Reserves and resources update
Companies: Genel Energy PLC
AUCTUS PUBLICATIONS SDX Energy (SDX LN)C; Target Price: £0.40: Conservative and sensible FY21 guidance – FY21 production guidance has been set at 5,620-5,920 boe/d (net entitlement). While this is below the FY20 net production of 5,987 boe/d, we note that the FY20 net production (excluding Gemsa) was above the initial guidance of 5,650 5,950 boe/d (excluding Gemsa) which had been set in January 2020, pre-COVID. Adjusting for a normalized environment, this suggests that the FY20 production exceeded expectations by a significant margin. This might suggest that the FY21 production guidance is equally conservative. FY21 gross production guidance in Morocco of 7.0-7.3 mmcf/d looks conservative in light of the ~8.5 mmcf/d achieved in 4Q20 and incorporates a 7-10 day maintenance period as well as two Eid holidays. The 4Q20 8.5 mmcf/d production included catch-up volumes following an extended COVID related period of shutdown at customers. We are reducing our FY21 gross production forecast from 8.0 mmcf/d to 7.3 mmcf/d. We have updated our Core NAV to reflect our more conservative future production estimates in Morocco, which is offset by the positive impact of lower opex at South Disouq from 2024 (as high water cut wells come offline) and lower opex and capex than we previously estimated at West Gharib. The shares trade at EV/DACF multiples of 1.3x in 2021. Our target of £0.40 per share suggests >100% upside. Vaalco Energy (EGY US/LN)C; Target price: £4.00: Hedging programme - Vaalco has entered into crude oil commodity swap agreements for a total of 709,262 bbl at a Dated Brent weighted average price of US$53.10/bbl for the period from February 2021 through January 2022. IN OTHER NEWS ________________________________________ AMERICAS Diversified Gas and Oil (DGOC LN): Operating update in the USA – FY20 production was ~100 mboe/d. YE20 net debt was ~ US$725 mm. The company made a US$8 mm bolt-on acquisition in 4Q20 of a producing asset. Gran Tierra Energy (GTE LN/CN): Trading update in Colombia – 4Q20 WI production was 21,907 bbl/d with WI production of 23,428 bbl/d in January to date. YE20 2P reserves were 133 mmboe slightly down from 142 mmboe at YE19. Karoon Energy: Resources update in Brazil – The Baúna oilfield and Patola oil discovery are estimated to hold 36.4 mmbbl 2P reserves and 18.9 2C contingent resources. ASIA PACIFIC CNOOC: Discovery on the South China Sea - CNOOC encountered oil and gas pay zones with a total thickness of approximately 422.2 m at the Huizhou 26-6 well in the Eastern South China Sea. The structure is located in Huizhou Sag in the Zhu1 Depression of the Pearl River Mouth Basin in the Eastern South China Sea with an average water depth of about 113 m. The well was tested at ~2,020 bbl/d of oil and 15.36 mmcf/d of natural gas. EUROPE ADX Energy (ADX AU)C: Operating update in Austria – 4Q20 production was 240 boe/d. Production was negatively impacted by an electrical interruption resulting from an flooding event in early October causing pump failures in 5 production wells. A well work-over program commenced in mid December 2020 which is expected to restore well production by the end of January 2021. ADX’s cash at YE20 was A$ 2.33 mm. Eco (Atlantic) Oil & Gas (ECO LN/EOG CN): Launching a renewable business in Europe – Eco has formed Eco Atlantic Renewables with Nepcoe Capital Partners to develop a business of potential high yield solar projects. Eco owns 70% of Eco Atlantic Renewables and the remaining 30% is owned by Nepcoe. Eco Atlantic is providing a shareholder loan of up to US$6 mm for its 70% stake in Eco Atlantic Renewables. Getech (GTC): Partnership in Hydrogen – Getech has entered partnerships with H2 Green and SGN together to advance a network of hydrogen hubs across the UK. An initial focus list of 30 potential green hydrogen hub locations has been agreed. Jersey Oil & Gas (JOG LN): Resources update in the UK – The estimate of the technically recoverable resources for the Buchan oil field has been increased by >50% to 126 mmbbl (mid case). This assumes 54% ultimate recovery factor. KNOC: Launching process to sell North Sea assets – Media reports indicated that KNOC has launched a process to divest its interests in UK, Dutch and Danish North Sea assets. Lundin Energy (LUNE SS): FY20 results – 4Q20 production was 185 mboe/d and FY21 production guidance has been set between 170 and 190 mboepd with development capex of US$850 mm. The company will also spend US$260 mm in exploration, US$20 mm in abandonment and US$70 mm on renewables in 2021. The gross plateau production of Phase 1 of the Johan Sverdrup development is 500 mbbl/d, which is expected to increase up to 535 mbbl/d by mid-2021. Edvard Grieg’s gross 2P reserves have increased by 50 mmboe to 350 mmboe. The well 7219/11-1, targeting the Bask prospect in licence PL533B, was dry. FY23 