Advantage reported third quarter financial and operating results in line with our expectations (CFPS $0.15 vs. GMPFE $0.15 vs. consensus $0.17). There are no changes to its outlook. Cash generation has not been this low since 2Q18 though for 4Q19e we are projecting 49% higher AFFO q/q on signs of price recovery in the domestic natural gas space. Liquids production was up once again, +22% q/q sequentially and +74% y/y, and with the advent of the Tidewater operated Pipestone gas plant in 4Q19e, should continue into 2020e.
Companies: Advantage Oil & Gas Ltd.
Advantage, through drilling 4x wells, has announced the successful delineation and appraisal of its entire 47 section (100% WI) land block at Progress in the Montney fairway, further announcing the discovery of a Montney light oil pool stretching across the entirety of its land holdings. Of the 4x wells drilled, Advantage has provided test rates from the most recent 16-36-77-9W6 well, which is of particular importance thanks to the implementation of an updated completion design replete with higher fracture intensity than prior efforts. The horizontal well was drilled to a measured depth of ~5,270 m (~2,870m lateral) and was completed using 2 tonnes of sand per meter. The results from its 3 day (72 hour) test concluding on September 2nd , 2019 saw the well produce at an average of 1,038 bbl/d light oil, 4.9 mmcf/d of raw gas (trace sour with an H2S content of 0.1%), and 290 bbl/d of plant recovered NGLs. We have elected to increase our 12-month target multiple to ~6.0x 2020e EV/DACF from ~5.5x previously, which at the current forward strip, results in an increase to our target price to $4.75/sh. This is a 35% discount to our revised RENAV (Atax, 10%), excluding a further 10% lift on time value accretion implied in the NAV methodology.
Advantage reported 1Q19 results which were largely in line, as production of 44,900 boe/d and funds flow of $0.26/sh overlaid both GMPFE and consensus estimates.
Advantage reported fourth quarter financial and operating results that were ahead of our expectations and consensus (CFPS $0.25vs. GMPFE $0.22 vs. consensus $0.23). The company previously reported its reserves as outlined in our prior note. We thought it was a strong report. Advantage’s guidance is unchanged. There are no material changes to our forecast. We continue to view this liquids rate of change growth story as very credible.
Advantage announced third quarter financial and operating results that were in line with our expectations and consensus. The company has refined and expanded its longer-term view, tentatively tabled in March 2018. Under its new 3-year outlook, liquids growth into 2021e is robust, anticipating an exit rate of upwards of 14,000 bbl/d, of which ~82% of liquids is condensate/light oil. Importantly, this is accomplished on projected cash generation at strip, with its D/CF (trailing) on strip decreasing to 1.6x/1.2x/0.6x in the 2019e/2020e/2021e timeframe. While even west Glacier liquids results are better than expected, the foundation of the longer-term growth outlook here is Wembley/Pipestone which is an area undergoing intense industry development.
Advantage announced second quarter financial and operating results that were in line with our expectations, and consensus in aggregate. During 2Q18, Advantage did not conduct any significant drilling or completion operations, as 88% of capital spending was directed to infrastructure projects, including the 150 mmcf/d Glacier gas plant expansion. Drilling is slated to resume in 3Q18e.
Advantage announced first quarter financial and operating results that were in line with our expectations and consensus in aggregate. There are no changes to its 2018e outlook, characterized by $175 mm capex to achieve 40,000-42,500 boe/d for 2018e (~229 mmcf/d & 1,750-1,850 bbl/d). Advantage did revise its outlook ~10 days ago as described in our comment dated April 23rd, 2016. Liquids volume were 27% behind in the reported period, but the company anticipates an effective double or more for 2H18e to achieve its target, implying ~2,400 bbl/d in 2H18e.
The stocks on the GMP FirstEnergy Best Ideas List represent our highest conviction BUY recommendations with an expected return of 20% or more over the next 12 months. The investment thesis for each name on the list is laid out in this report.
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Advantage’s 2Q16 financial results were in line with expectations given a prior operational update in early July. The Company’s Montney land base now stands at 150 net sections given 12 (100% WI) new sections added to its Montney land base in 1H16, including 7 net sections around its core Glacier property estimated to boost the Company’s Montney well inventory by 10%. Based on implied returns of ~17% to our revised 12-month target price of $10.25 per share (up from $10.00 per share prior), we are tentatively revising our recommendation to Outperform.
