Bigblu Broadband (BBB): Corp | Chariot Oil & Gas (CHAR): Corp | Pebble Beach Systems (PEB): Corp
Companies: CHAR BBB PEB
Chariot Oil & Gas (CHAR): Corp | dotDigital (DOTD): Corp | Gateley (GTLY): Corp | Iofina (IOF): Corp | Synairgen (SNG): Corp | Universe Group (UNG): Corp
Companies: CHAR DOTD IOF SNG UNG GTLY
Chariot’s interims represent something of a line in the sand for the new management team, with historic oil-focussed deepwater exploration spend written-off, demonstrating its recent corporate and strategic ‘reboot’, which has ushered in a more entrepreneurial approach. Strategy has shifted away from higher-risk frontier exploration in favour of opportunities that better fit the energy transition. With the annual cash burn cut 45% to US$2.5m, no remaining work commitments and period-end cash of US$5.8m, management has a clear path ahead to deliver on its ambitions.
Companies: Chariot Oil & Gas Limited
Avingtrans (AVG): Corp | Chariot Oil & Gas (CHAR): Corp | dotDigital (DOTD): Corp | Gateley (GTLY): Corp | Iofina (IOF): Corp | Synairgen (SNG): Corp | Universe Group (UNG): Corp
Companies: AVG CHAR DOTD IOF SNG UNG GTLY
Oil posted its first back-to-back weekly loss since April's rout with the end of the summer driving season and concern about OPEC's production compliance weighing on prices.
Futures in New York edged up on Friday, but prices fell 6.1% this week coinciding with a retreat in U.S. equities. Traders are also examining data indicating the United Arab Emirates since July has been regularly exceeding its quota under a deal between the Organization of Petroleum Exporting Countries and its allies.
The uncertainty over how much supply OPEC+ is returning to the market adds another wrench in the recovery for oil prices still reeling from the pandemic-driven blow to consumption. While U.S. supplies had grown tighter in past months and producers were expected to restrain production amid a weak financial backdrop, stockpiles rose again last week for the first time since mid-July.
Companies: 0R1M 0J50 JSE 88E ADV CAD CHAR ECHO ENOG EME I3E PMG RBD SQZ SOU TLW VGAS WTE PHAR
Chariot Oil & Gas (CHAR): Corp Reboot | City of London Group (CIN): Corp Clearing the runway for take-off
Companies: Chariot Oil & Gas Limited (CHAR:LON)City of London Group plc (CIN:LON)
A refreshing and upbeat investor presentation from Chariot’s new executive management team laid out its ambition to keep the company relevant in these changing times. Chariot’s historic high risk/reward deepwater oil exploration bias is out of fashion, and management intends to “be pioneering, think out of the box and be creative” going forward. This shift in approach is evident with its Lixus licence in Morocco, on which the Anchois gas discovery sits. This development opportunity has gone from strength to strength in a short space of time; not only via the recent material resource upgrade, but also a sharp reduction in expected development costs that sees our risked-NAV and price target rise another 14% to 32p/sh. There is still a long way to go, but early indications are positive for partnering and funding of this high-value, transformational gas opportunity.
Cairn Energy (CNE LN): Sale of Senegal interests take another step forward | Pantheon Resources (PANR LN): Talitha Production Unit extension secured | Chariot Oil & Gas (CHAR LN): Material resource upgrade, offshore Morocco
Companies: CNE PANR CHAR
Avacta (AVCT): Corp | Belvoir Group (BLV): Corp | Byotrol (BYOT): Corp | Chariot Oil & Gas (CHAR): Corp | Destiny Pharma (DEST): Corp | Omega Diagnostics (ODX): Corp | SRT Marine Systems (SRT): Corp | Telit (TCM): Corp
Companies: AVCT BYOT CHAR ODX SRT DEST TCM BLV
Chariot has announced another material upgrade to its Lixus block gas resource, offshore Morocco, following reprocessing of historic 3D seismic across the licence, which has dramatically improved image quality. An independent assessment of just the Anchois discovery has upgraded resource estimates by almost 150%, pushing our risked-NAV from 22p to 28p/sh. This can only improve the appeal of this high-value gas asset to potential partners. With the shares trading below end-2019 cash, Chariot offers a low risk, high return option on both the Moroccan gas market and the impending restart of industry exploration drilling in Namibia.
