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.
Companies: i3 Energy Plc
GeoPark (GPRK US)C; Target price of US$20.00: Re-instating dividend and up to 10% Buy back - FY21 production guidance has been set at 40-42 mboe/d excluding any contribution from exploration/appraisal with US$100-120 mm capex at US$40-45/bbl. This includes US$95-115 mm in Colombia (US$30-35 mm for exploration/appraisal) and US$4-5 mm in Ecuador. FY21 operating net back is guided at US$210-280 mm. 3-4 exploration wells will be drilled at CPO-5, some of which will test the continuity of the Guadalupe play encountered on Llanos-34 into CPO-5. The initial results of the Indico-2 well already look promising with more details expected imminently.1-2 exploration wells could be drilled in Ecuador in 2H21/early 2022. The company is re-instating its quarterly dividend set at US$0.0206 per share representing ~1.1% annual yield. An exceptional dividend of the same amount will be paid in 4Q20. GeoPark is also launching a share buyback programme for up to 10% of the issued shares. With shareholder distributions now re-instated, the very attractive investment profile of GeoPark (with production growth, material exploration upside, balance sheet strength and shareholder distribution) has been completely restored to what it was pre COVID-19 while oil prices continue to oscillate around US$40/bbl. This showcases the resilience of GeoPark’s assets and business model. The shares trade at ~60% discount to our Core NAV and ~40% discount to our 2P NAV of ~US$11 per share. Our unrisked NAV for the 2021 drilling programme is ~US$9.00 per share, which represents over 100% of the current share price. Most importantly, and contrary to most peers, the programme is diversified across multiple wells and relatively low risk.
Tethys Oil (TETY SS)C; Target price of SEK75.00: Adding near term exploration – The 3Q20 financials were inconsequential with negative working capital movements to be recovered in 4Q20. The company held US$48 mm in cash at the end of the period; which is in line with our expectations. The 4Q20 capex at Block 3 & 4 is likely to be similar to 3Q20 capex (U$6.5 mm), which is lower than what we were anticipating (US$10 mm). The main near term focus continues to be the upcoming drilling of the Thameen prospect on Block 49. Our unrisked NAV for the Thameen prospect, assuming 15 mmbbl resources, is SEK17 per share (~50% of the current share price). The Anan-1 well on blocks 3 & 4), to be drilled in 4Q20, is a near field exploration well for which we are not carrying any value yet. It is relatively low risk but could have a small positive impact on the company reserves. The current share price represents EV/DACF multiples of only 1.8x for 2020 and 1.7x for 2021 and the core dividend implies>5% yield. Our target price of SEK75 per share has been set close to our ReNAV.
IN OTHER NEWS
Frontera Energy (FEC CN): 3Q20 results – 3Q20 production in Colombia was 43,202 boe/d. The company held US$421 mm in cash (including US$162 mm in restricted cash) with debt of US$557 mm at the end of September. Working capital at the end of September was negative (-US$79 mm).
i3 Energy (I3E LN): Production update in Canada – Group production from the Gain and Toscana’s assets during October averaged 9,407 boe/d (61% gas, 39% liquids). A first dividend is expected to be declared and paid in 1Q21 with up to 30% of cashflow being distributed. The company anticipates that the dividend yield will be >10% on an annual basis.
Maha Energy (MAHA-A SS): Production update in Brazil and resources update in Oman – Production in October was 2,971 boe/d. The award of Block 70 in Oman to Maha has now been approved by the authorities. The Block is estimated to hold 1 mmbbl of 2P reserves and 22 mmbbl of 2C contingent resources of heavy oil.
Parex Resources (PXT CN): 3Q20 results – 3Q20 production in Colombia was 44,305 boe/d. 4Q20 production is expected to be 45,500-47,500 boe/d with US$35-45 mm capex. At Aguas Blancas, the rates of the AB-11 and AB-24 exploration wells did not meet minimum thresholds to warrant the development of the Southern Aguas Blancas area at current oil pricing. In 2021, Parex expects to produce 47,000-49,000 boe/d with US$165-$185 mm capex. The 2021 share buyback programme is budgeted at $155 million at US$45/bbl with YE21 working capital forecasted at US$335 mm (YE20e: US$330 mm).
