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Condor Petroleum (CPI CN) (not covered): 4Q18 results | ENI (ENI IM) (not covered): Norway discovery | La Francaise de l’Energie (LFDE FP)7 ; Speculative Buy, EUR34.00: Results for the six month period ending 31/12/2018 | Serinus Energy (SENX LN)1 ; Speculative Buy, £0.25: US$3mm private placement | Union Jack Oil (UJO LN) (not covered): Equity fundraising | Genel Energy (GENL LN); Speculative Buy, £3.20: 4Q18 results & New Dividend Policy | African Petroleum (APCL NO) (not covered): Merger with PetroNor | Eland Oil & Gas (ELA LN) (not covered): FY18 results
APCL CPI ENI SEN UJO GENL ELA
President Energy (PPC LN) (not covered): Argentina update | Cabot Energy (CAB LN)1 ; Speculative Buy, £0.10: Resources estimates in Italy | Equinor (EQNR NO) (not covered): Gas find in Norway | African Petroleum (APCL NO) (not covered): Relinquishes licences SL-03-17 and SL-4A-17 in Sierra Leone.
APCL PPC CAB
Melbana Energy (MAY AU) (not covered): Farming out Cuban asset | Energean Oil & Gas (ENOG LN) (not covered): Production in Greece | I3 Energy (I3E LN) (not covered): Change of CEO | Total (FP FP) (not covered): Discovery relinquishment in Norway | UK Oil & Gas (UKOG LN) (not covered): Well test results in the UK | Total (FP FP) (not covered): Deal in Algeria | African Petroleum (APCL NO) (not covered): African petroleum’s Senegal licences shopped by authorities
APCL ENOG I3E UKOG
Cabot Energy (CAB LN)1 ; Speculative Buy, £0.08: New Issue of Equity | Green Dragon Gas (GDG LN) (not covered): Intention to list producing assets on HKEX | Genel Energy (GENL LN); HOLD, £1.90: Refinancing Bond | African Petroleum (APCL NO) (not covered): Sierra Leone license extension
APCL G3E GENL CAB
Phoenix Global Resources (PGR LN) (not covered): Update on reduction of capital and Interoil demerger | PetroNeft Resources (PTR LN) (not covered): Operations update in Russia | Volga Gas (VGAS LN) (not covered): August production in Russia | Genel Energy (GENL LN); HOLD, £2.00: August 2017 Taq Taq production in Kurdistan | African Petroleum (APCL NO) (not covered): Corporate update, The Gambia
APCL PTR GENL
La Francaise de l’Energie (LFDE FP)1,7; Speculative Buy, EUR40.00: FY16/17 annual revenue | Regal Petroleum (RPT LN) (not covered): Ukraine update | Genel Energy (GENL LN); HOLD, £0.90: Payment for export in the KRG | African Petroleum (APCL NO) (not covered): No extensions on Gambian licences?