production guidance has been increased from 170-180 mboe/d to >200 mboe/d. Lundin expects to be carbon neutral by 2025 (2030 previously). Net debt at YE20 was US$3.9 bn. Reabold Resources (RBD LN): Raising new Equity for the UK – Reabold has raised £7.5 mm of new equity priced at £0.55 per share, representing a 2.8% premium to the previous day closing. The net proceeds will fund (among other things) additional appraisal and development activity at the West Newton project. MIDDLE EAST AND NORTH AFRICA Genel Energy (EGNL LN), Gulf Keystone Petroleum (GKP LN) and ShaMaran Petroleum (SNM CN): Payment from Kurdistan – Gulf Keystone, ShaMaran and Genel have received net payments of respectively US$14.1 mm, US$6.5 mm and US$11.9 mm from the Kurdistan Regional Government for crude oil sales during December 2020. The payment for Genel includes an amount for Sarta production for the first time. TransGlobe Energy (TGL LN/CN): FY21 budget – FY21 WI production is budgeted at 12-13 mboe/d (including 9.7 10.5 mbbl/d in Egypt with the balance in Canada) with capex of US$27.2 mm (US$16.6 mm in Egypt). Production at YE21 is estimated at 13.5-14 mboe/d (10.4-10.7 mbbl/d in Egypt). SUB-SAHARAN AFRICA FAR (FAR AU): Update in Senegal - FAR is now in default of the January payment to the SNE Joint Venture (Senegal) of US$18.9 mm. FAR does not have cash reserves to pay the January cash call or future cash calls to the Joint Venture. However, the effective date of the sale to Woodside is 01/01/2020. FAR has not received any binding acquisition offer from Remus. Global Petroleum (GBP LN): Resources update in Namibia – The PEL0094 licence, with 7 new leads, is now estimated to hold 2.9 bn bbl prospective resources. Savannah Energy (SAVE LN): Operating update in Nigeria – Savannah held cash balances of US$106.0 mm at YE20. FY20 production was 19.5 mboe. FY21 capital expenditure is budgeted at up to US$65.0 mm. Total capex to 2023 is now estimated at US$119 mm (down 13%). Tullow Oil (TLW LN): Operating update – FY21 production was 74,900 bbl/d with capex and decommissioning expenditure of ~US$290 mm and c.$50 mm respectively. YE20 net debt was ~US$2.4 bn. FY21 WI oil production guidance is forecasted to average 60-66 mbbl/d with capex of ~US$265 mm plus decommissioning expenditure of US$100 mm. FY21 WI production at TEN is forecasted at 16.2 mmbl/d (FY20: 23 mbbl/d). Victoria Oil & Gas (VOG LN): Update in Cameroon – 4Q20 gross gas sales in Cameroon was 5.1 mmcf/d. One of Victoria’s larger customers is commissioning additional power and thermal equipment which will increase consumption by approximately 0.56 mmcf/d once at full capacity. Around mid-2021, two other existing customers will be increasing consumption, adding another 0.95 mmcf/d of additional demand. Following the La-108 remediation work that was completed in November, the well was flowed at the 19 to 20 mmscf/d limit of the surface equipment during initial testing, EVENTS TO WATCH NEXT WEEK ________________________________________ 02/02/2021: BP (BP LN) – 4Q20 results 04/02/2021: Aker BP (AKERBP NO) – Capital Markets Day 04/02/2021: Royal Dutch Shell (RDSA/B LN) – 4Q20 results 04/02/2021: OMV (OMV AG) – 4Q20 results
Companies: ADX AKERBP DGOC GENL GTE JOG LUNE SAVE SDX SNM TGL EGY VOG
Panoro Energy (PEN NO)C; Target Price: NOK23.00: BW Energy (BWE NO) provides update in Gabon – BW indicated that 4Q20 gross production from the Tortue field was ~13,500 bbl/d, as an 11 day downtime took place in October for the annual maintenance program and to comply with Gabonese production allocations to meet OPEC quotas. A drilling contract for one development well (DTM-7H) and one exploration well has been recently awarded. There is also the option for another exploration well subject to the results of the drilling campaign. Pharos Energy (PHAR LN)C; Target Price: £0.40: Raising US$11.7 mm of new equity – Pharos has raised US$11.7 mm of new equity price at 19.25 p per share. The proceeds will be invested in Egypt to arrest production decline and boost production ahead of securing a farm in partner. IN OTHER NEWS ________________________________________ AMERICAS ExxonMobil (XOM US): Dry hole in Guyana – The Hassa wildcat on the Stabroek block was dry. Gran Tierra Energy (GTE LN/CN): Transaction to divest shares in PetroTal terminated – Gran Tierra, has terminated the purchase agreement with Remus Horizons regarding the proposed sale of 218,012,500 common shares in the capital of PetroTal. In a separate announcement Gran Tierra reported that 109 mm shares with private purchasers for US$14.8 mm Kosmos Energy (KOS US/LN): Discovery in the US Gulf of Mexico – The Winterfell well on the Green Canyon Block 944 encountered ~26 meters of net oil pay in two intervals in the sub-salt Upper Miocene. The well de-risks prospectivity in several neighbouring blocks held by Kosmos, with approximately 100 mmbbl of gross