AUCTUS PUBLICATIONS GeoPark (GPRK US)C: Strong performance at CPO-5 and increasing free cash flow through deleveraging – 1Q21 production was 38,131 boe/d with Llanos-34 WI oil production of ~24.9 mbbl/d as, out of the six new wells drilled during the period, only four were production wells (the other two were water disposal wells). Production growth at Llanos-34 is expected to accelerate in the subsequent quarters as the Company is adding a third drilling rig with more wells coming on stream and a YE21 rate of ~28 mbbl/d. WI production of ~4.0 mbbl/d at CPO-5 was higher than we anticipated (3.2 mbbl/d) as a result of the Indico-2 well continuing to produce ~6.2 mbbl/d and no water. The company has also launched a tender offer for up to US$255 mm of the company’s 6.5% senior notes due in 2024. Reducing the size of this bond or refinancing a portion with a lower cost product (given the currently high oil price and the very strong balance sheet of the business) would boost cashflow. A reduction of gross debt of US$100 mm would for instance reduce annual interest payment by US$6.5 mm. That amount is more than the yearly dividend and could potentially be returned to shareholders instead of being paid to bondholders. Our US$25 per share target price is unchanged. The story continues to be about production growth with a very large exploration upside, particularly at CPO-5 with 120-270 mmbbl WI prospective resources. Valeura Energy (VLU LN/VLE CN) : Transaction update in Turkey - One final key government consent for the sale of the Turkish gas producing asset is outstanding. Valeura and the buyer have agreed to revise the outside date from April 19, 2021 to July 30, 2021 to continue the approval process. It is not particularly surprising that government approvals can be delayed given the current context of COVID-19. Securing an acquisition on attractive terms could act as a catalyst for Valeura share price. IN OTHER NEWS ________________________________________ AMERICAS Canacol Energy (CEN CN): Dry hole in Colombia – Contracted natural gas production was 173 mmcf/d during March 2021. The Milano 1 exploration well did not encounter commercial gas and has been plugged and abandoned. Gran Tierra Energy (GTE LN/AN): Operating update in Colombia – 1Q21 production was 24,463 bbl/d with current production of 28,930 bbl/d. FY21production guidance remains 28,000-30,000 bbl/d. The company held US$20 mm in cash (+US$6 mm versus YE20) at the end of March after having paid down US$10 mm on its credit facility. At the end of March, the credit facility balance was US$190 mm. Touchstone Exploration (TXP LN/CN): Good well test results in Trinidad – The top 199 feet of the 449 feet identified as potential pay in sheet four of the overthrust Herrera formation at the Cascadura Deep-1 well flowed at 4,262 boe/d (comprising 22.9 mmcf/d of natural gas and 449 bbl/d of NGLs) on test. EUROPE ADX Energy (ADX AU): Production update in Austria – Production from the Gaiselberg and Zistersdorf field has been restored to 430 boe/d. Production had been temporarily reduced due to pump failures since December. Aker BP (AKERBP NO): 1Q21 update in Norway – 1Q21 production was 222.2 mboe/d. At the end of 1Q21, net interest-bearing debt amounted to US$3.3 bn. Serica Energy (SQZ LN): 4Q20 results – FY20 net production in the UK was 23.8 mboe/d. The company held 61 mmboe 2P reserves at YE20 (62.3 mmboe at YE19). YE20 cash was £89.3 mm with no debt. The dividend to be paid in July 2021 has been increased to 3.5 p per share (3.0 p per share in July 2020). FORMER SOVIET UNION JKX Oil & Gas (JKX LN): Update in Ukraine and Russia – 1Q21 production was 9,177 boe/d including 5,334 boe/d in Russia and the balance in Ukraine. JKX held US$28.4 mm at the end of March. MIDDLE EAST AND NORTH AFRICA DNO (DNO NO)/Genel Energy (GENL LN)/Gulf Keystone Petroleum (GKP LN)/ShaMaran Petroleum (SNM CN): Update in Kurdistan – DNO has received a net payment of US$54.0 mm from the KRG including US$14.2 mm as payment towards arrears from 2019 to 2020. Genel has received US$27.2 mm including US$5.4 mm for arrears. Gulf Keystone has received US$23 mm including US$5.5 mm for arrears. ShaMaran has received a net payment of US$10.5 mm including US$2.4 for arrears. At the end of March, the outstanding receivable balances for DNO, Gulf Keystone and ShaMaran were respectively US$238.6 mm, US$65.2 mm and US$38.3 mm. Gross production from the Tawke licence was 110,900 bbl/d in January, 112,000 bbl/d in February, 113,100 bbl/d in March and 115,500 bbl/d month-to-date in April. Sunny Hill: Algerian gas asset nationalised – The Ain Tsila field is being seized by Sonatrach. Sunny Hill (Petroceltic) holds 38.25% WI in the asset. Sunny Hill is asking for a US$ 1bn compensation. United Oil & Gas (UOG LN): Production and reserves update in Egypt – 1Q21 WI production was 2,520 boe/d including (2,053 bbl/d oil and 467 boe/d of natural gas). This compared with 1H21 guidance of 2,300-2,500 boe/d. The ASH-3 well, has been producing at an average of over 4,000 boe/d (880 boe/d net) since coming onstream on 5 March. YE20 gross 2P reserves on the on the Abu Sennan concession are estimated at 16.8 mmboe (+24% versus YE19), representing a 200% reserves replacement ratio. SUB-SAHARAN AFRICA FAR (FAR AU): Offer by Remus to acquire the company – Remus intends to make an offer to acquire FAR at A$2.1 cts per share. The offer is only conditional on FAR rejecting the sale of the Senegal assets. ReconAfrica (RECO CN): First exploration well encounters oil shows in Namibia - The sample log of the 6-2 well provided over 200 meters of oil and natural gas indicators/shows over three discrete intervals in a stacked sequence of reservoir and source rock. The company believes that this support the hypothesis of a working hydrocarbon system. Total (FP FP): Final agreements in Uganda signed – Total and the governments of Uganda and Tanzania have signed the final agreements to kick start the development of Uganda resources. First export is expected in 2025. Total (FP FP): Withdrawing application for additional drilling in South Africa – Media reports indicated that Total has decided to postpone its application for additional drilling Brulpadda and Luiperd, in offshore Block 11B/12B. Africa Energy (AFE CN/AEC SS) is Total’s partner on the asset. EVENTS TO WATCH NEXT WEEK ________________________________________ 20/04/2021: Pantheon Resources (PANR LN): Operational update 21/04/2021: Wentworth Resources (WEN LN): 4Q20 results 22/04/2021: Jadestone Energy (JSE LN): 4Q20 results
Companies: ADX AKERBP AKERBP CNE GENL GPRK GPRK GTE JKX SQZ SNM FP TXP VLE
AUCTUS PUBLICATIONS Panoro Energy (PEN NO)C: Better deal than expected in EG – Increasing our target price from NOK30 to NOK34 per share – The acquisition of Tullow’s EG asset has now closed and Panoro has paid a final consideration of US$89 mm in line with the initial price announced earlier (US$90 mm). Panoro has also sold a 903 mbbl cargo in EG associated with historical production in 2H20 and 1Q21 for US$59 mm net to Panoro (after royalty). This amount corresponds to Panoro’s net entitlement production (ie after distribution of government share of profit oil) with historical opex and capex already captured within the final consideration paid last week. This first cash flow effectively implies that 65% of the consideration paid at the end of March has been paid back a few days later. We are increasing our Core NAV from ~NOK21 to ~NOK24 per share and our ReNAV from ~NOK31 to ~NOK34 per share. The first Greater Hibiscus appraisal well is expected to be spudded in 2-3 weeks. This well is targeting 19 mmbbl prospective resources net to Panoro WI, potentially doubling the company’s reserves in Gabon. Our unrisked value for this well is ~NOK12 per share. PetroTal (PTAL LN)C; Target price of £0.60 per share: 1Q21 update – delivering on expectations – 1Q21 production was 7.3 mbbl/d, in line with guidance of 7-8 mbbl/d, with production negatively impacted by downtime at the 4H well. A pump has been replaced at the 4H well that has since been producing ~2,300 bbl/d vs 1,872 bbl/d prior to the pump failure. Production at the end of March had been restored to 8,275 bbl/d. The company continues to expect production to reach 18-19 mbbl/d by YE21. Following the repayment of US$7 mm payables since YE20 and US$16 mm to Petroperu to settle the derivative liability, the company has ~US$76 mm in cash (in line with our expectations). Of this amount, US$23 mm have been set aside for acquisitions (US$20 mm) and for the hedges that have been put in place (US$3 mm), leaving US$53 mm of “unrestricted liquidity”. PetroTal expects to receive ~US$36 mm from Petroperu as true-up payments for 2019/2020 sales. The company is delivering on its plans and the spudding of the first well of the 2021 programme should send a strong message that production is materially increasing again. The shares continue to trade at less than half our estimate of the value of the company based on its 2P reserves only (£0.41 per share @ Brent of US$60/bbl flat). Our Core NAV represents 3.5x the current share price. Pharos Energy (PHAR LN)C; Target price increased from £0.50 to £0.60 per share: All eyes on farm-in partner in Egypt – The new fiscal terms in Egypt are expected to be ratified in 3Q21 and a farm in partner is expected to be announced in 2Q21 (with completion of the transaction in 2H21). These are key milestones triggering the return to drilling in Egypt and allowing production in Egypt to triple to 12 mbbl/d. We are very confident Pharos will secure a partner given the renewed interest of the industry for Egypt (Cairn being the latest entrant with the acquisition of onshore assets from Shell). Once ratified the new terms are expected to be back dated to Nov 2020, resulting in a material positive impact on Pharos’ balance sheet . The company has put in place a working capital facility with the National Bank of Egypt, the size of which would immediately increase on ratification. At current oil prices, we believe that Pharos would likely have enough financial resources to start a two rig drilling programme until the farm out transaction completes. As we roll forward our DCF to YE21 and incorporate lower G&A (following salary reduction and ongoing head office headcount reduction), we are increasing our target price from £0.50 to £0.60 per share. Our Core NAV of £0.36 per