Orca is increasing its quarterly dividends from C$0.08 to C$0.10 per share.
Tullow Oil (TLW LN): RBL redetermination - Tullow and its technical banks have agreed a new debt capacity amount under the RBL facility of ~US$1.7 bn (down from US$1.8 bn at the end of September); this remains subject to formal approval by a majority of lending banks. Based on the new debt capacity amount, Tullow will have liquidity headroom of free cash and available debt facilities of ~US$0.9 bn.
EVENTS TO WATCH NEXT WEEK
01/03/2021: Seplat Petroleum (SEPL LN) – 4Q20 results
04/03/2021: Aker BP (AKERBP NO) – 4Q20 results
04/03/2021: Frontera Energy (FEC CN) – 4Q20 results
Companies: XOM XOM TLW 88E ENI ENI ENQ GTE I3E JSE KOS MAHAA PEN PEN TAL EGY
Pause in oil price rally on surprise US inventory build
Companies: TAL LEK UOG
• YE20 1P, 2P and 3P reserves were respectively 22.3 mmbbl (+4% vs YE19), 51.0 mmbbl (+7%) and 106.1 mmbbl (+25%).
• The YE20 estimates are net of 2.1 mmbbl production in 2020, implying a 5.4 mmbbl upwards revision for the 2P reserves compared to previous estimates. The 1P and 2P reserves increase reflect a reserves replacement ratio of respectively 38% and 157%.
• As we anticipated the reserves increase is the result of higher recovery factor assumptions, reflecting the performance of the wells to date. The new 2P and 3P cases assume recovery factors of respectively 15% (+1.4%) and 17% (+2.4%).
• We are increasing our target price from £0.50 to £0.60 per share to incorporate the reserves additions.
Some additional details on the YE20 reserves statement
The auditors now assume opex 19% lower than at YE19 in the 2P case (which we already assume in our model). In comparison with YE19, the lower opex represents an undiscounted saving of US$232 mm. The reserves auditor estimates the after tax NPV10 of the 2P reserves at US$621 mm at YE20 compared to US$746 mm at YE19. The change of value has to be read in light of much lower Brent price assumptions with the YE20 report assuming ~US$49/bbl in 2021, increasing to ~US$60/bbl in 2026. This compares with the YE19 report which assumed ~US$68/bbl in 2021, increasing to ~US$76/bbl in 2026.
Updating our valuation
The new reserves report illustrates the potential for further reserves increases at Bretana. Out of 84 mmbbl 3P reserves estimated at YE19, 51 mmbbl have now been booked as 2P in addition to 2.1 mmbbl having been produced. We believe that with additional production history, the reserves auditor will continue to revise upwards its estimates of recovery factors. Our new 2P NAV is £0.37 per share (£0.34 per share previously), which represents >2x the current share price. Our new ReNAV incorporating the increase in reserves is £0.59 per share (£0.52 per share previously). We have set our new target price at this level.
Companies: PetroTal Corp.
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
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.
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.
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
Oil prices continue strong rally despite weak global demand
Companies: Canadian Overseas Petroleum Limited (XOP:CNQ)PetroTal Corp. (TAL:TSX)
• PetroTal is confirming a US$100 mm capex programme in 2021 to produce an average of 11-12 mbbl/d in 2021, exiting 2021 at 18-19 mbbl/d. 4Q21 production is expected to be 16-17 mbbl/d, increasing from 9-10 mbbl/d in 1H21.
• The capex programme includes US$68 mm to drill five development wells (the 5th well will not contribute to production until Feb 2022) and one water disposal well. US$13 mm will be allocated to production facilities to increase water handling to 124 mbbl/d (of fluids - oil/water - blend) which would allow the company to process 24 mbbl/d of oil. A further US$17 mm will be spent on infrastructure and ESG, along with US$2 mm to prepare for drilling on Block 107.
• Following the completion of the US$100 mm bond issue, the company is executing on its plans.
• PetroTal continues to offer investors a combination of value and growth.
PetroTal at US$65/bbl
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.
Still 3x upside even after the recent share price rise
Our target price remains at £0.50 per share in line with our Core NAV (Brent LT of US$60/bbl). Our target price continues to represent almost 3x the current share price.
Even 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.
