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
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.
Oil posted its biggest monthly advance on record, just a few weeks after prices made a dramatic plunge below zero. Crude surged about 88% in May, with US futures on Friday rising above $35 a barrel for the first time since March, driven by massive supply curbs by producers across the world. Still, prices are well below levels at the start of the year, and demand that was crushed by the coronavirus crisis may need to show a sustained improvement for the rally to extend further.
For now, the outlook for consumption looks bleak, though it is on the mend. While virus-related lockdowns are easing, demand is not yet roaring back in the US Fuel sales that were clobbered in European nations such as Spain and Italy will take time to recover. China is a bright spot, but the rest of Asia is still struggling.
The number of rigs drilling for oil in the US fell for the eleventh week, stemming the massive glut of crude that flooded the market. Yet there is a risk that oil's advance could tempt producers to turn on their taps again.
US crude futures fluctuated Friday, as Federal Reserve Chairman Jerome Powell defended aggressive action to shield the economy as the coronavirus pandemic took hold. Prices surged at the close, with West Texas Intermediate oil settling 5.3% higher at $35.49 a barrel, after falling as much as 4% earlier in the day. Futures posted the biggest monthly jump in data going back to 1983.
Brent crude for July, which expires Friday, rose 4 cents to $35.33, closing below WTI for the first time since 2016. The global benchmark has rallied almost 40% this month. The more active August contract rose 5% to settle at $37.84.
Meanwhile, US President Donald Trump is poised to sign a measure that would punish Chinese officials for imprisoning more than one million Muslims in internment camps, as he looks to rebuke Beijing over its crackdown in Hong Kong and its response to the coronavirus. He has also discussed putting targeted sanctions and trade measures on China's financial sector.
More on the oil market:
As the fallout from crude's historic plunge continues, the Securities and Exchange Commission and the Commodity Futures Trading Commission have both opened probes into the $4.64 billion United States Oil Fund ETF.
As China's demand recovery outpaces the rest of Asia, falling fuel exports from the refining giant are providing a much-needed buffer for other processors in the region still grappling with lowered consumption and poor margins.
An early look at Saudi Arabia's crude exports for May shows that historic production cuts have done little to squelch the kingdom's flood of oil to China, which is just getting back on its feet from the coronavirus.
Companies: FOG PVR 88E DGOC EME TRIN UOG
United Oil & Gas (UOG LN): FY19 results, transformation to a full-cycle | E&P Predator Oil & Gas (PRD LN): LNG import licence application for Ireland
Companies: United Oil & Gas Predator Oil & Gas
Oil fell, paring a weekly gain, as investors weighed improving supply fundamentals against doubts surrounding China's economic growth.
Futures in New York slid 2% Friday but notched a 13% increase for the week. Major producers continue to scale back production. US explorers laid down another 21 oil rigs, bringing the total to the lowest since 2009. Beijing abandoned its economic growth target for this year due to “great uncertainty” over the coronavirus, triggering concerns over a demand recovery.
Yet, output cuts by major producers have helped shrink inventories globally at the same time that OPEC+ works to implement its pledged reductions. The alliance's programme this month is on the way to trimming 9.7 million barrels of daily crude output -- roughly 10% of global supplies and stockpiles at the storage hub at Cushing, Oklahoma, shrank by the most on record last week.
West Texas Intermediate crude for July delivery dropped 67 cents to settle at $33.25 a barrel.
Brent for July settlement fell 93 cents to end the session at $35.13 a barrel on the ICE Futures Europe exchange.
Gasoline futures fell 0.7% to $1.0382 a gallon.
China's oil demand earlier this month was probably at 92% of levels at the same time last year, IHS Markit said, and full-year consumption is likely to be around 8% lower than in 2019.
Oil climbed to the highest level since mid-March to post its third weekly gain as economies begin to reopen and signs continue to emerge that demand is recovering.