potential within Kosmos' acreage position. Pantheon Resources (PANR LN): Acquisition of acreage in Alaska - Pantheon Resources is acquiring 10.8% WI in each of the 16 leases in the 44,463 acre Talitha Unit from Otto Energy. The consideration consists of 14,272,592 shares of Pantheon. Upon completion of the acquisition, Pantheon will own a 100% WI in the Talitha Unit. Predator Oil & Gas (PRD LN): Operation update in Trinidad – The Pilot CO2 EOR results support pre-injection desktop production plateau forecasts of 243 -547 bbl/d from the Herrera #2 Sand. The CO2 sequestration potential is confirmed. At WTI oil price of US$50/bbl, projected EBITDA net-backs for the P50 and P10 pre-Pilot CO2 EOR production profiles at plateau production are estimated to be in the range US$15 – 25/bbl. Trinity Exploration & Production (TRIN LN): Operating update in Trinidad – 4Q20 production was 3,206 bbl/d. Trinity held net cash of US$17.5 mm at YE20. Westmount Energy (WTE LN): Acquiring further interest in Guyana explorer – Westmount has purchased 287,500 common shares in JHI for an aggregate cost of C$718,750. Westmount holds a total of 5,651,270 shares in JHI, representing ~7.7% of the issued common shares in JHI. Drilling operations at the first well in the Canje drilling campaign, Bulletwood-1, are ongoing, with completion of the well anticipated around mid to late February. Additional Canje drilling will follow-on in 1H21. EUROPE Aker BP (AKERBP NO): Trading update in Norway – Aker BP produced 223.1 mboe/d in 4Q20. FY20 capex was US$1.3 bn, exploration spend was US$246 mm and abandonment spend was US$178 mm. YE20 net debt was US$3.6 bn. Cairn Energy (CNE LN): Trading update – FY20 net production at Catcher and Kraken was just over 21,000 bbl/d, in line with guidance. FY20 cash capex was US$160 mm. FY21 net production is estimated to be 16,000 – 19,000 bbl/d with capex of US$85 mm (including US$10 mm at Kraken and Catcher). At YE20 Cairn held US$570 mm in cash with no drawn debt. In 2021, Cairn is planning to drill an exploration well on Block 10 in Mexico and there is an optional drilling opportunity for an appraisal well of the Saasken discovery (Cairn 15% WI). In the UK, Cairn will participate in the Shell-operated Jaws exploration well on P2380 (Cairn 50% WI). In Côte d’Ivoire, Cairn has assumed Operatorship (90% WI) in blocks CI-301 and CI-302 from Tullow which has exited both licences. The JV has exited blocks CI-518, CI-519, CI-521 and CI-522 effective end December 2020. ExxonMobil (XOM US): Progress at selling UK assets – Media reports indicated that ExxonMobil has entered exclusive discussions with HitecVision/NEO Energy with regards to the divestment of Central and Norther North Sea assets. Repsol (REP SM): Trading update – 4Q20 production was 628 mboe/d. Norway: Exploration licence award – Norway has awarded 61 licences to 30 companies. Equinor, Aker BP, Lundin Energy, DNO, Neptune Energy, Wintershall DEA, OKEA Energy, Var Energy and Spirit Energy were awarded interests in respectively 17, 10, 19, 10, 6, 16, 4, 10 and 3 licences. Serica Energy (SQZ LN): Operating update in the UK North Sea – Estimated FY20 net production from Serica's interests in Bruce, Keith, Rhum (BKR) and Erskine averaged 23,800 boe/d. With regards to the R3 operations, the removal of the 2005 completion is taking longer than anticipated due largely to the unexpectedly poor condition of the equipment being recovered from the well. As a result, R3 operations are now expected to continue into March 2021. Union Jack Oil (UJO LN): Further acquisition of interests in UK asset – Union Jack Union is acquiring a 15% interest in PEDL253, containing the Biscathorpe project from Humber Oil & Gas, increasing its interest to 45%. The consideration consists of £0.5 mm in cash plus a contingent payment of £0.5 mm. FORMER SOVIET UNION JKX Oil & Gas (JKX LN): Operating update in Ukraine and Russia – FY20 production was 10,238 boe/d including 5,389 boe/d in Russia and the balance in Ukraine. JKX held US$24.5 mm in cash at YE20. IG146 was completed to the Devonian in Ignativske (Ukraine) and encountered 2.6 m of net hydrocarbon bearing thickness. After initially testing of the IG146 well at an oil rate of 497 bbl/dd and a gas rate of ~200 boe/d in November the rate declined and the well is currently producing 35 boe/d. MIDDLE EAST AND NORTH AFRICA Apex International Energy: Discoveries in Egypt – The SEMZ-1X well discovered Bahariya oil with 17 feet of indicated pay and and tested at a rate of 100 bbl/d. The well will be fracced to maximize flow rate. The SEMZ-11X well encountered 65 feet of oil pay in the Cretaceous sandstones of the Bahariya and Abu Roash G formations. Testing of the Bahariya resulted in a peak rate of 2,100 bbl/d of oil and no water. DNO (DNO NO): Operating update – FY20 WI production was 95,100 boe/d including 17,300 boe/d in Norwar and the balance in