share (£0.28 per share) reflects our view of what the company could fund with its own balance sheet once the new terms in Egypt are ratified. Securing a farm in partner would unlock £0.18 per share of value in Egypt, increasing recovery factor a further £0.11 per share. Including the contingent resources in Vietnam, our unrisked NAV for the company’s reserves plus contingent resources is >£0.80 per share. Tethys OIl (TETY SS)C; Target price of SEK85 per share: Production update in Oman – Production from Blocks 3&4 in March 2021 was 11,508 bbl/d. This is in line with our expectations and previous months. IN OTHER NEWS ________________________________________ AMERICAS 88 Energy (88E LN/AU): Drilling update in Alaska – Multiple prospective zones at the Merlin-1 well were identified on logs with indicated good mobility across most of these zones. The well experienced technical problems with equipment and poor hole conditions were encountered. During testing of the lowest zone, good communication was not able to be re-established with the reservoir. Potential formation damage could have contributed to this issue. Moving to the next shallowest prospective zone, wellbore condition issues prevented a test as the tool became stuck. The tool was freed but the risk of returning to that zone was deemed too high. It is now too late in the season to initiate flow testing operations and the forward program will consist of plugging the well. The well may be re-entered in the future, if warranted, in order to drill a side track and conduct a flow test. Alvopetro Energy (ALV CN): Production update in Brazil – March sales volumes were 2,383 boe/d, including natural gas sales of 13.7 mmcf/d. BP (BP LN): Exiting Brazilian assets – BP is exiting exploration activities in the Foz do Amazonas basin. ASIA PACIFIC Total (FP FP): Cancelling gas projects in Myanmar – Total has cancelled its ultra-deepwater Block A-6 project. EUROPE Hurricane Energy (HUR LN): Reserves update in the UK – Lancaster 2P reserves are estimated at 7.1 mmbbl. A further 37.9 mmbbl 2C contingent resources has been estimated including 34.7 mmbbl classified as “Development Unclarified”. Lincoln is expected to hold 18.5 mmbbl 2C net to Hurricane (“Development Unclarified”) while Hurricane is estimated to also hold 25.5 mmbbl 2C contingent resources at the Warwick Crest discovery (“Development Unclarified”). IGas Energy (IGAS LN): FY20 results – FY20 production in the UK was 1,907 boe/d. FY21 production is expected to be 2,150-2,350 boe/d. At YE20, IGas held 17 mmboe 2P reserves (16 mmboe at YE19). YE20 net debt was ~£10 mm. OMV (OMV AG): 1Q21 update – 1Q21 production was 495 mboe/d. Prospex Energy (PXEN LN): Environment approval received for Italian development – The full environmental approval for the development of the Selva Malvezzi Gas-Field in northern Italy has been received from the Italian Government. Prospex holds a 17% interest in the Podere Gallina licence which holds the Selva gas field. The field has gross 2P gas reserves of 13.3 bcf and is expected to start production in mid-2022 with a maximum rate of 5.3 mmcf/d. Repsol (REP SM): 1Q21 update – 1Q21 production was 639 mboe/d. Royal Dutch Shell (RDSA/B LN): 1Q21 update – 1Q21 production is expected to be 3,320-3,435 mboe/d. FORMER SOVIET UNION Block Energy (BLOE LN): 1Q21 update in Georgia – By YE21, Block aims to drill two wells, each targeting initial production of 600 boe/d, and spud a third well. As of 31 March 2021, the Company had US$6.8 mm in cash. Caspian Sunrise (CASP LN): Operational update in Kazakhstan – 1Q21 production was 1,322 bbl/d. Domestic oil prices are US$7.27/bbl. Enwell Energy (ENW LN): Update in Ukraine – 1Q21 production was 4,576 boe/d. At the end of March, Enwell held US$60.9 mm in cash. MIDDLE EAST AND NORTH AFRICA United Oil & Gas (UOG LN): Discovery in Egypt – – The ASD-1X exploration well encountered a total of at least 22 m net oil pay interpreted across a number of reservoirs, including the Abu Roash C, Abu Roash E, Lower Bahariya and Kharita Formations. SUB-SAHARAN AFRICA Eni (ENI IM): Light oil discovery in Angola – Eni has made a light oil discovery in Block 15/06, in Angola’s deep offshore at the Cuica exploration prospect located inside the Cabaça Development Area. The discovery has a size estimated between 200 and 250 mmboe in place. Qatar Petroleum: Acquiring exploration assets in Namibia - Qatar Petroleum is acquiring a 45% participating interest in the PEL 39 exploration license pertaining to Block 2913A and Block 2914B, from Shell. EVENTS TO WATCH NEXT WEEK ________________________________________ 15/04/2021: Serica Energy (SQZ LN): 4Q20 results
Companies: 88E ALV BP/ ENI ENI HUR OMV OMV PEN PEN TAL PHAR REP REP RDSA TETY TETY FP
AUCTUS PUBLICATIONS Bahamas Petroleum Company (BPC LN)C: Uncommercial exploration well in the Bahamas – The Perseverance #1 well encountered oil, validating the structural model and the petroleum system, but did not encounter oil in commercial quantities. The well drilled a majority of the potential reservoirs of interest. Tethys Oil (TETY SS)C; Target price increased from SEK75 to SEK85 per share: 120% reserves replacement, special dividend, entering busiest exploration drilling period in Tethys’ history - For the 9th year in a row, Tethys has increased its reserves in 2020 with the 2P reserves replacement ratio of 120% highlighting the quality of the company’s assets. YE20 2P and 3P reserves are respectively 26.9 mmbbl and 37.9 mmbbl (~+3% versus YE19 for both 2P and 3P reserves). The increase reflects the conversion of contingent resources into reserves at Blocks 3 & 4. Tethys has declared a core dividend of SEK2 per share plus a special distribution of SEK2 per share. The FY21 capex programme of US$47 mm includes (1) US$32 mm on Blocks 3 & 4 with infrastructure upgrades and development and exploration drilling and (2) US$5 mm at Block 56 to drill up to three wells in the Al Jalmud area. The drilling programme will target different structures analogous to the producing fields on Block 6. Pending further details we have assumed 3 mmbbl gross prospective resources per structure. With the shares offering a combination of high dividend yield (~7%), support from a share buy back programme, value and reserves and exploration upside, we are increasing our target price from SEK75 to SEK85 per share. Please click here for the full PDF note IN OTHER NEWS ________________________________________ AMERICAS 88 Energy (88E AU/LN): Raising new equity – 88 Energy Limited is raising A$12 mm of new equity at a price of A$0.008 (equivalent to 0.45p). The price represents a discount 27% to the previous day closing price. The proceeds will be used to fund upcoming drilling in Alsaka, President Energy (PPC LN): Reserves update in Argentina and the USA – YE20 2P reserves were 24.3 mmboe, down from 26.4 mmboe at YE19. The company also held 33.3 mmboe of 2C contingent resources. In Paraguay, undiscovered in place resources have been estimated at >536 mmbbl. Trinity Exploration (TRIN LN): Operating update in Trinidad – FY21 production guidance has been set at 2,900 - 3,100 bbld/ with capex of US$6.0 - US$8.0 mm. EUROPE Equinor (EQNR NO): 4Q20 results and US assets divestment – Equinor reported a net adjusted loss of US$0.55 bn in 4Q20 with 2,043 mboe/d production. FY20 capex amounted to US$7.8 bn. The proved reserves replacement ratio was negative 5% in 2020. Equinor is also selling its interests in the Bakken field in the US states of North Dakota and Montana with 48 mboe/d net production to Grayson Mill Energy, backed by EnCap Investments, for a total consideration of ~US$900 mm. FY21 production is expected to be ~2% above FY20 with US$9-10 bn capex per year in 2021 and 2022. For the period 2020–2026, production growth is expected to come from new projects resulting in around 3% CAGR. Equinor has declared a quarterly dividend of US$0.12 per share, up 9% compared to 3Q20. IGas Energy (IGAS LN): Trading and reserves update in the UK – FY20 net production averaged 1,907 boe/d with opex of ~ US$33/boe. The company anticipates net production of between 2,150-2,350 boe/d and operating costs of ~US$32/boe in 2021. YE20 2P reserves have increased to 17.1 mmboe (16.1 mmboe at YE19). Cash balances as at YE20 were £2.4 mm with net debt of £12.2 mm. MOL: Dry hole in Norway - Wildcat well 2/9-6 S on production licence PL 617 was dry. Royal Dutch Shell (RDSA/B LN): Strategy update – Production is expected to decrease by 1-2% per year. The company plans to retain annual capex of US$19-22 bn per year and will target divestments of ~US$4 bn per year. Net debt is expected to be reduced to US$65 bn while the company targets total shareholder distributions of 20 30% of cash flow from operations. This includes a progressive dividend policy to increase dividends by ~4% per year. Total (FP FP): 4Q20 results – Total reported 4Q20 adjusted net earnings of US$1.3 bn with production of 2,841 mboe/d and FY20 capex of US$10 bn. FY21 production is expected to be stable compared to FY20 with net capex of US$12 bn. 4Q20 dividend has been set at EUR0.66 per share in line with previous quarter. MIDDLE EAST AND NORTH AFRICA DNO (DNO NO): 4Q20 results and acquisition of Kurdish assets – YE20 WI 2P reserves were 332 mmboe, (plus contingent resources of 152 mmboe) down 13 mmboe from YE19. 4Q20 WI production was 93 mboe/d including 77.7 mboe/d in Kurdistan and the balance in Norway. FY21 gross production from the Tawke licence is expected to be >100 mbbl/d. DNO forecasts capex of US$700 mm in 2021. YE20 net debt was US$473 mm. DNO is acquiring ExxonMobil’s 32% interest in the Baeshiqa license in Kurdistan, doubling DNO’s operated stake to 64%. The Company currently estimates gross license contingent resources from three of the tested zones in the two existing wells ranging from 12 mmbbl to 156 mmbbl. EVENTS TO WATCH NEXT WEEK ________________________________________ 18/02/2021: Repsol (REP SM) – 4Q20 results 19/02/2021: ENI (ENI IM) – 4Q20 results 19/02/2021: BWE Energy (BWE NO) – 4Q20 results
Companies: DNO RDSA 88E BPC EQNR TETY TETY FP
While busy making deals in the renewables space, Total, soon to be renamed TotalEnergies, benefited from improving fundamentals in oil & gas. This will be the case for a long time as management does not expect to be cash-neutral in renewables before 2030 and also excludes an IPO of the renewables activities.