Impact: Neutral to slightly positive. Advantage's 2Q16 financial results matched our expectations given a prior operational update, while 12 (100% WI) sections acquired in 1H16, particularly 7 net sections directly offsetting its core Glacier block, hold immediate drilling opportunities and will increase the Company's estimated drilling inventory here by ~10%.
Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.
Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS NVA PPY PNE RRX RMP SRX SGY TOG TET ATU CKE GXE IKM LXE MQL PRQ SPE SKX TVE TVETF YO
Advantage grew its corporate production to 35,000 boe/d including liquids volumes of 1,050 bbl/d in 2Q16, which is in line to slightly ahead of our prior forecast.Strong well performance, particularly from the Lower and Middle Montney, continued to drive reductions to the Company’s operating costs to $0.30/mcfe (down 14% over 1Q16 levels) and resulted in record low total cash costs of $0.60/ mcfe in the period.We have maintained both our Top Pick recommendation and $10.00 per share target price.
Impact: Positive. In 2Q16e, Advantage's corporate and liquids production are consistent with our estimates while strong well performance, particularly in the Lower and Middle Montney, continued to drive reductions to the Company's operating costs to $0.30/mcfe (down 14%) and resulted in record low total cash costs of $0.60/mcfe in the period.
Advantage reported first quarter financial and operating results that were in line to below expectations, with cash flow lower solely based on lower than anticipated realized hedging gains. The Company will have demonstrated one of the strongest y/y debt-adjusted growth rates in a while, keeping in mind that volumes are ~24% higher than that reported in 1Q16. The Company’s low cost structure remains intact. We have reduced our 12-month target price mildly to $10.00/sh and continue to offer a Top Pick ranking.
With this publication we briefly summarize our projections for 1Q16e quarterly results for the Junior E&P (Intermediate, Mid & Small Cap) segments of our coverage universe
Companies: AAV ARX BTE BNP CPG ERF POU PEY PGF PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PNE RRX RMP SRX SGY TOG TET ATU CKE GXE IKM LXE ROAOF MQL RE SPE SKX TVE TVETF YGR YO
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AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7m by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this Spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Auction Technology Group is considering an IPO on the Main Market. The Group operates six world-leading online Marketplaces and proprietary global auction platform technology for curated online auctions. In FY20 the Group delivered pro forma revenue of £52.3m, supported by notable underlying year-on-year growth from both Standalone ATG Group and Standalone Proxibid Group (12.4 per cent. and 40.4 per cent., respectively). For the same period, the Group delivered a strong profitability performance of £22.3m pro forma Adjusted EBITDA representing a pro forma Adjusted EBITDA margin of 42.6 per cent. Expected March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Team PLC announced their plans for an AIM IPO. Team owns Theta Enhanced Asset Management Ltd, trading as Team Asset Management. This is a Jersey-based active fund manager providing discretionary and advisory portfolio management services to private clients, trusts and charities. Assets under management were GBP291m in November, up from GBP140m in December 2019 . The Company is seeking to raise no less than £5 million. The Placing will be priced on a pre-money valuation for the Company of £7 million. Targeting March Admission. Virgin Wines UK Plc recently set out their plans for an AIM IPO. Virgin Wines is a direct-to-consumer online wine retailer that sells products to retail customers in the UK through two subscription schemes and a pay-as-you-go offering. The Group also sells a range of beers and spirits and operates a B2B sales channel for corporates. Deal details TBC but media reports suggest a £100m valuation. Targeting 2nd March Admission Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance. According to media reports, Deliveroo, are expecting to release their IPO plans on 8th March. The company raised more than $180m in January with a valuation of more than $7bn.
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Following our recent update, we have provided some further clarification regarding our financial forecasts, outlining our changes whilst upgrading our year end cash forecasts. Our revised cash forecasts are US$20.0m for FY21E and US$17.7m for FY22E (in advance of Echo FID). Furthermore, despite the challenging macro-environment, Trinity is highly geared towards increases in the oil price, with a US$60/bbl average realised oil price increasing our FY21E, closing cash expectations further to US$23.7m. Below we present a FY22E scenario whereby we assume that the capex involved in the Echo development does not come into play until a Final Investment Decision (FID), leaving the Company with a YE22E cash position of US$17.7m. Our forecasts reflect the current asset base and at this stage do not capture any upside for the extensive opportunity set.
