Cenkos: Falcon Oil & Gas Ltd -- Sailing Through The Seas of Uncertainty
Falcon Oil & Gas has announced it has farmed down a 7.5% interest in the Beetaloo Sub-basin to Origin Energy, with Origin increasing the gross cost cap of the Stage 2 and Stage 3 Beetaloo work programme by A$150.5m (cUS$92m) to A$263.8m (cUS$161m). As a result of the farm-down, we believe Falcon is now substantially funded for Stage 2 and Stage 3 work programme, eliminating equity and dilution risk for shareholders. Perhaps more importantly, Falcon is also fully funded through one of the greatest periods of uncertainty in the history of the oil and gas industry.
Falcon Oil & Gas
07 Apr 20
Cenkos: Oil & Gas Sector -- 88 Energy, Premier Oil, United Oil & Gas, UK Oil & Gas Plc, Empyrean Energy, Apache Corporation, Total SA, Tullow Oil, Neptune Energy, Equinor ASA, Westmount Energy, FAR, Energean Oil & Gas, BP Plc, TransGlobe Energy, JKX Oil &
Oil posted a record weekly jump on hopes that global producers will decide to make historic output cuts next week, though optimism was tempered by concern that the curbs will not avert a glut. The OPEC+ coalition including Saudi Arabia will hold a meeting of its members by video conference on Monday, with the gathering open to even producers outside the group. While it's unclear who will attend, market watchers are predicting that stockpiles are likely to swell even if global supplies are cut by 10 million barrels a day. Investors will be closely watching the guest list of the meeting -- especially names outside the Organisation of Petroleum Exporting Countries and its allies -- after Saudi Arabia made clear it will only cut production if others, including the US, shoulder some of the burden. US West Texas Intermediate futures ended the week up 32%, while Brent crude jumped 37%. Still, prices are less than half the levels at the start of the year, with the coronavirus crisis crushing demand. One delegate from the producer group said a global cut of 10 million barrels a day is a realistic goal. Russian President Vladimir Putin told the country's top oil executives that producing countries should join together to slash output to reverse the collapse in prices, adding that worldwide curbs of a little above or below 10 million barrels a day are possible. Meanwhile, US President Donald Trump is convening an extraordinary gathering of the nation's biggest refiners and producers at the White House on Friday. They are expected to discuss possible relief efforts from the administration, including potential American output cuts. Prices: West Texas Intermediate for May delivery rose $3.02 to settle at $28.34 a barrel Friday. Global benchmark Brent crude for June settlement jumped 14% to $34.11 a barrel. Gasoline futures rose 2.88 cents to 69.16 cents a gallon Friday. Getting countries from all over the world to agree would be a tough task. Even if that's successful, an output reduction of the size that's being discussed will be just a fraction of the 35 million barrels of daily demand destruction some traders now see
FOG PVR 88E DGOC EME UKOG TRIN UOG
06 Apr 20
Cenkos: Oil & Gas Sector --
Oil declined for a fifth straight week amid a one-two punch from collapsing demand due to the coronavirus crisis and ballooning supply from producers vying for market share. Futures in New York slumped 4.8% on Friday and are poised for the biggest quarterly drop on record as weak demand and an onslaught of supply roil markets. Refineries across the globe are curbing consumption as fuel use declines with people staying home. Meanwhile, major trader Trafigura Group expects as much as 1 billion barrels to be sent into storage tanks. More oil is headed into stockpiles as the Russia-Saudi war for market share that exacerbated crude's crash this month shows no sign of abating. The kingdom held firm on Friday, saying it hasn't had any contacts with Moscow about output cuts or on enlarging the OPEC+ alliance of producers. Russia also doubled down, with Deputy Energy Minister Pavel Sorokin saying oil at $25 a barrel is unpleasant, but not a catastrophe for Moscow. US crude has tumbled about 65% so far this quarter. The crash has crippled domestic producers who are forced to cut production for the first time in 35 years. The International Energy Agency this week warned that global demand was in “free fall” amid coronavirus lockdowns. Meanwhile, Iraq -- OPEC's second-biggest producer -- will allow national oil companies to boost their output and export without imposing any ceiling. Algeria has asked for an emergency OPEC board meeting to discuss the cuts. It comes as one of the world's largest supertanker owners said that ships are being filled with crude at a record pace, as land storage rapidly diminishes. Prices: West Texas Intermediate fell $1.09 to settle at $21.51 a barrel in New York on Friday. Prices dropped 4.1% this week. Brent crude lost $1.41 to settle at $24.93 a barrel. Swaps markets show that physical crude is selling several dollars below benchmark prices. The signs of storage starting to fill are growing, too. Inland tanks for heating oil in Germany are now full, while Pakistan banned oil imports on Thursday because its stockpiles are now sufficiently built up. Rigzone.
