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PetroTal (PTAL LN/TAC CN)C; Target price of £1.20 per share: 0.72 mmbbl sales will trigger a US$60 mm payment to PetroTal earlier than expected – Section II of the Northern Peruvian Pipeline has been temporary re-opened. As a result, 0.72 mmbbl of PetroTal’s Bretana oil has been tendered at the Bayovar port by Petroperu for the July lifting. This oil previously entered the pipeline in late 2020 for which PetroTal was paid just ~US$45/b
Companies: ZPHR RKH PPC APA APA FEC TAL IGAS HUR EQNR EQNR WEN VLE TETY TETY
Arrow Exploration (AXL LN/CN)C; Target price of £0.45 per share: Positive drilling results at RCS-1 could add further reserves - The RCS-1 well (the second well drilled by Arrow in Colombia this year) has encountered >55 feet of total net pay across six separate oil-bearing reservoirs in the C7, the Gacheta and the Ubaque, between 7,077 feet and 8,105 feet. No reserves were allocated to the Ubaque, C7 and one of the Gacheta sands. Thes
Companies: UKOG SQZ SOU CASP SOU SAVE REP REP JSE GTE EQNR EQNR ENI ENI COP COP TLW CNE CNE CNE ALV ALV SDX LBE HHR EGY AXL
Calima Energy (CE1 AU)C; Target price of A$0.75 per share: Becoming a dividend player - Calima intends to commence a half yearly dividend programme, beginning in 2H22 with first payment in 1H23. The initial half yearly dividend has been set at A$2.5 mm (~A$0.04 per share). On an annualized basis, this represents a 4.1% yield. The company also intends to undertake a share buy back programme for up to 10% of its issued capital in any 12
Companies: TRIN NOG TAL SNM SOU PGR AOI CE1 CASP CEG ENOG ENQ EQNR IOG OEX PEN PEN
ADX Energy (ADX AU)C; Target price of A$0.060 per share: Adding very high impact gas exploration in Austria - The ADX-AT-1 and ADX-AT-II licence areas have been expanded from 450 km2 to an area now encompassing 1,022 km2 at a minimal cost. The additional licence areas will be valid for up to 16 years without any relinquishment foreseen. The associated work programme can be covered by the drilling of one well. The portfolio expansion in
Companies: XOM XOM VOG MAHAA ADX AXL CE1 XOP DEC TETY TETY EQNR EQNR CHAR
ADX Energy (ADX AU)C; Target price of A$0.060 per share: Better reservoir performance than expected at Anshof - The Anshof-3 well has flowed at a maximum rate of 132 bbl/d (light oil and no water) from the Eocene reservoir. This is well above the flow rate of ~75 bbl/d announced two weeks ago and initial expectations of 40 80 bbl/d. Downhole pressure data recorded during the test also indicates better than expected reservoir flow perfo
Companies: TXP PXT TGL SENX KOS CZA AOI CNE CNE EQNR I3E TETY TETY VLE GENL FEC ENOG EME DNO DNO CNE AKRBP AKERBP ALV ALV PEN PEN GPRK GPRK ADX LBE
Imperial Helium (IHC CN)C; Under review: Merger with Royal Helium to build a material player with discovered resources and huge upside - Imperial Helium is merging with Royal Helium with Imperial Helium shareholders set to hold ~30% of the combined entity. The share exchange ratio suggests a 10% premium to the Imperial Helium share price on the day prior to the announcement. Shareholders will vote on the transaction in June with completion expected in the 2nd half of June. Management, insiders a
Companies: XOM XOM TRIN SHEL RBD OEX NOG MATD ALV ALV IOG GTE FEC EQNR EQNR ENOG BP/ IHC PEN PEN SDX EGY
The Q1 results were slightly above consensus following an exceptional quarter on the back of higher oil and record European gas prices. No update on capital distribution, with the group starting a $1.33bn share buyback programme as part of the $5bn announced in Q4. We shall have to await the H1 results for an update but clearly Equinor has the ability to do more with its $8bn net cash position, whether in the form of buybacks or m&a in renewables.