Touchstone Exploration (TXL LN/CN): Raising new equity – Touchstone is raising US$30 mm of new equity priced at £0.95 per share. The proceeds will be used for the Cascadura surface facility development, the testing of Chinook-1 and the drilling of the Chonook-1 and the Royston exploration wells.
Independent Oil & Gas (IOG LN): Update in the UK North Sea – Phase 1 of the SNS core project is on schedule for first gas in 3Q21 with drilling due to start in 1Q21.
MIDDLE EAST AND NORTH AFRICA
ShaMaran Petroleum (SNM CN): 3Q20 results – 3Q20 gross production at Atrush was 46.1 mbbl/d. FY20 gross production guidance remains 44-50 mbbl/d At the end of September, the company held US$29.9 mm in working capital.
Africa Oil (AOI SS/CN) & Impact Oil & Gas: Transactions in South Africa – Impact Africa is farming-out of a 50% WI and in the Transkei & Algoa exploration right, offshore South Africa to Shell. Shell has also been granted the option to acquire an additional 5% working interest should the joint venture elect to move into the Third Renewal Period, which is expected to be approximately 2024. Impact is acquiring 90% WI of Area 2 from Silver Wave Energy. Being immediately east and adjacent to Impact’s Transkei & Algoa Blocks, Area 2 compliments Impact’s existing position by extending the entire length of the ultra-deep-water part of the Transkei margin. Together, the Transkei & Algoa Blocks and Area 2 cover over 124,000 km2, with plays extending across both blocks. Africa Oil holds 31.10% of Impact.
Attis Oil & Gas (AOGL LN): Becoming a Helium business – Attis is merging with Helium One. Attis shareholder will be issued 1 Helium One share for every 236 Attis shares. The merger values Attis at £1.76 mm, and Helium at £6.0 mm. Helium One has Helium exploration assets in Tanzania. Helium One will be admitted to AIM in December subject to minimum fundraise of £5 mm.
BWE Energy (BWE NO): Update in Gabon – 3Q20 production at Dussafu was 15,449 bbl/d. Production cost (excluding royalties) was US$19.6/bbl. This includes approximately US$2 mm of additional costs related to the COVID-19 pandemic in the quarter. BWE has also acquired two jack-up drilling rigs for US$14.5 mm for the development of Hibiscus. A jack-up conversion is expected to reduce gross capital investments by ~US$100 mm compared to previous development plan.
Vaalco Energy (EGY US/LN): 3Q20 results – 3Q20 production in Gabon was 5,064 bbl/d. Vaalco held US$42 mm in cash (and no debt) at the end of September. 4Q20 WI production is expected to be between 5,300 bbl/d and 5,750 bbl/d.
EVENTS TO WATCH NEXT WEEK
09/11/2020: Kosmos Energy (KOS US/LN) – 3Q20 results
Companies: EGY AOI FEC GPRK I3E 7M7 0GEA MAHAA PXT 0VH4 SNM 3B8 SNM SHASF TETY TETY TXP
i3 Energy announced that, pursuant to the acquisition of Toscana Energy and as guided, its shares have commenced trading on the Toronto Stock Exchange (TSX) under the symbol ITE. The Company's shares are now tradeable on AIM and TSX.
San Leon Energy (SLE LN): Three-week extension to Decklar financing | I3 Energy (I3E LN): Comprehensive operations update post Toscana acquisition | Serinus Energy (SENX LN): Covenant waiver received
Companies: SLE I3E SENUSD
I3 Energy (I3E LN): Canadian court approves Toscana acquisition | Chariot Oil & Gas (CHAR LN): EOI’s received to develop Lixus, Morocco | Empyrean Energy (EME LN): Withdrawal from Borba drilling program, California | Impact Oil & Gas (Private) – Further South African exploration interests granted
Companies: I3E CHAR EME
i3 Energy has announced that it has published an Admission Document in respect of the proposed acquisition of Toscana Energy Income Corporation.
As previously announced, the Toscana acquisition is to be consummated via a plan of arrangement. Due to its size and nature when it was announced on 23 June 2020, the Toscana Acquisition constitutes a reverse takeover of the company pursuant to the AIM Rules. As a result, the Toscana Acquisition requires approval by i3 Shareholders by way of an ordinary resolution at a general meeting of the Company to be held on 29 October (amongst other conditions).
