Energean Oil & Gas (ENOG): Positive CPR report for offshore Israel | Reabold Resources (RBD LN): Publication of Victoria presentation | Echo Energy PLC (ECHO LN): Resumption of VAT reclaims | Bahamas Petroleum PLC (BPC LN): Perseverance #1 operations remain on track | Westmount Energy (WTE LN): Uncommercial discovery at the Tanager-1 well, offshore Guyana
Companies: ENOG RBD ECHO BPC WTE
Cairn Energy (CNE LN): Interim results, FY 2020 production guidance narrowed to 21,000-23,000bopd | Echo Energy (ECHO LN): Initial assessment of the Monte Aymond gas project confirms commercial viability | Jersey Oil & Gas (JOG LN): Interim results, JOG continues to finalise development plan for GBA
Companies: CNE ECHO JOG
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
Kosmos Energy (KOS LN): Significant farm down to Shell, offshore Africa | Echo Energy (ECHO LN): Reactivation of wells strengthens balance sheet | Mosman Oil & Gas* (MSMN LN): Operations at Stanley-4 progress
Companies: Echo Energy PLC (ECHO:LON)Mosman Oil & Gas Ltd. (MSMN:LON)
Trinity Exploration and Production (TRIN LN): Production up 8.5% yoy | Echo Energy (ECHO LN): Restructured relationship with CGC
Companies: Trinity Exploration & Production Plc (TRIN:LON)Echo Energy PLC (ECHO:LON)
Jadestone Energy (JSE LN): Further acquisition onshore Indonesia | Baron Oil* (BOIL LN): AGM statement, fully funded for work programmes | Echo Energy (ECHO LN): Successful contract extensions agreed in Argentina
Companies: JSE BOIL ECHO
Echo Energy (ECHO LN): FY19 results, acquisition of producing assets bring stability | Angus Energy (ANGS LN): Installation of processing facilities approval received | PetroTal (PTAL): PTAL raises £14.1m ahead of reopening the Bretana oil field
Companies: ECHO ANGS PTAL
Union Jack Oil* (UJO LN), STRONG BUY, TP: 0.82p: Increase in stake at Wressle, note published | Energean Oil & Gas (ENOG LN): Trading update, work in Singapore set to recommence | Echo Energy (ECHO LN): Reserve and resource update at Santa Cruz Sur
Companies: UJO ENOG ECHO
88 Energy (88E LN/AU): Update in Alaska | Echo Energy (ECHO LN): Operation update in Argentina | Subsidies to the oil industry in Argentina | Energean Oil & Gas (ENOG LN): Neptune Energy not acquiring Edison UK and Norway | EnQuest (ENQ LN): 1Q20 update | Equinor (EQNR NO): Dry hole in Norway | Hurricane Energy (HUR LN): Problem with a well at Lancaster in the UK, FY20 production will be “substantially” lower than expected | Lundin Energy (LUP SS): Reduced FY20 production on guidance of Norwegian government curtailment |SDX Energy (SDX LN): 1Q20 results | Total (FP FP): Not buying Ghana from Occidental Petroleum
Companies: 88E AOI ECHO ENOG ENQ DNQ HUR LYV SDX TLW
Jersey Oil & Gas (JOG LN): Jersey completes North Sea licence acquisition from Equinor | Mosman Oil & Gas* (MSMN LN): Mosman agrees sale of Welch for US$300k | Echo Energy (ECHO LN): Echo produces 2,250boepd on average year to date
Companies: JOG MSMN ECHO
Genel Energy (GENL LN): Trading update, regular payments from KRG, cashflow breakeven >US$30/bbl | Touchstone Exploration (TXP LN): Net debt falls by 68%, Chinook to be drilled in July 2020 | Echo Energy (ECHO LN): 2020 interest payments waived for Lombard Odier loan
Companies: GENL TXP ECHO
Diversified Gas & Oil (DGOC LN): Moving to the main board | Echo Energy (ECHO LN): Argentina update | Hurricane Energy (HUR LN): Operating update in the UK | JKX Oil & Gas (JKX LN): 1Q20 update in Ukraine and Russia | Regal Petroleum (RPT LN): Ukraine update | Tethys Oil (TETY SS): Production update in Oman | Update on payments in Kurdistan | Victoria Oil & Gas (VOG LN): 1Q20 update in Cameroon | Zenith Energy (ZEN LN/ZEE CN/ZENA-ME NO): Renegotiate price of Congo acquisition