Companies: Equinor ASA (EQNR:STO)Equinor ASA (EQNR:OSL)
Calima Energy (CE1 AU)C; Target price of A$0.65 per share: A$20 mm equity raise to fund growth – Calima has raised A$20 mm of new equity priced at A$0.20 per share to fund growth and boost its balance sheet. With ~A$16 mm capex in 1Q22, a “maxed-out” debt facility and covenant restrictions, the additional equity funding will allow Calima to sustain its capex programme and secure equipment ahead of the spring break-up period rather than
Companies: 88E AKRBP AKERBP ALV ALV BP/ CE1 CNE DNO DNO EQNR EQNR I3E JSE PAT TAL SHEL TETY TETY TTE EGY
Results came in higher than consensus, with an adjusted EBIT of $15bn (+53% qoq), almost all on the back of the record gas prices in Europe. The capital distribution is significantly increased with the 2022 share buy-back programme of up to $5bn (with a tranche of $1bn starting now), and an extraordinary one for four quarters. This additional distribution (extraordinary dividend + additional buy-back) represents around 75-80% of the free cash flow this quarter ($8.6bn) and is therefore positive.
ADX Energy (ADX AU)C; Target price of A$0.040 per share: Logging results at exploration well in Austria – Logging results from the Anshof-3 well confirmed 2.5-4 m of productive net pay at the primary oil Eocene target and 14 m of net gas pay at the Miocene sands. The secondary Cenomanian oil zone is not likely to be productive at this location due to low permeability. The Eocene net reservoir thickness at Anshof-3 location came in at t
Companies: TOM ADX ALV ALV BLOK CE1 XOP CHAR EQNR EQNR IOG OMV OMV SHEL TGL
ADX Energy (ADX AU) C; Target price of A$0.040 per share: Raising new equity to advance Austrian projects -ADX has raised A$2.8 mm of new equity via a placement priced at A$0.01 per share. As part of the placement investors received one unlisted option for every two new placement shares with a strike price of A$0.015 per share and an expiry date by 30/06/2022. The proceeds from the funding will be used for (1) ongoing feasibility wor
Companies: ADX ALV ALV CE1 CNE COP COP ECHO EQNR EQNR GENL GTE IHC TAL RHC RHC SQZ TETY TETY TTE TXP
IN OTHER NEWS
Canadian Overseas (COPL LN/XOP CN): Raising US$8 mm of new equity – Canadian Overseas has raised US$8 mm of new equity priced at 20p per share. The net proceeds of the placing are intended to be used for a bid for Cuda Energy LLC, or its assets, through a receivership process.
Southern Energy (SOUC LN): 3Q21 results – 3Q21 production in the USA was 12.3 mmcf/d with
Companies: ZEN SOU AOI XOP CHAR EQNR EQNR JSE LUPE SHEL SEPL SENX SOU
ADX Energy (ADX AU) C; Target price of A$0.040 per share: 3Q21 results – 3Q21 production in Austria was 275 boe/d, below our forecasts of ~315 boe/d due to well downtime. A well workover programme has started in October to add 100-150 boe/d. The Anshof-1 exploration well is expected to be spudded in December. An updated reserves report is expected in the coming weeks. The green Energy project is on track and engineering, planning and p
Companies: SOU PPC AXL CHAR DME DEC EQNR IHC LUPE NOG OMV OMV REP REP SHEL TETY TETY I3E ADX AKRBP AKERBP CE1 ENI ENI SEPL
Strong results, above consensus, as the company benefits from the surge in European gas prices. Adjusted earnings came in at $9.77bn (+111% qoq) and adjusted net income at $2.78bn (+70% qoq). While the second tranche of the share buy-back programme (for 2021) is increased from $300m to $1bn, the dividend is maintained at $0.18 per share, perhaps explaining the stock’s underperformance today.
ADX Energy (ADX AU) C: Target of A$0.040 per share: High impact newsflow in 2H21 - 2H21 will be very important for the company with significant upcoming newsflow. In our view, the most meaningful eventis the drilling of the Anshoff well in Austria. We were previously anticipating that the company would need a farm-in partner to fund the well. However, in the context of the current high oil price, >A$4 mm in cash at the end of June and
Companies: XOM XOM SOU NOG SEPL LUPE SHEL TETY TETY ADX CE1 DNO DNO ENI ENI EQNR EQNR GENL IHC OMV OMV PEN PEN PHAR REP REP SNM TTE
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Forecast and valuation update
Companies: IOG PLC
Companies: Savannah Energy Plc
With several opportunistic but timely acquisitions in 2021, coupled with the recent surge in the oil price, Zenith Energy has, in our view, completely transformed itself and its value proposition to investors. While for various reasons it has not been easy for the market to fully recognise and reward this transformation, we expect 1) doubling production, 2) further strengthening of its balance sheet and 3) becoming Free Cash Flow (FCF) generative this year, will make it difficult for the market
Companies: Zenith Energy Ltd.