PetroTal (PTAL LN): US$100m bond successfully secured | Mosman Oil & Gas*, BUY, (MSMN LN): Operations update, active drilling programme slated for FY21
Companies: PetroTal Corp. (TAL:TSX)Mosman Oil & Gas Ltd. (MSMN:LON)
Analysts calling for the next oil supercycle
PetroTal (PTAL LN/TAL CN)C; Target Price: £0.50: Successful US$100 mm bond raise opens new horizons – PetroTal has raised ~US$100 mm through a 3 year senior bond issue with a fixed coupon of 12% per year and a borrowing limit of US$125 mm. ~US$20 mm will be used to repay the US$16.6 mm derivative liabilities to Petroperu (formalized in November) and the US$2.9 mm government pandemic loan, while US$20 mm are earmarked to make acquisitions. The balance will be invested in the Bretana field to accelerate production, along with funds to secure a hedging programme. We had incorporated the bond issue in our forecasts that are based on a US$100 mm capex programme for 2021. The programme includes a total of four new producing wells and one disposal well. Drilling is expected to restart in March. With ~11.5 mbbl/d production in 2021 increasing to >16 mbbl/d (we assume cautiously 15 mbbl/d) in 2022, we continue to forecast respectively ~US$90 mm and US$170 mm operating cash flow (pre finance costs) in 2021 and 2022. This implies EV/DACF multiples of 2.2x in 2021 and 0.6x in 2022. There are multiple sources of upside that the company will now pursue: (i) The 3P reserves at Bretana represent ~100% upside to the 2P case. (ii) The Constitucion prospect (70 mmbbl) on Block 107 is expected to be drilled in 1Q22 or 2Q22. A success at Constitucion would also derisk larger prospects on the licence. (iii) PetroTal has also identified a total of ~115 mmbbl prospective resources at various prospects and leads on Block 95.
Valeura Energy (VLU LN/VLE CN)C: Initiating Coverage - Valeura is a Toronto and London listed ~US$40 mm market cap cash shell. The firm holds ~US$31 mm in cash and, in 1Q21, is expected to complete the divestment of its legacy producing asset for US$15 mm in cash. Valeura’s management team is very well-rounded with diverse transaction and operational experience and commercial acumen. The company attracted Equinor as a 50/50 partner for its deep gas Turkish assets where Valeura operated the drilling of multiple wells. Valeura is now looking to leverage its ~US$45 mm pro forma cash and listed equity to make acquisitions of undervalued assets or companies with producing assets and exploration upside within Eastern Europe, North Africa and the Middle East. Valeura is differentiated from other acquirers on three other counts. (i) It offers quality equity paper listed on the LSE main market and the TSX that can be used as a currency. (ii) It holds much more cash than many other shells. This is important because private equity sellers will require a degree of cash consideration alongside shares. Holding cash rather than having to rely on the market to access cash reduces execution risk. It also allows Valeura to target larger transactions combining the cash on the balance sheet with funds from other sources including debt and potentially further equity raises, depending on value accretion. (iii) Valeura’s shares trade near cash value which ought to result in fewer arguments regarding relative value.
Wentworth Resources (WEN LN)C; Target price: £0.40: Looking beyond the 2P reserves: proved developed reserves up by ~50% - The gross field YE20 2P reserves of 445.3 bcf at Mnazi Bay are unchanged compared to YE19 when adjusted for 2020 production. However, the field’s gross proved developed reserves at YE20 of 191 bcf have increased ~50% year on year. Adding back 23 bcf of production in 2020 suggests 87 bcf has been converted from proved undeveloped reserves to the developed category. This derisking of proved reserves reflects the lower sands being put in production, as these reserves had been previously classified as “behind pipe”. The independent auditor’s after tax NPV10-15 of US$98-117 mm for Wentworth’s interest in the field represent 2.5-3.0x the current EV of the company. The shares continue to trade at EV/DACF multiples of 2.9x in 2021 and 2.2x in 2022.
IN OTHER NEWS
Alvopetro (ALV CN): Production update in Brazil - January sales averaged 1,923 boe/d.
Maha Energy (MAHA-A SS): Reserves update and FY21 outlook – At YE20, the company held ~45 mmbbl of oil and 20 bcf of natural gas of 2P reserves in Brazil, USA and Oman. Maha also holds ~22 mmbbl contingent resources in Oman. Maha expects to produce 4.0-5.0 mboe/d in 2021 with US$26 mm capex.