Kurdistan. FY20 capex was US$515 mm increasing to US$700 mm in 2021. DNO held US$475 mm in cash at YE20. The KRG has put a plan in place to make payments towards DNO’s arrears (US$259 mm) such that if Brent prices exceed US$50/bbl in any month, the incremental revenue will be shared 50 50 between the KRG and the Tawke license partners. Energean (ENOG LN): Trading update – FY20 pro forma WI production was ~48.3 mboe/d with pro forma capital expenditure (including exploration expenditure) of US$558 mm. FY21 production is expected to be 35.0 40.0 mboe/d with capex of US$515 – 590 mm, Genel Energy (GENL LN): Operating update in Kurdistan – Gross operated production from the Tawke licence averaged 110,300 bbl/d in 2020, about evenly split between the Tawke and Peshkabir fields. FY20 production at Taq Taq was 9,670 bbl/d with a production rate of 8 mbbl/d at YE20. Sarta produced 520 bbl/d. The Sarta-3 well has produced at an average of ~5,500 bbl/d so far in 2021. Production from Sarta-2 is now expected in February. The 2021 appraisal drilling campaign is targeting a material portion of the 250 mmbbl of existing contingent resources, and prospective resources, in Jurassic formations. The Qara Dagh 2 well is expected to be spudded in 1Q21. FY21 WI Production is expected to be slightly above FY20 (31,980 bbl/d) with capex of US$150-200 mm. Genel held US$354 mm in cash (net cash of US$10 mm) at YE20. The KRG has submitted a reconciliation model for repayment of the receivable relating to the US$159 mm in unpaid invoices, whereby for each cent above a monthly dated Brent average of US$50/bbl, 0.5 cent per working interest barrel shall be paid towards monies owed. TransGlobe Energy (TGL LN): Operating update – Production averaged 12.4 mboe/d (including 11,178 boe/d in Egypt) in 4Q20 and 13.5 mboe/d during FY20. At YE20, TransGlobe held >US$30 mm in cash and had no net debt. SUB-SAHARAN AFRICA BW Energy (BWE NO): Equity raise – BWE has raised US$75 mm of new equity priced at NOK27 per share, representing a 9.5% discount to the previous day close. The net proceeds will be used for capital investments in the Dussafu licence in Gabon, development of the Maromba discovery in Brazil, new ventures and for other general corporate purposes. Total (FP FP) and Royal Dutch Shell (RDSA/B LN): Divestments in Nigeria – Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, have been sold to TNOG Oil and Gas for a consideration of US$533 mm net to Shell (30% WI) and US$180 mm net to Total (10%). EVENTS TO WATCH NEXT WEEK ________________________________________ 27/01/2021: Tullow Oil (TLW LN) – Trading update 28/01/2021: Lundin Energy (LUNE SS) – 4Q20 results
Companies: AKERBP CNE DNO ENOG XOM GENL GTE JKX KOS PEN TAL PHAR REP RDSA SQZ FP TGL
Valuation and forecast update
Genel Energy (GENL LN): Comprehensive trading update, active work programme slated for 2021 | PetroTal (PTAL LN): Successful agreement reached with Petroperu
Companies: Genel Energy PLC (GENL:LON)PetroTal Corp. (TAL:TSX)
Trading statement
Tawke update
November production payments received
Bahamas Petroleum Company (BPC LN)C; Target: £7.20: Initiating Coverage - Bahamas Petroleum (BPC) is a £100 mm market cap company with onshore assets in the mature oil provinces of Trinidad and Suriname and high impact exploration offshore The Bahamas and Uruguay. In Trinidad and Suriname, BPC has production assets, development projects to quicky grow production and several exploration opportunities that attracted little attention from previous operators. In The Bahamas, after 12 years of incubation, BPC will imminently spud one of the world’s highest impact exploration wells. With ~US$17.5 mm in cash plus a US$20 mm convertible, BPC’s shares trade below the value of the firm based on the Trinidad and Suriname assets alone. Drilling success in Trinidad and in Suriname would take our value for the firm based on these two countries’ assets alone to ~5.0-5.5p per share. A success at Perseverance in The Bahamas adds >17.00p per share (~6x the current share price) even assuming that BPC retains only 25% of the value of the discovery – retention of a higher stake increases this value pro rata. Our target price of 7.20p per share (~ReNAV) represents ~170% upside. Wentworth Resources (BPC LN)C; Target £0.40: Production returning to normality - With gross gas sales returning to 80-85 mmcf/d, operations are back to normal. The extension of the Kinyerezi-1 power station with 20 30 mmcf/d of additional gross demand by YE21 could boost sales, revenue and cash flow by 25% in 2022. We would expect this to translate into an increase in shareholder distributions. Wentworth’s Mnazi Bay field can already deliver 100 mmcf/d production without any additional capex. The shares continue to trade at EV/DACF multiples of 2.3x in 2020 and 1.0x in 2021. Our NAV based on the company’s 2P reserves stands at £0.27 per