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
i3 Energy provided its interim results for the period ended 30 June 2020 (published yesterday after the market close, with a correction to the interims published today at 10:04AM). The financial statements of i3 Energy do not reflect the reverse takeover completed by the company (post-period end) pursuant to its £29M equity raise and its acquisition of assets in western Canada, “the Gain Assets”; however, i3 Energy did provide the financial results of the Gain Assets for the period. These show revenues net of royalties of £16.0M operating costs of £13.0M and cash flow from operations before changes in working capital of £3.0M. For perspective, the average price of benchmark American oil (WTI) was $36.58/bbl and the average price of benchmark American natural gas (NYMEX, Henry Hub) was $1.80/mmbtu during the period. We retain our 17.7p preliminary fair value estimate on i3 Energy, which is premised on the 2P resource evaluations of GLJ and Sproule. We believe commodity prices will recover from the sell-off of recent days and believe the timing is opportune for acquirers of i3 Energy.
I3 Energy (I3E LN): i3 completes Gain Energy asset acquisition | Serica Energy (SQZ LN): Four new blocks awarded in the 32nd UKCS Licensing Round
Companies: i3 Energy Plc (I3E:LON)Serica Energy PLC (SQZ:LON)
i3 Energy has this morning announced the completion of the acquisition of Gain Energy Ltd for CAD$80M ($US 58.8M) and the sale of certain of the Gain Energy Ltd assets in Saskatchewan for CAD$45M ($US 33M). The transactions and their timing are consistent with the guidance previously provided by the company.
i3 Energy has successfully entered the Western Canadian Sedimentary Basin having secured the acquisition of Gain Energy and Toscana Energy. The company has been transformed into a prolific oil & gas producer – June 2020 production levels were circa 9,500 boe/d. All-in, the assets have been ascribed 2P reserves of 58.5 mm boe. Based largely on the analysis of i3 Energy's competent persons, GLJ and Sproule, we are putting forward a preliminary fair value estimate of 17.7p for the company's Canadian assets.
Deltic Energy (DELT LN): Material uplift in gas volumes – Selene prospect | I3 Energy (I3E LN): i3 successfully raises £30m to fund Gain Energy asset acquisition | Westmount Energy (WTE LN): Rig arrives offshore Guyana ahead of Exxon-operated exploration well
Companies: DELT I3E WTE
GeoPark (GRPK US)C; Target price US$20: Cash tax reduction and high impact drilling– The only item of interest in the 2Q20 financials was the fact that GeoPark did not pay any cash tax in 2Q20 (we were carrying a payment of US$40 mm). This explains why the cash balance at the end of June was so much higher than we expected at the time of the 2Q20 operating update in July). This also reflects important positive changes in Colombia. First, US$20-25 mm cash taxes in 2020 have been deferred to 2021 leaving only US$15-20 mm due in 2H20. In addition, Colombia is accelerating the reimbursement of income tax credits. GeoPark has already collected US$15 mm in July that will offset the remaining 2H20 cash tax. Overall in 2020, the company could potentially obtain a total refund of US$25 mm of income tax (out of which US$15 mm is firm and collected in July) plus US$15-20 mm of VAT. The key wells to focus on in 2H20 will be the 1-2 wells to be drilled at CPO-5 (GeoPark WI: 30%). While these wells are expected to increase production, they will also allow the company to start derisking the exploration upside associated with the block. The first well will be a development/appraisal well in Indico where the oil water contact has not been encountered yet. The second well is an exploration well at Aguila targeting the same play concept. The share price continues to trade at ~45% discount to our Core NAV of ~US$19 per share. Overall there could be 350-700 mmboe gross prospective resources across its Llanos blocks (including CPO-5). Our target price of US$20 per share reflects our ReNAV and attributes only ~US$1 per share to exploration. It represents over 100% upside to the current levels.