Companies: DGOC ECHO GENL GKP HUR JKX ENW TETY VOG ZEN
Huricane Energy (HUR LN): Watercut increases, production at Lancaster remains at 20,000bopd | JKX Oil & Gas* (JKX LN): 1Q20 operational update shows 11% yoy increase in production | Union Jack Oil* (UJO LN): Works continue at PEDL 183, in line with government regulations | Echo Energy (ECHO LN): Further cost cutting and focus on high margin gas | Regal Petroleum (RPT LN): Production up 5% yoy, operations continue unaffected | Columbus Energy Resources (CERP LN): Deeps cuts to G&A, Saffron testing results to be announced later this month
Companies: HUR JKX UJO ECHO ENW CERP
JKX Oil & Gas* (JKX LN): FY19 results, revenues exceed US$100m, SP Angel Flash Note published | Eco (Atlantic) Oil & Gas (ECO LN): Cost measures in place to preserve cash position | Echo Energy (ECHO LN): Amendments to loans and deferral of interest payments |
Companies: JKX ECO ECHO
GeoPark (GPRK US)C ; Target price: US$20: Constructed to handle US$25-30/bbl | Panoro Energy (PEN NO)C : Corporate update | Bahamas Petroleum Corporation (BPC LN): More money for Bahamas exploration | Echo Energy (ECHO LN): Cost cutting required to withstand low commodity prices | Jadestone Energy (JSE LN/CN): Vietnam first gas delayed from “not before 4Q21” to “no earlier than late 2022”. | Aker BP (AKERBP NO): Reducing capex, GY20 guidance maintained | EnQuest (ENQ LN): Reducing capex; Heather and Thistle/Deveron fields not restarting | Hurricane Energy (HUR LN): FY19 results | i3 Energy (I3E LN): Deal with contractor to drill wells at Serenity in the UK North Sea | Lundin Petroleum (LUP SS): Discovery in Norway | OKEA (OKEA NO): Suspend new project sanction | Majors cut cost and suspend buy back programmes | Total (FP FP): Discovery in the UK North Sea | Caspian Sunrise (CASP LN): Suspending drilling in Kazakhstan | Condor Petroleum (CPI CN): Update in Kazakhstan and Uzbekistan | DNO ASA (DNO NO): Reducing capex, cancelling dividend | Genel Energy (GENL LN): Reserves downgrade at Tawke in Kurdistan; restrained activities but dividend maintained | Energean Oil & Gas (ENOG LN): FY19 results | SDX Energy (SDX LN): Drilling update in Morocco | ExxonMobil (XOM US): Exiting Chad? | Kosmos Energy (KOS LN/US): Cutting capex budget and suspending dividend | Seplat Petroleum (SEPL LN): FY19 results
Companies: 0MDP PENUSD BPC ECHO JSE ARC ENQ HUR I3E LYV 3SX CASP NK1A GENL ENOG SDX 0R1M KOS SEPL
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Parkmead’s portfolio has evolved to the point where it is now a full-cycle E&P company with a low-cost Dutch production base and a broad spectrum of high-quality UK growth opportunities, encompassing material development projects and an attractive range of risk/reward exploration. Recently, it has diversified into renewables, future proofing its equity story and opening up a new ‘investor-friendly’ avenue of growth. A core strength of this management team is its commercial acumen and portfolio-driven approach to optimising value. Parkmead has been in portfolio construction mode to date but is now well positioned to start crystallising its intrinsic value. We initiate with a risked-NAV based price target of 155p/sh. Investors would do well to get on-board with a management team that has a strong track record of delivering shareholder value.
Companies: Parkmead Group PLC
Edison Investment Research is terminating coverage on Diversified Gas & Oil (DGOC), Vermilion Energy (VET) and Circle Property (CRC). Please note you should no longer rely on any previous research or estimates for these companies. All forecasts should now be considered redundant.