FOG PVR 88E DGOC EME POS TRIN UOG
30 Mar 20
Cenkos: Oil & Gas Sector -- Hurricane Energy, Jadestone Energy, Energean Oil & Gas, MOL Hungarian Oil & Gas, BP Plc, Genel Energy, Pantheon Resources, I3 Energy, Kosmos Energy, Ithaca Energy, Neptune Energy, Echo Energy, EnQuest, Jersey Oil & Gas
Oil capped its biggest weekly decline in almost three decades as concern that the collapse of global fuel demand will deepen outweighed talks between OPEC and Texas's energy regulator. Futures in New York tumbled 11% Friday, bringing the week's plunge to 29%, the biggest since January 1991. Some traders see demand shrinking as much as 10 to 20 million barrels a day as drivers stay home and flights are grounded across the world. Two of the three commissioners at Texas's oil agency are sceptical of a plan currently being weighed to curtail crude production in the state in an effort to balance global supply with demand and stabilise prices. Texas Railroad Commissioner Ryan Sitton said Friday he was invited by OPEC Secretary General Mohammad Barkindo to attend the group's summer meeting in Vienna. Sitton, one of three voting members of the commission, is proposing that the US coordinate with Russia and Saudi Arabia to curb supply. “With other governments manipulating oil markets, it's fair to ask: Why shouldn't our government step in to try to reinstate a more market-based approach?” Sitton said in a Bloomberg Opinion column. “It would stave off a total oil industry meltdown.” The plan comes as the nearest timespread for the US benchmark indicated its deepest oversupply since 2016. The American shale industry has found itself caught in the middle of the fight between Saudi Arabia and Russia. The sector has so far scaled back operations and is also threatened with a wave of bankruptcies. Prices: West Texas Intermediate for April delivery, which expires Friday, fell $2.79 to settle at $22.43 a barrel in New York. The more active May contract slid $3.28 to $22.63 a barrel. Brent for May settlement fell $1.49 to settle at $26.98 a barrel on the ICE Futures Europe exchange.
FOG PVR 88E DGOC EME TRIN UOG
23 Mar 20
Cenkos: Oil & Gas Sector -- 88 Energy, Premier Oil, Equinor ASA, Total SA, Premier Oil, Hurricane Energy, Echo Energy, Touchstone Exploration, ExxonMobil Corporation, SDX Energy, Solo Oil, Tower Resources, Angus Energy
Oil in London plunged the most since 2008 on signs of a breakdown in the global producer alliance that helped engineer crude's recovery from the worst crash in a generation. Futures plummeted more than 9% in London as talks between members of the OPEC+ group collapsed in Vienna. Producers in the alliance are free to pump at will starting next month, after Russia refused to bend to Saudi Arabia's wish for output cuts aimed at offsetting the coronavirus crisis's impact on demand. The end of the talks without a deal raises the prospect of another war for market share among producers, which had exacerbated crude's collapse back in 2014 amid a global glut. The OPEC+ alliance was formed in 2016 after the price crash imperilled economies dependent on oil revenue and led to a wave of bankruptcies among smaller exploration companies across the globe. Oil's plunge of Friday was mirrored in shares of producers, with Exxon Mobil Corp. sliding 5% and Chevron Corp. dropping 3.3%. Global markets are already in a precarious condition, with investors fleeing risk assets on mounting fears that the coronavirus outbreak will derail economic growth. Russia resisted pressure from allies in the Organisation of Petroleum Exporting Countries to join a 1.5 million-barrel supply reduction, saying it favours maintaining supply reductions at current levels until June. Moscow is said to still be willing to have a meeting with OPEC and allies in June. The collapse in discussions is the latest escalation of tensions between the Saudi-Russia alliance. Unlike other oil-exporting nations, Russia has a higher tolerance for lower prices given its plentiful international reserves, low debt levels, and resilient fiscal budget. OPEC+, which controls more than half of the world's oil production, has underpinned prices and reshaped the geopolitics of the Middle East, but is now under significant strain. West Texas Intermediate futures for April delivery fell $4.62 to $41.28 a barrel on the New York Mercantile Exchange. Brent for May settlement dropped $4.72 to $45.27 on the London-based ICE Futures Europe Exchange. The structure of the futures market revealed concerning signs of oversupply as Brent's so-called red spread -- the difference between December contracts in consecutive years -- sank deeper into bearish contango, reaching the lowest level since 2016. Other oil-market news: Consultant FGE now sees a decline in oil demand of 480,000 barrels a day this year, while Redburn says demand may drop by 1.5 million barrels day. Oil exports from the neutral zone between Kuwait and Saudi Arabia will resume from next month, adding more supply just as OPEC tries to cut. China's seaborne oil imports fell 13% month-on-month in February to the least since Bloomberg began tracking the data.