Parex Resources (PXT CN): Reserves update in Colombia – 4Q20 production was 46,642 boe/d. Parex held 194 mmboe of 2P reserves at YE20 (-2% vs YE19).
Jadestone Energy (JSE LN): Trading update in Australia/Vietnam and New Zealand – Jadestone had net cash of US$82.0 mm at YE20. The completion of the acquisition of the New Zealand asset is expected to take place in 1H21.
ADX Energy (ADX AU)C: Upsized Equity raise – ADX is raising A$3 mm of new equity from its shareholders at a price of A$0.006 per share. In addition, participating shareholders will be granted one option for every two subscribed shares to acquire new shares at a strike price of A$0.08 per share.
Aker BP (AKERBP NO): 4Q20 results – 4Q20 production in Norway was 223.1 mboe/d, with US$1.73 bn capex for FY20. YE20 net debt was US$3.6 bn. FY21 production guidance has been set at 210-220 mboe/d with total capital spend of USD 2.2-2.3 bn. The company anticipates a dividend for 2021 of US$450 mm (up from US$425 mm in 2020).
BP (BP LN): 4Q20 results – Adjusted net profit for 4Q20 was US$115 mm. FY20 production was 3,473 mboe/d with US$12 bn capex. The organic reserves replacement ratio was 78% for the year. Including acquisitions and divestments, the total reserves replacement ratio was -5%.
DNO (DNO NO): Discovery in Norway – DNO has made a 45-70 mmboe discovery at the Røver Nord prospect in the Norwegian North Sea license PL923 in which the Company holds a 20% WI.
EnQuest (ENQ LN): Acquisition of UK assets – EnQuest is acquiring 26.69% WI in Golden Eagle from Suncor. The transaction adds production of ~10 mboepd, ~18 mmbbl of net 2P reserves and ~5 mmbbl of net 2C resources. FY21 opex for the acquired asset is ~US$5/boe. The effective date of the transaction is 01/01/2021. The initial consideration is US$325 mm, with an additional contingent consideration of up to US$50 mm depending on oil price. EnQuest plans to finance the transaction through a combination of a new secured debt facility and an equity raise of up to US$50 mm. FY20 production was 59,116 boe/d with capex of ~US$130 mm. Gross production at Kraken was 37,518 bbl/d. YE20 net debt was US$1,280 mm. FY21 production is expected to be between 46,000 boe/d and 52,000 boe/d; Kraken gross production is expected to be between 30,000 bbl/d and 35,000 bbl/d.
Lundin Energy (LUNE SS): Dry hole in Norway – The 7219/11-1 exploration well on the Bask prospect in production licence 533B was dry.
OKEA Energy (OKEA NO): 4Q20 results – 4Q20 production in Norway was 16,171 boe/d. At YE20, OKEA held NOK2,400 mm in debt and had NOK 871 mm in cash. OKEA expects go produce 15.5-16.5 mboe/d in 2021 with NOK0.6-0/7 bn.
OMV (OMV AG): 4Q20 results – 4Q20 production was 472 mboe/d. The company expects to produce 480 mboe/d in 2021 with cape of US$2.7 bn.
Royal Dutch Shell (RDSA/B LN): 4Q20 results – Shell reported 4Q20 adjusted net earnings of US$0.4 bn with production of 3,371 mboe/d and FY20 capex of US$18 bn. FY21 production guidance has been set at 3,300 3,500 mboe/d. 1Q21 dividend has been increased by 4% from 4Q20 to US$0.1735 per share.
FORMER SOVIET UNION
Caspian Sunrise (CASP LN): Operational update in Kazakhstan – The company currently produces 1.2-1.5 mbbl/d. Domestic oil prices in Kazakhstan are currently only US$6/bbl.
Nostrum Oil & Gas (NOG LN): Operating update and reserves downgrade Kazakstan – FY20 sales volumes were 21,514 boe/d. Net debt is expected not to exceed US$1.1 bn at YE20. YE20 2P reserves are estimated at 39 mmboe (down 91 mmboe compared to YE19). The revisions in reserves are mainly due to the downgrade of reserves attributed to the development of the Biyski-Afoninski West & North-West reservoirs to the contingent resources category. FY21 production guidance has been set at 17,000 boe/d, corresponding to a sales volume of 16,000 boe/d.
