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  • 01 Jun 18

Discontinuing research coverage

We are discontinuing research coverage of Spartan Energy, as the stock has been delisted following its recently approved acquisition by Vermilion Energy. All prior production and financial estimates, as well as research ratings and target prices, must no longer be relied upon.

Companies: Spartan Energy
  • 21 Feb 18

2017YE results and reserves

Management reported annual production of 22,200 boe/d, which is largely in line with our estimates of 22,125 boe/d and represents y/y PPS growth of 17%. This results in 4Q17 production of 22,636 boe/d, which is relatively flat QoQ but slightly ahead of our estimates of 22,340 boe/d. The company reported quarterly adjusted funds flow from operations of $65 mm ($0.35/sh dil), which was significantly ahead of our estimates of $57 mm ($0.31/sh dil) and consensus at ~$0.31/share. We don’t have the full financials yet leaving us to speculate on the reason for the large cash flow beat. Our guess at this juncture is better than forecasted realized light oil pricing and operating costs but we await the release of the audited statements in the middle of March. Reserves increased 2% on a PDP basis to 45.3 mmboe, 5% on a 1P basis to 73 mmboe and 4% on a 2P basis to 113.5 mmboe. PDP reserves made up 62% of 1P and 40% of 2P reserves, which is relatively flat y/y. Based on 2017 production, this represents a 2P RLI of 13.9 years. We have updated our model to reflect 2017YE results and reserves. With our current 2018 estimates in line with management’s 2018 guidance, we have not made any changes to our forecasts. With an implied return of 72%, we are maintaining our BUY rating.

Companies: Spartan Energy
  • 11 Jan 18

2018 budget and guidance

Spartan plans for 2018 E&D spending of $183 million plus $22 million for discretionary spending on waterflood and seismic initiatives. The 2018 drilling program calls for 140 net development oil wells including 64 net open-hole wells, 29 net Ratcliffe wells, 30 net frac’d Midale, and the remaining to the Viking light oil play. Management expects this to result in average annual production of 23,400 boe/d and an exit rate of 25,000 boe/d, representing growth of 6% YoY and 11% exit to exit. Average production was below our prior estimate of 24,270 boe/d and consensus of 24,470 boe/d. However, 2018 exit rate guidance aligned with our prior 4Q18 forecast of 25,100 boe/d. Based on US$60/b WTI, management forecasts cash flow of $267 million ($1.51/sh), which is higher than our prior estimates of $1.35/sh ($1.40/sh on strip) and consensus of $1.28/sh. We attribute this largely to 2018e production expense guided at $16.65/boe vs. GMP FE at $17.35/boe. We have updated our estimates to reflect the 2018 guidance. With an implied projected return of 42%, we are maintaining our BUY rating.

Companies: Spartan Energy
  • 09 Jan 18

Quality available at deep discounts amidst overt sector pessimism

The stocks on the GMP FirstEnergy Best Ideas List represent our highest conviction BUY recommendations with an expected return of 20% or more over the next 12 months. The investment thesis for each name on the list is laid out in this report.

Companies: CNQ AAV ATU PXX KEL RRX SPE WCP PXT SES PPL

  • 09 Nov 17

3Q17 results; production continues to track ahead of guidance

 3Q17 production of 22,630 boe/d was slightly ahead of our GMP FEestimate of 21,750 boe/d and the street estimate of 21,730 boe/d.  Quarterly cash flow of $41.1 mm ($0.22/sh dil) was in line with ourestimates of $40.1 mm ($0.22/share dil) and consensus of $0.21/share.  Production costs in the quarter were down 6% QoQ and were 5% belowour estimates ($17.28/boe vs GMPFE estimates of $18.15/boe). This is due to the fact that production costs were elevated in 2Q17 so it was positive to see the reduction to more normalized levels.  Reported realized pricing look like it came in a bit light at $46.98/boe vs. GMP FE at $48.12/boe.  The company spent $35.1 mm on E&D, which included drilling 39 (28 net) wells and bringing on-stream 37 (27.2 net) wells. SPE exited the quarter with net debt (ex. financial lease) of $205.1 mm (1.3x annualized 3Q CF) and $193.3 mm drawn on its $350 mm credit facility.  We have updated our estimates to reflect quarterly results. With an implied projected return of 37%, we are maintaining our BUY rating.