Futures in New York rose 19% during the week. OPEC is optimistic that the worst of the oil crisis is over and sees signs that the global economy is starting to recover. States in the US are beginning to ease lockdown measures and reopen. Beaches in New York, New Jersey, Connecticut, and Delaware will be open for Memorial Day, according to New York State Governor Andrew Cuomo.
The price for the WTI June contract briefly rose above that of the July contract for the first time since mid-March, indicating that concerns around storage capacity are easing. Stockpiles at the key US storage hub in Cushing, Oklahoma, shrank last week for the first time since late February. The number of rigs drilling for oil in the US fell by another 34 and is at a level not seen since before the shale revolution kicked off at the beginning of the last decade as producers slash output.
Oil prices are still down more than 50% this year. Demand is far below pre-virus levels and Rystad Energy says that global oil demand in 2020 will fall 11%. Still, BP Plc sees evidence of consumption rising and the International Energy Agency said the market's outlook has improved. Additionally, Saudi Arabia will slash supply to its customers around the world in June as part of OPEC and its allies' record production cuts.
West Texas Intermediate for June delivery rose $1.87 to settle at $29.43 a barrel in New York.
Brent for July settlement climbed $1.37 to $32.50 a barrel.
However, the oil market's recovery remains fragile. More than 30 tankers laden with the kingdom's crude are set to reach the US this month and the next, according to ship-tracking data compiled by Bloomberg. That could put fresh pressure on storage just as the glut shows signs of easing.
Oil notched its first back-to-back weekly gain since February amid optimism around production cuts beginning to eat into a massive supply glut.
Futures in New York climbed 25% this week. Explorers are cutting production in response to crude oil trading in the $20-a-barrel range. EOG Resources Inc is cutting about a quarter of its oil production for May in one of the biggest US shale retrenchments to date.
The number of US rigs drilling for oil fell to a level not seen since before the shale-oil revolution kicked off at the beginning of the last decade.
As rigs shut and nationwide production lessens, signs of a demand recovery are also occurring, with drivers hitting roadways as coronavirus-led lockdowns ease.
This week's data from the Energy Information Administration proved supportive. US gasoline supplied, an indicator of consumption, rose by the most in almost two years last week and nationwide crude production declined for a fifth straight week to the lowest since July 2019.
West Texas Intermediate for June delivery advanced $1.19 to settle at $24.74 a barrel on the New York Mercantile Exchange.
Brent for July settlement climbed $1.51 to $30.97 a barrel.
Still, prices need to trade at a certain level in order to see the glut shrink meaningfully. That price level keeps supply from overwhelming capacity at Cushing.
Crude posted its first weekly gain in a month as global production cuts start to lift physical markets.
Futures in New York rose 17% this week. Oil companies have announced major production closures with Chevron Corp saying it will shut as much as 400,000 barrels of daily output and Exxon Mobil Corp reporting it will cut rigs in the Permian Basin by 75% by the end of the year. Concho Resources Inc said it is curtailing about 4-5% of its production.
At the same time, OPEC's pledge to trim supply by 9.7 million barrels a day has gone into effect. Algerian Energy Minister Mohamed Arkab, who holds OPEC's rotating presidency, called on members of the cartel to implement more than 100% of their agreed production cuts.
The price of real crude is reacting to the curbs, with key grades from the Caspian to the North Sea trending higher in recent days. Globally, the number of rigs drilling for oil and gas tumbled almost 20 percent in April, and in the US, the oil rig count dropped by 53 to 325, a seventh straight week of declines.
Still, crude came off highs during the session on lingering concerns over a glut of oil and lack of places to store it.
West Texas Intermediate for June delivery rose 94 cents to settle at $19.78 a barrel in New York, the highest level in two weeks.
Brent for July settlement fell 4 cents to end the session at $26.44 a barrel.