MIDDLE EAST AND NORTH AFRICA
BP (BP LN): Divesting assets in Oman – BP is selling a 20% participating interest in Oman’s Block 61 to PTTEP for US$2.6 bn. Following completion of the sale, BP will remain operator of the block, holding a 40% interest.
United Oil & Gas (UOG LN): Trading update – FY20 WI in Egypt production was 2,195 boe/d. At YE20, the company held US$2.1 mm in cash. 1H21 production in Egypt is forecast to average between 2,300 and 2,500 boe/d for 1H21 with US$5.3 mm capex.
Seplat Petroleum (SEPL LN): Update in Nigeria – Seplat ‘s Joint Venture, the ANOH Gas Processing Company, has raised US$260 mm in debt to fund the completion of its ANOH Gas Processing Plant. Construction cost is now expected to be no more than US$650 mm, inclusive of financing costs and taxes, below the original projected cost of US$700 mm.
EVENTS TO WATCH NEXT WEEK
09/02/2021: Tethys Oil (TETY SS) – 4Q20 results
11/02/2021: DNO (DNO ASA) – 4Q20 results
11/02/2021: Royal Dutch Shell (RDSA/B LN) – Strategy day
Companies: NOG CASP RDSA ADX AKERBP ALV BP/ DNO ENQ JSE LUNE MAHAA OMV PXT TAL SEPL WEN
Market update - WEN, PTAL, MSMN
Companies: TAL WEN MSMN
• PetroTal has raised ~US$100 mm through a 3 year senior bond issue with a fixed coupon of 12% per year and a borrowing limit of US$125 mm. ~US$20 mm will be used to repay the US$16.6 mm derivative liabilities to Petroperu (formalized in November) plus US$2.9 mm for the government pandemic loan while US$20 mm are earmarked to make acquisitions. The balance will be invested in the Bretana field to accelerate production, along with funds to secure a hedging programme.
• Recall that with the recent upwards shift of the Brent forward curve, the potential derivative liabilities is now an asset and Petroperu is expected to owe PetroTal ~US$8 mm. Under the current forward curve, PetroTal should therefore now receive a total of ~US$25 mm (=US$16.6 mm + US$8 mm) from Petroperu from the settled oil profits during 1H21.
• We had incorporated the bond issue in our forecast that is supporting a US$100 mm capex programme for 2021. The programme includes a total of four new producing wells and one disposal well. Drilling is expected to restart in March with one deviated well followed by a new horizontal well. PetroTal will then drill one water disposal well.
Focusing on growing cashflow
With ~11.5 mbbl/d production in 2021 increasing to >16 mbbl/d (we assume cautiously 15 mbbl/d) in 2022, we continue to forecast respectively ~US$90 mm and US$170 mm operating cash flow (pre finance cost) in 2021 and 2022. This implies EV/DACF multiples of 2.2x in 2021 and 0.6x in 2022. The additional liquidity will also allow PetroTal to repay the company’s account payables and ensure strong relationships with the contractors.
3.5x upside without including any exploration potential
Our target price remains to £0.50 per share in line with our Core NAV. Our target price represents over 3.5x the current share price.
There are multiple sources of upside that the company will now pursue: (i) The 3P reserves at Bretana represents ~100% upside to the 2P case. (ii) The Constitucion prospect (70 mmbbl) on Block 107 is expected to be drilled in 1Q22 or 2Q22. A success at Constitucion would also derisk larger prospects on the licence. (iii) PetroTal has also identified a total of ~115 mmbbl prospective resources at various prospects and leads on Block 95.
Panoro Energy (PEN NO)C; Target Price: NOK23.00: BW Energy (BWE NO) provides update in Gabon – BW indicated that 4Q20 gross production from the Tortue field was ~13,500 bbl/d, as an 11 day downtime took place in October for the annual maintenance program and to comply with Gabonese production allocations to meet OPEC quotas. A drilling contract for one development well (DTM-7H) and one exploration well has been recently awarded. There is also the option for another exploration well subject to the results of the drilling campaign.
Pharos Energy (PHAR LN)C; Target Price: £0.40: Raising US$11.7 mm of new equity – Pharos has raised US$11.7 mm of new equity price at 19.25 p per share. The proceeds will be invested in Egypt to arrest production decline and boost production ahead of securing a farm in partner.
IN OTHER NEWS
ExxonMobil (XOM US): Dry hole in Guyana – The Hassa wildcat on the Stabroek block was dry.
