Edison Investment Research is terminating coverage on Medigene, PetroMatad, Brady and Stride Gaming. Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.
Previously published reports can still be accessed via our website.
Companies: Petro Matad
Petro Matad has announced the flow test results from Heron-1, drilled in September in the north of Block XX. The well flowed hydrocarbons from a 12m interval from 2,834m in the upper portion of the Lower Tsagaantsav Formation without the need for artificial lift. The well flowed 46° API oil at an average rate of 200bopd, making it one of the lightest oils recorded in the basin. A peak production of 821bopd was achieved. We assumed an initial well production of 240bopd in our model. Petro Matad will now incorporate all data from the drilling campaign into reinterpretation of Block XX to apply for an Exploitation Licence from the Government of Mongolia to be able to put Heron-1 into production in 2020. We valued Heron at 4.9p/share (out of our total 20.1p RENAV for Petro Matad).
Petro Matad (MATD LN) (not covered): Operating update in Mongolia | Equinor (EQNR NO) (not covered): 3Q19 results | Serinus Energy (SENX LN); SPECULATIVE BUY, £0.20: Licence extension in Romania | Serica Energy (SQZ LN) (not covered): North Sea update | Waldorf Production acquiring UK North Sea assets
Companies: MATD SEN SQZ
Petro Matad has announced results from Gazelle-1, the final well in its three-well drilling campaign in Block XX, Eastern Mongolia. The well did not encounter hydrocarbons in the Lower Tsagaantsav objective and found a thin good quality pay zone in the Upper Tsagaantsav. We valued Gazelle at 1.4p/share (out of our total 20.1p RENAV for Petro Matad). The company’s operational focus will now switch to testing the successful Heron-1 well, which established a 77m gross oil-bearing interval in a structure that has proven productive in the adjacent Block XIX.
Petro Matad is now drilling Gazelle-1, the final well of its 2019 three-well exploration and appraisal campaign in Block XX, in Mongolia. Results are expected during October, alongside test results from the successful Heron-1 well. In the south-west of the block, the riskiest well in the programme, Red Deer-1, did not encounter hydrocarbons. We update our valuation on the back of results from the two first wells of the campaign. Red Deer, previously valued at 2.8p/share has been removed from our sum of the parts. We have de-risked Heron to a 68% chance of commercial success vs 45% in our last note. We now value the asset at 4.9p/share and will update the probability of success once the well test results are announced. Our risked valuation, post assumed farm-out value dilution, is updated to 20.1p/share (down 7%) at $70/bbl long-term Brent, which we expect to revisit after drilling Gazelle-1 and well testing Heron-1.
Diversified Gas &Oil (DGOC) - DGO continues with its successful acquisition growth strategy | Petro Matad (MATD): Spud of exploration well Gazelle-1 | Sound Energy (SOU) - 1H 2019 report reflects a difficult six months for the company | Cabot Energy* (CAB) - Subscription to raise US$350,000
Companies: DGOC MATD SOU CAB
Petro Matad announced yesterday that the Red Deer-1 well in Block XX in Mongolia did not encounter hydrocarbons. The well was the second in a three well exploration and appraisal campaign and follows on from last week’s successful result in Heron-1. We valued Heron-1 at 3.3p/share, which has now been de-risked, and Red Deer-1 at 2.8p/share, which can now be discounted, but on balance we expect little to change in our last risked valuation of 21.6p/share The company will now complete its programme with the drilling of Gazelle-1 and the testing of Heron-1.
ExxonMobil (XOM US) (not covered): Oil discovery offshore Guyana | Petro Matad (MATD LN) (not covered): Red Deer-1 well dry & operational update | Equinor (EQNR NO) (not covered) & Aker BP (AKERBP NO) (not covered): Gas discovery in the Norwegian Sea
Companies: Exxon Mobil Corporation Petro Matad
Touchstone Exploration (TXP LN/CN)1 ; BUY, £0.25 : Very good results at the first Ortoire well in Trinidad | ExxonMobil (XOM US) (not covered): Selling Norway? | Hurricane Energy (HUR LN) (not covered): Well update in the UK | Independent Oil & Gas (IOG LN)1 ; BUY, £0.55: EUR100 mm bond issue | Reabold Resources (RBD LN) (not covered): Well results in Romania | Petro Matad (MATD LN) (not covered): Drilling results in Mongolia
Companies: TXP XOM HUR IOG RBD MATD
AMRYT PHARMA PLC— a biopharmaceutical company focused on developing and delivering innovative new treatments to help improve the lives of patients with rare or orphan diseases have raised $60m before expenses and will relist on the AIM Market on the 25/09/2019
Companies: ONC PEN RBD UOG SAE SIM MATD CER MSMN MPL
SEC S.p.A. Adm ission is follow ing a reverse takeover under Rule 14 by SEC S.p.A of Porta Com m unications plc, another AIM quoted company. No funds being raised. Due 4 September. Mkt cap c £9.9m. The merger will create a business with global fee income of around €80m and a host of PR agencies, including Newgate, Publicasity and Newington.