Companies: Total SE
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 ________________________________________ AMERICAS 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. EUROPE 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. SUB-SAHARAN AFRICA 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
Total benefits from its relationship with the Adani group that started three years ago in LNG. The transaction will help the French company to reach its 2025 target in renewables, which seems to be its highest priority.
Bahamas Petroleum Company (BPC LN)C; Target Price: 6.70p: Funding update – BPC has exercised a put option to raise £3.75 mm priced at 2p per share. PetroTal (PTAL LN/TAL CN)C: Target Price increased from £0.45 to £0.50: US$100 mm bond to accelerate activities and grow production - 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), clean up its balance sheet, put in place a hedging programme and allow the firm to consider regional acquisitions. 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 production starts to decline from 2024. We note that the 3P case only assumes five additional wells (~US$70 mm) compared to the 2P case. 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). Pharos Energy (PHAR LN)C; Increasing our target price from £0.35 to £0.40 per share on reserves uplift – The highlight of Pharos’ operational update is the ~40% increase in 2P reserves in Egypt expected as at YE20 (YE19 28.5 mmbbl). This reflects improved waterflood performance based on recent field data, and a new drilling and workover plan for 2021 onwards. Drilling is expected to recommence in Vietnam in 3Q21, a quarter earlier than previously announced. We have increased our target price from £0.35 per share to £0.40 per share to factor in the expected increase in reserves in Egypt. We estimate the value of Pharos based on Vietnam only at £0.23-0.27 per share. This is 15-35% above the current share price. Securing a partner to fund a development programme with four rigs in Egypt would increase the value of the ~ 40 mmbbl 2P reserves in Eqypt and unlock the contingent and 108 mmbbl prospective resources. Our incremental unrisked value for the four rig programme is £0.17-0.19 per share (~85% upside to the current share price). Successfully negotiating new terms with EGPC could lead to an improvement of up to US$6/bbl in the breakeven price. We have previously estimated that securing similar terms to TransGlobe would boost our Core NAV by £0.10-0.12 per share and ReNAV by £0.13-0.15 per share. TransGlobe Energy’s share price has tripled since the new terms on its licences were announced. Tethys Oil (TETY SS)C; Target Price: SEK75.00: Production update in Oman – Production at Block 3&4 in December was 11,481 bbl/d. Vaalco Energy (EGY LN/US)C; Target Price: £4.00: Initiating Coverage - VAALCO is a US and UK listed ~£75 mm market cap, ~10 mbbl/d oil producer (pro-forma) with West African assets. VAALCO has an excellent track record as an operator having grown a 30 mmbbl discovery in Gabon to a field that has produced >118 mmbbl so far with an additional 37 mmbbl remaining 2P reserves plus ~80 mmbbl upside at YE19. The shares have suffered in the past from (1) a lack of materiality as VAALCO held only ~31% of its main asset, with G&A viewed as representing a disproportionate amount of cash flow and (2) lack of visibility on how the significant amount of cash on the balance sheet would be deployed. The US$44 mm acquisition of an additional ~28% WI in Etame announced in November, thereby almost doubling production, reserves and resources overnight, has addressed these issues. The story is now about continuing to grow reserves at the producing Gabonese field and to replicate this success elsewhere. With estimated net cash of >US$25 mm at the end of 1Q21, VAALCO’ s shares trade at less than half our 2P NAV of ~£2.70 per share. The current share price discounts an EV/DACF multiple of 1.2x in 2021. Low risk infill drilling of contingent resources could add ~£0.45 per share (30% of share price) with an overall unrisked value for the upside at the producing asset of £4.80 per share (~4x the current share price). Finalizing the farm out of its asset in Equatorial Guinea could start unlocking a further £4.20 of unrisked value. Our target price of £4.00 per share (~ our ReNAV) represents ~230% upside. Wentworth Resources (WEN LN)C; Target Price: £0.40: >100 mmcf/d reached in December - FY20 gross production was 65.36 mmcf/d (in the middle of the 60-70 mmcf/d guidance) with ~83 mmcf/d on average during the month of December. Repairs to the MB-2 flowline were completed on 9 December, increasing the capacity of the field to over 100 mmcf/d. Production reached 103 mmcf/d for five days during that month. Gross production guidance for FY21 is 65-75 mmcf/d, below the 80 mmcf/d we were carrying as production growth is pushed back by a year. Cash on hand of ~US$18 mm is in line with our expectations. With 70 mmcf/d gross production in 2021 and almost no capex, we forecast FY21 Free Cash Flow of ~US$10 mm. With FY20 dividends of only US$3.2 mm and ~US$18 mm in cash, we believe there is scope to increase the dividend. At the current share price, the FY20 dividend represents a yield of ~6%. Even after the recent share price appreciation, the shares continue to trade at EV/DACF multiples of 2.9x in 2021 and 2.2x in 2022. This compares with 3.8x for 2020, suggesting there is room for multiple expansion given the stable nature of the business. IN OTHER NEWS ________________________________________ AMERICAS 88 Energy (88E LN/AU): Acquisition in Alaska – 88 Energy is acquiring the Umiat Oil Field, located on the North Slope of Alaska. The proceeds consist of a 4% overriding royalty interest and the assumption of the abandonment liability of two historic wells (at an estimated cost of ~US$1 mm). Umiat is an historic oil discovery, made in 1945 in shallow Brookian (Nanushuk) sandstones, located immediately adjacent to southern boundary of Project Peregrine. The Umiat-23H well was flow tested at a sustained rate of 200 bbl/d with no water in 2014. Gross 2P reserves were estimated at 123.7 mmbbl on 1 December 2015. Equinor (EQNR NO): Farming down Argentinian offshore exploration to Shell - Equinor and YPF farm-down 30% interests in the CAN 100 block, located in the North Argentinian Basin to Shell. Pantheon Resources (PANR LN): Dispute in East Texas and acquisition of new acreage - Kinder Morgan has filed a petition against Pantheon, seeking payment of ~US$3.35mm with respect to the early termination of a Gas Treating Agreement between Kinder Morgan and Vision Operating Company. In a separate statement, the company indicated it has acquired 100% interest in ~66,000 acres in the State of Alaska's North Slope Areawide Lease Sale. The new leases are positioned in two areas contiguous to the company’s current acreage. Parex Resources (PXT CN): Operation update in Colombia – 4Q20 production was 46,550 boe/d compared to Parex’ guidance of 45,500-47,500 boe/d. 1Q21 production is expected to average 46,500-47,500 boe/d. The Brent/Vasconia differential is currently ~US$2/bbl. Parex estimates a cash position of US$325 mm at YE20. Total (FP FP): Discovery in Suriname - The Keskesi East-1 well, in Block 58, encountered a total of 63 meters net pay of hydrocarbons, comprised of 58 meters net black oil, volatile oil, and gas pay in good quality Campano-Maastrichtian reservoirs, along with 5 meters of net volatile oil pay in Santonian reservoirs. EUROPE Independent Oil & Gas (IOG LN): Operating update in the UK – Phase 1 remains on schedule for First Gas in 3Q21. Drilling is expected to start in early 2Q21. Hurricane Energy (HUR LN): Operating update in the UK North Sea - Production for the final four months of 2020 averaged 12,500 bbl/d. Current water cut is 25%. YE20 net free cash was US$106 mm, compared to US$87 mm at 30 November 2020. Lundin Energy (LUNE SS): Resources increase in Norway – YE20 2P reserves are 670.9 mmboe (+ 39.3 mmboe versus YE19). The YE20 2C resources are 275.5 mmboe (+90.2 mmboe et YE19). OMV (OMV AG): Trading update – 4Q20 production was 472 mboe/d including 290 mboe/d of natural gas. FORMER SOVIET UNION Enwell Energy (ENW LN): Operating update in the Ukraine – 4Q20 production was 4,444 boe/d. At YE20, the company held US$61 mm in cash. Petroneft (PTR LN): Potential acquisition in Russia – Petroneft is looking to acquire an additional 40% interest in Licence 67 from Belgrave Naftogas for US$2.9 mm including US$1.2 mm in shares and the balance in cash. MIDDLE EAST AND NORTH AFRICA Gulf Keystone Petroleum (GKP LN): Operating update in Kurdistan – FY20 gross production at Shaikan was 36,625 bbl/d with current production of 44,000 bbl/d. As at 12 January 2021, the Company had a cash balance of US$147 mm. FY21 gross production guidance has been set at 40,000 to 44,000 bbl/d with US$15 to $20 mm net capex and US$2.5 to US$2.9/bbl opex. ShaMaran Petroleum (SNM CN): Terms update for bonds – ShaMaran is looking to use free cash in excess of US$15 mm to buy back its Bonds in the market to satisfy the cash sweep redemption requirements. United Oil & Gas (UOG LN): Production update in Egypt – 2H20 WI production was 2,340 boe/d in line with guidance for the period of 2,300 boe/d. SUB-SAHARAN AFRICA BW Energy (NEW NO): Farm-in transaction in Namibia – BW Energy is acquiring 39% WI in the Kudu offshore licence from the National Petroleum Corporation of Namibia (NAMCOR). BW will pay US$4 mm in cash and carry NAMCOR’s share of development costs until first gas. NAMCOR will also have the opportunity to acquire an additional 5% working interest post first gas. Orca Energy (ORC.A/B CN): Update in Tanzania – FY20 sales volumes were 57.7 mmcf/d. Cash and short-term investments totalled US$103.8 mm at YE20. As at YE20 there were no current receivables due from TANESCO. The TANESCO long-term trade receivable was US$27.6 mm. EVENTS TO WATCH NEXT WEEK ________________________________________ 18/01/2021: Repsol (REP SM) – Trading update 19/01/2021: Genel Energy (GENL LN) – 4Q20 trading update 20/01/2021: Cairn Energy (CNE LN): Trading update
Companies: 88E BPC EQNR HUR LUNE PXT PHAR SNM TETY TETY FP EGY WEN
Being cash positive at such levels is a must and the results were above estimates with the E&P division up by $1bn qoq at $801m. A mixed picture for the other divisions, with integrated gas impacted by the price lag in LNG contracts and refining & chemicals suffering from depressed margins, while marketing again picked up and actually came in up yoy. The gearing was down to 22% vs 23.6%, thanks to cash generation and further capex cuts.