FOG PVR DGOC EME TRIN UOG 88E
09 Mar 20
Cenkos: Oil & Gas Sector -- 88 Energy, United Oil & Gas, Rockhopper Exploration, Argos Resources, Jadestone Energy, Gran Tierra Energy, Kosmos Energy, Petrofac, Hunting, ADES Holding, Panoro Energy ASA, Pantheon Resources, Wintershall Dea, Africa Oil Corp
Oil had it worst week since the financial crisis as panic over the coronavirus pandemic battered global markets. Futures in New York fell 16% this week, marking the biggest weekly drop since December 2008. The viral outbreak showed no signs of relenting, with the World Health Organisation raising global risk to “very high” from “high.” The collapse of financial markets prompted US Federal Reserve Chairman Jerome Powell to assure investors that the central bank is prepared to cut interest rates to mitigate the virus' threat to economic activity. Oil prices have tumbled almost 27% this year on concerns the coronavirus outbreak will dent crude demand. OPEC and its allies have signalled the coalition could reach an agreement to stem the rout before meeting in Vienna next week. Saudi Arabia is reportedly pushing for collective OPEC+ production cuts of an additional 1 million barrels a day, of which it would bear the brunt. West Texas Intermediate futures for April delivery fell $2.33, or 5%, to settle at $44.76 a barrel on the New York Mercantile Exchange. Brent for April settlement, which expired Friday, lost $1.66, or 3.2%, to end the session at $50.52 a barrel on the ICE Futures Europe exchange. The more active May contract fell 4% to $49.67. Brent's so-called red spread -- the difference between December contracts in consecutive years -- sank deeper into bearish contango, settling at lowest level since 2018. Oil market drivers: Gasoline futures fell 1.1% to settle at $1.3955. The US will sell up to 12 million barrels of oil from its emergency government stockpile just as global crude demand takes a hit from the spreading coronavirus. The volume of crude that will be shipped to China from West Africa next month is set to drop by at least ten million barrels as the demand destruction caused by the coronavirus hits home. The Trump administration is ready to unleash the full impact of sanctions on Chevron Corp's operations in Venezuela as the US seeks to further squeeze the Maduro regime.
FOG PVR DGOC EME TRIN UOG 88E
02 Mar 20
Cenkos: Oil & Gas Sector -- Falcon Oil & Gas, UK Oil & Gas Plc, United Oil & Gas, Hunting Plc, Touchstone Exploration, PetroTal Corp, Cairn Energy, Tullow Oil, Petrofac, Echo Energy, Vaalco Energy, Ascent Resources
Oil fell as the coronavirus outbreak accelerated beyond China, intensifying concerns about the infection's economic fallout. Futures fell 0.9% in New York on Friday. China revised how it calculates infection totals for the third time this month, raising questions about data reliability and confirming the virus's growing reach. Meanwhile, a key IHS Markit gauge of factories and service providers in the world's largest economy dropped for the first time in seven years, sparking sell-offs in government bonds and equities. Oil has fallen more than 12% this year as China's viral outbreak crippled industrial activity and transportation at a time when energy supplies already were abundant. The World Health Organisation said if countries do not respond strongly now, the spread outside China may become a wider threat. Still, crude posted a second consecutive weekly gain, supported by supply disruptions in Venezuela and Libya. West Texas Intermediate for April delivery fell 50 cents to settle at $53.38 a barrel on the New York Mercantile Exchange, ending the week 2.6% higher. Brent for April settlement declined 81 cents to settle at $58.50 on the ICE Futures Europe exchange putting its premium over WTI at $5.12. The global benchmark rose 2.1% for the week. The Organisation of Petroleum Exporting Countries and its allies will meet in March as originally scheduled after efforts by Saudi Arabia to hold an emergency meeting failed to materialise amid resistance from Russia. Saudi Arabia's energy minister dismissed a Dow Jones report on Friday that Riyadh was considering a break from its four-year oil production alliance with Russia. Russia has remained noncommittal to an OPEC proposal for additional production cuts. Rigzone.