Companies: OPM PPIX MATD RENX JSG SOLI QIL ECHO LVCG CHRT
Providence Resources (PVR)/Lansdowne Oil & Gas* (LOGP): Corporate Update | Nostrum Oil & Gas (NOG): | PetroMatad (MATD): Operational Update | Cabot Energy (CAB): Q2 Results
Companies: PVR NOG MATD CAB
Kosmos Oil & Gas (KOS): Q2 results | PetroMatad (MATD): Red Deer spud & Heron Suspension | Pantheon Resources (PANR): Farmout Process | Lansdowne Oil & Gas* (LOGP)/Providence Resources (PVR): Funding Update and Providence Restructuring | Mosman Oil & Gas (MSMN): Stanley-3 Spud | Volga Gas (VGAS): Drilling Update
Companies: KOS MATD PANR LOGP MSMN VGAS
JKX Oil & Gas (JKX): Well Result | PetroMatad (MATD): Spudding of Well | Pantheon Resources (PANR): Proposed Placing
Companies: JKX MATD PANR
Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m.
Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.
Companies: CORA HGM SOLG INHC MATD MTPH DPP GWI VANL PEN
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We currently have 91 research reports from 7
InfraStrata's acquisition of the iconic Harland & Wolff (H&W) shipyards in Northern Ireland has been transformational for the group, and with a carefully planned growth strategy, there is a clear route to cash breakeven in the short term. Over the medium to long term, these facilities could support a c£400m revenue business. With the company trading at a c30% discount to its H1/20A book value and c65% to its Adj NAV, we initiate with a Buy recommendation.
Anglo Asian Mining is an AIM listed precious and base metals producer running flagship Gedabek operations in western Azerbaijan which include three producing mines and processing facilities. The Company targets 75-80koz GEOs in 2020 with low cost operations providing capital for organic growth opportunities within the highly prospective +1,000km2 land package, with the potential for additional attractive targets outside Azerbaijan as well as 25% of FCF dividend programme.
Companies: Anglo Asian Mining
Falcon is uniquely placed in the current challenging commodity price environment with its strong cash position (US$11.5m at 31 March 2020), fully funded drilling programme and high quality assets. Following the farm down of a 7.5% participating interest to partner Origin Energy in return for an A$150.5m increase in the gross cap carry, we believe Falcon is fully funded through one of the greatest periods of uncertainty the oil and gas industry has ever faced. At a time when many in the industry fight for their very survival, we believe Falcon has managed to secure a fantastic deal for shareholders, which should see the Company through to the potential monetisation of its 22.5% participating interest. We maintain our price target at 40p, a 426% premium to the current share price and reiterate our BUY recommendation.
Companies: Falcon Oil & Gas
President is again demonstrating its ability to adapt rapidly to extreme macro conditions to maintain the balance sheet and keep its asset portfolio intact. A further US$6m subscription from Trafigura alongside a US$4.1m debt for equity swap will reduce debt to ~US$15m. Working capital will also be boosted by up to US$3.1m from the equity placing plus £2.2m from the retail offering. These not only materially improve the balance sheet but also bring President into strategic alignment with a strong industry partner. This, together with the benefit of Argentine fixed oil prices, leaves it primed to pursue a dynamic growth plan.
Companies: President Energy
The El Salmiya-5 well has come in significantly ahead of pre-drill expectations, encountering 120m of net pay, and testing 8,700boepd from the primary Kharita target formation. When coupled with the ASH-2 well which is still producing over 3,000boepd, net production levels from Abu Sennan are likely to rise to over 2,500boepd in the coming weeks. We model 2020 net production averaging c2,100boepd, generating a gross profit after royalties and opex of cUS$5.8m and EBITDA of cUS$3.6m. We increase our price target from 6.5p to 7.3p, a 152% premium to the current share price and reiterate our BUY recommendation.
Companies: United Oil & Gas
Sylvania's share price has fallen 53% since its peaked on the 21st Feb, as the global economy hit the brakes. The short term demand outlook for PGMs is miserable, with supply chains breaking down as both luxury goods and car sales sales collapse.
Companies: Sylvania Platinum
Savannah Energy is an AIM-listed E&P company with two sets of assets: (i) in-production gas and oil fields and a regional monopoly gas distributon network in South East Nigeria (well away from the risky Delta area); and (ii) licenses over 50% of a prolific oil basin in Niger.