Companies: Spartan Energy
  • 11 Aug 16

ANNOUNCES 2Q16 FINANCIAL AND OPERATING RESULTS

Impact: Neutral. Spartan's 2Q16 financial results were consistent with our outlook on all key figures and inline with consensus cash flow estimates.

Companies: Spartan Energy
  • 03 Aug 16

ANNOUNCES SE SASKATCHEWAN ACQUISITION & CONCURRENT $70 MM BOUGHT DEAL FINANCING, UPDATED 2016E GUIDANCE

Impact: Neutral. Spartan's most recent acquisition continues to consolidate its land position at its key properties and build inventory in SE Saskatchewan at reasonable metrics. The Company's updated 2016e capital budget of $68 mm is cautiously below our prior view (FCC was $80 mm) and is expected to generate annual production of 10,700 boe/d (FCC was 11,000 boe/d) which will likely result in a minor reduction to our proforma production and cash flow outlook. Although we expect this acquisition and financing announcement, in isolation, would show as slightly dilutive to our CFPS outlook given financing proceeds well above the transaction price, recall, the Company has completed three meaningfully accretive transactions ($148.7 mm for 2,980 boe/d) since mid-May without concurrent equity issues.

Companies: Spartan Energy
  • 26 Jul 16

2Q16e Quarterly Preview

Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.

Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS NVA PPY PMT PNE RRX RMP SRX SGY TOG TET ATU CKE GXE IKM LXE MQL PRQ SPE SKX TVE TVL YO ZAR

  • 29 Jun 16

ANNOUNCES TWO CONSOLIDATING SE SASKATCHEWAN ACQUISITIONS, RENEWS BANK LINE AT $150 MM

Impact: Positive. Spartan continues to capitalize on the low in the commodity cycle further consolidating its land base in SE Saskatchewan, adding low decline production and bolstering its well inventory at attractive metrics. We expect the Company balance sheet will continue to screen as flexible with ~$100 mm forecast to be drawn on its recently renewed and unchanged $150 mm credit facility following these transactions.

Companies: Spartan Energy
  • 20 May 16

Adds Mass in SE Saskatchewan, Acquires Wyatt Oil + Gas

Spartan is acquiring, privateco, Wyatt Oil + Gas Inc. for $77 mm through an all-share transaction which includes the assumption of $42 mm of debt. The deal adds 1,330 boe/d, 14.6 mm 2P reserves, 45 net sections of land and 177 drilling locations in southeast Saskatchewan which are proximal to Spartan’s existing core operations. Given our revised estimates point to 10% per share accretion on a CFPS basis while 2017e/2016e PPS share growth (debt-adjusted) jumps to 13%, we are increasing our target price to $3.75 per share.

Companies: Spartan Energy
  • 20 May 16

ANNOUNCES $77 MM SOUTHEAST SASKATCHEWAN ACQUISITION

Impact: Positive. The deal brings in production and a stable of drilling locations proximal to Spartan's current assets at a reasonable valuation. This marks the Company's first significant acquisition in ~2 years.

Companies: Spartan Energy
  • 11 May 16

SPARTAN Q1 RESULTS IN LINE TO SLIGHTLY BETTER THAN EXPECTATIONS

Neutral to slightly positive with production ~5% ahead of expectations (on higher capital spending) while cash flow overlaid our estimates. Higher 1Q16 production and mild spring break-up conditions could have positive implications for estimates for 2Q16e and beyond.

Companies: Spartan Energy
  • 11 May 16

Spartan’s 1Q16 Results In Line to Slightly Better than Expectations

Spartan delivered 1Q16 results that were in line on a cash flow basis, however ahead on a production basis. Spending was modestly higher than anticipated.