Companies: Trinity Exploration & Production Plc
Bluebird Merchant Ventures (BMV LN) – Funding proposed through digital token linked to gold Empire Metals* (EEE LN) – Empire complete acquisition of Eclipse gold project Condor Gold* (CNR LN) – Drilling underway on the Cacao Vein Cornish Metals* (CUSN LN) – Osisko converts its note to a royalty Orosur Mining* (OMI LN) – High-grade gold intersections received at Anza Phoenix Copper* (PXC LN) – £2m debt facility to accelerate the Empire project Rambler Metals and Mining* (RMM LN) – New non-executive appointment to strengthen the board Tertiary Minerals* (TYM LN) – Lucky Copper Project drilling
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i3 Energy has provided an interim update the highlights of which are: • Production is exceeding expectations with lower declines than modelled resulting in stable production from November 2020 to January 2021 averaging 9,150 boe/d (41% liquids) – about 1,000 boe/d greater than expected by the forecasts of the company's competent persons' reports at the time of its relisting. • Based on the futures curves for oil & gas, the company anticipates net operating income for 2021 (revenue minus royalties, operating costs, transportation and processing) of approximately CAD $35m (US $27.6m). • Maintenance capital expenditure guidance in conjunction with the net operating income amounts to CAD$3m. • i3 Energy completed an 80 hour flow-test on a horizontal Falher well located on its Noel acreage in Northeast British Columbia. The flow test ran for a sustained period at 4,200 mcf/d (700 boe/d) on a 1/4” choke. The well is expected to be brought on production at approximately 500 boepd during the second quarter of 2021, following tie-in. This well was not included in the company's 2P reserve estimates. The result represents a materially value enhancing development. Both the net income guidance and maintenance capital guidance excludes the potential contribution of the Noel acreage. • The Company continues to progress the legal process to allow it to declare a dividend in Q1 2021. As previously disclosed, the Company aims to distribute up to 30% of free cash flow as a dividend to shareholders. • The company indicated that discussions continue with a potential farm-in partner for the Serenity discovery and terms are being negotiated. The recent strengthening in commodity prices has reinvigorated activity within i3's virtual data room, and additional parties previously contacted during early 2020 have now re-engaged with the company. The company indicated that the market will be updated if and when an agreement is reached. (see Table 1 for asset scale/value estimates in relation to the company's North Sea assets).
Companies: i3 Energy Plc
AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7 million by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this Spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Auction Technology Group is considering an IPO on the Main Market. The Group operates six world-leading online Marketplaces and proprietary global auction platform technology for curated online auctions . In FY20 the Group delivered pro forma revenue of £52.3 million, supported by notable underlying year-on-year growth from both Standalone ATG Group and Standalone Proxibid Group (12.4 per cent. and 40.4 per cent., respectively). For the same period, the Group delivered a strong profitability performance of £22.3 million pro forma Adjusted EBITDA representing a pro forma Adjusted EBITDA margin of 42.6 per cent. Expected March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. 4basebio UK Societas is a specialist life sciences group focused on therapeutic DNA for gene therapies and DNA vaccines and providing solutions for effective and safe delivery of these DNA based products to patients. The Company has been divested from 4basebio AG , a German company listed on the Prime Standard segment of the Frankfurt Stock Exchange . No capital to be raised on Admission. Anticipated market capitalisation on AIM Admission: £14.53m.
Companies: SAR PAF PTRO NEXS TYM BOD CLX FAB ODX DUKE
AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7m by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this Spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Team PLC announced their plans for an AIM IPO. Team owns Theta Enhanced Asset Management Ltd, trading as Team Asset Management. This is a Jersey-based active fund manager providing discretionary and advisory portfolio management services to private clients, trusts and charities. Assets under management were GBP291m in November, up from GBP140m in December 2019 . The Company is seeking to raise no less than £5 million. The Placing will be priced on a pre-money valuation for the Company of £7m. Targeting March Admission. Virgin Wines UK Plc recently set out their plans for an AIM IPO. Virgin Wines is a direct-to-consumer online wine retailer that sells products to retail customers in the UK through two subscription schemes and a pay-as-you-go offering. The Group also sells a range of beers and spirits and operates a B2B sales channel for corporates. Deal details TBC but media reports suggest a £100m valuation. Targeting 2nd March Admission Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance. According to media reports, Deliveroo, are expecting to release their IPO plans on 8th March. The company raised more than $180m in January with a valuation of more than $7bn.