FOG PVR DGOC EME TRIN 88E
24 Feb 20
Cenkos: Falcon Oil & Gas Ltd -- Drilled, Cased and Completed
Falcon Oil & Gas, along with its partner Origin Energy have announced the successful completion of the Kyalla 117 N2-1H ST2 well. The 1,579m lateral section drilled within the Lower Kyalla shale, has been successfully cased and cemented, thereby de-risking the operational challenges encountered by the initial horizontal well. At 1,579m, the lateral section is above the initial 1,000m pre-drill estimate, providing the Company with sufficient lateral length to optimise both the location of the frac's and the subsequent flow rates. Results obtained to date have been encouraging, with the well encountering good reservoir continuity, conductive natural fractures and continuous gas shows. Preparatory work, including the drilling of water impact monitoring boreholes will commence in the coming month ahead of fracture stimulation and production testing.
Falcon Oil & Gas
20 Feb 20
Cenkos: Oil & Gas Sector -- Ithaca Energy, BP Plc, Eco (Atlantic) Oil & Gas, Chrysaor, President Energy, Wentworth Resources, EnQuest, RockRose Energy, Valeura Energy, Echo Energy, TransGlobe Energy, Victoria Oil & Gas, Hurricane Energy, Touchstone Explora
Oil declined for the fifth straight week as the spreading coronavirus clouded the demand outlook and OPEC awaited Russia's decision on whether to cut production. Futures in New York fell 2.4% for the week, posting the longest weekly losing streak since 2018. Chinese refiners are processing 15% less crude than before the outbreak as the infection crimps demand. Meanwhile, Russia hesitated to accept a proposal by OPEC+ to cut output by 600,000 barrels a day. Russian Energy Minister Alexander Novak promised an answer to the proposal in “days”. In the US, gasoline futures rose to the highest in more than a week after Phillips 66 shut the sole fuel-making unit at its Bayway refinery in New Jersey, the largest on the East Coast. Futures rose 1.7% to settle at $1.5239 per gallon. Majors including Total SA and BP Plc projected a significant hit to global oil demand this year due to the virus, compounding fears of a supply glut plunging the market's structure into a bearish contango. Both state-owned and private refineries in China have scaled back processing by at least 2 million barrels a day over the past week, said people with knowledge of operations at the nation's largest complexes. So-called throughput could fall further as demand for aviation and transportation fuels continues to shrink as entire cities remain locked down and travel is restricted, the people said. West Texas Intermediate for March delivery fell 63 cents to settle at $50.32 a barrel on the New York Mercantile Exchange. Brent for April delivery lost 46 cents to settle at $54.47 a barrel on the London-based ICE Futures Europe exchange putting the premium over WTI at $3.92.
FOG PVR EME TRIN 88E
10 Feb 20
cenkos: Oil & Gas -- Falcon Oil & Gas, Diversified Gas & Oil, Exxon Mobil Corporation, UK Oil & Gas, Coro Energy, Hurricane Energy, Energean Oil & Gas, Tullow Oil, Gran Tierra Energy, Savannah Petroleum, Serica Energy, Echo Energy, Bahamas Petroleum, Block
Beset by demand fears tied to a growing public health crisis as well as economic concerns, West Texas Intermediate (WTI) and Brent crude oil prices declined Friday and are down for the week. The March WTI dropped by 58 cents Friday to settle at $51.56 per barrel. The contract peaked at $53.36 and bottomed out at $50.97. Against the 24 January 2020 settlement price, WTI is down nearly five percent. Expiring Friday was the March Brent contract, which remained unchanged at $58.29 per barrel – four percent below the close a week-ago. April Brent lost 71 cents, ending the day at $56.62 per barrel.
