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Research Tree provides access to ongoing research coverage, media content and regulatory news on WESTERN ENERGY SERVICES CORP. We currently have 18 research reports from 1 professional analysts.
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WESTERN ENERGY SERVICES CORP
WESTERN ENERGY SERVICES CORP
28 Jul 16
Western reported a 2Q16 EBITDAS loss of $2 mm, slightly better than our forecasted loss of $3 mm. Western’s current Canadian drilling rig utilization is 29%, above industry average of 20% with five rigs currently on take or pay contracts. Day rates are likely to be weak in upcoming quarters, but equipment has to go back to work before pricing improves. As such, we view current utilization as a step in the right direction. The outlook for Contract Drilling is unchanged from our prior views. We have decreased our 2016e EBITDAS by $3 mm to $9 mm and 2017e by $7 mm to $41 mm, respectively, with the primary reason being tied to a weaker profitability outlook in the Production Services division.
The Swing Provider of Drilling Rigs to Key Canadian Resource Plays
31 May 16
We are of the view a recovery in the WCSB rig count is forthcoming; Western is one of the key drillers to own given its leverage to the spot market. Based on our analysis, we view Western as one of the key swing suppliers of drilling rigs for key Canadian resource plays (Montney and Deep Basin). The Company has been one of the most efficient drillers in the Montney (196 m/day vs coverage universe average of 189 m/day) and has drilled the deepest wells on average in the Deep Basin in our coverage universe. We estimate Western’s mid-cycle and “peak” EBITDAS of $85 mm and $134 mm. Applying the Company’s 2011 to 2014 average EV/EBITDAS multiple of 6.0x, we arrive at implied share prices (implied returns) of $4.49 (69%) and $8.86 (234%). There have been no changes to our estimates with this update.
1Q16 Results and Revised Credit Facility
02 May 16
Western reported 1Q16 EBITDAS of $3 mm, which was in line with our estimate.The Company’s credit facility and covenant package has been amended. This is a positive development as Western now has access to $50 mm of borrowing capacity, while also saving an estimated $1.5 mm of costs annually. The Company’s view on 2H16e has improved, and while we are not yet modelling this, it could result in positive revisions to our estimates.
1Q16 RESULTS AND REVISED CREDIT FACILITY
28 Apr 16
We expect the stock to trade lower tomorrow as results were modestly behind consensus and the reduced credit facility ($195 mm to $50 mm) is likely to take some investors by surprise. However, we believe the reduction of the facility should be viewed positively in the context that Western now has access to its facility due to relaxed covenants (which it did not before), will save $1.5 mm annually due to reduced costs and is unlikely to require borrowings for the duration of our forecast. We would be buyers of the stock on any weakness.
1Q16e Preview and Commodity Update – All Is Quiet on the Western Front
13 Apr 16
We are updating our oilfield industry forecasts post the release of FirstEnergy’s new commodity price forecast for crude oil and natural gas on March 24, 2016. We have updated our 2016e Canadian well count/drilling days forecast to 3,209/37,335 from 3,800/43,325. In 2017e, we have left our forecast unchanged at 6,200 wells/70,200 days. In the U.S., our 2016e rig count forecast is now 482 (prior: 610) and 2017e is 675 (prior: 775). Data for 1Q16e came in weaker than our prior forecast anticipated, and we have lowered our estimates across our coverage universe accordingly. We are currently below 1Q16 consensus for 15 of 18 companies in our coverage universe, but the percentages are misleading given the absolute size of EBITDAS being earned this quarter.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Playing the long term, with short-term risks
16 Feb 17
After the publication of the annual results, we update our view and highlight the key points. Q4 16 key highlights As a reminder, the company reported results 30% below expectations at $400m for Q4 16. By division: 1) In upstream, underlying replacement costs profit came to $400m, vs. a loss a year earlier of $728m and a loss of $224m in Q3 16, reflecting the ongoing lower costs which have benefited from simplifications, efficiencies and lower exploration write-offs. In the US, the loss is still $147m. Production came in at 2.19mbpd, down 5.5% yoy due to disposals and up 1.8% on an underlying basis thanks to ramp-ups. One of the key events during the quarter was the renewal of BP’s onshore concession in the UAE with a 10% interest in the ADCO onshore oil concession. In terms of outlook, production should be higher in 2017 and will depend on the timing of project start-ups, acquisitions, divestments, and OPEC quota. Also the Abu Dhabi concession will be visible as from Q1 17. 2) In downstream, replacement costs profit came to $877m, down from $1.2bn a year ago and $1.4bn in Q3 16. The US division showed a loss of $371m vs a gain of $1.25bn. Non-US Fuel business earnings halved to $417m due to the weaker refining environment as well as the impact from the particularly large turnaround at the Whiting refinery. In lubricants, profit rose to $357m, reflecting the continued strong performance in its growth markets and premium brands as well as simplifications and greater efficiencies. The margin should remain unchanged for Q1 17. 3) Rosneft. Underlying replacement costs profit came to $135m, down from $235m a year ago, affected by the increased government take. Production was at 1.15mbpd, up from 1.03mbpd a year ago. This reflects the completion of the acquisition of Bashneft and Rosneft’s increased stake in the PetroMonagas venture. BP received a dividend of $322m after deduction of the withholding tax, in July 2016. On the Macondo oil spill, the charge taken for the Q4 16 pre-tax was $530m. This reflects BP’s latest estimates for claims including business economic loss. The pre-tax cash outflow on costs related to the oil spill for the full year 2016 was $7.1bn. Cash flow Excluding the Gulf of Mexico payment, the operating cash flow was $4.5bn. Underlying operating cash flow excluding the oil spill-related payment was $17.8bn for the full year. Proceeds during the year and the scrip dividend were not enough to cover capex and the cash dividend. Gearing at the end of the year increased to 27% ($35.5bn debt), in the high range of the group’s target of 20-30%. Organic capital was $16bn, below original guidance of $17bn to $19bn. Capex in 2017 should be close to $16-17bn. Divestment proceeds should be higher in 2017, close to $5bn and then reducing by $2-3bn per year after 2018. The total costs of the Deepwater payment should fall to $2bn in 2018 and then $1bn per year as from 2019. In 2017, this should be close to $5bn. All in all, including the latest acquisitions, cash flow break-even should be close to $60/bbl in 2017.
GMP FirstEnergy ― UK Energy morning research package
17 Feb 17
Enquest (ENQ LN): Speculative Buy, £0.65: Kraken FPSO in the field and hooked up in the North Sea | Ithaca Energy (IAE LN/CN)6: BUY, £1.40: Stella First Hydrocarbons in the North Sea | Bowleven (BLVN LN) (not covered): Denies claims made by Crown Ocean Capital
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management