Companies: CCS OKYO SML BEG SBIZ GDP SGM SEN AMO KZG
The Calabar power station, which accounts for the majority of Savannah’s Nigerian gas sales, has entered a new power supply agreement with the Republic of Togo, with more in discussion, raising the prospect of meaningful increases in Savannah’s gas supplies to the plant. These additional volumes will come at negligible additional cost, leveraging the bottom-line impact. The recently signed Mulak Energy gas sales agreement demonstrates this, boosting our 2022 earnings by 8% and our risked-NAV and price target by 6% to 55p/sh.
Companies: Savannah Energy Plc
AUCTUS PUBLICATIONS Bahamas Petroleum Company (BPC LN)C: Target price of 1.90p: Looking beyond the Bahamas - The Perseverance #1 well encountered oil, validating the structural model and the petroleum system, but did not encounter oil in commercial quantities. While the drilling results were disappointing for the B North prospect, the company believes that the presence of (1) oil in good reservoirs and (2) a good seal derisk the B South prospect and the C structure and could improve the profile of the assets vis-à-vis a potential farm partner. BPC is initiating a formal farm out process. With a further £2 mm drawn on the convertible facility, BPC has ~US$15 mm in cash. Following the payment of pending invoices associated with Perseverance #1, we estimate the cash will drop to US$6-7 mm, which is enough to fund the appraisal programme in Suriname and Trinidad, including the redrill of the 11 mmbbl Saffron appraisal well. This is a very material well with an unrisked value of ~1p per share. Our unrisked NAV for Suriname is ~0.5p per share. We have reduced our Core NAV from ~2p to 1.5p as we incorporate the company’s cash position and the updated share count. We treat the drawn convertible as debt. Our new ReNAV of ~1.9p excludes the Bahamas and the wells in the SW peninsula. Our new target price has been set at this level. GeoPark (GPRK US)C; Target price increased from US$20 to US$24 per share: Large reserves increase at CPO-5. Better visibility on exploration resources –The highlights of the YE20 reserves report are (1) the large increase of high value WI 2P and 3P reserves at CPO-5 in Colombia (up from respectively 9.5 mmbbl at YE19 and 14.9 mmbbl to 21.1 mmbbl (x2.2) and 50.1 mmbbl (x3.3) at YE20) and (2) the independent estimates of ~400-900 mmbbl (Pmean-P10) net unrisked prospective resource across the company’s assets in Colombia and Ecuador, confirming the large potential upside within the asset base. The large reserves increase at CPO-5 reflects a re-interpretation of the data for the Indico and Mariposa reservoirs. The 400-900 mmbbl net unrisked prospective resources include 120-270 mmbbl at CPO-5, 110-210 mmbbl on other Llanos blocks, 150-300 mmbbl in the Putumayo and 14-29 mmbbl in Ecuador. We note that the potential resources size at CPO-5 could be larger than the current net 2P reserves at Llanos-34. The reserves increase and large exploration resources at CPO-5 showcase GeoPark’s very good understanding of the geology and demonstrate the logic of the acquisition of Amerisur by GeoPark. We are increasing our Target price from US$20 to US$24 per share as we incorporate the additional reserves at CPO-5 which more than compensates for the reserves reduction at Platanillo. Panoro Energy (PEN NO)C; Target price increased from NOK23 to NOK30 per share: Moving up league – Panoro is acquiring a 14.25% WI in Ceiba/Okume (EG) and an additional 10% in Dussafu Marin (Gabon) for an initial consideration of U$140 mm. An additional contingent consideration of US$40 mm could be payable over multiple years if oil price remains high and if certain operational targets are achieved. The acquisition is transformative as it x4 the FY21 production (+6.9 mbbl/d), x3 2P reserves (+25 mmbbl), and x8 2C resources (+29 mmbbl), turning Panoro is a much more material company. Boosting Panoro’s interest Dussafu increases the company’s exposure to the 2Q21 exploration drilling programme at the Greater Hisbiscus area with the potential to add ~19 mmbbl (WI) to the 2P reserves category with an unrisked value of >NOK12 per share. The acquisition is being funded through a US$70 mm equity raise priced at NOK15.50 per share and US$90 mm of new debt (7.5% interest). The acquisition was agreed a few months ago when Brent was only ~US$45/bbl. With Brent now at >US$60/bbl the transaction has only become more accretive. Our ReNAV for the acquired assets is ~US$320 mm. When factoring the new equity issue, our Core NAV and ReNAV are increased from respectively NOK14 and NOK23 to NOK21 and NOK30 per share and our EV/DACF multiples for 2021 and 2022 are almost divided by 2. PetroTal (PTAL LN)C; Target price of £0.50 per share: US$100 mm capital programme in 2021 - PetroTal is confirming a US$100 mm capex programme in 2021 to produce an average of 11.8 mbbl/d in 2021, exiting 2021 at 18.6 mbbl/d. 4Q21 production is expected to be 16.6 mbbl/d, increasing from 9.2 mbbl/d in 1H21. We have adjusted our FY21 production estimates to reflect the company’s latest guidance. Our FY21 operating cash flow estimate of ~US$90 mm reflects US$52.5/bbl for Brent. At US$57.5/bbl and 15.3 mbbl/d production in 2022, we forecast FY22 operating cash flow of US$170 mm, which represents 90% of the company’s current market cap. At a Brent price of ~US$65/bbl, FY21e and FY22e operating cash flow would jump to respectively ~US$150 mm and ~US185 mm. At the current share price, EV/DACF multiples are only 2.7x in 2021 and 0.8x in 2022. At US$65/bbl, our Core NAV would be £0.68 per share and EV/DACF multiples would only be 1.3x for 2021 and 0.4x in 2022. For each US$5/bbl increase in Brent price, our Core NAV increases by ~£0.10 per share. IN OTHER NEWS ________________________________________ AMERICAS Frontera Energy (FEC CN): Exploration update in Guyana – A total of 32 prospects on the Corentyne block and the Demerara block have been estimated to hold 6,089 mmboe unrisked prospective resources net to Frontera. The fluid content considered for the prospects is mainly oil (64%), natural gas (28%) and the remainder condensate (8%). The first prospect (Kawa-1) is expected to be drilled in 1H21. Pantheon Resources (PANR LN): Drilling results in Alaska – The Talitha #A well has encountered oil in all the target horizons. Four distinct oil-bearing zones have been identified. The current plan is to test the Shelf Margin Deltaic, Basin Floor Fan (two separate zones) and the Kuparuk zones. Testing all zones is critical to determine ultimate commerciality. Royal Dutch Shell (RDSA/B LN): Selling Canadian assets – Shell is selling its Duvernay shale light oil position in Alberta to Crescent Point Energy for a total consideration of US$707 mm. The consideration is comprised of US$550 mm in cash and 50 million Crescent Point shares (valued at US$157 mm) . The transaction includes the transfer of approximately 450,000 net acres in the Fox Creek (Kaybob) and Rocky Mountain House (Willesden Green) areas, along with related infrastructure, currently producing around 30,000 boe/d. EUROPE ENI (ENI IM): 4Q20 results – ENI reported adjusted net profit of EUR66 mm for the period with 1,713 mboe/d production. ENI held 6.9 bn boe of proven reserves at YE20, representing a replacement ratio of 43%. Repsol (REP SM): 4Q20 results – Respol reported 4Q20 adjusted net earnings of EUR0.4 bn with production of 628 mboe/d and FY20 capex of US$10 bn. Repsol is also launching a share buy back programme for 2.58% of its share capital. MIDDLE EAST AND NORTH AFRICA DNO (DNO NO): Reserves update in Kurdistan and Norway – YE20 Tawke license gross 2P reserves stood at 394 mmbbl (400 mmbbl at YE19) and 3P reserves at 605 MMbbls (641 MMbbls in 2019). At YE20 the Baeshiqa license in Kurdistan held 2C resources of 43 mmbbl. WI 2P reserves in Norway were 64 mmboe at YE20. The Company’s North Sea 2C resources totalled 120 mmboe. Genel Energy (GENL LN): Reserves update in Kurdistan – YE20 WI 2P reserves were 117.2 mmbbl (YE19: 123.8 mmbbl) with 143.4 mmbbl 2C contingent resources (YE19: 152 mmbbl). Gross 2P reserves on the Tawke field were 245 mmbbl while Peshkabir held 125 mmbbl. Taq Taq and Sarta were estimated to hold respectively 33 mmbbl and 34 mmbbl gross 2P reserves at YE20. Sarta continues to be estimated to also hold 258 mmbbl gross 2C contingent resources. Gulf Keystone (GKP LN): Reserves update in Kurdistan – YE20 gross 2P reserves at Shaikan were 505 mmbbl (YE19: 578 mmbbl) with 2C contingent resources of 293 mmbbl (YE19: 239 mmbbl). The 2P Triassic and Cretaceous reserves of 47 mmbbl were reclassified as gross 2C contingent resources. ShaMaran Petroleum (SNM CN): Reserves update in Kurdistan – YE20 gross 2P reserves at Atrush were 109.9 mmbbl (YE19: 108.5 mmbbl). FY21 gross production guidance has been set at 39-44 mbbl/d with gross capex of US$53.2 mm. SUB-SAHARAN AFRICA BWE Energy (BWE NO): 4Q20 results – 4Q20 gross production at Dussafu in Gabon was 