FOG PVR DGOC EME TRIN 88E
03 Feb 20
Cenkos: Oil & Gas Sector -- United Oil & Gas, Trinity Exploration & Production, 88 Energy, Santos, Oil Search, Egdon Resources, Cairn Energy, PetroTal Corp, SDX Energy, Lekoil, Touchstone Exploration.
West Texas Intermediate (WTI) and Brent crude oil prices faltered again Friday. The March WTI contract lost $1.40 Friday to settle at $54.19 per barrel. The light crude marker traded within a range from $53.85 to $55.95. Compared to the 17 January 2019, settlement, WTI is down 7.4 percent. March Brent ended the day at $60.69 per barrel also losing $1.35. Week-on-week, Brent is down 6.4 percent. The latest Weekly Petroleum Status Report from the U.S. Energy Information Administration (EIA) showed: A slight, 400,000-barrel draw in US commercial crude inventories – in line with analysts' 300,000-barrel forecasts but lower than the American Petroleum Institute's report showing a gain. Despite the crude draw, a 1.7 -barrel increase in domestic gasoline inventories that is four percent higher than the five-year average. A 1.2 million-barrel drop in distillate stocks – still at a 28-month high but two percent below the five-year average. Lower demand at US refineries as utilisation dropped 1.7 percent to 90.5 percent. A nearly 1 million-barrel drop in the amount of crude stored at the Cushing, Okla., hub to 35 million barrels, or approximately 45 percent of capacity there. Steady domestic crude product at 13 million barrels per day (bpd). Like crude oil, reformulated gasoline (RBOB) declined Friday. February RBOB settled at $1.515, reflecting a 4.5-cent loss. RBOB is down 7.6 percent against its week-ago price.
FOG PVR DGOC EME TRIN 88E
27 Jan 20
Cenkos: Oil & Gas Sector -- Falcon Oil & Gas, ConocoPhillips, Lekoil, Tullow Oil, PetroTal, Serica Energy, China National Offshore Oil Corporation (CNOOC), Cairn Energy, Africa Oil Corp, Genel Energy, RockRose Energy, Egdon Resources
General News: Norway The Norwegian Government has awarded 28 oil and gas companies a total of 69 offshore blocks as part of the APA 2019 licensing round. 33 blocks were awarded in the North Sea, with 23 in the Norwegian Sea and a further 13 in the Barents Sea. Equinor received the most licences with 23, followed by Var Energi with 17 and Aker BP with 15. PE backed firms, Neptune Energy and Chrysaor received eight and thirteen blocks respectively. Norway. Senegal's 2020 Licensing Round will be launched on the 28 January 2020 at the King Fahd Hotel in Dakar. The licensing round comprises 12 blocks in the MSGBC Basin, offshore Senegal. The Round officially launches on the 31 January 2020, with applications to be delivered by the 31 July 2020. Petrosen, along with TGS, GeoPartners and PGS have provided 14,000km of 2D seismic, 10,000km of 3D seismic and 50,000sqkm of multibeam data. Further investment events are planned in London on 19-20 February and in Houston 24-25 February. Senegal.
FOG PVR DGOC EME TRIN 88E
20 Jan 20
Cenkos: Falcon Oil & Gas Ltd -- Kyalla Operational Update
Falcon Oil & Gas have announced that the Kyalla 117 N2-1H horizontal production hole section well is to be plugged and sidetracked following operational difficulties with the original horizontal production hole section. Drilling operations will recommence on the new horizontal section within the next month. Despite the operational challenges, results obtained to date are encouraging with the well encountering good reservoir continuity, conductive natural fractures and continuous gas shows.
Falcon Oil & Gas
13 Jan 20
Cenkos: Oil & Gas Update -- Apache Corporation, Pharos Energy, Premier Oil, Rockhopper Exploration, RockRose Energy, Columbus Energy Resources, Cairn Energy, Serinus Energy
West Texas Intermediate (WTI) and Brent crude oil futures edged downward Friday and posted significant declines for the week. WTI for February delivery lost 52 cents Friday to settle at $59.04 per barrel. It traded within a range from $58.85 to $59.78. Compared to 3 January 2020 settlement, the WTI is down 6.4 percent. March Brent shed 39 cents to end the day at $64.98 per barrel. It is down 5.3 percent for the week. Reformulated gasoline (RBOB) finished higher Friday. The. February RBOB contract price settled at $1.66 per gallon, reflecting a nearly one-cent gain. Week-on-week; however, RBOB is down 5.1 percent. Henry Hub natural gas posted a gain for the third straight trading day, with the February contract adding nearly four cents to close at $2.20. Compared to a week ago, gas futures are up 3.3 percent. Rigzone.
