Research, Charts & Company Announcements
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PETROAMERICA OIL CORP
PETROAMERICA OIL CORP
PETROAMERICA OIL CORP. (PTA) ANNOUNCES 3Q15 RESULTS
27 Nov 15
Market Impact: Neutral. Petroamerica reported 3Q15 production of 3,655 bbl/d (FCC 3,250 bbl/d) and cash flow of US$3.5 mm (FCC US$0.7 mm). Production in 4Q15e of 2,912 bbl/d is tracking in line with our estimate of 2,950 bbl/d. While the 3Q15 results were better than expected, 3Q15 results are secondary to the arrangement agreement with Gran Tierra that is expected to close around the end of January 2016e.
Petroamerica Oil Corp. Announces Acquisition by Gran Tierra Energy
13 Nov 15
Petroamerica has entered into an agreement with Gran Tierra Energy (GTE – TSX), in which Gran Tierra will acquire all of its outstanding common shares of Petroamerica for total net consideration of approximately US$85 mm. As per the terms of the agreement, Petroamerica shareholders can elect to receive either 0.4 of a Gran Tierra share for each Petroamerica share held or C$1.32 per share in cash. This acquisition price represents a 43% premium to Thursday’s closing price of $0.92 per share. We assume that Petroamerica shareholders will elect to receive shares, thereby continuing to benefit from the upside potential of the combined entity. We recommend that Petroamerica shareholders vote in favour of the deal and tender their shares. The acquisition is expected to close at the end of January 2016e.
PETROAMERICA OIL CORP. (PTA) ANNOUNCES PRIVATE PLACEMENT OF UP TO US$20 MM SENIOR SECURED DEBENTURES
28 Oct 15
Market Impact: Negative. Petroamerica has entered into a private placement agreement to issue up to US$20 mm in senior secured debentures. The proceeds will be used to appraise and develop the Cumplidor Field on the PUT-7 Block (50% WI) and to reactivate development activity in the fields located on the Suroriente Block (15.8% WI). If the entire US$20 mm in senior secured debentures are issued, the financing is 46% dilutive to our current 2016e cash flow estimate to approximately US$3 mm (previously US$6 mm). Our dilution estimate does not include (1) the potential for cash flow growth from the appraisal and development activity on the Cumplidor Field and Suroriente Fields or (2) the potential dilution for the issuance of up to 6 mm warrants, versus the current basic share count of 58 mm shares.
PETROAMERICA OIL CORP. (PTA) REPORTS 2Q15 RESULTS AND PROVIDES 2H15 GUIDANCE
25 Aug 15
Market Impact: Negative. Petroamerica reported 2Q15 production of 3,634 bbl/d and cash flow of US$3.0 mm (US$0.03 per share), which was below expectations. Also, 2H15 production guidance is well below our production outlook, and as such, we will be reducing our go-forward production outlook. Offsetting the reduced production profile is also a substantial reduction in 2015e capital spending.
Petroamerica Oil Corp. Acquires PetroNova Energy in an All-Share Transaction
16 Jun 15
Petroamerica has agreed to acquire PetroNova Energy (PTA – TSX-V) in an all-share transaction that has been valued at approximately C$29 mm (US$23 mm). Petroamerica will issue 216 mm shares and assume C$1.6 mm of net debt. The acquisition is expected to close near the end of July 2015e, at which point Petroamerica will have approximately 1.1 billion shares outstanding. The Company plans to consolidate its shares on a 10:1 basis following the close of the acquisition.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
01 Nov 16
Since our last outlook note, Quadrise has begun to supply MSAR for extended LONO sea trials, paving the way for commercial adoption from calendar H217 onwards. In August it signed a memorandum of understanding with clients in the Kingdom of Saudi Arabia (KSA), which is a key enabler for progressing the production-to-combustion pilot there. In October it completed a placing and open offer raising a total of £5.25m (gross). This should enable it to transition comfortably to the commercial phase on successful completion of the LONO and KSA trials.
Dividends reinstated; is it time to turn (more) optimistic?
08 Dec 16
Glencore continues to surprise the markets, earlier with its fast pace of asset disposals and now with the reinstatement of dividends. The following were the key details shared with investors in a meeting held on 1 December 2016: 1/ completed $6.3bn of asset disposals; 2/ reduced net debt (including readily marketable inventories) by $12.5bn over the last 18 months; 3/ reiterated trading’s 2016 EBIT guidance towards the upper end of the $2.5-2.7bn range; 4/ expects healthy annualised 2016 free cash flows – even at Q1 16 commodity price lows; at 2017 forward prices, FCFs are guided to be $6.5bn; 5/ dividends would be reinstated from 2017 – with $1bn to be paid in two equal tranches in H1 and H2; thereafter (i.e. 2018 onwards), $1bn would be a fixed annual dividend payment (banking on the stability of trading’s cash flows) plus a minimum 25% of FCFs from industrial activities. Production guided to grow Source – Investor Presentation December 2016 While copper would be negatively impacted by the end-of-life impact at Alumbera and the Ernest Henry divestment, the output for all other commodities is guided to be higher (in varying degrees).
Raising Target Price to 2,500p per share
01 Nov 16
Royal Dutch reported clean EPS of US$0.35, nearly 50% ahead of consensus. More importantly, cash flow jumped QoQ to US$8.5bn which should go a long way to confirming Shell’s capacity to maintain the current dividend, despite the increase in gearing to 29.2%. Upstream returned to profitability on an underlying basis for the first time since 1Q15. We believe these results confirm our view that Shell’s dividend can and will be maintained at US$0.47 per quarter and we increase our Target Price to 2,500p per share, given further sterling weakness.
Conviction List Q4 2016
05 Oct 16
Since its inception in 2010, the Conviction List has outperformed the market in 13 of 18 periods and a reinvested Conviction List would have returned 255% against a Small Companies index that would have returned 130%. Our Conviction List returned 3.7% over the last quarter; this was set against the benchmark UK Small Companies index that returned 11.3% over the same period. Our Q4 portfolio reflects our outlook for a temporary sweet spot for UK growth during the second half of 2016. The downside risk from the uncertainty of the EU Referendum result has been countered by stimulus from the Bank of England, signs of a looser fiscal stance and an 18% YoY reduction in the Sterling Exchange Rate. Compressed corporate fixed income spreads continue to provide a valuation underpin for global equities.