Access Intelligence (ACC): Corp | Chariot Oil & Gas (CHAR): Corp | KRM22 (KRM): Corp | Redcentric (RCN): Corp | SDI Group (SDI): Corp
Companies: CHAR RCN SDI KRM ACC
Chariot Oil & Gas (CHAR): Corp 2019 results – primed | Evgen Pharma (EVG.L): Corp Investigator-led study in COVID-19 | genedrive (GDR): Corp Conversion of $8m convertible bond | STM (STM): Corp Solid start to FY 2020 with trading in line | Zambeef (ZAM): Corp Inline despite macro headwinds
Companies: CHAR STM ZAM EVG GDR
No surprises in Chariot’s FY19 results, which reiterate the strength of its balance sheet and its ability to ride out the coronavirus for a considerable time if necessary. Year-end cash stood at US$9.6m, or 2p/sh, equivalent to almost the entire market cap. Understandably in the current environment, there is little appetite for unfunded oil exploration. However, with a material and increasingly ‘shovel-ready’ gas discovery in Morocco, Chariot has an asset that should be appealing to a broad spectrum of partners, even today. With such low expectation in the share price, progress on this front would be richly rewarded.
Ascent Resources (AST LN): Entering Cuba | Diversified Gas and Oil (DGOC LN): Acquisition in the US | Phoenix Global Resources (PGR LN): Production shutdown and licence termination in Argentina | Premier Oil (PMO LN): Exiting Area A in Alaska following drilling results | Coro Energy (CORO LN) and Empyrean Energy (EME LN): Resources increase in Indonesia | Falcon Oil & Gas (FOG LN/FO CN): Farm out transaction in Australia | Oil Search (OSH AU): US$700 mm equity raise| Discovery in Norway | Baron Oil (BOIL LN)/Upland Resources (UPL LN): Relinquish UK licence | EnQuest (ENQ LN): FY19 results | IGas Energy (IGAS LN): FY results | Ithaca Energy (Delek): Cutting capex for the North Sea | OMV (OMV AG): 1Q20 trading update | Repsol (REP SM): 1Q20 update | Valeura Energy (VLE CN/VLU LN): Constrained gas sales in Turkey | Block Energy (BLOE LN): Shutting production in Georgia | Regal Petroleum (RPT LN): FY19 results | Chariot Oil & Gas (CHAR LN): Corporate update | Energean Oil & Gas (ENOG LN): Resources increase in Israel | SDX Energy (SDX LN): FY19 results and discovery in Egypt | Tethys Oil (TETY SS): Reduction of extraordinary dividend, capex reduction, FY20 production guidance
maintained | Africa Oil (AOI SS/CN): Tax update in Kenya | Giant gas development projects delayed | Kosmos Energy (KOS LN/US): Cost reduction and RBL redetermination | Vaalco Energy (EGY US/LN): Production update in Gabon
Companies: 88E AOI AST BLOE BOIL CHAR CORO DGOC EGY EME ENOG ENQ IGAS KOS OSH OMV PGR PMO REP ENW SDX TETY UPL VLE
Research Tree provides access to ongoing research coverage, media content and regulatory news on Chariot Oil & Gas Limited.
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Forecast and valuation update
Companies: HUR HUT HRCXF
Anglo Asian Mining is an AIM listed precious and base metals producer running flagship Gedabek operations in western Azerbaijan which include open pit and underground mining facilities and a processing complex fit for different types of ores. Production runs at ~70-80kozpa GEO (~90% gold) with low operating costs status allowing the Company to generate FCF for organic growth opportunities within the highly prospective +1,000km2 land package and potential value accretive transactions over targets outside Azerbaijan as well as offer a generous dividend yield.