APCL RPT GENL SDX
Amerisur Resources (AMER LN)6: HOLD, £0.30: Production volumes trending higher | Anadarko Petroleum (APC US) (not covered): More gas in Colombia | LGO Energy (LGO LN) (not covered): Operating update in Trinidad | Vermilion Energy (VET CN)1,6; BUY, C$63.00: Results as expected, outlook unchanged | Lundin Petroleum (LUPE SS/LUP CN) (not covered): 1Q17 results | Volga Gas (VGAS LN) (not covered): April 2017 production | Kuwait Energy: Intention to float in London | African Petroleum (APCL NO) (not covered): Contemplated Private Placement | Total (FP FP) (not covered): Boosting presence in Senegal upstream
APCL AMER APC VET LUPE VGAS TTA CERP
Independent Resources (IRG LN) (not covered): Change of strategy and funding | Repsol (REP SM): (not covered): Increases interest in Vietnam | SDX Energy (SDX LN/CN)1; BUY, £0.75: Important discovery at South Disouq | Tethys Oil (TETY SS)6; BUY, SEK70: Production Update in Oman | African Petroleum (APCL NO) (not covered): Potential farm out in Senegal and Gambia
APCL REP TETY ECHO SDX
GeoPark Limited (GPRK US)1,6: BUY, US$6.50; expansion of Jacana oil field | Parex Resources (PXT CN)4 : Buy; C$24.00, Expansion of Jacana oil field | Canacol Energy (CNE CN) (not covered): New gas sales contract and production outlook in Colombia | Nostrum Oil & Gas (NOG LN)6; BUY, £6.00: Model roll forward & 3Q16 financial results | Sound Energy (SOU LN) (not covered): £24 mm raise & Tendrara flow rate onshore Morocco | African Petroleum (APCL NO) (not covered): Exits Liberia
APCL GPRK PXT CNE NOG SOU
In December 2015, African Petroleum (APCL) announced it had entered into a farm-down agreement with Ophir Energy over its CI-513 licence area. On 10 March the transaction completed. This will trigger a payment of US$16.9m towards APCL’s back costs, provide it with a well-funded partner and is a vote of confidence in its asset quality. The deal was made possible by the flexibility shown by the Côte d’Ivoire government to make fiscal terms more attractive and the extended drilling timetable, which is important in the current macro environment. The cash payment will fund APCL to continue to farm down its other assets in West Africa, many of which are close to recent discoveries in Senegal and Mauritania. We await further deals and the probable announcement of drilling in 2017.
AFRICAN PETROLEUM
We are discontinuing coverage on African Petroleum Corporation Limited.
African Petroleum (APCL) has announced it has entered into a new PSC with Ophir Energy on its CI-513 licence area, Côte d’Ivoire. Ophir will take a 45% interest in return for a US$16.9m contribution towards APCL’s back costs and paying an additional 10% towards drilling costs. Importantly, the PSC has also been renegotiated to reflect the current commodity price environment and outlook for deepwater developments. This has resulted in an extension of the minimum work commitments (a well is now required within two years), adjusted fiscal terms and holding costs. The involvement of a company of Ophir’s size is a vote of confidence in the acreage, which contains Ayame West, a prospect with mean unrisked resources of 800mmstb across a number of horizons.
Market reaction: Very positive. Just based on Cash, this would value Block-513 at US$33.8 (100% WI), in line with our valuation for the asset at US$34 mm (about NOK0.25 per share). This excludes the small (10%) carry component. This transaction is also boosting African petroleum balance sheet by US$16.9 mm.
APCL has completed the private placement, raising NOK16.5m (c $2m). This capital injection allows the company to continue to fund itself, while finding partners for drilling across its extensive offshore African portfolio. The previously announced farm-down of an interest in CI-513 continues to progress, with completion expected following negotiation and government approval. The company is also in advanced discussions with several interested parties across the Senegalese and Gambian licences. Industry interest has been piqued by exploration success in Senegal (Cairn/FAR) and Kosmos (Mauritania) and we are hopeful of successful deals.
The Company has completed a Private Placement raising NOK 16,476,293 (c.US$2 mm) through the allocation of 96,919,370 shares at NOK 0.17/sh on a pre-consolidation basis. The subscription price represents a discount of NOK 0.04 to the opening price of the shares on the Oslo Axess on Thursday. The proceeds from the Private Placement will be used to strengthen the Company's balance sheet and liquidity position, to fund working capital and for general corporate purposes.
Stuart Lake, the CEO of Africa Petroleum (APCL), is stepping down for health reasons. He will be replaced by the current COO, Jens Pace. Jens has over 30 years’ industry experience, including roles at BP (and previously Amoco), latterly as VP of exploration (North Africa). His experience in a multitude of African countries and as the COO at APCL since October 2012 means he should be well placed to take the reins from Stuart. We wish Mr Lake a swift recovery.