Companies: Spartan Energy
  • 26 Apr 16

Intermediates, Mid Caps & Small Caps

With this publication we briefly summarize our projections for 1Q16e quarterly results for the Junior E&P (Intermediate, Mid & Small Cap) segments of our coverage universe

Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX RMP SRX SGY TOG TET ATU CKE GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR

  • 16 Mar 16

Posts Solid 2015 Financial and Reserve performance, Conservative 1H16e Budget, Closes $96 mm Financing

After coming off restriction following our participation in Spartan’s $96 mm equity financing wherein the Company issued 39.9 mm shares at $2.41 per share, we summarize the Company’s 4Q15 results, 2015 reserves and 2016 capital guidance. Fourth quarter results beat both our production and cash flow estimates while the Company posted single digit 1P and 2P basis F&D costs in a relatively quiet and organic year of operations, aided by a y/y reduction in FDC. A conservative 1H16e budget of $18 - $20 mm will see volumes remain at at Spartan’s 2015 average of just over 8,850 boe/d. Our target price continues to be supported by our updated NAV methodology, offering decent returns, particularly on a risk-adjusted basis.

Companies: Spartan Energy

Research, Charts & Company Announcements

Research Tree provides access to ongoing research coverage, media content and regulatory news on Spartan Energy. We currently have 31 research reports from 1 professional analysts.

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  • 18 Jun 19

SP Angel – Oil & Gas View

Hurricane Energy (HUR): Operational Update | Sound Energy (SOU): Placing & Update | Chariot Oil & Gas (CHAR): Feasibility Study | Reabold Resources (RBD): Operational Update

Companies: HUR SOU CHAR RBD

  • 18 Jun 19

SP Angel – Morning View

Anglo Asian Mining* (AAZ LN) BUY, 127p – Exploration Report | Bluejay Mining* (JAY LN) BUY, Target price 21.3p – Focus on delivery of 5,000t, 89% ilmenite grade bulk smelter sample for Rio Tinto | Chaarat Gold* (CGH LN) BUY, 42p – Tulkubash Drilling results | Strandline Resources (STA AU) – Strandline gains US$26m credit approval for mineral sands mine in Tanzania from Nedbank CIB | Virginia Energy Resources (VUI CN) – US Supreme Court upholds Virginia State ban on Uranium | Yellow Cake (YCA LN) – Annual results

Companies: AAZ JAY CGH YCA

  • 19 Jun 19

LIBERUM: Asiamet Resources* - Sell-off overdone, BKM ready for financing & partner value unlock

Asiamet shares have fallen 24% since the release of the BKM Bankable Feasibility Study on Friday on increased capex and opex numbers. We think the move is an over-reaction.

Companies: ASIAMET RESOURCES
  • 21 Jun 19

LIBERUM: CEO Video - Peter Bird, Asiamet

In these four short videos Asiamet's CEO Peter Bird discusses results of the BKM Bankable Feasibility Study, additional exploration work to be undertaken on the KSK license, the anticipated financing for these activities and strategy and next steps in relation to Beutong.

Companies: ASIAMET RESOURCES
  • 23 May 19

LIBERUM: Sirius Minerals* - On the cusp of a major de-risking event

The completion of $825m in equity and convertible financing now puts Sirius on the cusp of finalising the funding package for its WoodSmith mine. The company plans to issue a $500m high yield bond in the coming months which will unlock the remaining $2.5bn credit facility from JP Morgan, needed to complete the project.

Companies: Sirius Minerals
  • 19 Jun 19

Prodigious cashflow AND bigger “system” potential

Anglo Asian Mining (AAZ) is a highly cash-generative miner of gold, silver and copper from four mines in Azerbaijan, where it has close ties to the government. In 2018, it produced 83,376 of gold equivalent ounces (GEOs), paid its first dividend and had net cash on its balance sheet. At this stage, we have made the highly conservative assumption of no production beyond 2025. Nevertheless, our DCF valuation of 156p reflects AAZ’s prodigious cash generation and gold/copper stockpiles. Indeed, we estimate that the company’s aggregate underlying free cashflow during 2019-25 will be in excess of its current market capitalisation and the annual free cash yield will average 16.2%.

Companies: Anglo Asian Mining
  • 19 Jun 19

Pan African Resources - Solid push towards year end

In its nine-month operational update, Pan African Resources (PAF) disclosed production that is consistent with its FY19 guidance of 170,000oz. This caused us to reduce our FY19 forecasts fractionally in anticipation of lower production than we previously expected from Barberton offset by higher (but lower-margin) production from Evander underground and the BTRP. More importantly, however, Pan African’s directors approved the development of the Evander 8 Shaft pillar project, with production from as early as August, causing us to increase our forecasts for FY20 and beyond and our ultimate valuation of the company.