share. Growing sales to 110 mmcf/d would take our 2P NAV to £0.32 per share. The shares also offer investors an exposure to a name focused on natural gas, the cleanest fossil fuel (and the preferred transition fuel to renewable energy). ________________________________________ AMERICAS Alvopetro Energy (ALV CN): Production update in Brazil – November natural gas and condensates sales were respectively 11.0 mmcf/d and 86 bbl/d, for an overall average of 1,924 boe/d. ExxonMobil (XOM US): Discovery in Suriname – The Sloanea-1 exploration well (Block 52) encountered several hydrocarbon-bearing sandstone packages with good reservoir qualities in the Campanian section. Gran Tierra Energy (GTE CN/GTE LN): Update in Colombia – FY21 production is expected to stand between 28 30 mbbl/d with operating cash flow of US$150-170 mm and capex of US$130-150 mm (assuming Brent price of US$49/bbl). The company’s borrowing base under its credit facility has been redetermined to US$215 mm with US$200 mm readily available. The facility matures in November 2022. Gran Tierra expects the credit facility's balance to be ~US$185 million as of YE20. At YE21, the balance is expected to be further reduced to US$130 150 mm. Maha Energy (MAHA-A SS): Production update in Brazil – Production in November was 2,121 boe/d. Production was significantly reduced during the month due to several wells being serviced, operational delays at Tie-2 and testing operations at Tartaruga. President Energy (PPC LN): Production update in Argentina – Total current production is 4,000 boe/d including gas production of ~2,000 boe/d. United Oil & Gas (UOG LN): Updated resources estimates in Jamaica – The Walton Morant licence is estimated to hold 2.4 bn bbl gross prospective resources across 11 prospects and leads. The Colibri prospect is estimated to hold 406 mmbbl prospective resources. EUROPE Equinor (EQNR NO): Dry hole in Norway – The 7018/5-1 wildcat on the Spissa prospect on production licence 960 in the Barents Sea was dry. Independent Oil & Gas (IOG LN): Portfolio update in the UK North Sea – IOG has confirmed it will take the P2589 licence with the Panther and Grafton prospects. Licence P2587 will not be taken as the identified structures are too small and carry too much risk. The structure around the Harvey-2 well is estimated to hold 12-35 bcfe of recoverable gas, while the structure around the 48/23b-6 well location remains a small, isolated closure of sub economic size. IOG will only retain interests in the structure around Harvey-2 but relinquish the remainder of the licence. The north-west area of the previously mapped Redwell structure is unlikely to hold a gas accumulation and the associated licence is being relinquished. Reabold Resources (RBD LN): More oil encountered onshore UK - The West Newton B-1Z side-track encountered an estimated hydrocarbon column of 62 metres in the Kirkham Abbey Formation (primary formation), significantly exceeding previous observations. This suggests the overall hydrocarbon column in the accumulation is at least 118 metres. The results indicate an extensive accumulation with good reservoir continuity. The reservoir porosity is 14%. The secondary Cadeby objective was unsuccessful at this location. MIDDLE EAST AND NORTH AFRICA Energean Energy (ENOG LN): Potential acquisition in Israel – Energean is in discussion with Kerogen to acquire the 30% interest in the Karish and Tanin leases, offshore Israel it does not already own. Genel Energy (GENL LN): Resumption of overriding royalty in Kurdistan - The Kurdistan Regional Government has indicated it will resume override payments on Tawke gross production from January. Genel will receives 4.5% of monthly Tawke gross field revenues. Assuming the prevailing oil price, this translates into >US$5 mm of additional cash proceeds on a monthly basis. SUB-SAHARAN AFRICA Africa Energy (AFE CN, AEC SS), Africa Oil (AOI CN/SS): Well test results in South Africa - The Luiperd-1X well was flowed at 33 mmcf/d and 4,320 bbl/d of condensate on test. The choke configuration could not be increased due to surface equipment limitations. The absolute open flow potential of the well is expected to be significantly higher than the restricted test rates. Africa Energy holds ~5% indirect interest in the asset. Africa Oil holds an aggregate 31.2% indirect interest in Africa Energy. LEKOIL (LEK LN): Notice of default in Nigeria – Optimum is exercising default clauses with regards to OPL 310 given that payment of US$7.6 mm had not been received from LEKOIL. The default clause stipulates that Optimum and LEKOIL have to seek a buyer to whom LEKOIL’s 17.14% Participating Interest as well as all the financial obligations within OPL 310 will be transferred. Orca Energy (ORC.A/B CN): Share buyback programme – Orca will commence a share buy back programme of up to C$40 mm at a price range of between C$6.50 and C$7.50 per share.
