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
RockRose Energy (RRE LN): All cash offer to purchase RockRose for 1,850p/share | I3 Energy Energy (I3E LN): Binding purchase and sale agreement for Gain Energy confirmed
Companies: Rockrose Energy (RRE:LON)i3 Energy Plc (I3E:LON)
In this note, we analyze the indebtedness of 35 international E&Ps publicly listed in the UK, Canada, Norway, Sweden and the USA. For each company, we look at (1) cash position, (2) level and nature of debt (including covenants), (3) debt service and principal repayment framework and (4) Brent price required from April to YE20 to meet all the obligations and keep cash positions intact. We also estimate YE20 cash if Brent were to average US$20/bbl from April to YE20. While the oil demand and oil price collapse are of unprecedented historical proportions and the opportunities to cut costs much more limited than in 2014, most companies (with a few exceptions) entered the crisis in much better position than six years ago, with stronger balance sheets and often already extended debt maturities. In addition, this time around, many E&Ps have already been deleveraging for 1-2 years and are not caught in the middle of large developments that cannot be halted. The previous crisis also showed that debt providers could relax debt covenants for a certain period as long as interest and principal repayment obligations were met. This implies that as long as operations are not interrupted and counterparties keep paying their bills (Kurdistan), the storm can be weathered by most for a few quarters.
With (1) Brent price of about US$50/bbl in 1Q20, (2) reduced capex programmes, (3) material hedging programmes covering a large proportion of FY20 production at higher prices and (4) limited principal repayments in 2020, we find that most companies can meet all their costs and obligations in 2020 at Brent prices below US$40/bbl and often below US$35/bbl) from April until YE20 and keep their cash intact, allowing them to remain solvent at much lower prices for some time. In particular, Maha Energy and SDX Energy are cash neutral at about US$20/bbl. When factoring the divestment of Uganda, Tullow needs only US$9/bbl to maintain its YE20 cash equal to YE19. Canacol Energy, Diversified Gas and Oil, Independent Oil & Gas, Orca Exploration, Serica Energy and Wentworth Resources are gas stories not really exposed to oil prices and Africa Oil has hedged 95% of its FY20 production at over US$65/bbl.
Companies: ARC AOI CNEC CNE DGOC EGY ENOG ENQ GENL GKP 0MDP GTE HUR IOG JSE KOS LYV 0GEA 3SX ORC/B PENUSD PHAR PMO PTAL PXT RRE SDX SEPL TETY TGL TLW TXP WRL
Panoro Energy (PEN NO)C: Initiating coverage | 88 Energy (88E LN/AU): Acquisition in Alaska | BP (BP LN): Transaction in Alaska with Hilcorp renegotiated | Columbus Energy Resources (CERP LN): Oil discovery in Trinidad | Premier Oil (PMO LN) and Rockhopper Exploration (RKH LN): Sea Lion farm out (Falklands) exclusivity period extended | BP (BP LN): 1Q20 results | Equinor (EQNR NO): Dry hole in Norway | Getech (GTC LN): Business update | Hurricane Energy (HUR LN): Business update in the UK North Sea |IGas Energy (IGAS LN): Shutting some production in the UK | Lundin Energy (LUP SS): 1Q20 results | OKEA (OKEA NO): 1Q20 update in Norway | OMV (OMV AG): 1Q results | Premier Oil (PMO LN): Court approves schemes of arrangement | Royal Dutch Shell (RDSA/B LN): 1Q20 results and dividend reduction | RockRose Energy (RRE LN): Operational update in the UK | UK Oil & Gas (UKOG LN): £1.275 mm equity raise | Caspian Sunrise (CASP LN): Operating update in Kazakhstan | Exillon Energy (EXI LN): February and March production in Russia | Nostrum Oil & Gas (NOG LN): 1Q20 update in Kazakhstan | PetroNeft (PTR LN): Operations update | Genel Energy (GENL LN): Update in Kurdistan – While negotiations are ongoing the KRG will not exercise the notice of an intention to terminate the Bina Bawi PSC | ShaMaran Petroleum (SNM CN): Business update in Kurdistan | Tethys Oil (TETY SS): Production reduction in Oman | Total (FP FP): Dry hole in Lebanon | Aminex (AEX LN) and Solo Oil (SOLO LN): Licence extension in Tanzania | Far Limited (FAR AU): Update in Senegal | Lekoil (LEK LN): Final payment with Nigerian partner rescheduled | Orca Exploration (ORC.A/B CN): FY19 results | Savannah Energy (SAVE LN): Financial and operating update in Nigeria | San Leon Energy (SLE LN): Special dividend | Seplat Petroleum (SEPL LN): 1Q20 results