Companies: Anglo Asian Mining PLC
Shanta Gold (AIM: SHG) has announced this morning its production and operational results for the quarter ended 30th September 2020 – see Fig 1. Overall this was a robust performance (from one of the most consistent operators in the sector) in the face of the pandemic and a very busy quarter for the company at corporate level. QoQ production fell to 19,973 oz and AISC rose to $883/oz – both caused by a temporary drop in grade – but the ongoing strength in the gold price resulted in a 16% and 46% increase in EBITDA QoQ and YTD respectively. There was an increase in net debt to $5.1m which can be explained by the $7.1m cash outlay for the West Kenya projects as well as the reduction in the hedge book (they also have $5.9m of gold dore in the gold room). The company remains on track to hit its full year guidance of 80-85koz of production at an AISC of $830-880/oz which would make it the third year in a row they have hit their unaltered guidance for the year. This would be a remarkable achievement for a major gold miner operating in a developed market let alone one operating in the South West corner of Tanzania. Likewise the fact the company has recorded zero lost time injuries makes it nearly three years in a row with no LTIs. With the greenlight for Singida and a scoping study completed for the West Kenya Project during the quarter, the company can look forward to leveraging this operational expertise across a larger and longer life production base (c.220Koz of annualised production). We continue to believe the market is still to wake up to this given a market cap of US$219m, next to no debt and EBITDA annualising at $90m.
Companies: Shanta Gold Limited
H1 2020 saw extreme commodity price weakness, but was still a productive period for President, especially for its balance sheet, with debt more than halving to US$15m following a placing, strategic subscription and debt-to-equity conversion. This leaves President on a sound financial footing, well positioned to ride out sustained lower prices if necessary while delivering the growth potential within its core Argentine business, further evidence of which was provided with today’s positive drilling update. We are cutting our price target by 10% to 3.5p due to lower near-term production forecasts, but this is still more than double the current share price with further operational catalysts on the near-term horizon.
Companies: President Energy PLC
Oil posted a small weekly gain on tentative signs that demand is picking up even as a new wave of coronavirus cases casts a shadow over the market.
Futures in New York edged lower on Friday, but still managed to record an advance of 0.7% this week on shrinking US crude stockpiles and signs of improving demand in China and India. Gains were capped by record new virus cases from Germany to Portugal and the biggest surge in US daily infections in two months.
Crude futures in New York have clung close to the $40-a-barrel mark since September amid uncertainty around a demand recovery as the virus rages. Meanwhile, OPEC producers and allies see a risk of an oil surplus next year if Libya's production rises and demand remains depressed.
At the same time, the market's structure continues to strengthen, with the spread between Brent's nearest contracts at its narrowest since late July. For West Texas Intermediate futures, the prompt spread rallied to its tightest contango in a month.
West Texas Intermediate for November declined 8 cents to settle at $40.88 a barrel.
Brent for December settlement lost 23 cents to $42.93 a barrel. The contract rose 0.2% this week.
Prices pared earlier losses on Friday after American retail sales and consumer sentiment indicators topped estimates.
The Organization of Petroleum Exporting Countries and its allies are facing pressure to postpone their plans for tapering output cuts. Given the uncertainty over the oil demand outlook, the right course of action is to wait for now, JPMorgan analysts including Natasha Kaneva wrote in a report. The move to add another 2 million barrels of day onto the market in January could be postponed by a quarter, the report said.
OPEC+ is also contending with the unexpected return of Libyan oil output, which hit 500,000 barrels a day this week. The group forecasts that global oil supplies could increase by 200,000 barrels a day next year if Libya manages to revive supply and the pandemic hits demand harder than expected, according to a document seen by Bloomberg.
Companies: FOG PVR 88E DGOC EME TRIN UOG
Trifast has released an interim trading update which highlights trends that have continued from the AGM statement in September with trading slightly ahead of the Group's base case assumptions for FY21 of revenue down c.16% YoY. September was the strongest month in the Group's first half and the press release indicates that October has also started well for sales and orders. The trading update indicates resilience in the business considering the tough trading environment.