13.5 mbbl/d. FY21 gross production is expected to be 14.8-15.9 mbbl/d. BWE held US$120.6 mm in cash at YE20. FAR (FAR AU): Indicative offer from Lukoil – Lukoil has made a non binding conditional offer to acquire 100% FAR at A2.2c per share in cash. The Lukoil proposal values FAR at A$220 mm. FAR is in default to cash calls in Senegal amounting to US$44 mm. FAR has until mid July 2021 to remedy the defaults. PetroNor E&P (PNOR NO): Equity raise and acquisition in Congo – PetroNor is raising US$50-60 mm of new equity including US$32-42 mm in cash and the balance through the issue of equity as in-kind consideration for the acquisition of Symero. As a result of the acquisition and a court ruling in Congo related to parts of MGI indirect share in the PNGF Sud licence, PetroNor’s net interest in PNGF Sud increases from 10.5% to 16.83%. Net production from PNGF Sud will increase from 2,385 bbl/d to 3,850 bbl/d and YE20 net 2P oil reserves from 9.9 mmbbl to 15.9 mmbbl. EVENTS TO WATCH NEXT WEEK ________________________________________ 22/02/2021: Kosmos Energy (KOS LN/US) – 4Q20 results 22/02/2021: President Energy (PPC LN) – 4Q20 results 25/02/2021: Panoro Energy (PEN NO) – 4Q20 results
Companies: BPC DNO ENI FAR FEC GPRK PEN PANR TAL REP RDSA SNM
Anglo American (AAL LN) – Iron ore performance underpins 2020 EBITDA Horizonte Minerals (HZM LN) – Araguaia granted power-line licence Norilsk Nickel (MNOD LI) – Water inflow triggers partial suspension of operations in 2 Siberian mines Impala Platinum (IMP JSE) – Gross profit rises 263% in HY ended December 31st
Companies: GMKN AAL HZM IMP
Trifast has released a good trading update, continuing the operational momentum from the interim results and improved growth in Q4 2020. The Group indicates that “trading levels continue to strengthen” with 5% revenue growth in the four months to the end of January. At current revenue run rates, the Group expects FY21 revenue to be slightly ahead of current consensus. With a renewed restocking cycle and good operating leverage, we see upside risks to our conservative earnings forecasts, partly offset by increasing challenges
Companies: Trifast plc
AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7 million by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this Spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” Kanabo Group (RTO by Spinnaker Opportunities SOP.L) on the main market (standard). Raising £6m, enlarged mkt cap £23.4m. Kanabo focuses on the distribution of Cannabis-derived products for medical patients, and non-THC products for CBD consumers . Due 16 Feb. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Auction Technology Group is considering an IPO on the Main Market. The Group operates six world-leading online Marketplaces and proprietary global auction platform technology for curated online auctions . In FY20 the Group delivered pro forma revenue of £52.3 million, supported by notable underlying year-on-year growth from both Standalone ATG Group and Standalone Proxibid Group (12.4 per cent. and 40.4 per cent., respectively). For the same period, the Group delivered a strong profitability performance of £22.3 million pro forma Adjusted EBITDA representing a pro forma Adjusted EBITDA margin of 42.6 per cent. Expected March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Cordiant Digital Infrastructure to admit its shares on the Specialist Fund Segment of the Main Market of the London Stock Exchange . Targeting a £300m raise. Cordiant invests in global infrastructure and real assets, running infrastructure private equity and infrastructure private credit strategies through limited partnership funds and managed accounts. Due 16 Feb. 4basebio UK Societas is a specialist life sciences group focused on therapeutic DNA for gene therapies and DNA vaccines and providing solutions for effective and safe delivery of these DNA based products to patients. The Company has been divested from 4basebio AG , a German company listed on the Prime Standard segment of the Frankfurt Stock Exchange . No capital to be raised on Admission. Anticipated market capitalisation on AIM Admission: £14.53m. Due 17 Feb Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5m by way of private placement of new Common Shares to advance the United Downs copper-tin project. The Company expects that Admission will become effective 16 February 2021. The Company's Common Shares will continue to be listed and trade on the TSX-V in Canada. Raising £8.2m. £18.7m mkt cap.