Companies: 88E AEX PENUSD BP/ CASP CERP DNQ EXI FAR TTA HUR GENL GTC IGAS LEK LYV NOG 3SX OMV ORC/B PMO PTR RKH RDSA RRE SAVE SLE SEPL 0VH4 TETY SCIR UKOG
Royal Dutch Shell (RDSB LN): Dividend cut for the first time since the Second World War | Rockhopper Exploration (RKH LN): Navitas remains committed to farm-in, terms extended | RockRose Energy (RRE LN): Trading update, production remains strong, well hedged this year | Ascent Resources* (AST LN): Further expansion into Cuba
Companies: RDSB RKH RRE
RockRose Energy (RRE LN): FY19 results underline year of significant growth | Columbus Energy Resources (CERP LN): Goudron IPSC extended to June 2020
Companies: Rockrose Energy (RRE:LON)Columbus Energy Resources (CERP:LON)
88 Energy (88 LN/AU)/Premier Oil (PMO LN): Drilling update in Alaska | Eco (Atlantic) Oil & Gas (ECO LN/EOG CN): Update in Guyana | Maha Energy (MAHA-A SS): Acquisition in USA and production update | Parex Resources (PXT CN): Low capex programme and production update in Colombia | Total (FP FP): Significant discovery in Suriname | Aker BP (AKERBP NO): Small discovery on Norway | BP (BP LN): 1Q20 update and capex reduction | Providence Resources (PVR LN): US$3 mm equity raise | RockRose Energy (RRE LN): FY19 results, guidance revision | Royal Dutch Shell (RDSA/B LN): 1Q20 update | Valeura Energy (VLE CN/VLU LN) : Update in Turkey | Caspian Sunrise (CASP LN): Production update in Kazakhstan | JKX Oil & Gas (JKX LN): FY19 results | Nostrum Oil & Gas (NOG LN): Corporate update in Kazakhstan | Energean Oil & Gas (ENEOG LN): Progress at Edison E&P acquisition | Payment from Kurdistan received | TransGlobe Energy (TGL LN/CN): Operating update in Egypt | United Oil & Gas (UOG LN): Update in Egypt | Aker Energy: Postponing development in Ghana | Canadian Overseas Petroleum (COPL LN/XOP CN): US$63 mm legal claims by Essar against ShoreCan | Tullow Oil (TLW LN): RBL redetermination in line, no further principal repayment until 2021 and further capex reduction
Companies: 88E ARC BP/ CASP COPL NK1A ENOG GENL GKP JKX 0GEA NOG PMO PXT PVR RDSA RRE TGL TLW UOG VLU
Bahamas Petroleum Corporation (BPC LN): Delaying exploration activities in the Bahamas | i3 Energy (I3E LN): Canadian acquisition | Touchstone Exploration (TXP LN/CN): FY19 results | Cairn Energy (CNE LN): FY20 capex reduced but production guidance maintained | ENI (ENI IM): Capex reduction and new production guidance | Equinor (EQNR NO): Reducing spending | IGas Energy (IGAS LN): Update in the UK | Independent Oil & Gas (IOG LN): FY19 results | Lundin Petroleum (LUP SS): Reducing dividends, increased plateau at Johan Sverdrup | OMV (OMV AG): Reducing costs | Repsol (REP SM): Corporate update | RockRose Energy (RRE LN): Corporate update, maintaining dividends | Serinus Energy (SEN LN): FY19 results | Block Energy (BLOE LN): Acquiring Georgian assets from Schlumberger | Regal Petroleum (RPT LN): Acquisition in Ukraine | Gulf Keystone Petroleum (GPRK LN): Operating update in Kurdistan | Africa Oil (AOI SS/CN): Reserves update | Vaalco Energy (EGY US/LN): Operating update in Gabon
Companies: BPC I3E TXP CNE ENI DNQ IGAS IOG LYV OMV REP RRE SENUSD BLOE ENW GKP AOI EGY
RockRose Energy (RRE LN): FY20 capex reduced by 25% | Touchstone Exploration (TXP LN): FY19 results, 6% increase in average production | Block Energy (BLOE LN): Acquisition of producing Block XIB (615 km2 ) and exploration Block IX (1,925 km2 ) | Upland Resources (UPL LN): Steady, if unexciting progress
Companies: RRE TXP BLOE UPL
Rockrose Energy (RRE LN): Drilling campaign on schedule | Cairn Energy (CNE LN): FY19 results, Cairn swings into profit | SDX Energy (SDX LN): Rabul-3 encounters 116ft of net pay, Egypt
Companies: RRE RRE SDX