Gran Tierra Energy (GTE LN/CN): Transaction to divest shares in PetroTal terminated – Gran Tierra, has terminated the purchase agreement with Remus Horizons regarding the proposed sale of 218,012,500 common shares in the capital of PetroTal. In a separate announcement Gran Tierra reported that 109 mm shares with private purchasers for US$14.8 mm
Kosmos Energy (KOS US/LN): Discovery in the US Gulf of Mexico – The Winterfell well on the Green Canyon Block 944 encountered ~26 meters of net oil pay in two intervals in the sub-salt Upper Miocene. The well de-risks prospectivity in several neighbouring blocks held by Kosmos, with approximately 100 mmbbl of gross potential within Kosmos' acreage position.
Pantheon Resources (PANR LN): Acquisition of acreage in Alaska - Pantheon Resources is acquiring 10.8% WI in each of the 16 leases in the 44,463 acre Talitha Unit from Otto Energy. The consideration consists of 14,272,592 shares of Pantheon. Upon completion of the acquisition, Pantheon will own a 100% WI in the Talitha Unit.
Predator Oil & Gas (PRD LN): Operation update in Trinidad – The Pilot CO2 EOR results support pre-injection desktop production plateau forecasts of 243 -547 bbl/d from the Herrera #2 Sand. The CO2 sequestration potential is confirmed. At WTI oil price of US$50/bbl, projected EBITDA net-backs for the P50 and P10 pre-Pilot CO2 EOR production profiles at plateau production are estimated to be in the range US$15 – 25/bbl.
Trinity Exploration & Production (TRIN LN): Operating update in Trinidad – 4Q20 production was 3,206 bbl/d. Trinity held net cash of US$17.5 mm at YE20.
Westmount Energy (WTE LN): Acquiring further interest in Guyana explorer – Westmount has purchased 287,500 common shares in JHI for an aggregate cost of C$718,750. Westmount holds a total of 5,651,270 shares in JHI, representing ~7.7% of the issued common shares in JHI. Drilling operations at the first well in the Canje drilling campaign, Bulletwood-1, are ongoing, with completion of the well anticipated around mid to late February. Additional Canje drilling will follow-on in 1H21.
Aker BP (AKERBP NO): Trading update in Norway – Aker BP produced 223.1 mboe/d in 4Q20. FY20 capex was US$1.3 bn, exploration spend was US$246 mm and abandonment spend was US$178 mm. YE20 net debt was US$3.6 bn.
Cairn Energy (CNE LN): Trading update – FY20 net production at Catcher and Kraken was just over 21,000 bbl/d, in line with guidance. FY20 cash capex was US$160 mm. FY21 net production is estimated to be 16,000 – 19,000 bbl/d with capex of US$85 mm (including US$10 mm at Kraken and Catcher). At YE20 Cairn held US$570 mm in cash with no drawn debt. In 2021, Cairn is planning to drill an exploration well on Block 10 in Mexico and there is an optional drilling opportunity for an appraisal well of the Saasken discovery (Cairn 15% WI). In the UK, Cairn will participate in the Shell-operated Jaws exploration well on P2380 (Cairn 50% WI). In Côte d’Ivoire, Cairn has assumed Operatorship (90% WI) in blocks CI-301 and CI-302 from Tullow which has exited both licences. The JV has exited blocks CI-518, CI-519, CI-521 and CI-522 effective end December 2020.
ExxonMobil (XOM US): Progress at selling UK assets – Media reports indicated that ExxonMobil has entered exclusive discussions with HitecVision/NEO Energy with regards to the divestment of Central and Norther North Sea assets.
Repsol (REP SM): Trading update – 4Q20 production was 628 mboe/d.
Norway: Exploration licence award – Norway has awarded 61 licences to 30 companies. Equinor, Aker BP, Lundin Energy, DNO, Neptune Energy, Wintershall DEA, OKEA Energy, Var Energy and Spirit Energy were awarded interests in respectively 17, 10, 19, 10, 6, 16, 4, 10 and 3 licences.
Serica Energy (SQZ LN): Operating update in the UK North Sea – Estimated FY20 net production from Serica's interests in Bruce, Keith, Rhum (BKR) and Erskine averaged 23,800 boe/d. With regards to the R3 operations, the removal of the 2005 completion is taking longer than anticipated due largely to the unexpectedly poor condition of the equipment being recovered from the well. As a result, R3 operations are now expected to continue into March 2021.
