Stifel FirstEnergy Morning Research Package

CES Energy Solutions(CEU-TSX); BUY, C$3.75― After yesterday’s management update, we still think the stock is a double | Gear Energy (GXE-TSX); HOLD, C$0.55 ― Reports 4Q19 results and 2019 reserve book | Inter Pipeline (IPL-TSX); HOLD, C$21.00― FLASH: 4Q19 results slightly below Street | Kelt Exploration (KEL-TSX); BUY, C$5.65― Reports 2019 reserve book | Ovintiv (OVV-NYSE); BUY, C$20.00― OVV –FCF outlook and capital efficiencies improving | Peyto Exploration & Development(PEY-TSX); HOLD, C$4.35―

Announces 4Q17 results ahead of consensus

Peyto reported fourth quarter financial and operating results that were ahead of consensus expectations, with CFPS of $0.98/sh in the period in line with our forecast though ahead of consensus of $0.93/sh. There are no material changes to our forecast in aggregate though we have moved some elements associated with timing mildly, as it has preserved a $200-$250 mm E&D capex outlook for 2018e in what is largely a back-end weighted 2H18e program. We have maintained our 12-month target price to $15.

Confirms dividend reduction, 2018e capex moderation

As anticipated in the current Canadian natural gas price forward complex, Peyto has announced its intention to reduce its dividend to $0.06/month from $0.11/month (~$119 mm per annum from $218 mm) beginning in 2018e. Further, the company will lower 2018e E&D capex to $200-$250 mm from $300-$450 mm prior, below sustaining capex levels that we previously estimated at $325-$350 mm. The company attained its 2017 exit target of 115,000 boe/d, and at 11,000 bbl/d or ~10% liquids, is entering the year

Announces Second Quarter Results

Peyto announced second quarter financial and operating results that were in line with our expectations, highlighted by the preservation of profitability in the period, which will likely be singular across all E&P reporting. There is no change to 2016e guidance. We expect Peyto to continue to strive towards a ~120,000 boe/d 2016e exit rate. Peyto should be a core portfolio holding. We have realigned our 12-month target price to a valuation in line with that of its peer group at the strip, and as

2Q16e Quarterly Preview

Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly rev

Peyto Announces First Quarter Results, Impressive Attrition Observed in Costs (Again), Intent to Maximize Earnings Generation

Coming off of research restriction following our participation in Peyto’s $172.5 mm equity offering, issuing 5.4 mm shares at $32.00/sh, Peyto reported first quarter results that were well ahead of forecast and should easily validate investor subscription in its equity issue.

Intermediates, Mid Caps & Small Caps

With this publication we briefly summarize our projections for 1Q16e quarterly results for the Junior E&P (Intermediate, Mid & Small Cap) segments of our coverage universe

Domestic E&P Statistical Package and FD&A Review

With this publication we highlight various metrics and statistics forthcoming from yearend reserve books for our Domestic E&P coverage universe (Integrateds, Large Cap, Oilsands, Intermediate, Mid Cap, and Small Cap). Similar charts for YE2014 reserves can be found in our Statistical Package dated April 7, 2015.

Intermediates, Mid Caps & Small Cap Commodity Price Update

With this publication we highlight forecast revisions associated with our commodity price update (Natural Gas Update; Crude Oil Update), roughly characterized by near term lifts in crude oil prices concurrent with a reduction to portended 2016e and 2017e natural gas pricing outlooks. While there are a few ranking changes on mostly non-material moves to valuations, implied returns within the group on the whole are far less than postulated only a few months ago, reflective of resurgent equity pric

Announces Fourth Quarter Results, Impressive Attrition observed in Costs, Historically Low Capital Reinvestment e ciencies Ahead

Peyto reported fourth quarter results that were in line to ahead of our expectations. While the Company has reduced 2016e E&D capital investment by $100 mm to $500-$550 mm, our volume growth and CFPS targets are actually up, a direct result of both lower operating and capital inputs embedded into our revised forecast. We reiterate our 12-month target price of $40.50/sh and Outperform ranking. Thematically, the current commodity price environment reminds us of the spring of 2012, and within that

ANNOUNCES STRONG 2015 FINANCIAL RESULTS

Impact: Postive. Peyto announced solid 4Q15 results that were ahead of our production and cash flow expectations. The Company also offered an updated 2016e outlook that included a reduced capital program, citing improved capital efficiencies, that will likely prompt upward revisions to our proforma estimates.

Peyto Announces 2015 Reserve Book, Lowest Costs in Corporate History Complemented by Sizeable Decrease to FDC Balance

Peyto reported 2015 year-end reserves illustrative of the achievement of remarkable cost efficiencies and decent reserve growth consistent across all categories. A rigorous self-assessment, characteristic of a typical Peyto report, validates the premise of successful profit-oriented business strategy. There is no change to its 2016e guidance and related growth targets though the Company seems to be gravitating towards the upper end of its prior target ranges. Updating our NAV methodology, we are

Intermediate/Mid/Small Cap Commodity Price Update Impact

With this publication we highlight forecast revisions associated with our crude oil commodity price update. Concurrent within a dynamic time for E&Ps, some of which have already begun the process of 2016 capital budget downdrafts, revised estimates attempt to directionally capture a shift towards capital conservation, though severely weakened futures curves have influenced our thinking for the better part of 6 months anyway. We expect further capital investment reductions forthcoming from E&Ps i

Survival of the Fittest

This publication serves to recap the chaotic changes that have happened since original 2016e budgets were disseminated, plus provide clarity on the names we believe will thrive, survive, or those that will be challenged to remain in this group for much longer.