Premier Oil (PMO LN): Proposed UK North Sea Acquisitions, Financing and Extension of Credit Facilities | SDX Energy (SDX LN): 35% reserves upgrade at South Disouq | RockRose Energy (RRE LN): Year End Trading Update | Rockhopper Exploration (RKH LNP): Heads of Terms with Navitas Petroleum to farm-in to the Sea Lion
Companies: PMO SDX RRE RKH
Rockrose Energy (RRE LN): Seven wells planned by the end of 2020 | Savannah Petroleum (SAVP LN): CPR confirms 2P reserves of 99.6MMboe (gross)
Companies: Rockrose Energy (RRE:LON)Savannah Energy Plc (SAVE:LON)
Alvopetro (ALV CN) (not covered): Development financing in Brazil | GeoPark (GPRK US) 1 : BUY, US$26.00: New oil discovery in Llanos 34 Block opens-up 20-40 mmbbl gross potential | Getech (GTC LN) (not covered): 1H19 results | RockRose Energy (RRE LN) (not covered): 1H19 results | Serica Energy (SQZ LN) (not covered): 1H19 results | Total (FP FP) (not covered): Dividend growth acceleration | Vaalco Energy (EGY US)1 ; BUY, US$3.00: Reserves and resources update
Companies: ALV 0MDP GTC RRE SQZ EGY
Hurricane Energy (HUR) – Warwick West spuds today | RockRose Energy (RRE) – Strong financial results, 60p interim dividend proposed | Serica Energy (SQZ): Half Year Report, material cash flows in 2020 | Aminex (AEX): Ruvuma Farm-Out Update and Acceleration of Drilling Operations
Companies: HUR RRE SQZ AEX
Tullow Oil (TLW): H1 Results | Diversified Gas & Oil (DGOC): Trading Statement | Independent Oil & Gas (IOG): TRF Acquisition & Well Spud | RockRose (RRE): Re-admission | Exillon Energy (EXI): Production Report
Companies: TLW DGOC IOG RRE EXI
Research Tree provides access to ongoing research coverage, media content and regulatory news on Rockrose Energy.
We currently have 38 research reports from 5
Litigation Capital Management (LCM) is an alternative asset manager specialising in disputes financing, with its main operations in Australia and the UK. The company provides funding for litigation in exchange for a share of any settlement and has built a strong track record of supporting winning c
Companies: Litigation Capital Management Ltd
In a positive 10-month update Belvoir has detailed trading is ahead of its pre-COVID expectations. Gross profit is up +10% in the Property division and +11% in Financial Services. Overheads are now significantly below the original budget and management has decided to reimburse staff for salary sacrifices earlier in the year and repay the Government in full for COVID furlough monies and grants. Taking all this into account, we have upgraded our FY 2020E EPS by +4%. A further catch-up dividend of 1.3p will be paid alongside the final 2020 dividend and we forecast net debt of £4.5m at December 2020. The resilience of Belvoir’s franchise model has been proved and, in our view, highlights the long-term growth potential when markets return to more normal conditions.
Companies: Belvoir Group PLC
H1 has seen a clearer outlook for portfolio valuations which has allowed Mercia to recoup some of the reduction at the Finals. Cash earnings are better than expected as costs have remained lower for longer. A well-funded portfolio and £25m cash has prompted declaration of a maiden 0.1p interim dividend – a strong signal of confidence. Lower costs and increased asset values have prompted 30-45% upgrades to adj. EBITDA across the horizon. The shares are trading at a 32% discount to NAV, of which 17% is cash. This disregards all value for the asset management platform. A 10x EBITDA multiple ascribed to 3rd party asset management earnings plus NAV points to a c.40p/share intrinsic value, before further value creation.
Companies: Mercia Asset Management PLC
Today's trading update demonstrates Equals producing robust FY20E revenues, as it rebounds steadily from a COVID-19 affected Q2/20. Material progress has been made on rightsizing costs, the benefits of which should be felt in FY21E. While our newly reissued forecasts expect a weaker profit delivery in H2/20E, we expect strong YoY EBITDA growth thereafter, as the group returns to double-digit revenue growth with a rationalised cost base and geared profit growth. Should these forecasts be met, we expect the current c2x EV/Sales multiple to move back towards Jan 20's pre-covid 4x multiple, hence we move back to “Buy”.