Companies: Pan African Resources
  • 20 Jun 19

Promising AGM Statement

Hydrodec has released an encouraging AGM statement this morning with a number of positive developments which should start to crystallise the upside in the shares, notably the sale of the Australian operations and the potential addition of a complimentary product that could drive higher utilisation earlier than previously expected. The utility focus and market developments are also making progress, justifying the Group’s strategy and the Board remains confident in the outlook for 2019 and beyond. Reiterate buy.

Companies: Hydrodec Group
  • 20 Jun 19

SDX Energy - FY19 management guidance reset

Despite our last published FY19 forecasts reflecting a more conservative production ramp-up than management guidance, SDX’s guidance revisions have resulted in a further downgrade to our short-term cash flow forecasts and NAV. We reduce FY19e production from 4.3kboed to 3.4kboed (-21%) and project more moderate growth in SDX’s Morocco gas demand with an associated RENAV impact of -42%. Key drivers of management’s downgrade include lower Sebou gas demand growth, a higher than anticipated water cut at North West Gemsa and a delay to production ramp-up at South Disouq. Our valuation falls from RENAV 86.5p/share to 49.8p/share (-42%), while our core NAV (producing assets and South Disouq) falls from 70.1p/share to 45.0p/share (-36%). Based on our latest estimates, we expect SDX to end FY19 with c $4.9m of net cash on the balance sheet.

Companies: Sdx Energy
  • 25 Jun 19

SP Angel – Oil & Gas View

Eland Oil & Gas (ELA): OML 40 Operational Update | Genel (GENL): Shareholder Buyback | Exillon Energy (EXI): May Production Report | Mosman Oil & Gas* (MSMN): Operations Update | Cabot Energy* (CAB): AGM Statement | Gulf Keystone (GKP): Dividend Declaration | TOMCO (TOM): Field Test Update

Companies: ELA GENL EXI MSMN CAB GKP TOM

  • 24 Jun 19

SP Angel – Oil & Gas View

Nostrum Oil & Gas (NOG): Strategic Review & Proposed Acquisition | Pantheon Resources (PANR): Partnership

Companies: Nostrum Oil & Gas Pantheon Resources

  • 11 Apr 19

Quarterly Research Outlook

We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.

Companies: ARS CYAN HYR LIT SOM ABBY AMS AMER ANX ATYM AVON BLVN PIER BUR CGS CAML CALL CSRT TIDE DTG DEMG EMR FPO FST GTLY GENL GOR GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO INDI JHD JOG KEYS KCT KGH LAM LOK MACF MNO MANO MOD MKLW OXIG PCA PANR PARK PGM PHC PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TRAK TRI VNET VTC ZOO ZTF

  • 10 Jun 19

Comprehensive update note

The purpose of this note is to provide an overview of the implications for i3 Energy’s forthcoming summer-2019 three-well drilling programme, to provide context for the forthcoming commercial and regulatory milestones that i3 Energy could be expected to achieve under a success case scenario and to provide the market with our fair value estimate for i3 Energy.

Companies: I3 Energy
  • 25 Jun 19

FY2019 results in line with expectations

Cropper’s FY2019 adj. PBT of £4.0m was in line with our forecast as the group achieved £100m of sales for the first time. While all three divisions saw revenue growth, Technical Fibre Products (TFP) was again the major contributor to profits achieving a record £8.9m of EBIT. As anticipated, James Cropper Paper (JCP) delivered an operating loss due to the c.£6.5m impact of higher pulp prices over the last two financial years. Colourform/3DP also made a loss in FY2019 but there has been good progress with contract wins since. We are encouraged that despite the lower profits the dividend was maintained at 13.5p as forecast. We have maintained our adj. PBT forecasts at £5.5m and £7.0m for FY2020 and FY2021 respectively and introduced a forecast of £9.0m for FY2022 as the benefits of the extensive capital investment programme over the next two years start to come through.

Companies: James Cropper
  • 25 Jun 19

Genel Energy - Share Buyback Programme

Genel has announced a share buyback programme of up to US$10m, over a period from now until 5 July (when the company enters a close period).

Companies: Genel Energy