Panoro Energy (PEN NO)C; Target price of NOK23.00: Delivering production growth in Tunisia – Gross production in Tunisia has averaged 4,850 bbl/d in October, up from ~4,000 bbl/d in 1Q20 following the restart of operational activities in 3Q20. The Guebiba-10 sidetrack has encountered net pay in both the Berino and shallower Douleb reservoirs. Initially bringing the Berino onstream will add a few 100s bbl/d from mid November. There are three other work-overs due in the next few months on the field and while gross production of 5,000 bbl/d now represents a new very solid base, there is also potential to quickly take gross production in Tunisia to 6,000 bbl/d. The potentially more important story of Guebiba-10 is the Douleb reservoir. While the net pay in the Douleb is smaller than at the Berino, the reservoir is of better quality and this formation, once opened (after the Berino is depleted), could generate 1.0-1.5 mbbl/d production from Guebiba-10 only. Panoro has already identified new Douleb well locations with an ongoing remapping of the field. The results of the remapping and the associated work programme should be available in 1H 2021 and could offer material opportunities for further production growth. Tethys Oil (TETY SS)C; Target price of SEK75.00: Taking control of Block 56 – Tethys is acquiring a further 45% interest in the exploration and production license covering Block 56 onshore Oman. The consideration consists of US$5 mm in cash and up to US$2 mm by way of a carry of future expenditure. The agreement further includes additional consideration in the case of a declaration of commerciality. The transaction will increase Tethys’ interest in Block 56 from 20% to 65%. Tethys is also assuming operatorship. Given that Tethys had undertaken drilling and testing activities earlier this year, we view this additional commitment as very encouraging. Block 56 has a lot of similarities to Blocks 3 & 4 and Tethys could add value by applying its knowledge of the geology of Blocks 3 & 4 to Block 56. Medco acquired Ophir Energy for >£400 mm in cash last year and, in the context of lower oil prices, we can understand Medco’s need to reduce its capital exposure to its diversified portfolio of assets. With Tethys now in control of operations, there could be more activity taking place on Block 56 in 2021 including seismic and perhaps further drilling. The share price has dropped to its lowest point in 2020, which represents a ~35% discount to our Core NAV. The core dividend represents >5% yield. Our unrisked NAV for the Thameen prospect, assuming 15 mmbbl resources, is SEK17 per year (~50% of the current share price). The current share price represents EV/DACF multiples of only 2.2x for 2020 and 1.9x for 2021. IN OTHER NEWS ________________________________________ AMERICAS BP (BP LN): Exiting Brazilian assets – BP is transferring the operatorship of a deep-water exploration block in the Foz do Amazonas basin off Brazil. Diversified Gas & Oil (DGOC LN): 3Q20 results and dividend increase– 3Q20 production in the USA was 107 mboe/d. Production from the legacy assets has been maintained at 69 mboe/d. Net debt at the end of September was US$730 mm. The company has declared a dividend for 3Q21 of US$0.04 per share up 7% versus 2Q20 dividend (US$0.0375 per share). Hess Corporation (HES US): Resources increase in Guyana – Gross resources encountered in Guyana have been increased from 8 bn boe to 9 bn boe. Maha Energy (MAHA-A SS): Strategy update – Maha plans to grow production to 15 mboe/d in Brazil, Oman and the USA over a five year horizon. President Energy (PPC LN): 1H20 results and update in Argentina – The LB-1001 well has now been tested with net pay 32% ahead of expectations. The company is expected to add ~1,030 boe/d of new gas production by the end of November including ~590 boe/d from the LB-1001 well. Production in 1H20 was 2,747 boe/d. Net debt at the end of June stood at US$11.3 mm. The exploration well EVN-x1 near the Estancia Vieja field encountered net pay of a total of 10 metres (including 7 metres of oil). These results provide support for the pre-drill projections of production of ~350 boe/d of gas and 188 bbl/d of oil. Westmount Energy (WTE LN): Drilling programme update in Guyana – Westmount holds small indirect interests in the ExxonMobil operated Kaieteur and Canje blocks, offshore Guyana. The Exxon Mobil drilling programme on both blocks has commenced, with the Tanager 1 well on the Kaieteur block currently drilling and a further two wells expected on the Canje Block over the next six to nine months. It is anticipated that the first well on the Canje Block, Bulletwood-1, will be spudded in November/December 2020. The Bulletwood-1 prospect is reported to be a 'Liza look-alike' confined channel complex and will target prospective resources of ~500 mmbbl of oil. The second well on the Canje Block will target either Sapote-1 in the east of the block or Jabillo-1, in the northwest of the block, which is reported as a billion-barrel class basin floor turbidite fan. The Tanager-1 well on the Kaieteur block (currently being drilled) targets unrisked gross prospective oil resource of 136 mmbbl to 452 mmbbl, with an aggregate chance of success 72%. EUROPE ADX Energy (ADX AU): 3Q20 update in Austria – 3Q20 production is Austria was 308 boe/d. ADX had A$2.1 mm in cash at the end of September. Aker BP (AKERBP NO): 3Q20 results – 3Q20 production in Norway was 201.6 mboe/d. The company maintains its FY20 production estimate and has narrowed the guidance range to 210-215 mboe/d from 205-220 mboe/d. Net debt at the end of September was US$3.64 bn. BP (BP LN): 3Q20 results – 3Q20 adjusted net profit was US$0.1 bn with overall production of 3,318 mboe/d (including Rosneft). 4Q20 production is expected to be slightly lower due to maintenance activities. ENI (ENI IM): 3Q20 results – 3Q20 production was 1,701 mboe/d. The company reported an adjusted net loss over the period of EUR 153 mm. The FY20 production guidance of 1.72-1.74 mmboe/d has been reiterated. Equinor (EQNR NO): 3Q20 results – 3Q20 adjusted net income was US$0.27 bn with 1,994 mboe/d production. Organic capital expenditures are estimated at ~US$8.5 bn for 2020 and ~US$10 bn for 2021, and ~US$12 bn annual average for 2022-2023. For the period 2019–2026, production is expected to grow by ~3% per year. IGas Energy (IGAS LN): Hydrogen MOU – IGas has signed a heads of terms with BayoTech, a manufacturer of modular hydrogen generation systems, to produce hydrogen IGas' existing gas resources. IGas has initially identified two of its existing sites, in the South East, where the gas resource can be reformed into hydrogen which will then be sold to local or national customers. Lundin Energy (LUNE SS): 3Q20 results – 3Q20 production in Norway was 157.5 mboe/d with free cash flow of US$164 mm. The FY20 production guidance increased from 157 mboe/d to 161-163 mboe/d with 4Q20 production targeting ~175 mboe/d. The company held US$3.7 bn net debt at the end of September. Neptune Energy: Small discovery in Norway – Well 6406/12-G-1 H (Fenja area) did not encounter reservoir rocks in either the primary or secondary exploration target. However, the well did encounter a total oil column of 38 m above the secondary exploration target in the lower part of the Intra-Melke Formation. The preliminary calculation of the 6406/12-3 A (Bue) oil discovery has now been reduced to between ~1.2 and 10 mmboe, while the estimate for the new oil discovery is between 3 and 10 mmboe. OMV (OMV AG): 3Q20 results – 3Q20 Adjusted net income was EUR80 mm with 444 mboe/d production. OMV expects total production to be between 450 mboe/d and 470 mboe/d in 2020 with total organic capex of EUR1.7 bn. Repsol (REP SM): 3Q20 resuts – 3Q20 adjusted net earnings were EUR7 mm with 616 mboe/d production. Royal Dutch Shell {RDSA/B LN): 3Q20 results – 3Q20 adjusted earnings were US$955 mm with 3,081 mboe/d production. 