Union Jack Oil (UJO LN): Further acquisition of interests in UK asset – Union Jack Union is acquiring a 15% interest in PEDL253, containing the Biscathorpe project from Humber Oil & Gas, increasing its interest to 45%. The consideration consists of £0.5 mm in cash plus a contingent payment of £0.5 mm.
FORMER SOVIET UNION
JKX Oil & Gas (JKX LN): Operating update in Ukraine and Russia – FY20 production was 10,238 boe/d including 5,389 boe/d in Russia and the balance in Ukraine. JKX held US$24.5 mm in cash at YE20. IG146 was completed to the Devonian in Ignativske (Ukraine) and encountered 2.6 m of net hydrocarbon bearing thickness. After initially testing of the IG146 well at an oil rate of 497 bbl/dd and a gas rate of ~200 boe/d in November the rate declined and the well is currently producing 35 boe/d.
MIDDLE EAST AND NORTH AFRICA
Apex International Energy: Discoveries in Egypt – The SEMZ-1X well discovered Bahariya oil with 17 feet of indicated pay and and tested at a rate of 100 bbl/d. The well will be fracced to maximize flow rate. The SEMZ-11X well encountered 65 feet of oil pay in the Cretaceous sandstones of the Bahariya and Abu Roash G formations. Testing of the Bahariya resulted in a peak rate of 2,100 bbl/d of oil and no water.
DNO (DNO NO): Operating update – FY20 WI production was 95,100 boe/d including 17,300 boe/d in Norwar and the balance in Kurdistan. FY20 capex was US$515 mm increasing to US$700 mm in 2021. DNO held US$475 mm in cash at YE20. The KRG has put a plan in place to make payments towards DNO’s arrears (US$259 mm) such that if Brent prices exceed US$50/bbl in any month, the incremental revenue will be shared 50 50 between the KRG and the Tawke license partners.
Energean (ENOG LN): Trading update – FY20 pro forma WI production was ~48.3 mboe/d with pro forma capital expenditure (including exploration expenditure) of US$558 mm. FY21 production is expected to be 35.0 40.0 mboe/d with capex of US$515 – 590 mm,
Genel Energy (GENL LN): Operating update in Kurdistan – Gross operated production from the Tawke licence averaged 110,300 bbl/d in 2020, about evenly split between the Tawke and Peshkabir fields. FY20 production at Taq Taq was 9,670 bbl/d with a production rate of 8 mbbl/d at YE20. Sarta produced 520 bbl/d. The Sarta-3 well has produced at an average of ~5,500 bbl/d so far in 2021. Production from Sarta-2 is now expected in February. The 2021 appraisal drilling campaign is targeting a material portion of the 250 mmbbl of existing contingent resources, and prospective resources, in Jurassic formations. The Qara Dagh 2 well is expected to be spudded in 1Q21. FY21 WI Production is expected to be slightly above FY20 (31,980 bbl/d) with capex of US$150-200 mm. Genel held US$354 mm in cash (net cash of US$10 mm) at YE20. The KRG has submitted a reconciliation model for repayment of the receivable relating to the US$159 mm in unpaid invoices, whereby for each cent above a monthly dated Brent average of US$50/bbl, 0.5 cent per working interest barrel shall be paid towards monies owed.
TransGlobe Energy (TGL LN): Operating update – Production averaged 12.4 mboe/d (including 11,178 boe/d in Egypt) in 4Q20 and 13.5 mboe/d during FY20. At YE20, TransGlobe held >US$30 mm in cash and had no net debt.
BW Energy (BWE NO): Equity raise – BWE has raised US$75 mm of new equity priced at NOK27 per share, representing a 9.5% discount to the previous day close. The net proceeds will be used for capital investments in the Dussafu licence in Gabon, development of the Maromba discovery in Brazil, new ventures and for other general corporate purposes.
Total (FP FP) and Royal Dutch Shell (RDSA/B LN): Divestments in Nigeria – Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, have been sold to TNOG Oil and Gas for a consideration of US$533 mm net to Shell (30% WI) and US$180 mm net to Total (10%).