Companies: Trifast plc (TRI:LON)Trifast plc (25D:BER)
Phoenix today updates its resource for the Empire deposit in Idaho after the summer's drilling (32 additional holes). The new Measured and Indicated (M&I) Resources stands at 22.9Mt grading 0.4% copper, 0.2% zinc, 10.3g/t silver and 0.32g/t gold (up from 19.3Mt grading 0.4%, 0.2%, 11g/t and 0.35g/t respectively from the last calculated resource in May 2020) plus a further 10Mt in the Inferred category at similar grades. M&I resources now stand at 173kt copper equivalent (current metal prices) against the previous M&I resource estimation at 155kt copper equivalent.
Companies: Phoenix Copper Ltd. (United Kingdom)
GeoPark (GPRK US)C; Target price US$20 per share: Drilling at CPO-5 has started - The 3Q20 operating update did not contain any surprises, with overall production increasing by 5% vs the previous quarter, reflecting higher sales in Brazil, Argentina and Chile. Importantly, gross production at Llanos-34 is back to 60 mbbl/d with some work-over backlog and development drilling having restarted. Overall net production (across all of GeoPark’s assets) was 40 mboe/d at the end of September and FY20 production guidance of 40-42 mboe/d has been reiterated (2H20 capex guidance of US$25-35 mm). Drilling at CPO-5 (GeoPark WI: 30%) has now commenced with the Indico-2 appraisal well. With the Indico-1 well still producing 5,169 bbl/d since first oil in December 2018, Indico-2 could add 60% to CPO-5 overall production by YE20 in a success case. GeoPark will publish its 2021 capex budget on 4 November. We view this as an important event as this will provide further visibility on a very exciting drilling programme with 5-7 wells at CPO-5 and 1-2 wells in Ecuador. The exploration program for 2021 will likely test the continuity of the Guadalupe play encountered on Llanos-34 into CPO-5.
Tethys Oil (TETY SS)C; Target price SEK75.00 per share: Initiating coverage - Tethys Oil is a well-funded, dividend-paying, Sweden listed US$160 mm market cap E&P with ~25 mmbbl 2P reserves in Oman and ~10 mbbl/d WI production. The company stands apart from its peers in three principal ways: (1) It has achieved “textbook” execution, turning what was initially a small uncommercial onshore discovery on a tiny portion of Blocks 3&4 into a large field that has already produced ~100 mmbbl with a further ~120 mmbbl 3P reserves. (2) The production is very cash generative even at US$40/bbl. At US$45/bbl, even at the currently OPEC constrained production rate, operating cashflow funds all development plus some exploration activities and allows Tethys to pay a 5% dividend. (3) Tethys is conservatively run with US$60 mm in cash and no debt. Historically, the story was about steady y-on-y production, reserves and dividend growth. While these features are still present, an investment in Tethys now also offers diverse exposure to high impact exploration with drilling activities on recently acquired onshore blocks expected to start before YE20. Our target price of SEK75 per share reflects ReNAV and implies over 70% upside.
IN OTHER NEWS
Alvopetro (ALV CN): Production update in Brazil – 3Q20 sales were 1,764 boe/d at the Caburé Project.
Maha Energy (MAHA-A SS): Production and capex guidance update – FY20 production (mostly in Brazil) is expected to stand at 3,700–4,000 boe/d (4,000-5,000 boe/d previously). The FY20 capex budget increased by US$8.7 mm to US$24 mm. YE20 production is expected to be 5,200 – 5,700 boe/d.
Pantheon Resources (PANR LN): Resources update in Alaska – The Kuparuk formation at the Talitha project is estimated to contain 1.4 billion bbl of oil in place (OIP) and a Prospective Resource of 341 mmbbl as a most likely case.
Touchstone Exploration (TXP LN): Discovery in Trinidad – The Chinook well encountered 589 net feet of gas pay in three unique thrust sheets in the Herrera sands. Additional natural gas pay of ~20 net feet was encountered in the shallower Cruse formation. Completion and testing of the well is expected to be undertaken in 1Q21.