Companies: Equals Group Plc
Today's news & views, plus announcements from AZN, LLOY, WEIR, TATE, GFTU, INCE, DELT, SOLG, HYVE
Companies: LLOY SOLG INCE
Liontrust has delivered in line interims, however AuM growth since the HY point drives higher earnings estimates. In H1, net inflows remained strong despite the backdrop and, alongside performance, contributed to 28% AuM growth. Post-period, performance momentum has boosted AuM by a further 5% to £28.1bn, plus the completion of Architas. Together, this results in a step up in the run rate. We update our forecasts for higher than expected AuM driving a +5% upgrade to FY21e EPS and +10-13% in outer years. We do not forecast scaling in Architas or Global which could prompt further upgrades, reducing the 15x FY22e PER.
Companies: Liontrust Asset Management PLC
Today's news & views, plus announcements from LLOY, POG, FRAS, PETS, SPR, WHI, FKE, RLE
Companies: Lloyds Banking Group plc (LLOY:LON)Real Estate Investors plc (RLE:LON)
Today's news & views, plus announcements from Capita, JD Wetherspoon, HarbourVest Global Private Equity, Walker Crips Group, Randall & Quilter*, Michelmersh Brick, LoopUp, Schroders British Opportunities Trust and Baillie Gifford UK Growth Trust.
Companies: Randall & Quilter Investment Holdings Ltd.
An in-line trading update for the year to 31 December 2020 states EBITDA will be at least £3.6m and £2.0 at the PBT level. However, conservative budgeting affects 2021E and 2022E with the company rebasing expectations following year-end re-forecasting exercise, taking into account the prolonged challenging macroeconomic environment. The acquisitive opportunity remains in place.
Companies: STM Group PLC
Record has set itself the goal of generating greater growth and H121 showed some encouraging steps in this direction. The substantial new dynamic hedging mandate in the period was traditional business for the group, but there was also news of a new currency impact fund, which provides diversification, higher fee margins and the potential for significant development. The implementation of new IT systems is underway, and measures to develop and retain staff have been taken.
Companies: Record plc
Resilience throughout the COVID pandemic has driven positive portfolio gains and further capital investment. The 119p/share NAV does not come as a surprise given the £27.5m equity raise at 120p was only completed a month ago, and will be deployed to target a deep £120m pipeline – now underway. Trading momentum has been sustained in Augmentum's (“AUGM”) portfolio companies which are high growth, disruptive and innovative. There is (much) more value to play for as this continues. For public markets investors, this is a diversified and professionally managed route to access attractive VC assets with structural growth. Should this value be forthcoming, the current premium is only the tip of the iceberg.
Companies: Augmentum Fintech
President Trump likes to project himself as a highly successful businessman, but surprisingly little is known about his true financial position. Various articles, including a 2016 in-depth analysis by The Wall Street Journal, have speculated about his income and asset base. All sorts of claims and counter-claims have been made about his wealth – by Trump himself, pitching his fortune at some $9bn, and by journalist Timothy O'Brien, suggesting that it is as “low” as $150m-$250m. It is doubtful whether we shall ever know the truth, but we can use Trump’s UK corporate filings to gain an insight into his businesses in Scotland.
Companies: AVO ARBB ARIX CLIG DNL FLTA ICGT PCA PIN PHP RECI STX SCE TRX SHED VTA YEW
Palace Capital’s (PCA) H121 performance was robust and ahead of our central expectations. We have slightly increased FY21 earnings forecasts and introduced FY22–23 estimates, with growth driven by Hudson Quarter completion, on track for March 2021. Significant additional reversionary potential and development/refurbishment represent significant value creation potential.
Companies: Palace Capital plc
To achieve YoY revenue growth over H1/20A despite the challenges of Covid-19 and its impact on the travel sector is testament to Equals' resilience and increasing focus on B2B and International payments services. While weaker gross profit and EBITDA margins have impacted profitability in H1/20, we see potential for an earnings recovery in H2/20 given cost reduction measures currently being undertaken. This should lead Equals to cash breakeven in Q4/20 and FCF positive by early FY21.
Gore Street has been reassuring investors that its Northern Irish projects will complete in time to maximise the benefits of contracts under the DS3 scheme. Today’s news of the energisation of the first project suggests that the company will meet the deadline with a good margin.
Companies: Gore Street Energy Storage Fund PLC