Companies: WEN AOI ALV BPC GENL GTE MAHAA RBD
Override payments to resume
AMERICAS 88 Energy (88E LN/AU): Farm out in Alaska – 88 Energy is selling 50% WI in the Peregrine project to Alaska Peregrine Development Company (APDC). in return, APDC will contribute US$11.3 mm towards the cost of the Merlin-1 well (estimated gross cost US$12.6 mm). APDC is a special purpose investment vehicle organized for Project Peregrine. Its members are a consortium of private US entities. Bahamas Petroleum Company (BPC LN)C: PSC contract in Trinidad renewed and Resources update – The company has entered into a new PSC for the Goudron Block with Heritage. The contract is valid until 30 June 2030. 2P reserves on the company’s licences are estimated at 1.3 mmbbl. In addition, the company is estimated to have 7.5 mmbbl contingent resources in Trinidad and Suriname, excluding the Saffron discovery. The company’s base programme for 2021 will include (1) the drilling of the Saffron well with up to 7 production follow-on wells on success; (2) an EWT at Weg Naar Zee in Suriname in February 2021 followed by up to 6 development wells; and (3) up to 2 exploration wells on the South West Peninsula of Trinidad. The programme is expected to cost US$20 mm. An accelerated programme (US$35 mm capex) would include 8 further Saffron wells in Trinidad, 3 further Weg Naar Zee wells and one exploration well in the SWP. Echo Energy (ECHO LN): Update in Argentina – Production in Santa Cruz from 1 January to 17 November 2020 was 1,990 boe/d. Touchstone Exploration (TXP LN/CN): Drilling results in Trinidad – The Cascadura Deep-1 well encountered natural gas pay totalling ~1,315 net feet in four unique thrust sheets in the Herrera sands. This includes 308 net feet in two previously untested Herrera thrust sheets located below the sands observed in the Cascadura-1ST1 well. While the well was originally planned to be drilled to a total depth of 10,600 feet, the gas sands encountered in the deepest sheet proved difficult to manage, and the decision was made to cease drilling at a depth of 8,303 feet to preserve the substantial pay section encountered in the well. ASIA PACIFIC Jadestone Energy (JSE LN): Trading update – Group production from January to November was11,356 bbl/d. FY20 production guidance remains 11,000–12,500 bbl/d. At the end of November Jadestone held net cash of US$82.6 mm. The Maari acquisition is now expected to close in 1H21 rather than by YE20 as previously anticipated as a result of delays caused by COVID-19 and New Zealand’s recent general election. EUROPE Providence Resources (PVR LN) and Lansdowne Oil & Gas (LOGP LN): Farm out in Ireland – Providence and Lansdowne are farming out 50% WI in Baryroe to SpotOn. In return SpotOn will provide a non-recourse loan to Providence and Lansdowne for their share of the development cost. The funding will incur a blended average annual interest rate of less than 8% through the repayment period which will be repayable from SEL 1/11 production cashflow. SpotOn is entitled to 80% of the net production cashflow from SEL 1/11 until the debt is repaid. UK Oil & Gas (UKOG LN): Consent for UK project refused - Surrey County Council has refused planning consent for the company's 100% owned Loxley-1/1z Portland gas appraisal project. FORMER SOVIET UNION Block Energy (BLOE LN): Raising new equity – Block has raised ~£5.3 mm of new equity priced at £0.03 per share (almost a 30% discount to the previous day close). Caspian Sunrise (CASP LN): Update in Kazakhstan – The MJF field is currently producing at rates between 1,300 and 1,550 bbl/d. A consistent flow of oil has not been established at Deep Well A8 and the company had another stuck pipe at the Deep Well A5. The result of the acid treatments at Deep Well A6 have to date have been