FOG PVR EME TRIN 88E
13 Jan 20
Cenkos: Falcon Oil & Gas Ltd -- Horizontal Drilling Commences
This morning, Falcon Oil & Gas, along with its JV partner Origin Energy, announced that drilling had commenced on the horizontal section of the Kyalla 117 N2-1H appraisal well, situated in the Beetaloo Sub-Basin, Australia. The 1,000-2,000m horizontal well is being drilled in the Lower Kyalla shale at a depth of c1,800m TVD. We expect the horizontal section of the well to take between 20-25 days to drill. Following its completion, the well will be fracture stimulated and put on a 90-day extended production test, with results expected in Q2/20. We reiterate our BUY recommendation and our 41p price target.
Falcon Oil & Gas
11 Dec 19
Oil & Gas Daily Flow
Gulf Keystone Petroleum (GKP LN): Strong trading update, additional buyback initiated | Reabold Resources (RBD LN): Drilling the VG-6 well commences, onshore California | Eco (Atlantic) Oil & Gas (ECO LN): JV Partners secure the Orinduik licence for a further three years | SDX Energy (SDX LN): South Disouq stabilises at 50MMscf/d, three months ahead of schedule | Falcon Oil & Gas (FOG LN): Horizontal drilling of the Kyalla 117 N2-1H appraisal well commences
FOG GKP RBD ECO SDX
10 Dec 19
Cenkos: Falcon Oil & Gas Ltd -- Early Encouragement
This morning, Falcon announced that the preliminary data from the vertical section of the Kyalla 117 N2-1 well has confirmed the presence of elevated gas shows with relatively high C3, C4 and C5 components across the Kyalla shale. As a result, Falcon, along with its JV partner Origin Energy, have elected to drill the horizontal section within the Kyalla formation following the final evaluation of the vertical well results. Once complete, the horizontal section will be fracture stimulated and put on a 90-day extended production test, with results expected in Q2/20.
Falcon Oil & Gas
20 Nov 19
Small Cap Feast
The Pebble Group, a provider of products, services and technology to the global promotional products industry, announces its intention to seek admission of its shares to trading on the AIM market of the London Stock Exchange, which is expected to take place in early December 2019.The Group delivered revenue of £99.8m in the year ended 31 December 2018.No mention of bottom line and a suggestion that funds raised would provide an exit to private equity shareholders and the repayment of debt. Offer TBA. Longboat Energy raising £10m. Expected admission November 2019. The company has been established by the former management team of Faroe Petroleum to create a new full-cycle North Sea oil and gas company .The strategy to achieve this will initially be through the acquisition of assets where the management team can add value through subsurface and operational improvements, follow-up deal opportunities and nearfield exploration; and by value creation through the drill bit.
FOG TPFG DNL FIF BREE GRL AVO INFA EMH
20 Nov 19
Cenkos: Falcon Oil & Gas Ltd - Drilling Commences
Yesterday, Falcon Oil & Gas announced the spudding of the Kyalla 117 N2-1 exploration well in the Beetaloo Sub-Basin, Australia. The Kyalla 117 N2-1 well is the first well in the Stage 2 drilling programme to evaluate the potential of the Kyalla shale liquids rich gas play, with Falcon and its partner, Origin Energy looking to build on the 6.6Tcf of gross 2C contingent resource already discovered within the Middle Velkerri B shale dry gas play during 2015/2016. Following the Stage 2 programme, the JV will look to achieve commercial production flow rates in the most prospective play(s) through the drilling and stimulation of two horizontal wells in 2020. With a largely carried work programme and a resource base far in excess of any of its peers we believe Falcon offers investors a low-risk, low cost entry point into an emerging world-class basin. We maintain our BUY recommendation and our 41p price target.