IN OTHER NEWS
Frontera Energy (FEC CN): 2Q20 results | Gran Tierra (GTE LN/US/CN): 2Q20 results | i3 Energy (I3E LN): Acquisition of Canadian assets and £30 mm funding | Maha Energy (MAHA-A SS): Production update in Brazil | Parex Resources (PXT CN): 2Q20 results
Pharos Energy (PHAR LN): Licence extension in Vietnam and RBL confirmation
bp (BP LN): 2Q20 results and change of strategy | Hurricane Energy (HUR LN): Technical update in the UK | Neptune Energy: Discovery in Norway | Spirit Energy: Dry hole in Norway
MIDDLE EAST AND NORTH AFRICA
Genel Energy (GENL LN): 1H20 results
Kosmos Energy (KOS US/LN): 2Q20 results | San Leon Energy (SLE LN): Acquires 10% Interest In new Nigerian oil export system | Vaalco Energy (EGY LN/US): 2Q20 results
EVENTS TO WATCH NEXT WEEK
10/08/2020: Diversified Gas & Oil (DGOC LN) – 2Q20 results
11/08/2020: JKX Oil & Gas (JKX LN) – 2Q20 results
13/08/2020: Africa oil (AOI CN/SS) – 2Q20 results
Companies: BP/ FEC GENL 0MDP I3E PXT PHAR HUR KOS 0GEA EGY
PetroTal (PTAL LN/TAL CN)C; Target price £0.45: 1Q20 results/Bretaña expected to restart in July – 1Q20 financials are in line with expectations and 1Q20 production had been reported previously. At the end of 1Q20, current trade and other payables had been reduced to ~US$45 mm compared to ~US$55 mm at YE19. Most importantly. PetroTal continues to expect the Bretaña field to be re-opened this month. The contingent liability with Petroperu is estimated at US$25 mm at the current oil price and the company has entered into a financial swap for 0.46 mmbbl of oil with an ICE Brent reference price of US $40.58/bbl to cover the upcoming sale by Petroperu at the Bayovar port. This is a recovery story that we continue to like. It offers a combination of value, production and cash flow growth and reserves upside. We anticipate that the imminent reopening of the field with be an important catalyst to the share price.
i3 Energy (I3E LN): Reveals takeover target in Canada | Maha Energy (MAHA-A SS): Production update | Aker BB (AKERBP NO): 2Q20 update in Norway | Energy (RRE LN): Recommended offer by Viaro Energy | Spirit Energy: Dry hole in Norway | Enwell Energy (ENW LN): Ukraine update | JKX Oil & Gas (JKX LN): 2Q20 update in Ukraine and Russia | Pharos Energy (PHAR LN): Operating update in Egypt and Vietnam | Sound Energy (SOU LN)C: Terms of Moroccan licence renegotiated | Tethys Oil (TETY SS): June production in Oman | Victoria Oil & Gas (VOG LN): Gas sales contract with ENEO in Cameroon terminated
EVENTS TO WATCH NEXT WEEK
14/07/2020: Aker BP (AKERBP NO) – 2Q20 results
15/07/2020: Premier Oil (PMO LN) – 1H20 update
13-17/07/2020: GeoPark (GPRK US) – 2Q20 update
Companies: I3E 0GEA JKX PHAR DNQ ARC ENI HUR PTAL REP RRE SOU TPL VOG OMV
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Today's news & views, plus announcements from AZN, LLOY, WEIR, TATE, GFTU, INCE, DELT, SOLG, HYVE
Companies: LLOY SOLG INCE
GeoPark (GPRK US)C; Target price of US$20.00: Divesting non-core asset in Brazil - GeoPark is selling its 10% non-operated working interest in the Manati gas field in Brazil to Gas Bridge for US$27 mm. We do not see much upside to the Brazilian asset (in terms of growing reserves or through exploration opportunities) and this divestment may allow GeoPark to reallocate resources to its core operations. We would rather see management remaining focused on deploying capital on higher return assets such as Colombia and Ecuador. Even after this week’s share price appreciation, our Core NAV continues to be 60% above the current share price. Our unrisked NAV for the 2021 drilling programme is ~US$9.00 per share, which represents ~90% of the current share price.