4Q20 production available for sales is forecasted to be 3,130-3,370 boe/d. Shell is increasing the 3Q20 dividend by 4%. Total (FP FP): 3Q20 results – 3Q20 adjusted net earnings were US$0.85 bn with 2,715 mboe/d production. Total is maintaining its quarterly dividend of EUR0/66 per share. FY20 production is expected to be ~2.9 mmboe/d with net investments of less than US$13 bn including US$2 bn in renewables and electricity. FORMER SOVIET UNION Epsilon Development: Discovery in Uzbekistan – Media reported indicated that Epsilon has discovered ~600 bcf of natural gas and 3 mmbbl of condensate at the Alouddin-4 well on the Kultak-Kamashinsky block. Overall, the company has discovered a total of ~1.4 tcf and 7 mmbbl of condensate since January. Nostrum Oil & Gas (NOG LN): 3Q20 update in Kazakhstan - Average sales volumes over the first 9 months of 2020 were 22,269 boe/d. FY20 production forecast has been increased to 21,000 boe/d, corresponding to sales volumes of 20,000 boe/d (19,000 boe/d previously). At the end of September, Nostrum held cash in excess of US$88 mm and net debt is expected not to exceed approximately US$1,074 mm. The upcoming reserves estimate may lead to a material downgrade in the company's Proven and Probable reserves. Petroneft (PTR LN): 1H20 results – 1H20 WI production in Russia was 783 bbl/d. The company held net debt of US$3.8 mm at the end of June. Zoltav Resources (ZOL LN): 1H20 results – 1H20 production in Russia was 24.3 mmcf/d for gas and 215 bbl/d for condensate. Zoltav has US$0.45 mm in cash at the end of June. MIDDLE EAST AND NORTH AFRICA Chariot Oil & Gas (CHAR LN): Potential debt funding for Moroccan offshore project – Chariot received a non-binding Expression of Interest Letter from Africa Finance Corporation for the provision of development debt finance for the Anchois Gas Discovery and the development of future discoveries from the wider prospect portfolio of the Licence. Chariot has also received a non-binding Expression of Interest for the provision of Reserves Base Lending for the development of the Anchois Gas Discovery with a Multinational Investment Bank. Both expressions of interest take into account an estimated capex of US$300-500 mm. Dana Gas: Selling Egyptian assets – Dana Gas is selling its Egypt onshore gas and condensate assets to IPR Energy for US$236 mm. The assets include 100% WI in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases. During 1H20, these concessions produced 30,950 boe/d, and contributed US$38 mm to the Company’s EBITDA. The consideration comprises (i) a base cash consideration of US$153 mm and (ii) contingent payments of up to US$83 mm subject to average Brent prices and production performance between 2020-2023 as well as the realization of potential third party business opportunities. DNO ASA (DNO NO): 3Q20 results – 3Q20 WI production was 97,900 boe/d, of which Kurdistan contributed 80,200 bbl/d and the North Sea 17,700 boe/d. DNO expects to exit the year with Kurdistan and North Sea production at 3Q20 levels. DNO held US$652 mm net debt at the end of September. Genel Energy (GENL LN): Update at in Kurdistan – 3Q20 gross production at the Tawke licence increased 12% versus 2Q20 to 113,700 bbl/d (50/50 split between the Tawke and the Peshkabir fields) following a campaign of quick turnaround, low cost well interventions and the startup of the Kurdistan region of Iraq’s first enhanced oil recovery project. Genel has received US$9.4 mm for crude sales in September. Gulf Keystone Petroleum (GKP LN): Payment in Kurdistan - Gulf Keystone has received a net payment of US$7.7 mm from the Kurdistan Regional Government for Shaikan crude oil sales during September 2020. ShaMaran Petroleum (SNM CN): Payment in Kurdistan – ShaMaran received a net payment of US$5.4 mm from the Kurdistan Regional Government for Atrush oil sales invoice entitlements for the month of September 2020. SUB-SAHARAN AFRICA Africa Oil (AOI SS/CN), Africa Energy (AEC SS/ AFE CN), Total (FP FP) and Impact Oil & Gas: Second gas and condensate discovery in South Africa – The Luiperd-1X deepwater exploration well on Block 11B/12B encountered 73 metres of net gas condensate pay over a mid-Cretaceous high-quality reservoir interval and did not encounter the water contact. The well will now be tested. The net pay encountered in the Luiperd target objective is much larger than the main reservoir at the Brulpadda discovery. The joint venture is now proceeding with development studies and will engage with authorities on the commercialization of gas instead of drilling another exploration well in this program. LEKOIL (LEK LN): 1H20 results - Otakikpo (Nigeria) production averaged 5,676 bbl/d over the period (2,271 bbl/d net to LEKOIL). Net debt at the end of June stood at US$15.6 mm. Seplat Petroleum (SEPL LN): 3Q20 results – Production in Nigeria over the first 9 months of 2020 was 50,653 boe/d including 100 mmcf/d for natural gas. There was a 77% uptime for the Trans Forcados Pipeline during the period and the produced liquid volumes from OMLs 4, 38 and 41 were subject to 8.6% reconciliation losses. Seplat was advised of production quota cuts of between 20%-30% across its assets in July and August. The cuts are expected to hold through January 2021. As a result, the FY20 production guidance is narrowed to 48-52 mboe/d (including 31-34 mbbl/d for liquid). The completion of the Amukpe-Escravos pipeline has been delayed again and the company now expects commencement of export of the initial permitted volume of 40 mbbl/d through the Escravos terminal in 2H21. First gas at the NOH project continues to be expected to occur in 4Q21. Seplat has declared an interim dividend of US$0.05 per share. Over the first 9 months of 2020, Seplat received a total of US$147 mm from NPDC towards the settlement of outstanding dollar-denominated cash calls and US$100 mm in Naira to offset Naira cash calls. Net debt at the end of September was US$480 mm. Victoria Oil & Gas (VOG LN): Update in Cameroon – 3Q20 gross sales rate were 4.7 mmcf/d of natural gas. During October 2020 weekday gas sales have occasionally exceeded 5 mmcf/d with a peak at 6.1 mmcf/d. One more thermal and power customer will be tied in shortly. Net debt at the end of June stood at US$12.5 mm. EVENTS TO WATCH NEXT WEEK ________________________________________ 03/11/2020: Tethys Oil (TETY SS) – 3Q20 results 03/11/2020: Genel Energy (GENL LN) – 3Q20 update 03/11/2020: Gran Tierra Energy (GTE LN/CN) – 3Q20 results 04/11/2020: GeoPark (GPRK LN) – 3Q20 results 05/11/2020: Frontera Energy (FEC CN) – 3Q20 results
Companies: AKERBP BP/ LUNE MAHAA RDSA TETY TETY AOI DGOC DNO ENI EQNR GENL HES NOG OMV PEN PTR REP SEPL SNM FP VOG
PetroTal (PTAL LN/TAL CN)C; Target price £0.45 per share: Resumption of production - PetroTal has recommenced production at Bretana with current production of 11 mbbl/d. This followed multiple agreements between the Peruvian government and local communities. Although the export pipeline is not open yet, Petroperu has been carrying out maintenance activities. The government is expecting the pipeline to be re-opened in time to receive Bretana’s oil production. Meanwhile PetroTal is also selling ~1.3 mbbl/d to Iquitos. We view the resumption of production as an important step, demonstrating the support of the local communities. This is encouraging for the forthcoming re-opening of the export pipeline. We have factored in our forecasts the delays associated with the prolonged shut-in with only one development well to be drilled in 4Q20 boosting production from December. With an inventory of eight new oil wells to develop the 2P reserves, we anticipate the company to ramp-up development activities in 2021. We are currently assuming FY21 cash capex of US$40 mm (including the repayment of payables) to grow production to ~14 mbbl/d by YE21 (12.5 mbbl/d in average over 2021). Assuming production of just ~10 mbbl/d during 4Q20, this would lead to FY20 operating cash flow (before working capital movement) of ~US$30 mm (including ~US$15 mm in 4Q20), resulting in EV/DACF multiples of ~4x in 2020. On only ~12.5 mbbl/d production in 2021, we estimate EV/DACF of ~1x at US$48/bbl. Our Core NAV for the company at a Brent price of US$45/bbl (flat, no escalation) and 12.5 mbbl/d production in 2021 (declining thereafter) is £0.25 per share, representing >120% upside to the current level. At US$50/bbl for Brent, our Core NAV would be £0.35 per share (x3.5 current level). IN OTHER NEWS ________________________________________ AMERICAS Bahamas Petroleum (BPC LN): Update in Trinidad and the Bahamas and US$12 mm placing– Drilling at the Perseverance #1 well in the Bahamas is expected to start in late 2020. The well is targeting recoverable P50 prospective oil resources of 0.77 bn bbl with an upside of 1.44 bn bbl. In Trinidad, the work programmes look to increase production from 400-450 bbl/dd to 500 bbl/d by YE20 and to 2,500 bbl/dd by YE21. In a separate statement, BPC indicated that the unrisked NPV10 of the Perseverance prospect is estimated at >US$2.5 bn at US$40/bbl. Bahamas Petroleum has also raised US$12 mm of new equity priced at 2p per share representing 30% discount