Companies: Savannah Energy
April 2020 production payment
Companies: Gulf Keystone Petroleum
2019 was a significant year for United Oil & Gas, dominated by the acquisition of Rockhopper Egypt and its 22% working interest in the Abu Sennan concession. The acquisition has transformed United into a full-cycle E&P with c1,760boepd of production. With low operating costs (cUS$6.5/bbl) and drilling costs, Abu Sennan remains cash flow positive with oil prices below US$20/bbl. Additional downside protection comes from the Company's pre-payment facility with BP, effectively hedging 6,600bbls per month at US$60/bbl until September 2022 and its long-term fixed gas contracts, insulating 20% of United's production from the current price volatility. We update our model, accounting for slightly higher operating costs, setting our price target at 6.5p a 242% premium to the current share price and reiterate our BUY recommendation.
Shearwater sells resilience and today's trading update shows us how resilient demand has been for its products and services. The Group has swung to EBITDA profitability and cash flow is well ahead of expectations. The macro themes of cyber security and remote working are supportive of robust demand levels going forward. We are maintaining our forecasts. Buy.
Companies: Shearwater Group
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: AKERBP AOI CNE CNE DGOC EGY ENOG ENQ GENL GKP GPRK GTE HUR IOG JSE KOS LUPE MAHAA OKEA ORC.B PEN PHAR PMO PTAL PXT RRE SDX SEPL TETY TGL TLW TXP WRL
Companies: Hurricane Energy
An independent resource audit by Gaffney, Cline & Associates (GCA) has significantly increased the resources at the Mako gas field following the JV's highly successful drilling campaign in Q4/19. GCA have increased the 2C gross recoverable dry gas volumes when compared to its previous resource assessment (in January 2019) by 79% to 495Bcf, slightly ahead of the internal 493Bcf assessment. In the upside case, the 3C resources have increased by 108% to 817Bcf, significantly higher than the 3C internal resource estimate of 666Bcf. Following the GCA resource upgrade, the Mako field has been proven to be one of the largest gas fields ever discovered in the West Natuna Basin and is believed to be the largest undeveloped resource in the region. Located close to existing infrastructure and well established markets, we believe Mako is an attractive proposition, which we currently value at US$18.3m or 3.2p using a US$6/mcf long term gas price.
Companies: Empyrean Energy
Petropavlovsk PLC (LSE: POG) have released their FY2019 results and Q1 trading update this morning. The company had already released production numbers for last year. Overall the numbers reflected a strong operational performance although various financial/other parameters thwarted positive changes below the EBITDA line. Conversely net cash from operations reduced by 43% due to lower cash from prepayment as part of the group’s forward sale facility with the banks, yet net debt came down to $561m. . We show the key figures in Table 1.
An independent resource audit by Gaffney, Cline & Associates (GCA) has significantly increased the resources at the Mako gas field following the JV's highly successful drilling campaign in Q4/19. GCA have increased the 2C gross recoverable dry gas volumes when compared to its previous resource assessment (in January 2019) by 79% to 495Bcf, slightly ahead of the internal 493Bcf assessment. In the upside case, the 3C resources have increased by 108% to 817Bcf, significantly higher than the 3C internal resource estimate of 666Bcf. Following the GCA resource upgrade, the Mako field has been proven to be one of the largest gas fields ever discovered in the West Natuna Basin and is believed to be the largest undeveloped resource in the region. Located close to existing infrastructure and well established markets, we believe Mako is an attractive proposition, which we conservatively value at US$18.3m (risked) or 3.2p using a US$6/mcf long term gas price, unrisked our valuation of Mako increases to US$25.2m or 4.3p per share. We value Empyrean as a whole at 19.0p per share a 280% premium to the share price and reiterate our BUY recommendation.
Valuation – We have updated our Mako model, with gas first in 2023 (previously 2022). Using a long term gas price of US$6/mcf, and a 10% discount factor we value the 42.1Bcf of net 2C resources at US$18.3m (risked) or 3.2p per share. We include a 30% risking to account for any potential commercial risks (including political and fiscal changes), cost risks (associated with potential development cost variations) and timing risks (to allow for any project delays). Unrisked our valuation increases to US$24.7m or 4.3p per share.
A key sensitivity to our valuation is the gas price, at US$8/mcf our valuation of Mako increases to US$31.0m or 5.3p per share (risked), US$44.3m or 7.6p per share (unrisked) and at US$10/mcf our valuation increases to US$40.8m or 7.0p per share (risked), US$58.4m or 10p per share (unrisked).
Combined, we value Empyrean's portfolio at 19p per share, a 280% premium to the share price.