inconclusive. The domestic oil prices in Kazakhstan are only US$6/bbl. MIDDLE EAST AND NORTH AFRICA Genel Energy (GENL LN): Gulf Keystone Petroleum (GKP LN), ShaMaran Petroleum (SNM CN): Payment in Kurdistan – Genel, ShaMaran and Gulf Keystone have received respectively net payments of US$10.3 mm, US$7.5 mm and US$5.44 mm from the Kurdistan Regional Government for oil sales for the month of October 2020. TransGlobe Energy (TGL LN/CN): Restructuring of Egypt Licences - The West Gharib, West Bakr, and North West Gharib concessions will be merged into the Merged Concession with a new 15-year development term and a 5-year extension option. Cost recovery terms are being improved and the production sharing terms will be scaled to oil price. The increased cash flows is expected to fund new investments in incremental recovery projects. Near-term operational netbacks are estimated to increase by respectively US$5-7/bbl at US$40/bbl (Brent), US$7-9/bbl at US$50/bbl and US$9-11/bbl at US$60/bbl. The company has estimated that the new terms increase the company’s risked economic contingent resources (best case) by 59.1 mmbbl. In return TransGlobe will make an initial equalization payment of US$15 mm and a bonus payment of US$1 mm on ratification. There will be five further annual equalization payments of US$10 mm each being made over five years. United Oil & Gas (UOG LN): Operational update in Egypt – WI production from Abu Sennan is on target to exceed previous guidance of 2,300 boe/d for 2H20. SUB-SAHARAN AFRICA Eco (Atlantic) Oil & Gas: Licence update in Namibia- Four new Petroleum Exploration Licenses have been agreed on the company’s existing offshore blocks, leading to the expansion of its acreage position. The new licences cover approximately 28,593 km2, with over 2.362 Billion BOE of prospective P50 resources. FAR Limited (FAR AU): Woodside Petroleum pre-empts divestment in Senegal – Woodside is pre-empting the sale by FAR to ONGC of its interest in the Rufisque, Sangomar and Sangomar Deep assets.
Companies: CASP BPC SNM TXP UKOG 88E GENL JSE TGL
United Oil & Gas (UOG LN): Rig contract for the ASH-3 well signed, Abu Sennan Licence, Egypt | Genel Energy (GENL LN): First liftings at Sarta confirmed | Zephyr Energy (ZPHR LN): Approvals and permits in place ahead of State 16-2 well spud | Echo Energy (ECHO LN): VAT reclaims could lead to welcome liquidity boost
Companies: UOG GENL ZPHR ECHO
Lansdowne Oil & Gas*, Providence Resources (LOGP LN, PVR LN): Barryroe Farm-out confirmed | Caspian Sunrise (CASP LN): Operational challenges at Deep Well 5 affecting gross production | Enwell Energy (ENW LN): Mekhediviska-Golotvshinska licence extension confirmed | Genel Energy (GENL LN): Government payments for oil sales | Gulf Keystone Petroleum (GKP LN): KRG pays US$7.5m for October sales
Companies: LOGP CASP ENW GENL GKP
October production payments received
Research Tree provides access to ongoing research coverage, media content and regulatory news on Genel Energy PLC. We currently have 429 research reports from 9 professional analysts.
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
Shanta Gold (AIM: SHG), the East Africa-focused gold producer has, this morning, released its full year results for 2020. The company previously announced production and operational figures for 2020 alongside group-wide reserves and resources update. As such the figures reported today are in line with our forecasts down to EBITDA level, but generally better than expected elsewhere– see Fig 1. Overall it has clearly been a strong year financially with revenue, EBITDA and EPS up by 31%, 34% and 270% respectively from the previous year. The company has also kept to its promise of a maiden dividend with 0.10p per share payable in April as part of a semi-annual programme.