to the previous close. The transaction to divest 100% WI in the Inniss-Trinity asset will not complete and BPC will retain the asset. Echo Energy (ECHO LN): 1H20 results – 1H20 production in Argentina was ~2,150 boe/d. The company held US$1.2 mm in cash at the end of the period with a loan of US$24.2 mm. Occidental Petroleum (OXY US): Selling Colombia onshore to Carlyle - Occidental Petroleum is selling its onshore assets in Colombia to Carlyle for US$825 mm. The Colombia assets sale includes the company’s operations and working interests in the Llanos Norte, Middle Magdalena and Putumayo Basins. Total (FP FP): Exiting Foz do Amazonas in Brazil – Total is transferring to Petrobras its equity interest in five exploration blocks in the Foz do Amazonas Basin, located 120 kilometers offshore Brazil. EUROPE Cairn Energy (CNE LN): 1H20 results – 1H20 net oil production was 22.4 mbbl/d. The company held US$84 mm in cash at the end of June and no debt. FY20 net production guidance has been set at 21-23 mbbl/d in the upper range of the previous guidance of 19-23 mbbl/d with US$135 mm capex. The company plans to pay a US$250 mm special dividend following the divestment in Senegal. A ruling on the India tax dispute continues to be expected after the summer. Equinor (EQNR NO): Discovery in Norway - Equinor has encountered 13-38 mmboe recoverable resources at the Swisher prospect in PL 248 C. Lundin Energy (LUNE SS): Increasing reserves at Norway field – The gross 2P reserves at the Greater Edvard Grieg Area have been increased by ~50 mmboe) to 350 mmboe due to the continued outperformance of the field. The expected plateau production period from the Greater Edvard Grieg Area has been extended by a further year to late 2023. Royal Dutch Shell (RDS A/B LN): 2Q20 update – 2Q20 production is expected to be 2,970-3,110 mboe/d. Total (FP FP): Maintaining dividend distributions – Total announced that its dividend is supported at Brent price of US$40/bbl. This is in stark contrast to BP and Shell that have materially reduced distributions. FORMER SOVIET UNION Block Energy (BLOE LN): Update in Georgia - Block has shut-in the West Rustavi field's production at wells WR 16aZ and WR-38Z to conserve gas resources until the gas sales pipeline is complete late in 2020. The company held US$2.3 mm in cash at the end of June. Enwell Energy (ENW LN): Ruling overturned in Ukraine – A previous ruling that had found that the Svystunivsko-Chervonolutskyi exploration licence had not been awarded regularly has been overturned in favour of Enwell by the Appellate Administrative Court. Petroneft (PTR LN): FY19 results – FY19 gross production in Russia was 1,614 bbl/d. The company held ~64 mmbbl WI 2P reserves at YE19. At YE19, Petroneft held US$0.3 mm in cash with current debt of US$4.3 mm. MIDDLE EAST AND NORTH AFRICA Gulf Keystone Petroleum (EKP LN): Receives payment from the KRG – Gulf Keystone has received net payment of US$9.8 mm for Sales at Shaikan in August. ShaMaran Petroleum (SNM CN): Receives payment from the KRG – ShaMaran has received net payment of US$6.8 mm for sales at Atrush in August. United & Gas (UOG LN): 1H20 results – WI production in Egypt from the end of February to the end of June averaged 1,975 boe/d, increasing from 1,709 boe/d on the 1st of March to 2,716 boe/d on the 30th of June. 2H20 WI production is forecasted at 2,300 boe/d. The company held US$1.3 mm at the end of June. SUB-SAHARAN AFRICA Savannah Energy (SAVE LN): Update in Nigeria – Average gross production in the year-to-date period ended 31 August 2020 was 20.4 mboe/d. At the end of August, the group held US$84.7 mm in cash (including US$34.9 mm set aside for debt service) with net debt of US$426.8 mm. The company forecasts FY20 production of 21 23 mboe/d with capex of US$45 mm. Vaalco Energy (EGY US/LN): Operating update in Gabon – 3Q20 net production is estimated at 4,370 bbl/d at the midpoint of the FY20 guidance. The company expects to have US$37 mm in cash at the end of 3Q20. A 3D seismic campaign will be run in 4Q20.
Companies: BPC CNE EQNR GKP LUNE OXY PTR TAL RDSA SAVE SNM EGY FP
The dividend is confirmed for 2021 with $40 oil and the group is taking a moderate stance on the energy transition. While BP believes oil demand has already peaked, Total sees a peak by 2030 and undersupply following the low investments of 2020-22. Hence, the rationale to maintain its oil & gas operations (and grow in LNG) to fund the transition. The targets are decent in renewables as well, with 35GW of installed capacity by 2025.
PetroTal (PTAL LN)C; Target price £0.40: Important development in Peru – On August 28, 2020, the Government of Peru announced a Supreme Decree approving the financial Gap Closure Plan within a number of provinces in northeast Peru, including Loreto, the area where PetroTal operates the Bretana oil field. The decree provides for a six year financial commitment of approximately US$1.7 bn to the communities. This is important as the decree specifically addresses the local community participation criteria, that have been a recurrent key area of contention for years with some communities in Peru. US$46 mm will be designated for economic development of the localities over the next four months by the Peruvian government. Since the announcement of the Decree, government and municipality representatives have been consulting with the community representatives . After meeting with the Bretana community in the coming days, it is expected that PetroTal will restart oil production shortly thereafter. IN OTHER NEWS ________________________________________ AMERICAS 88 Energy (88E LN/AU): Update in Alaska – The final petrophysical interpretation from the recently drilled Charlie-1 well provides an increase in net pay from 280’ to 398’, with the largest contribution coming from the Lima discoveries in the Seabee Formation. These improvements are despite using higher cut-offs for both reservoir and net pay. Alvopetro (ALV CN): Update in Brazil - In August, total sales were 1,867 boe/d. Total aggregate gross prospective resources identified at the B1 prospect (block 183) and the C1 prospect (block 182) are estimated at 59.4 bcf. Echo Energy (ECHO LN): Operating update in Argentina - Net 2020 production at Santa Cruz Sur over the period 1 January to 7 September was 2,040 boe/d. Exxon Mobil (XOM US): New discovery in Guyana - ExxonMobil has made its 18th discovery at the Redtail-1 well on the Stabroek Block with 70 meters of high-quality oil bearing sandstone. Total (FP FP): Dropping operatorship of Brazilian exploration blocks – Total is resigning from its role of operator for five exploration blocks, located in the Foz do Amazonas Basin. These exploration blocks are referenced as FZA-M-57, FZA-M-86, FZA-M-88, FZA-M-125 and FZA-M-127. Westmount Energy (WTE LN): Increasing stake in JHI Associates - Westmount has purchased 1.55 mm common shares in JHI by way of the issue of 18.3 mm new ordinary shares in Westmount, which will represent approximately 12.7% of Westmount's enlarged issued share capital. JHI holds a 17.5% carried interest in the Canje Block, offshore Guyana, where ExxonMobil is the operator. At the completion of the transaction, Westmount will hold 6.9% in JHI. ASIA PACIFIC Hibiscus Petroleum: Raising ~ US$480 mm to acquire upstream assets – Hibiscus is raising up to US$480 mm from a private placement of convertible redeemable preference shares to acquire oil and gas assets. Jadestone Energy: 1H20 results – 1H20 WI production in Australia was 12,116 bbl/d. Net cash at the end of June was US$78.3 mm. FY20 production guidance has been reduced to 11.0–12.5 mbbl/d from 12.0-14.0 mbbl/d previously, as a result of a slowdown in well interventions. Jadestone reiterated its FY20 capex guidance of US$30 35 mm. A maiden interim dividend of 0.54 US cents/share has been declared, representing a total distribution of US$2.5 mm, in line with the lower end of the FY guidance of US$7.5–12.5 mm, split approximately one-third/two-thirds between interim/final. The company anticipates to be debt free by the end of 1Q21. Most approvals are now in place with regards to the New Zealand acquisition and Jadestone expects final government approvals in 4Q20 post the upcoming general election. In Vietnam, discussions are continuing with the government on the FDP and a future gas sales agreement. EUROPE Hurricane Energy (HUR LN): Reserves downgrade in the UK – 2P reserves have been reduced from 30.7 mmbbl to 9.4 mmbbl (as of 01/09/2020) with 2C contingent resources cut from 486 mmbbl to 58 mmbbl at