Falcon Oil & Gas
10 Oct 19
Cenkos: Falcon Oil & Gas Ltd - Back to Drilling
After a three-year hiatus, Falcon will once again commence drilling operations in September, with the Kyalla 117 N2 horizontal appraisal well the first in a two well programme to test the ability to flow liquids rich gas from the Kyalla and Velkerri shale plays. The well has received all of the necessary approvals for the planned drilling, stimulation and testing programme, with the well pad and access road construction nearing completion. Following the two well programme, Falcon and its partner, Origin Energy will look to achieve commercial production flow rates through the drilling and stimulation of two further horizontal wells in the most prospective play(s) during 2020. With 6.6Tcf of gross 2C contingent resource already booked in the Velkerri B shale dry gas play and a largely carried work programme, we believe Falcon offers investors a low risk, low cost entry point into a world class play, with a resource potential far in excess of any of its peers. We maintain our BUY recommendation and our 41p price target.
Falcon Oil & Gas
27 Aug 19
Cenkos: Falcon Oil & Gas Ltd - Full Steam Ahead
Falcon Oil & Gas is an international oil and gas company focussed on the acquisition, exploration and appraisal of unconventional oil and gas assets. Falcon has a 30% interest in three exploration permits in the Beetaloo Sub-basin, in the Northern Territories (NT), Australia - covering 4.6million gross acres and estimated to contain 496 trillion cubic feet (TCF) of original gas in place (OGIP) within the Middle Velkerri B dry gas shale play. As part of a transformational farm out to Origin Energy in 2014, the Company carries up to A$113m (US$80m) for the costs of the upcoming Stage 2 and 3 work programme to drill and hydraulically fracture stimulate four further horizontal wells and evaluate the potential of the Kyalla and Velkerri liquid plays before confirming commercial production flow rates in the most prospective play(s). On Friday, the Company conditionally raised gross proceeds of cUS$9m (c£7m) to primarily fund Falcon's share of the next cUS$100m of capital expenditure on the Beetaloo work programme and its ongoing G&A. By the end of the Stage 3 work programme, a total of US$300m would have been spent by Falcon and its partners in determining the commerciality of the Beetaloo. Through its transformational farm-out deals with Hess and Origin, we estimate Falcon's share of this gross cost to be approximately US$15m, or 5% of the total capex to date for its 30% working interest. Prior to development we would expect Falcon to monetise its interest and exit the play. Given the multi-TCF potential, strategic location and multiple commercialisation options, we believe Falcon offers early entry to a world-class play with potential upside far greater than any of its peers. We initiate coverage with a price target of 41p and a BUY recommendation.
Falcon Oil & Gas
20 May 19
SP Angel – Oil & Gas View
Block Energy (BLOE): Result of £12 million Placing | Cairn Energy (CNE): AGM Statement | Falcon Oil & Gas (FOG): Proposed $10 million Placing | Lekoil (LEK): Resignation of CFO | Ophir Energy (OPHR): Sale of Mexico licence | SDX Energy (SDX): Q1 Results | UK Oil & Gas (UKOG): Production Test Update
FOG BLOE CNE LEK OPHR UKOG SDX
17 May 19
Small Cap Feast
Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019. Chaarat Gold Holdings—RTO, the Company intends to acquire Kapan Mining and Processing CJSC, which owns the Shahumyan mediumsized polymetallic mine in Kapan in the Republic of Armenia. No raise, market cap of £110.1m, due early Feb
FOG NTOG VAST AFHP PLMO RBN DIS SUMO REDX BOOM
21 Jan 19
Small Cap Tea
Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine ("South Crofty"), a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June. Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May Team17 Group -video games label and creative partner for independent developers. Since 2014, delivered a revenue CAGR of 69% (31 December 2015 to 31 December 2017), with revenues of £29.6m and Adjusted EBITDA of £12.9m. Offer TBA Serinus Energy -international upstream oil and gas exploration and production company. Its principal assets are located in Romania (development phase) and Tunisia (production phase). Raising c.£10m at 15p. Due 18 May. Mkt cap £32.6m
FOG NYR SYM TPOP VLS TENG CAKE DNL MYX
15 May 18
Small Cap Breakfast
Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May Team17 Group -video games label and creative partner for independent developers. Since 2014, delivered a revenue CAGR of 69% (31 December 2015 to 31 December 2017), with revenues of £29.6m and Adjusted EBITDA of £12.9m. Offer TBA Serinus Energy -international upstream oil and gas exploration and production company. Its principal assets are located in Romania (development phase) and Tunisia (production phase). Raising c.£10m. Offer TBA. Due mid May.