Trinity Exploration and Production (TRIN LN): 3Q20 operational update in Trinidad – 3Q20 production was 3,135 bbl/d. The company held US$22.2 mm in cash as at 30 September. FY20 production guidance remains 3,100-3,300 bbl/d.
Aker Bp (AKERBP NO): 3Q20 update in Norway – Aker BP produced 201.6 mboe/d in 3Q20. The FY20 production guidance of 205-220 mboe/d is reiterated.
UK Oil & Gas (UKOG LN), Angus Energy (ANG LN) and Egdon Resources (EDR LN): Onshore UK licence relinquished – Long-reach/shallow wells at the Holmwood prospects are neither technically viable nor economically feasible. The licence has been relinquished.
FORMER SOVIET UNION
Caspian Sunrise (CASP LN): Operating update in Kazakhstan – Production at the MJF structure averaged ~1,340 bbl/d. The completion of maintenance activities, the return to production of Well 141 and the installation of a pump at Well 151 are expected to increase production capacity to 2,200 - 2,500 bbl/d.
Enwell Energy (ENW LN): Ukraine update – 3Q20 production in Ukraine was 4,629 boe/d. The company held US$55.7 mm in cash at the end of September.
Kosmos Energy (KOS US/ LN): RBL Redetermination – Kosmos’ RBL credit facility has been redetermined with US$1.32 billion, a reduction of US$130 mm from the previous drawn amount of US$1.45 billion. Repayment of the reduction in borrowing base will be made from available liquidity in 4Q20.
EVENTS TO WATCH NEXT WEEK
20/10/2020: Touchstone Exploration (TXP LN) - Webinar
Companies: TXP ALV ALVOF A6Y DETNOR AKERBP DETNOR DETNF ARC RO1 CASP ROXIF GPRK KOS 7M7 0GEA MAHAA PANR P3K PTHRF TETY TETY UKOG 0UK UKLLF
Oil retreated as a further increase in Libyan output threatens to return more supply to a market that is already grappling with a pandemic-induced slump in demand.
Crude futures fell 1.9% in New York on Friday and posted their first weekly decline in three. Libya lifted force majeure on its Ras Lanuf and Es Sider ports and oil output will surpass 1 million barrels a day in four weeks, according to the state-run National Oil Corp. The announcement came as prospects for more Libyan output increased following the signing of a permanent cease-fire agreement.
Prices were already on the decline as talks appeared to stall on a US stimulus deal before the election, with House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin trading blame for the impasse. A deal would have injected a sorely needed boost to demand, with positive catalysts for prices harder to come by heading into the end of the year.
US benchmark crude futures declined 2.5% over the week as a resurgence of coronavirus infections spurred governments around the world to renew tighter lockdown restrictions. While comments from Russian President Vladimir Putin signalling openness to delaying a planned OPEC+ output hike helped bolster prices, the continued return of Libyan production complicates the group's tapering strategy.
West Texas Intermediate for December delivery declined 79 cents to settle at $39.85 a barrel.
Brent for the same month declined 69 cents to end the session at $41.77 a barrel. The contract fell 2.7% over the week.
Despite the prospect of more Libyan supply returning to the market, Brent's structure remained firm. The spread between the global benchmark's nearest contracts strengthened on Friday to its narrowest contango since late July
Meanwhile, traders' attention is shifting toward the outcome of the US election in November, which could have varying implications for US supply. Presidential candidate Joe Biden said fossil fuels need to be phased out over time, a comment seized on by Donald Trump as a threat to the industry. But there is debate over how much such a policy would impact oil prices in the near future.
Other oil-market news:
Venezuelan crude inventories have surged 84% over the past three weeks as the threat of US sanctions ward away buyers of the nation's most important commodity. That raises the risk that state-run PDVSA will have to start shutting in production again, and is the latest sign that Venezuela's oil industry is on the verge of collapse.
Oil and gas output in Norway, western Europe's biggest producer, could rise to a record by the middle of the decade as new fields come on stream, according to consultants Rystad Energy AS.