Alternative Resource Capital
We are increasing our fair value estimate for Pantheon Resources to 208p, from under review (previously 184p). The change reflects what we believe was an unambiguously positive winter drilling campaign. This full note details the background analysis to the change in estimate of fair value, which includes a valuation table and an assessment of the forthcoming Alkaid#2 well.
Companies: Pantheon Resources plc
Chariot has signed a front-end engineering and design (FEED) agreement with Schlumberger and Subsea 7 (the Subsea Integration Alliance) for the Anchois gas development project. Chariot and the Subsea Integration Alliance will adopt a “one team” integrated and collaborative approach to fast-track first gas from Anchois to maximise the return on investment for all stakeholders. The scope of work covers all the development's offshore elements including well completions and subsea production systems
Companies: Chariot Limited
RCS-1 flow testing results
Companies: Arrow Exploration Corp.
Trinity has announced the commencement of its highly anticipated onshore drilling campaign. The Company's fully funded, six well drilling programme will target an aggregate 450-1,100mmbbls of reserves at a cost of US$14-17m. In addition to drilling four “conventional” low angle wells, Trinity will also drill one horizontal well and one deeper appraisal well, with both the horizontal and deeper appraisal wells having the potential to deliver substantially higher production and economic returns ve
Companies: Trinity Exploration & Production Plc
EQTEC has reached a key milestone in its Southport energy from waste project with the appointment of Anaergia as EPC and O&M partner. This is a complex project using multiple waste treatment solutions and we see EQTEC’s inclusion as a demonstration that it’s technology can combine with these to create an optimal outcome.
Companies: EQTEC PLC
Wentworth has announced a positive operational update ahead of its AGM to be held later today. Daily production year-to-date (YTD) has averaged 92.2MMscf/d, a c15% YoY increase (2021: 79.9MMscf/d) and ahead of Wentworth's 2022 guidance of 75-85MMscf/d. As noted previously, the strong performance of the Mnazi Bay asset YTD has allowed Wentworth to increase its total dividend distribution in respect of 2021 to 1.7p per share, a yield of c7.1%. Mnazi Bay continues to supply Tanzania with half of th
Companies: Wentworth Resources PLC
• Section II of the Northern Peruvian Pipeline has been temporary re-opened.
• As a result, 0.72 mmbbl of PetroTal’s Bretana oil has been tendered at the Bayovar port by Petroperu for the July lifting. This oil previously entered the pipeline in late 2020 for which PetroTal was paid just ~US$45/bbl at the time.
• PetroTal will receive the difference between this price and the price at which Petroperu will sell the oil in July (~US$120/bbl), generating over US$60 mm of price adjustment true-up r
Companies: PetroTal Corp.
Wentworth has announced the acquisition of a 25% non-operated working interest in the Ruvuma PSA from Scirocco Energy for an initial consideration of US$3m plus contingent payments of up to US$13m. The consideration is structured to ensure that the majority is only paid in a success case, providing Wentworth with a low-cost entry point into a high growth opportunity. The transaction has the potential to nearly double the Company's production by 2026 and add over 190Bcf of 2P reserves on a Final
Completion of commissioning of Kiln 3 at Vanchem last month keeps Bushveld on track to end 2022 with a sustainable production run rate of 5,000-5,400t V pa, a solid platform from which to refocus on longer-term growth. Fully utilising the vast array of processing infrastructure at Vanchem to treat feed from an expanded mining and ore concentration operation at Vametco makes a lot of sense given the fixed component of costs at the former and the large mineral resource at the latter. Bushveld’s re
Companies: Bushveld Minerals Limited
• 2022 YTD gross production was 92 mmcf/d, ahead of our expectations of 89 mmcf/d for 1H22.
• The FY22 production guidance remains unchanged at 75-85 mmcf/d. It looks very conservative in our view.
• The company currently holds US$26 mm in cash and no debt. This is in line with our expectations.
• TPDC continues to be current with regards to receivables.
• We re-iterate our target price of £0.45 per share.
Steady growth and dividend
Our Core NAV for the company based on its 2P reserves only i
Savannah, which operates the Barroso lithium mine project in Portugal, reports today the results of its locked cycle test to determine optimal flotation reagents to confirm lithium recoveries and spodumene concentrate grades. Savannah is aiming for a 5.5%Li2O concentrate grade with a near 80% recovery. The reported work confirms that these should be possible and that in larger scale, bulk testing these parameters may improve. The work also highlights that there are still optimisations to be h
Companies: Savannah Resources Plc