Lancaster and from 565 mmbbl to 45 mmbbl at Lincoln. Lancaster EPS production for September to December 2020 is expected to average 12,000-14,000 bbl/d. The company held net debt of US$123 mm at the end of June. Reabold Resources (RBD LN) and ADX Energy (ADX AU): Partner not farming in Romania assets? – Tamaska Oil & Gas has decided not to proceed with the farmin transaction relating to the EX-10 Parta Exploration licence in Western Romania held by Danube Petroleum (49% ADX, 51% Reabold). Tamaska does not intend to proceed with the planned acquisition of 3D exploration seismic. Serica Energy (SQZ LN): 1H20 results – 1H20 production in the UK North Sea was 21,600 boe/d. First gas at Columbus continues to be expected by the end of 2021. Serica held £101 mm in cash at the end of June. The Parkmead Group (PMG LN): Licence awards in the UK – Parkmead has been offered 50% WI in Blocks 14/20g & 15/16g situated in the Central North Sea, adjacent to Parkmead's extensive Greater Perth Area. Two further licences have been offered to Parkmead as part of the 32nd Round. Block 14/20c (Parkmead 100%) is located in the Central North Sea and contains extensions to the Lowlander oil field and the Fynn Beauly oil discovery. Block 42/28g (Parkmead 100%) is situated in the Southern North Sea near the Tolmount gas discovery. FORMER SOVIET UNION Cadogan Petroleum (CAD LN): 1H20 results – 1H20 production in Ukraine was 230 bbl/d. The company held US$11.6 mm in cash at the end of June. MIDDLE EAST AND NORTH AFRICA Chariot Oil & Gas (CHAR LN): Resources update in Morocco – Anchois is now expected to hold 361 bcf of contingent resources (2C) and 690 bcf of prospective resources (P50). Energean (ENOG LN): 1H20 results – 1H20 pro forma production (including Edison E&P) was 52.1 mboe/d, with FY20 production guidance unchanged at 44.5 - 51.5 mboe/d. The acquisition of Edison E&P is expected to be completed during 4Q20. The FY20 pro forma capex guidance has been reduced by US$75-125 mm to US$635 - 705 mm, primarily due to (i) the rescheduling of expected milestone payments under the Karish EPCIC contract; and (ii) expected timing of capital expenditure on Edison E&P in Egypt. Net debt at the end of June was US$597 mm. ShaMaran Petroleum (SNM CN): Receives payment from Kurdistan – ShaMaran has received a net payment of US$6.5 mm from the Kurdistan Regional Government for Atrush oil sales invoice entitlements for the month of July 2020. Tethys Oil (TETY SS): Production update in Oman – WI production in August was 10.8 mbbl/d. Zenith Energy (ZEN LN): Acquisition in Tunisia – Zenith is acquiring a 26% interest in the North Kairouan permit and the Sidi El Kilani Concession, which contains the Sidi El Kilani oilfield for US$0.3 mm. SUB-SAHARAN AFRICA Africa Oil (AOI/SS CN): Extension of Kenya licences – The partners on the 10BB and 13T licences have been given the right to extend the second exploration period until 31 December 2020, with a further extension until 31 Dec 2021. Kosmos Energy (KOS US/ LN): Selling frontier exploration assets for US$100-200 mm – Kosmos is selling interests in blocks offshore São Tomé & Príncipe, Suriname, Namibia, and South Africa to Shell. The consideration consists of an upfront cash payment of ~US$100 mm, plus contingent payments of US$50 mm payable upon each commercial discovery from the first four exploration wells drilled across the assets, capped at US$100 mm in aggregate. Three of the four wells are currently planned for 2021. Tullow Oil (TLW LN): 1H20 results – 1H20 production was 77 mboe/d. Net debt at the end of June was US$3.0 bn. FY20 production guidance has been narrowed from 71-78 mbbl/d to 73-77 mbbl/d following good well performance in Ghana. During 1H20, Jubilee and TEN produced 84,700 bbl/d and 50,900 bbl/d gross respectively. This strong performance is a result of (1) increased gas offtake nominations, (2) permission to temporarily increase flaring, (3) higher than forecast facility uptime of over 95% at both FPSOs and (3) greater reliability and redundancy in the water injection facilities on the Jubilee FPSO. The Ntomme-09 production well came on stream in August and is adding c.5,000 bbl/d gross to TEN oil production. FY20 free cash flow is forecast to break even at the current Brent forward curve. The semi-annual RBL debt capacity redetermination is expected to complete in early October 2020. The next redetermination will be in January 2021. Drilling of the Goliathberg-Voltzberg North well in Block 47, Suriname, is planned for 1Q21.
Companies: 88E AOI ALV ENOG XOM HUR JSE KOS PMG TAL RBD SQZ SNM TPL FP TLW
PetroTal (PTAL LN)C; Target price £0.45: Production at Bretana restarts – In anticipation of the re-opening of the ONP, Bretana oil production recommenced on July 15, 2020 and achieved over 12,000 bbl/d when all seven wells were online. Oil deliveries have also already commenced to the Iquitos refinery and approximately 40,000 bbl are expected be delivered during July 2020. Oil is being barged to the Saramuro Pump Station and will be delivered into the ONP immediately after it reopens , now expected in early August 2020. To manage the company’s inventory and barge storage capacity, Bretana production has been reduced to approximately 8,000 bbl/d pending the restart of the pipeline. While the share price has already increased 30% over the last three weeks, we continue to see PetroTal as a value and growth stock. The company’s value based on its 2P reserves only (2P NAV of £0.28 per share) represents 2x the current share price and our Core NAV is 3x current levels. Assuming production of ~12 mbbl/d in 2021 (i.e. the level achieved when the field was restarted) PetroTal’s share price implies EV/DACF multiples of 1.7x in 2021 and 0.2x in 2022. On a production/capex low case, we estimate that PetroTal generates aggregate Free Cash Flow over 2021-2022 equal to the company’s market cap. IN OTHER NEWS ________________________________________ AMERICAS ExxonMobil (XOM US): Further volumes discovered in Guayana | Karoon Energy: Softening terms for acquisition of Brazilian asset | President Energy (PPC LN): Operational update in Argentina | Total (FP FP): Significant discovery in Suriname ASIA PACIFIC Jadestone Energy (JSE LN): 2Q20 update | Repsol (REP SM): Compensation in Vietnam | ENI (ENI IM): Large volume confirmed in Vietnam EUROPE ADX Energy (ADX AU): Operational update in Austria and Romania | ENI (ENI IM): 2Q20 results, lower capex | EnQuest (ENQ LN): UK Acquisition | Equinor (EQNR NO): Dry hole in Norway | Hurricane Energy (HUR LN): Operational update in the UK | Lundin Energy (LUNE SS): 2Q20 results | OMV (OMV AG): 2Q20 results/dividend reduction/Volumes discovered at Hades (Norway) reduced | Royal Dutch Shell (RDSA/B LN): 2Q20 results | Total (FP FP): 2Q20 results, Dividend distributions maintained | Zenith Energy (ZEN LN): Acquisition of Italian assets terminated FORMER SOVIET UNION Enwell Energy (ENW LN): Negative licence update | Nostrum Oil & Gas (NOG LN): 1H20 trading update in Kazakhstan MIDDLE EAST AND NORTH AFRICA BP (BP LN), ENI (ENI IM), Total (FP FP): Discovery in Egypt | DNO (DNO NO): 2Q20 results | ShaMaran Petroleum (SNM CN), Gulf Keystone Petroleum (GKP LN) and Genel Energy (GENL LN): Payment in Kurdistan | Sound Energy (SOU LN)C: Raising up to £4.5 mm of new equity SUB-SAHARAN AFRICA Angola lowering tax | Cairn Energy (CNE LN): Divesting Senegal and returning cash to shareholders | Total (FP FP): Divesting mature assets in Gabon | Savannah Energy (SAVE LN): FY20 results and update in Nigeria | Seplat Petroleum (SEPL LN): 1H20 results | Tullow Oil (TLW LN): 1H20 update | Victoria Oil & Gas (VOG LN): 2Q20 update in Cameroon EVENTS TO WATCH NEXT WEEK ________________________________________ 04/08/2020: BP (BP LN) – 2Q20 results 04/08/2020: GeoPark (GPRK US) – 2Q20 results 04/08/2020: Gran Tierra Energy (GTE LN/CN) – 2Q20 results 05/08/2020: Parex Resources (PXT CN) – 2Q20 results 07/08/2020: Frontera Energy (FEC CN) – 2Q20 results
Companies: XOM KAR BP/ CNE DNO ENI ENQ EQNR GENL HUR JSE LUNE NOG OMV TAL REP RDSA SAVE SEPL SOU FP TLW VOG
The results came in above estimates and the dividend was confirmed. The group reported substantial trading profits, which seems to be a constant this quarter. This was expected with such volatility, but difficult to model properly. The group took an $8.1bn impairment, of which $5bn on Canadian reserves with Total leaving them unexploited. Oil majors recognizing the presence of stranded assets is a strong signal and confirms the group’s stance on the energy transition.