Companies: Diversified Gas & Oil PLC
Panoro Energy (PEN NO)c; Target price of NOK23.00: Revisiting Gabon - BW Energy provided an update on Dussafu with FY20 production guidance expectation marginally below previous guidance (14.25 mbbl/d versus 15 16 mbbl/d) due to COVID-19 restrictions and OPEC+ quotas. This results in FY20 opex expected to be US$19/bbl which is slightly above the previous guidance of US$17-18/bbl. The drilling of DTM-7H, and the tie-in of DTM-6H and -7H, has been deferred to mid-2021 with first oil expected in 3Q21 and our estimate of the timing of the field production ramp-up has been delayed by one quarter. BWE continues to expect production from the Dussafu area to reach >30 mbbl/d in 2023 and ~40 mbbl/d in 2024. The Hibiscus development is expected to offer 15% IRR at
Companies: TGL TGA 88E FEC JSE LUPE LUNE LNDNF LYV NOG GB_NTRM NSTRY 3NO PANR P3K PTHRF PTAL TETY TETY AOI ENOG PEN SDX EGY
• In an Important development, PetroTal has signed a contract with an international oil trader for a pilot shipment to export 0.12 mmbbl into the Atlantic region using the Amazon river through Brazil. The shipment will be sold FOB Bretana, priced at the forward month Brent ICE price, and paid within two weeks of loading at Bretana. There are no subsequent oil price adjustments.
• At November 19, 2020, PetroTal had cash resources of US$9.8 mm, with accounts payable and accrued liabilities of ~US$39 mm, a reduction of ~US$11 mm from the end of 2Q20. The company has been paid US$5.5 mm for delivery of 0.192 mm bbl of oil to Petroperu in October. Production is constrained to ~5,000 bbl/d pending the reopening of the export pipeline.
• We understand that the pilot should start in December. This would not only provide ~US$5 mm in cash to PetroTal but also allow production to return to recent levels (11.5 mbbl/d), effectively unlocking the fundamental value of the asset.
Balance sheet considerations
The potential financial derivative liability has been reduced from US$22.5 mm at the end of June to US$17 mm at the end of September. Of the US$39 mm current payables 46% are not due before 2021 and we note that the company still holds US$13 mm in account receivables and US$4.7 mm in inventory.
Financials on “a back to normal” scenario with flat production
We are now assuming production remains constrained at 5 mbbl/d over 4Q20 with minimum capex with cashflow and receivables being used to repay the due payables over the period.
On production of just ~11.5 mbbl/d during 2021, we estimate operating cashflow of US$85 mm at US$48/bbl Brent. This would result in free cashflow of >US$40 mm assuming capex of US$20 mm to maintain production and US$20 mm to repay the remaining payables. This compares with a current market cap of just US$75 mm, suggesting FY21 free cashflow would represent over 50% of the current market cap in a no growth scenario assuming production can be exported.
Our target price of £0.45 per share represents 6x the current share price.
Companies: PetroTal Corp.
EQTEC has announced today that the Company and Scott Bros. Enterprises Limited have agreed to extend the exclusivity period of the Billingham MOU until 18 December 2020. The Billingham MOU has been subject to previous extensions, as announced on 23 October 2019, 23 June 2020 and 18 September 2020.
Companies: EQTEC PLC (KEU1:FRA)EQTEC PLC (EQT:LON)
Pantheon announced that is has contracted a rig to drill the Talitha well and that drilling operations are expected to commence in January 2021. The well will target four independent reservoirs, in three separate trapping sequences, which the company estimates has the potential to contain in the region of a billion barrels of recoverable oil, although ongoing work is required to formally delineate the full potential of the targets.
Companies: Pantheon Resources plc
The Prime Minister vowed last week to “restore Britain's position as the foremost naval power in Europe” and promised an extra £16.5bn in defence spending over the next four years. Mr Johnson expects this investment to “spur a renaissance of British shipbuilding across the UK”, and specifically mentioned five locations where this would occur, including Belfast and Appledore – the location of InfraStrata's shipyards. Other supportive policy initiatives emanating from the government include Mr Johnson's pledge in October that offshore wind will power every home in the country by 2030. We believe this demonstrable support from the highest level of government vindicates InfraStrata's strategy, and demonstrates the significant opportunities available to the company as it bids on numerous shipbuilding and fabrication contracts. We reaffirm our Buy rating.
Companies: InfraStrata plc
Salt Lake Potash's AGM update reported that the Lake Way project is now 74% complete. Construction of the process plant is on-schedule with practical completion and first SOP production planned for Q1/21. Drawdown of the Senior Facility Agreement funds and repayment of the Taurus bridge loan is expected soon.