Moderate Risk, High Reward Within Top Ideas Portended for 2016

While a new year, a lot of our Top Ideas are old and familiar. We continue to believe the market will coalesce around low cost entities able to grow or at least maintain earnings power within a framework of capital conservation. While we continue to be optimistic surrounding elevated M&A activity, management teams and boards will be reluctant to sell at cyclical troughs, and as such do not believe the market will speculate on transactions despite some compelling asset prices reflected in equitie

Jubilee Metals - Operational Update Q3 FY2024

Jubilee today reports its Q3 and third quarter operational results from its expanding operations in Zambia (copper) and South Africa (chrome and PGM). South Africa is on a growth trajectory with record chrome production of 409kt in the quarter (Q2 FY2024 381kt) and a monthly record in March of 145kt and production YTD of 1.13Mt (0.94Mt). Jubilee is well underway to its annual target capacity of 2,1Mt/yr especially with the new 300kt/yr chrome plant at Thutse expected to be operational in August

Trinity Exploration and Production - Reserves Reduction but Solid Core Business

Trinity has announced a c28% reduction to its 2P reserves following a YE23 review. Despite the decrease in the Company’s 2P reserves, Trinity’s core business remains robust, with a reserves/production ratio of >12.5 years at YE23. Whilst there is significant potential for growth within the current portfolio, this will be difficult to unlock from the current balance sheet and we believe further financing will be required. We update our target price to 76p (from 202p), a c85% premium to the curren

I3 Energy (I3E LN) - Canada royalty assets sale

I3 has announced the sale of the majority of its royalty interests in Canada, for US$24.8m cash. This allows the company to fully repay amounts drawn on its debt facility and create a working capital surplus, giving I3 significant additional funding flexibility going forward

Morning Note – 16 April 2024

Valeura Energy (TSX: VLE): Three exploration wells deliver three discoveries

• The Nong Yao-13 exploration well in the new Nong Yao D area that was targeting multiple zones has encountered >30 feet of new oil play across several new shallow intervals which have not been produced elsewhere on the concession. These reservoirs are believed to be recurring across the Nong Yao D area. • The drilling result confirms that oil has successfully migrated into this area of the block (a factor that was seen to be a risk in the Nong Yao D area) and open the opportunity for further a

NextSource Materials - Initiation

NextSource is uniquely positioned to build a leading vertically integrated position, ex China, in the supply of Lithium-ion battery anode material which is essential for the Energy Transition. The company is commissioning phase 1 of its world-class Molo graphite mine in Madagascar and is in the final permitting process for its first Battery Anode Facility (BAF) to be located in Mauritius. The company is backed by Vision Blue, established by Sir Mick Davis, former CEO of Xstrata. On our calculat

DEC FY23 Results Update

DEC reported FY23 results which were in line with expectations and announced the acquisition of joint venture assets from Oaktree along with an updated capital allocation framework.

Morning Note – 15 April 2024

Oil & Gas - Cavendish sector note

Chariot, Energean, Touchstone Exploration, Longboat Energy, Hartshead Resources, BP, Helix Exploration, PetroTal, Pantheon Resources, Caspian Sunrise, Petrofac, DNO ASA, Valeura Energy, Aker BP, Var Energi Source: FactSet, weekly change 08/04/24-12/04/24 Oil rose as Israel braced for a possible attack from Iran, a development that would threaten major disruptions in a region that accounts for a third of the world’s crude output. An assault is expected to come as soon as the next 48 hours, which

Clean Power Hydrogen - New customers and licensees circling…

CPH2 has released FY23 results with the company completing the period with a slightly lower cash outflow from operations and a higher cash balance than forecast. Looking ahead, with a new and improved technical and engineering team, the company has committed to completing Factory Acceptance Testing of its first MW scale electrolyser, the 0.5MW MFE110, within the next three months. In our view, this will be a major milestone for the company which will demonstrate that its unique technology can be

SP Angel . Morning View . Copper prices hold higher as China processing fees fall below $0/t amid low feedstock availability

Union Jack Oil (UJO LN) - Wressle update

Union Jack has released an update on its Wressle asset, reporting maturing production from Wressle-1, alongside progress for significant further development activities on the field going forward.

PROGRESSIVE: Pharos Energy: Delivering on operations and balance sheet

Pharos Energy reported FY23 results on 27 March. Group net production of 6,508 boepd (FY22: 7,166 boepd) was in line with guidance, assisted by successful development drilling in Vietnam and exploration successes in Egypt. Pharos’s strong cash generation resulted in a stronger balance sheet, with net debt reduced to US$6.6m (from US$28.9m at the end of 2022) and cash balances totalling US$32.6m. This left the group free to return more cash to shareholders, including a 10% increase in dividends,

Union Jack Oil* (UJO LN) - Wressle update and dividend plans

Union Jack announced an operational update on its onshore UK Wressle field and confirmed plans to announce the payment of a cash dividend to shareholders along with the FY23 results in May. Wressle continues to deliver material revenues to the Company, generating positive cash flow and providing it with sufficient cash resources to fund shareholder returns and invest in new development projects.

Union Jack Oil+ (UJO, House Stock at 23p) - Wressle update