Companies: Shanta Gold Limited
tinyBuild— a leading video games publisher and developer with global operations. tinyBuild's strategic focus is in creating longlasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC. Due mid-March. 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). Has raised £13M in an oversubscribed placing. £25m mkt cap. Due 26 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. 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 £5m. The Placing will be priced on a pre-money valuation for the Company of £7m. Targeting March Admission. Virgin Wines UK Plc has 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. Anticipated mkt cap £110m. Raising £13m in new money and vendor sale of £34.9m . Due 2nd March. 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: YEW IKA UPR WYN ENW BWNG TRAK DBOX HZM G4M
Lancaster activity update
Companies: Hurricane Energy Plc
Anglo Asian Mining* (AAZ LN) BUY – H2/20 exploration work returns exciting results at Gedabek CA Bushveld Minerals* (BMN LN) - Strong Buy 31p – Vanadium prices rise as new demand meets tight supply Gemfields (GEM LN) – Resumption of operations at Kagem and Montepuez after a year of disrupted production and sales GoldStone Resources* (GRL LN) – Exercise of warrants raises £1.2m Power Metal Resources* (POW LN) – Portfolio update Strategic Minerals* (SML LN) – Continued access to Cobre confirmed while current copper prices boost Leigh Creek economic returns
Companies: GML AAZ BMN GRL POW SML
Pantheon Resources has this morning announced that the better than expected well-logs from the Kuparuk formation warranted a change in plan for the testing of that formation, namely, from an open hole test to a more rigorous cased hole test (with a 4 ½ inch liner). However, due to equipment failures and technical issues, the formation started to become damaged in its current location and as such it was not possible to set the casing string (4 ½ inch liner). Accordingly, the company has made the decision to drill a new modestly angled sidetrack in the Kuparuk formation. It is estimated that the sidetrack will take 2-3 days to drill, some 650 feet through the Kuparuk formation, which should then allow a better testing operation. As a result of the cold weather in Alaska, the drilling season may be extended into early April.
Companies: Pantheon Resources 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 £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
tinyBuild— a leading video games publisher and developer with global operations. tinyBuild's strategic focus is in creating longlasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC. Due mid-March. 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. 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 £5m. The Placing will be priced on a pre-money valuation for the Company of £7m. Targeting March Admission. Virgin Wines UK Plc has 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. Anticipated mkt cap £110m. Raising £13m in new money and vendor sale of £34.9m . Due 2nd March. 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: ARS ESC AQX ARTL KRS KBT GRP BOOM CNS ANIC
UK railway privatisation, which was launched in the mid-1990s, has finally turned full circle: the Department of Transport has recently confirmed that its controversial railway franchise system will be scrapped. In this month's feature article, Nigel Hawkins, the Infrastructure analyst at Hardman & Co, examines the 25-year history of railway privatisation and chronicles its ups and its downs. The successes of railway privatisation, such as new rolling stock, are addressed, along with the many shortcomings, which included minimal vertical integration. With the winding up of the franchise system, the UK railway sector is effectively reverting to its former status as a nationalised industry, a shift started with the renationalisation of the collapsed Railtrack – later re-badged as Network Rail – in 2001.
Companies: ARBB BBGI CLIG DNL FLTA ICGT OCI PCA PIN PXC RECI SCE TRX SHED VTA YEW
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
Today's news & views, plus announcements from MRW, BNZL, HICL, AGK, SEPL, SEIT, SDY, BGO, SHED
Companies: BGO SEIT SEPL
Anglo Asian Mining* (AAZ LN) – Termination of the proposed JV with Conroy Asiamet Resources (ARS LN) – £10m fundraising Beowulf Mining* (BEM LN) – 2020 results highlight progress in Kosovo and Sweden Cornish Metals* (CUSN LN) – Warrants exercised Phoenix Copper* (PXC LN) – Exercise of warrants follows recent economic update for Empire development project Scotgold Resources* (SGZ LN) – Production update and management/Board changes.
Companies: ARS CUSN AAZ BEM PXC SGZ
Today's news & views, plus announcements from RIO, TW, CRDA, TPK, PHP, MGGT, SHI, WHR
Companies: PHP RIO SHI TPK
Adriatic Metals* (ADT1) – Acquisition of RAS Metals Arc Minerals* (ARCM LN) – Change of accounting reference date and issue of 1.2m new shares to service provider Caledonia Mining* (CMCL LN) – Non-executive appointment Phoenix Copper* (PXC LN) – £2m debt facility to accelerate the Empire project Strategic Minerals* (SML LN) – Exploring potential to the west at Redmoor Power Metal Resources* (POW LN) – Drilling update Rainbow Rare Earths* (RBW LN) – 10,000tpa Gakara down-stream process plant feasibility confirmed Sunrise Resources (SRES LN) – Progress report on projects
Companies: CMCL ADT ARCM PXC POW RBW SML SRES
We are replacing our preliminary valuation of i3 Energy, which had been premised on the valuations of GLJ and Sproule, with our own valuation model and our own commodity price assumptions. The resource estimates assumed in our valuation remain aligned with those of i3 Energy's resource evaluators, namely, GLJ, Sproule and AGR Tracs. Our fair value amounts to 15.0p/share, which compares to our prior and preliminary valuation of 17.7p/share. Our valuation is premised on the proven and probable reserves of the company's Canadian assets; therefore, we believe that the company's current share price provides an opportunity to acquire a compelling investment at a steeply discounted entry price.