Companies: Salt Lake Potash Limited
Jersey Oil & Gas announced today that is has entered into an agreement to acquire the entire share capital of CIECO V&C (UK) Limited, which is currently owned by two international entities headquartered in Japan. The acquisition secures an additional 12% working interest in Licence P2170 (Blocks 20/5b & 21/1d), which provides Jersey Oil & Gas with 100% of the licence. The licence contains the majority of the Verbier oil discovery in addition to three drill ready prospects: Verbier Deep, Wengen and Cortina. The acquired entity has approximately £15M of tax losses which will provide value to Jersey Oil & Gas. Consideration will consist of £150k in cash and contingent payments of i) £1.5M upon field development plan approval of Verbier within P2170 (as already discovered) by the OGA ii) £1.0M upon the 1st anniversary of attainment of first oil. The acquisition is conditional on OGA approval amongst other technicalities, which we do not anticipate will be problematic. The acquired entity will be free of debts.
Companies: Jersey Oil & Gas PLC
Oil rose to the highest in nearly three months with positive Covid-19 vaccine developments paving the way for a more sustained recovery in oil demand.
Futures rose 5% in New York this week for a third straight weekly gain as Pfizer Inc and BioNTech SE requested emergency authorisation of their Covid vaccine Friday. Moderna Inc also released positive interim results from a final-stage trial and said it is close to seeking emergency authorisation. Still, further gains were limited by broader market declines amid a dispute between the White House and the Federal Reserve over emergency lending programmes.
Even with vaccines on the horizon, a recovery in oil demand faces obstacles with governments under pressure to tighten restrictions and curb the spread of the virus. UK Prime Minister, Boris Johnson's officials are considering tougher pandemic rules placed on broader regions of England next month after a national lockdown is set to end and the country returns to its tiered system. Meanwhile, the shift toward working from home may have a lasting chill on gasoline demand, according to Federal Reserve Bank of Kansas City President Esther George.
The recent climb in headline prices has been accompanied by significant moves in timespreads, where traders bet on the price of oil in different months. The spread between West Texas Intermediate for December 2021 delivery and the following month moved to backwardation, while the closely watched gap between December 2021 and 2022 WTI contracts is close to also flipping.
West Texas Intermediate for December delivery, which expired Friday, rose 41 cents to settle at $42.15 a barrel.
The January contract rose 52 cents to end the session at $42.42 a barrel.
Brent for January settlement gained 76 cents to $44.96 a barrel. The contract rose 5.1% this week.
Pfizer and BioNTech's vaccine could be the first to be cleared for use, but first it must undergo a thorough vetting. The filing could enable its use by the middle to the end of December, the companies said in a statement. Yet, it could take at least three weeks for a US Food and Drug Administration decision.
Companies: FOG PVR 88E DGOC EME TRIN UOG
Acquisition of CIECO P2170 interest
Companies: JOG JYOGF TPC1
Savannah’s acquisition of a key strategic Nigerian gas asset with strong growth potential has been ignored by the market. Its significant exploration success in Niger has also gone unrewarded. Delivery of the strong free cash flow potential these assets offer will re-rate the shares, which are materially undervalued. Management’s tenacity in getting the Seven Energy acquisition across the line alongside the impressive early progress with the acquired assets should give investors confidence. We initiate with a Buy rating and risked-NAV based price target of 49p/sh.
Companies: Savannah Energy Plc
Trifast has reported FY21 interim results that highlight the tough operating conditions with material falls in revenue, and operating leverage driving sharp reductions in profitability. The c.£16m equity raise helped to cushion the financial impact and the ongoing recovery exiting the first half provides some optimism for the Group heading in to FY22. We reinstate our buy recommendation.
Companies: Trifast plc (TRI:LON)Trifast plc (25D:BER)
Today's news & views, plus announcements from KGF, MRO, UU, BAB, BRW, FUTR, GNS, HICL, LIO, AEXG, FUL, KWS
Companies: AEX GNS HICL
While a three-year plan would have been more than enough, the new CEO delivered a roadmap for the next ten years. The idea is to show how Tullow’s existing assets can generate sufficient cash for the next decade. Discipline is key, with deleveraging as top priority. Spending is on a tight budget ($2.7bn for the next ten years) with 90% of it going to develop the West African assets. The quest to regain investors’ trust continues.
Companies: Tullow Oil plc