EVENTS TO WATCH NEXT WEEK
27/01/2021: Tullow Oil (TLW LN) – Trading update
28/01/2021: Lundin Energy (LUNE SS) – 4Q20 results
Companies: AKERBP CNE DNO ENOG XOM GENL GTE JKX KOS PEN TAL PHAR REP RDSA SQZ FP TGL
Genel Energy (GENL LN): Comprehensive trading update, active work programme slated for 2021 | PetroTal (PTAL LN): Successful agreement reached with Petroperu
Companies: Genel Energy PLC (GENL:LON)PetroTal Corp. (TAL:TSX)
• PetroTal is launching a bond issue to raise US$100 mm. This would allow the firm to accelerate drilling and development activities at Bretana (~US$40 mm), put in place a hedging programme and allow the firm to consider regional acquisitions.
• Some of the proceeds of the bond issue will be used to repay the US$16.6 mm derivative liabilities to Petroperu that was formalized in November. However, with the recent upwards shift of the forward curve, the potential derivative liabilities is now an asset and Petroperu is expected to owe PetroTal ~US$8 mm. Under the current forward curve, PetroTal should therefore now receive a total of ~US$25 mm (=US$16.6 mm + US$8 mm) from Petroperu from the settled oil profits during 1Q21.
• Assuming the extra funding is put in place, we are increasing our capex programme for 2021 from US$40 mm to US$90 mm. We are also increasing our production forecast for 2021 from ~11 mbbl/d to ~15 mbbl/d that we maintain broadly flat in 2023 as we assume PetroTal will drill additional wells before starting to decline from 2024. We note that the 3P case only assumes five additional wells (~US$70 mm) compared to the 2P case.
• Current production has now increased from 9.5 mbbl/d last week to 10 mbbl/d.
• PetroTal has now also signed an agreement for a second pilot shipment through Brazil in February 2021, of up to 220,000 barrels of oil.
Positive impact on cash flow and NAV
With more production, we are now forecasting operating cashflow of ~US$170 mm in 2022 and ~US$155 mm in 2023. We are also increasing our Core NAV from £0.43 per share to £0.52 per share. The additional funding would also allow the company to drill exploration wells such as the 70 mmbbl Constitucion prospect (£0.40 per share Unrisked).
We are increasing our target price from £0.45 per share to £0.50 per share in line with our new Core NAV. Our target price represents over 3x the current share price.
PetroTal (PTAL LN): US$100m debt financing package sought, production at Bretana continues to ramp up
Helium One (HE1 LN): Submission of key environmental studies ahead of high impact exploration campaign
Companies: PetroTal Corp. (TAL:TSX)Helium One Global Limited (HE1:LON)
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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
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
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. Subject to EGM on 21st March. Rogue Baron plc have announced its application for admission to the AQSE growth market. Rogue Baron owns five subsidiaries, namely: Shinju Spirits, Inc., Shinju Whiskey LLC, Mazeray Corporation, STI Signature Spirits Group LLC and Legacy Retail Group LLC. The Company’s goal is to build each of its brands that makes them a buyout target. Deal size TBC an expected admission date 12th March 2021. Global review platform, Trustpilot has announced its intention to float on the premium list of the LSE. Trustpilot provides an open platform, which creates a place where businesses and consumers can gain actionable insights and collaborate. Consumers are able to share feedback, at any time, about any business with a website and review feedback left by other consumers. Total revenues were US$64.3 million, US$81.9 million and US$102.0 million for the years ended 31 December 2018, 2019 and 2020, respectively. The Offer would comprise new Shares to be issued by the Company (raising gross proceeds of approximately US$50 million to support Trustpilot's growth plans and repay indebtedness) and an offer of existing Shares to be sold by certain existing shareholders, directors and employees. Timing TBC. In The Style, the e-commerce womenswear fashion brand with an influencer collaboration model, announces their intention to float on AIM. In The Style is a pure-play e-commerce fashion brand with a l customer base of women predominantly aged between 16 and 35. Founded in 2013, the group has delivered £35.4 million net sales and £3.6 million Adjusted EBITDA in the nine months to 31 December 2020, with sales up 159% from £13.7 million for the nine months to 31 December 2019. Admission is expected to take place on or around 17 March 2021. Deal size TBC. Media reports video game firm, Catalis is mulling a London IPO, just over a year after being bought by a private equity firm. Catalis’s accounts are reportedly expected to show revenues increasing to £60m in 2020, up from £43m, with adjusted earnings of £15m. Deal details and timing TBC. 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. 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 is expecting to release its IPO plans on 8th March. The company raised more than $180m in January with a valuation of more than $7bn.