Panoro Energy (PEN NO)c; Target price of NOK23.00: 2021 will be a transformational year - 2020 has been a difficult year for the oil and gas industry and 2021 is a turning point for Panoro. In Gabon, development activities at Ruche are expected to return to normal with gross production set to grow to 20 mbbl/d. The company will also appraise Hibiscus to test the 155 mmbbl upside case (=2x existing 2P reserves). The development of Hibiscus is expected to be sanctioned. Importantly, while the existing FPSO has a nominal oil processing capacity of 45-45 mbbl/d, processing expansion is possible which allows for a potential oil production plateau of 70 mbbl/d. We estimate the value of Panoro’s reserves in Dussafu at NOK10.40 per share. Derisking the contingent resources in Gabon could add ~NOK3 per share. We estimate that the upside at Hibiscus has a further unrisked NAV of ~NOK10 per share for a total unrisked NAV of NOK23 per share for the discovered and “to be appraised” volumes in Gabon. Overall, including Nigeria, South Africa and Tunisia, we estimate the unrisked value of the 2021 activities at NOK30 per share; which represents 2.3x the share price. Our target price of NOK23 per share has been set close to our ReNAV.
Pharos Energy (PHAR LN)c; Target price of £0.35: Low cost. Quickly scalable. High impact, quality exploration – Pharos is a £ mm market cap, ~12 mboe/d oil producer that acquired the Egyptian assets of Merlon in 2019. Under the stewardship of a blue-chip management team that turned Cairn Energy from a micro-cap into a successful E&P that returned US$4.5 bn to shareholders, Pharos has undergone a multi-faceted transformation, enhancing governance and rebalancing its asset portfolio. Given the recent macro challenges, this process appears to have gone unnoticed by many investors. Pharos now holds ~50 mmboe 2P reserves in Egypt and Vietnam. Vietnam provides stable cash flows even at low oil prices. Egypt production can be increased rapidly (up to x2.5 to 13 mbbl/d) with additional investment. Pharos also holds world class exploration assets in Israel, Egypt and Vietnam. With a healthy balance sheet (cash: ~US$38 mm, net debt:~US$36 mm), Pharos’ shares trade at EV/DACF multiples of 5,000 bbl/d, increasing production from the Shaikan field by~15%. FY20 gross production is expected to be at the upper end of the 35,000 – 36,000 bbl/d production guidance, with the field currently producing at ~39,000 bbl/d.
LEKOIL (LEK LN): Requisition from large shareholder to change the board of the company - LEKOIL has received a letter from Metallon, holding 15.4% of the company, requisitioning an extraordinary general meeting to vote on the replacement of the Chairman and the appointment of Michael Ajukwu, Thomas Richardson and George Maxwell as directors of the company.
Orca Exploration (ORC.A/B CN): 3Q20 results - 3Q20 WI production in Tanzania was 60.9 mmcf/d. At the end of September, Orca held US$79.2 mmm in working capital including US$98.5 mm in cash and long-term debt
of US$54.2 mm.
Tullow Oil (TLW LN): Capital Market Day – 2020 production to date averages 75 mbbl/d with FY20 production guidance of 73-77 mbbl/d. Assuming an oil price of US$45/bbl in 2021 and US$55/bbl flat nominal from 2022 onwards, Tullow expects to generate US$7 bn of operating cashflow over the next 10 years with capex of US$2.7 bn. The first phase of investment will start in 2Q21 with the commencement of a multi-well drilling programme in Ghana. In Suriname, the prospective Goliathberg-Voltzberg North-1 well will spud in 1Q21.
Victoria Oil & Gas (VOG LN): Positive licence update in Cameroon – The duration of the onshore Matanda licence has been extended by one year to December 2021. The gross unrisked prospective resources are now estimated at 1,196 bcf, up from 903 bcf previously. 19 gas prospects haven identified in shallower Tertiary-aged reservoirs, plus 7 prospects in deeper, Cretaceous-aged prospects. The Company believes the largest of these prospects has mean unrisked Prospective Resources of >65 bcf, with geological Chance of Success estimated at >40%.
Companies: VOG BPC ENQ GPRK JOG JYOGF TPC1 7M7 0GEA MAHAA PEN PHAR RBD REP SENX TLW
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
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
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
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
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)
Acquisition of CIECO P2170 interest
Companies: JOG JYOGF TPC1
Central Asia Metals (CAML LN) following a successful ramp up at Sasa, progress in the environmental clean up and confirmation of the remedial costs in line with the previously guided US$1.5m the company has declared an interim dividend of 6p/sh. This will be paid on 11 December 2020 with a record date of 20 November 2020.
Companies: Central Asia Metals Plc
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
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
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)
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
Today's news & views, plus announcements from AV, BVIC, PZC, RQIH, PMI, MUL, AEXG, INCE
Companies: AEX RQIH INCE