Panoro Energy (PEN NO)C; target price: NOK20.00: Balance sheet withstanding US$25/bbl | PetroTal (PTAL LN/TAL CN)C: Temporary Shut In of Bretana Oil Field Due to COVID-19 Pipeline Closure | Cairn Energy (CNE LN): Dry hole in Mexico – The Ehecatl-1 exploration well on Block 7 did not encounter hydrocarbons | Diversified Gas and Oil (DGOC LN): 1Q20 trading update and dividend payment | Frontera Energy (FEC CN): 1Q20 update; dividend suspended; FY20 production guidance withdrawn | Maha Energy (MAHA-A SS): Low production in Brazil in April | G3 Exploration (G3E LN): Production suspended by receivers in China | Aker Bp (AKERBP NO): Reducing FY20 capex, cutting dividends | Equinor (EQNR NO): 1Q20 results | Total (FP FP): 1Q20 results, maintaining dividend | Repsol (REP SM): 1Q20 results and discoveries in Mexico | Cadogan Petroleum (CAD LN): FY19 results | DNO (DNO NO): 1Q20 results and well results in Kurdistan | Genel Energy (GENL LN): 1Q20 production update at Tawke |Tethys Oil (TETY SS): 1Q20 results | Aminex (AEX LN): Agreeing to pay CGT in Tanzania to complete farm out
Companies: PEN TAL DNO GENL AEX CAD FP EQNR REP TETY AKERBP G3E MAHAA DGOC CNE
Research Tree provides access to ongoing research coverage, media content and regulatory news on Total SE. We currently have 44 research reports from 4 professional analysts.
CAML’s Q1 2021 production rates of copper, zinc and lead were down slightly versus Q1 2020, but we believe output of all three metals remains on course to meet group guidance for 2021. The latter is in-line with production levels over recent years, which if achieved we believe would result in material earnings (and potentially dividend) growth this year given the rally in base metals prices over recent months relative to 2020 average levels. Our 2021 forecasts would put CAML on an EV/EBITDA multiple of under 5x and a compelling dividend yield of over 6%, the latter conservatively assuming a free cash flow pay-out ratio below that used to set the 2020 dividend. Given our estimates assume zinc and lead prices broadly in-line with current pricing levels and a copper price assumption that is some way below current spot, we believe the risks to our 2021 estimates lie to the upside.
Companies: Central Asia Metals Plc
Pantheon has announced that it has concluded operations at the Talitha #A Well. Although, the parameters and estimates in respect of the horizons penetrated by the Talitha #A well can be expected to change materially as the well results are interpreted, for now we are comfortable with our 88.9p/sh pre-drill fair value estimate. We believe that positive volumetric analysis of the Talitha #A well in respect of the Basin Floor Fan and the Shelf Margin Deltaic will be determinant for near-term changes to our fair value estimate.
Companies: Pantheon Resources plc
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Dispersion Holdings PLC, an investor in the high growth FinTech sector within the UK, the USA and Canada, has announced its intention to IPO on the Access Segment of the Aquis Stock Exchange Growth Market. The Board intends to deploy the majority of the Company’s cash resources in the acquisition of minority interests in a number of different, yet to be identified, companies in the broad FinTech sector, and to apply expertise to the business operations and strategic plans of these companies. Target Admission Date of 30 April. Darktrace plc. Intends to float on the main market of the London Stock Exchange (premium). Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Due early May, musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. 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. Due 27 April.
Companies: KIBO MTW GWI MTR DUKE ITM GDR MSMN CMCL PTRO
INITIATION OF COVERAGE - Transforming Morocco's energy mix
Companies: Sound Energy plc
Hargreaves has released an unscheduled and very positive update. The performance of the German JV has improved materially, prompting a 45% upgrade to FY21 EPS forecasts. Meanwhile, the Services and Land businesses in the UK are trading in line with expectations, whilst driving significant outperformance on cash. This has created a £26m positive swing versus previous FY21 cashflow forecasts, albeit with catch up investment to follow in FY22. In our view, the Hargreaves story has genuine momentum and today’s update reinforces our confidence in the progress being made across the Group.
Companies: Hargreaves Services plc
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange. Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Timing TBA musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51m) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. 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. Due 27 April.
Companies: KIBO ROCK VRCI K3C TOU ADT PCA ATYM IOM MJH
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange. Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Timing TBA musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51m) will be used to fund the Acquisition. Due 19 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. 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. Due 27 April.
Companies: GAL AXS IDH GWMO AGL YEW INFA HE1 PPC CASP
Companies: BOKU RBGP MUL WATR GFIN MKA TIDE MNO INX TUNE
Following a general meeting of shareholders on 14 April 2021, Jersey Oil & Gas closed a placing and open offer raising £16.6M (pursuant to the results of the placing announced 17 March 2021). We believe the capital raise materially strengthens Jersey's outlook by i) securing the near-term funding to “keep the foot on the gas” into 2022 in relation to its engineering work in line with the objective of realising first oil from the Greater Buchan Area (“GBA”) project in late 2025, ii) strengthening its balance sheet ahead of farm-out negotiations and iii) displaying that it has strong equity capital market support. We are increasing our fair value estimate to 622p from 526p to reflect the equity capital raise and a corresponding change to our risking factor from 12.5% to 20%. We believe that Jersey Oil & Gas has an exceptionally compelling outlook into 2021 and 2022.
Companies: Jersey Oil & Gas PLC
The victory of Guillermo Lasso in the Ecuador elections derisks the SolGold investment case and materially increases the likelihood of a takeover bid in our view. Not only was Lasso the pro foreign direct investment candidate, which should get potential investors off the fence, but the clear win allows for a smooth transition. Combined with encouraging progress on the PFS re-scoping and exploration at Porvenir, we are lowering the discount to 20% from 30% on our valuation. This raises the price target to 44p or just 2.6 weeks of BHP’s spot FCF generation.
Companies: SolGold Plc
The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are familiar. The belief that the roll-out of the vaccine and some relaxation of lockdown limitations will lead to a significant economic recovery, compared to the collapse seen in the first half of 2020, due to lockdowns. Indeed, the recent economic picture is becoming more optimistic than previous expectations. According to the ONS, the economy grew a little more than initially estimated in Q4 last year. This means GDP for 2020 as a whole contracted by 9.8%, revised up marginally but still the worst contraction on record. Markets, in general, have focused upon the potential scope and extent of the recovery. The sectors and stocks that have outperformed have been seen as ‘recovery’ plays with a rotation from stocks seen as ‘lockdown’ winners into those set to benefit from the ‘unlocking of society’ and/or exposed to the consumer. We expect 2021 will continue to be a “stock-picker’s” market. The sharp increase in the household savings ratio in Q4 highlights the scope for a recovery driven by expenditure. As further lockdown limitations are lifted, evidence of this growth will help to underpin the more optimistic outlook for Q2 and beyond.
Companies: AMYT ARBB BPC BAG BVC BEG BONH BLVN BRSD CML CWK CRPR EYE ECHO FDM FAR FA/ GPH GSF HUW INSE JDG KAPE KP2 MACF MPAC MNZS NESF NBI OTMP OBD PREM QFI RUA SCS SEN SOS SUR TON TOU TXP TGL TCN UEM VLS WYN
Shanta Gold (AIM: SHG), the East Africa-focused gold producer, has today announced an exploration drilling and resource update. The results are from 3,590m of drilling conducted in February and March 2021 and is new information since the last exploration update released on 16th March 2021. They relate to Luika which is part of the NLGM operations in Tanzania and the high-grade development project in WKP. Both are positive.
Companies: Shanta Gold Limited
Anglo Asian Mining* (AAZ LN) - STRONG BUY – Quarterly production update and CY21 guidance Botswana Diamonds (BOD LN) – Moving to a further stage of drilling at Thorny River Capital Limited (CAPD LN) – Q1 2021 delivers strongest ever quarterly revenue GoldStone Resources* (GRL LN) – Update paves way for production ramp-up at Homase Kenmare Resources (KMR LN) - Q1 production rises on higher grade and production despite Covid-19 isolation for management and staff Rainbow Rare Earths* (RBW LN) – Temporary suspension of REE concentrate exports Serabi Gold* (SRB LN) –– Grade improvements drive higher Q1 gold production
Companies: CAPD AAZ BOD GRL KMR RBW SRB
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Dispersion Holdings PLC, an investor in the high growth FinTech sector within the UK, the USA and Canada, has announced its intention to IPO on the Access Segment of the Aquis Stock Exchange Growth Market. The Board intends to deploy the majority of the Company’s cash resources in the acquisition of minority interests in a number of different, yet to be identified, companies in the broad FinTech sector, and to apply expertise to the business operations and strategic plans of these companies. Target Admission Date of 30 April. Darktrace plc. Intends to float on the main market of the London Stock Exchange (premium). Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Due early May. musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. 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. Due 27 April.
Companies: ADME RTC SAV DFCH HUW TEG ANIC KOO MIRI SPSY
Trinity has released a Q1/21 update ahead of its 2020 full year results in May 2021. Having proven its low cost, low risk production model during the past 12-months, which has seen one of the worst downturns in the history of the industry, Trinity's focus is now on scaling with the backdrop of a much improved oil price outlook. Production during Q1/21 was resilient having reduced by a modest 3% QoQ to 3,107bopd, in spite of Trinity not drilling any new wells since 2019. Net average production guidance for 2021 is expected to be 2,900-3,100bopd (before the potential drilling of new wells and/or acquisitions). Tight cost controls reduced operational costs YoY, with only a modest increase on a per unit basis. Given the improved oil outlook, recently implemented SPT reform, the continued integration of the Company's recently acquired 3D seismic data and the finalising of the ten-year LOA extensions, Trinity hopes to recommence drilling in H2/21. The potential benefits of the 3D seismic onshore could be transformative and with the news that Trinity and its partner have been short listed for the next stage of the potential high impact NWD Onshore exploration play of particular note from today's update. We increase our target price to 31p (from 30p), c2.2x the current share price and reiterate our BUY recommendation.
Companies: Trinity Exploration & Production Plc