Companies: LND GDR GAMA SOLI SHED RLE CRU WRES SBI MNO
Today's news & views, plus announcements from MRW, BNZL, HICL, AGK, SEPL, SEIT, SDY, BGO, SHED
Companies: BGO SEIT SEPL
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
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
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. 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: ADME NFC CHAR WHR MKA IXI MOS D4T4 ALS TERN
Oil fell the most since November with a stronger dollar and concerns surrounding inflation weighing on crude's best start to the year on record.
Futures in New York declined 3.2% on Friday, with a rising dollar reducing the appeal of commodities priced in the currency. Yet, the US crude benchmark still managed to post a nearly 18% gain this month as inventories worldwide tighten and pockets of demand return. Domestic crude production dropped in 2020 for the first time in four years, according to the US government.
Crude prices have notched the largest year-to-date gain than in any year prior for the same time period, in part due to OPEC+ production curbs helping to deplete global stockpiles. Plus, the unprecedented cold blast that recently halted millions of barrels of US output means oil markets are about 100,000 barrels a day tighter than previously thought, according to JPMorgan Chase & Co. Supply scarcity may worsen in the coming months as North Sea fields undergo major maintenance.
The Organisation of Petroleum Exporting Countries and its allies will meet next week to decide on output levels. While Russia has signalled it favours a further easing of production cuts, the country's oil output dipped below its OPEC+ target this month, meaning it failed to take full advantage of the more generous quota it was afforded after January's OPEC+ meeting.
West Texas Intermediate for April delivery fell $2.03 to settle at $61.50 a barrel.
The US crude benchmark rose 3.8% this week.
Brent for April settlement, which expires on Friday, declined 75 cents to end the session at $66.13 a barrel.
The contract gained 5.1% this week.
The more actively traded May contract declined $1.69 to settle at $64.42 a barrel.
Soaring bond yields on Thursday were the latest sign that accelerating inflation could trigger a pullback in monetary policy support that has helped fuel gains in risky assets during the pandemic. While global bonds have since stabilised, a less accommodative approach to monetary policy could have ripple effects across commodity markets.
Companies: FO 88E DGOC EME TRIN UOG
Today's news & views, plus announcements from SMDS, PSN, POLY, RIO, BIFF, SONG, HSX, PAGE, RLE, SHED
Companies: PSN RLE RIO
Concept select update
Companies: Jersey Oil & Gas PLC
Today's news & views, plus announcements from RIO, TW, CRDA, TPK, PHP, MGGT, SHI, WHR
Companies: PHP RIO SHI TPK
Arc Minerals* (ARCM LN) – Immediate appointment of Rothschild & Co as financial adviser
Chaarat Gold* (CGH LN) – Fatal incident at Kapan in Armenia
Kodal Minerals* (KOD LN) – Progress report on West African gold exploration
Phoenix Copper* (PXC LN) – Raising £16.45m to develop the Empire mine open pit development project
Trans-Siberian Gold (TSG LN) – High grade Vein 25 mining operations resume after accident investigation is completed
Companies: ARCM CGH KOD PXC TSG
Central Asia Metals (CAML LN) has reported Q4 2020 production with 3,365t of copper taking full year output to 13,855 in line with our forecast of 13.9kt and at the top end of guidance. Q4 lead output was 7,442t meaning 29,741t over the full year, up 2% YoY and in line with our forecast of 30kt while zinc output of 5,848t took full year output to 23,815t again in line with our forecast of 24kt and up 2% YoY despite the disruption at Sasa which CAML has overcome rapidly as we expected.
Companies: Central Asia Metals Plc
BlueRock Diamonds (BRD LN) – BlueRock reports $423/ct tenders, raises £1.5m in oversubscribed placing
Cornish Metals* (CUSN LN) – Warrants exercised
Metal Tiger (MTR LN) – Progress at Kitlanya East
Pure Gold Mining (PUR LN) – Further drilling results from Red Lake
Savannah Resources* (SAV LN) – Processing circuit optimization points to capital and operating costs savings at MdB
Nornickel to Stabilize Water Inflows at Arctic Mine by Next Week
Companies: CUSN PGM BRD SAV MTR