Companies: OHG MDZ PEG IQE RBN WHR HMI ANIC KOD GMR
Base Resources* (BSE LN) – Kwale North Dune mineral resource increase GoldStone Resources* (GRL LN) – Homase fully permitted. SP Angel appointed broker to Goldstone Horizonte Minerals (HZM LN) – £18m raised to progress the Araguaia ferronickel project Trans-Siberian Gold (TSG LN) – Rodnikova Scoping Study
Companies: BSE GRL HZM TSG
Report on Techcrunch that IROKO, a Nigerian-based media company, could file to go public in the next 12 months on the London Stock Exchange (LSE) Alternative Investment Market. Founded by Jason Njoku and Bastian Gotter in 2011, IROKO boasts the largest online catalogue of Nollywood film content globally. According to this report, the media company will raise between $20 million and $30 million valuing the company at $80 million to $100 million. AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7 million by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” Kanabo Group (RTO by Spinnaker Opportunities SOP.L) on the main market (standard). Raising £6m, enlarged mkt cap £23.4m. Kanabo focuses on the distribution of Cannabis-derived products for medical patients, and non-THC products for CBD consumers . Due 16 Feb. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March Auction Technology Group is considering an IPO on the Main Market. The Group operates six world-leading online Marketplaces and proprietary global auction platform technology for curated online auctions . In FY20 the Group delivered pro forma revenue of £52.3 million, supported by notable underlying year-on-year growth from both Standalone ATG Group and Standalone Proxibid Group (12.4 per cent. and 40.4 per cent., respectively). For the same period, the Group delivered a strong profitability performance of £22.3 million pro forma Adjusted EBITDA representing a pro forma Adjusted EBITDA margin of 42.6 per cent. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Cordiant Digital Infrastructure to admit its shares on the Specialist Fund Segment of the Main Market of the London Stock Exchange . Targeting a £300m raise. Cordiant invests in global infrastructure and real assets, running infrastructure private equity and infrastructure private credit strategies through limited partnership funds and managed accounts. Due 16 Feb 4basebio UK Societas is a specialist life sciences group focused on therapeutic DNA for gene therapies and DNA vaccines and providing solutions for effective and safe delivery of these DNA based products to patients. The Company has been divested from 4basebio AG , a German company listed on the Prime Standard segment of the Frankfurt Stock Exchange . No capital to be raised on Admission. Anticipated market capitalisation on AIM Admission: £14.53m. Due 17 Feb Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5m by way of private placement of new Common Shares to advance the United Downs copper-tin project. The Company expects that Admission will become effective 16 February 2021. The Company's Common Shares will continue to be listed and trade on the TSX-V in Canada. Raising £8.2m. £18.7m mkt cap.
Companies: CCS UKOG PTD SFE STAR ATYM AVG PHD CGNR SNX
The trading update covers Trifast’s Q3 period and up to date, prior to its March year-end, and signals that FY revenues should be slightly ahead of market expectations. It also commits to reinstating dividends at the FY results. As such, we are upgrading revenues by 3% and EPS by 7.3%. We maintain our price target at 175p, which offers decent upside to current levels. The shares have been subdued of late but still offer good recovery prospects.
Union Jack Oil (UJO) has announced the convening of a General Meeting of the company on 10 March 2021. In a shareholder circular issued on 19 February 2021, the company has proposed the adoption of new articles of association and in particular, a 200 for 1 proposed consolidation of the company’s share capital. This will reduce the number shares in issue from c.19.8 billion to approximately 99.1 million. The company anticipates that this action could reduce volatility and improve liquidity of the shares while also increasing the marketability of UJO to a wider range of potential investors.
Companies: Union Jack Oil Plc