African-focused diversified minerals exploration company principally focused on the discovery and development of its lithium and gold projects in emerging frontier provinces. IronRidge has significant and multiple province-scale gold and lithium projects across Ghana and Côte d’Ivoire through joint ventures while advancing an expansive gold portfolio in Chad. The company continues to review opportunities with its two wholly-owned iron ore projects in Gabon, West Africa and its bauxite and titanium assets in Queensland, Australia. IronRidge’s focus on lithium and gold gives investors exposure to rapidly growing lithium technology markets while hedging prominent global economic uncertainty via gold exploration portfolio.
Companies: IronRidge Resources Ltd
Lithium in London with a focus on European projects
This corporate sector note on lithium will comment on the European lithium raw material sector and how the advanced projects being developed by Savannah Resources, European Metals Holdings and European lithium fit into the European-regional picture. Lithium production from these projects, once commissioned, will go some way to creating a domestic supply of this critical metal within Europe.
• Savannah Resources – Developing the Mina Do Barroso project in Portugal as a producer of spodumene concentrate. The project is in Feasibility.
• European Metals Holdings – Developing the Cinovec project in the Czech Republic as an integrated producer of lithium hydroxide / carbonate. The project is in Feasibility.
• European Lithium – Developing the Wolfsburg project in Austria as an integrated producer of lithium hydroxide. The project is in Feasibility.
Companies: KDNC EMH SAV
Central Asia Metals (CAML LN) reported strong copper results for Q3 2020, up 14% QoQ to 3.9kt enabling a 3.7% increase in our 2020F production forecast to 13.9kt, in line with new guidance of 13.5-14kt. YTD copper production of 10.5kt was broadly flat YoY. This does imply a marginal YoY increase overall for 2020F, however, as well as realised grades being ahead of expectation, we expect CAML to push hard at Kounrad to offset Sasa disruption as much as possible. Kounrad has been out of focus recently, however, with copper prices up 10% YTD and with a strong fundamental outlook, the asset’s low cost base continues to underpin the CAML investment case.
Companies: Central Asia Metals Plc
Despite the absence of new drilling activity, Trinity's Q3/20 production has remained robust, averaging 3,135bopd - an 11.3% YoY increase (Q3/19: 2,816bopd). YTD 2020 average production volumes have averaged 3,232bopd, a 9.8% YoY increase (YTD 2019: 2,943bopd), with 2020 production guidance remaining unchanged at 3,100-3,300bopd. Oil price realisations YTD 2020 have averaged US$37.3/bbl and, as a result, no Supplemental Petroleum Tax (SPT) will be payable in respect of the first three quarters of 2020. Cash as at 30 September 2020 was US$22.2m (30 June 2020 US$19.7m). Elsewhere, we view the proposed Budget reforms to the SPT regime as an important step forward by the Trinidad and Tobago Government and a recognition that SPT needs reforming. The proposed reforms will enhance cash flows between US$50-US$75/bbl and therefore allow companies to invest to grow production and deliver attractive returns for shareholders. We update our valuation and reiterate our price target at 31p per share, a 250% premium to the current share price.
Companies: Trinity Exploration & Production Plc
Trans-Siberian Gold's (TSG) Q320 results show improved year-on-year and quarter-on-quarter top line results, despite a reduced operational performance, largely due to higher gold and silver prices and increased tonnages. Gold grade and silver grades from the Asacha Gold Mine for the first nine months of the year are slightly lower than we had expected [due to Q1 performance]. Production levels above are expectations, which has negated the impact of the lower average grade for the first 9 months. We raise forecasts and our target price to 184p.
Companies: Trans-Siberian Gold PLC (TSG:LON)Trans-Siberian Gold PLC (UJ1:FRA)
Goldplat the processor of gold-bearing wastes and residues from mining operations today reports on its first quarter ending Septe2020. As expected the company continues to maintain robust operating profits from its South African operation (£1.12m, up from £1.07m in the same period last year) and an increased operating profit from its Ghana operation (£0.28m up from £23k). Goldplat is in the process of selling its Kilimapesa gold mine in Kenya which contributes small operating losses to the Groups overall performance with the sale expected to finalise by the end of December.
Companies: Goldplat plc