FOG VNL NTOG BLVN THAL CEPS MIDW TLY FARN CRAW
11 May 18
Small Cap Breakfast
Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices. Raising £7.5m to £10m. Offer TBA. Due early Dec Ten Lifestyle Hldgs - Technology-enabled lifestyle and travel platform providing trusted concierge services to the world's wealthy. Net revenue increased from £20m in the year ended 31 August 2015 to £33m in the year ended 31 August 2017, a compound annual growth rate of 29%. Offer raising £32.2m at 134p with market cap of £104.8m, expected 29 Nov 2017. Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native invideo advertising . 2016 rev £0.7m and £7.3m operating loss. Offer TBA Keystone Law Group— full service law firm with over 250 self-employed lawyers . Due 27 Nov. Raising £10m at 160p. Mkt Cap £50m. Revenue of £25.6 million and EBITDA of £2.1 million. In FYJan17. Beeks Financial Cloud -niche cloud computing and connectivity provider for automated (algorithmic) trading in Forex and Futures financial products . Raising £7m. Mkt Cap c.£24.5m. Due 27 Nov. FYJun17 rev £4m. Profitable at operating level. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. OG Graphite, brownfield development-stage graphite company focused on the reactivation of its wholly-owned Kearney natural flake graphite mine and mill located 280 km north of Toronto, Canada. Offer TBA, expected mid November.
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24 Nov 17
The Oily Rag
We discuss the impact of this year’s hurricane season on the US and global markets. We are of the view that the market needs to factor in the potential impact on the oil price of annual disruptions to US production during the hurricane season. The impact of the hurricane season has historically only resulted in mainly offshore production being shut in. However, as climate change accelerates, hurricanes in the Gulf of Mexico now have more energy and can reach landfall. As a result, densely packed refining infrastructure needed to shut in, affecting both domestic and international prices for refined products and crude.
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10 Nov 17
GMP FirstEnergy ― UK Energy morning research package
Gran Tierra Energy (GTE CN)1,6; BUY, C$5.00: 1Q17 results | Falcon Oil & Gas (FOG LN/FO CN) (not covered): Origin Energy acquires Sasol’s interests in Beetaloo in Australia | SDX Energy (SDX LN/CN)1; BUY, £0.75/C$1.25: Results of SD-1X well in Egypt
FOG GTE SDX
05 May 17
The Oily Rag
We discuss the outlook for the North Sea following the Wood Review and restructuring within the industry since the downturn in the oil price. Consistent with other mature regions, the North Sea has struggled with declining production and a stubbornly high cost base. Following the Wood Review and changes to the fiscal terms and regulatory environment, we discuss how these developments could prolong production and maximise economic recovery in the long term. Issues remain surrounding decommissioning and appetite for the region given its maturity but there is now at least a clear framework around which the industry can constructively operate. We feel that the future of the North Sea will be driven by the smaller, more nimble E&Ps and we profile Hurricane Energy, Ithaca Energy, Independent Oil & Gas and Parkmead Group. We also discuss the opportunities for the service sector.
FOG CHAR EOG HUR IOG IAE PMG SAC SOU WRL
11 Nov 16
The Oily Rag
Despite a particularly mild winter, the US power sector used 2.2tcf of gas between December and February, an increase of over 10% on the previous year. The key driver for this increase has been a shift away from coal due to the introduction of stricter environmental controls on the sector under the terms of the ‘Clean Power Plan’. As a result, the electricity sector now accounts for c30% of gas demand in the US, and this is set to increase further as more coal-fired generation is replaced by cleaner gas-fired capacity.
FOG CHAR EOG IOG IAE SAC SOU WRL
05 Aug 16
Servoca*: Acquisition of A+ Teachers (CORP) | Vmoto*: Interim results on track with strong momentum (CORP) | Plethora Solutions*: Interims (CORP) | STM Group*: Making good progress (CORP) | Wolf Minerals: First tungsten concentrate produced (BUY) |Falcon Oil & Gas: Kalala S-1 well result (BUY)
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01 Sep 15