Since crude plunged into negative territory last week, investors have been fleeing the nearest futures contracts, increasing volatility. The United States Oil Fund LP, which came under pressure from regulators last month due to the size of its WTI position, said on Friday that it will halve holdings in the July contract. The fund said it may expand investments to include products beyond the benchmark New York crude grade.
Oil edged lower for the week after paring losses following the dramatic collapse on Monday that saw prices in New York plunge below zero for the first time in history.
West Texas Intermediate for June delivery rose 2.7% Friday, closing the curtain on a tumultuous week of wild price swings. US operators have started to shut old wells and halt new drilling, actions that could reduce output by 20%. Russia's seaborne exports from the Baltic will fall to a 10-year low in May, while Kuwait and Algeria said they are reducing production earlier than required under the OPEC+ deal.
Oil exploration across the U.S. fell the most in 14 years with drillers idling 60 rigs, according to data from Baker Hughes Co. on Friday. This marks the sixth straight week of decreased activity levels, halting almost half of American exploration.
In a sign of how severe the supply imbalance is, traders are using barges - usually busy moving fuels around Europe's petroleum-trading hubs - as cargo storage instead. Meanwhile, an American pipeline operator is looking at ways to free up space on its conduits to stock more crude.
WTI for June delivery rose to 44 cents to settle at $16.94 a barrel in New York. The contract fell 7.3% for the week.
Brent added 11 cents to settle at $21.44 a barrel.
With no clear indication of when demand might recover, the market is set for a prolonged slump that will reshape the industry for years to come. Oil's collapse will be followed by the weakest recovery in history, according to the World Bank. Rigzone.
Companies: FOG PVR 88E DGOC TRIN UOG
Oil closed the week at the lowest since 2002 as an historic OPEC+ production cut failed to counter a wave of gloomy demand forecasts and concerns that traders are quickly running out of room to store crude. Futures in New York ended the week down 20% after Sunday's agreement by OPEC+ to cut output by almost 10 million barrels a day. The agreement was not enough to overcome signs that energy demand was cratering as people sheltered from the coronavirus pandemic.
China reported that its economy suffered a historic slump in the first quarter, OPEC predicted demand for its oil will fall to a three-decade low and US and Europe inventories swelled. Meanwhile, prices in the physical oil market have disconnected from futures, with landlocked crudes such as Bakken and Western Canadian Select worth about $11 to $12 a barrel.
In the US, a key exchange-trade fund plans to move some of its giant futures position to a later month. The move comes as near-term prices for US crude are trading at huge discounts to later-dated contracts on concern the storage hub of Cushing, Oklahoma, will fill to capacity. That has seen prices disconnect from Brent futures in London.
West Texas Intermediate futures for May, which expires next week, are at an almost $7 a barrel discount to June futures, close to the biggest spread between the front and second month contracts in 11 years. Dated Brent was assessed at $18.86 on Thursday, according to S&P Global Platts, far below futures prices, and real cargoes are trading at even steeper discounts.
Oil investors searching for a bottom of the price rout in West Texas Intermediate crude have rushed into exchange-traded funds. Net-long positions surpassed 400,000 lots on Friday, the highest since at least 2016. Investors have poured more than $1 billion into the United States Oil Fund ETF so far this week. At Thursday's close, the fund held more than a quarter of all the June WTI contracts. As of Friday, the fund will now hold 20% of its contracts in the second WTI futures month.
West Texas Intermediate dropped $1.60 to settle at $18.27 a barrel in New York. The contract traded as low as $17.31 earlier in the session, the lowest since 2001.
Brent for June delivery rose 0.9% to $28.08 a barrel.
The collapse in oil prices is prompting a rapid decrease in production. Drilling rigs targeting crude in the US fell by 66 to 438, the lowest since Oct 2016, Baker Hughes said Friday. With the recent output-cut deal by OPEC and its partners failing to revive prices, Saudi Arabia and Russia have said they'll “continue to closely monitor the oil market and are prepared to take further measures jointly with OPEC+ and other producers if these are deemed necessary.” Saudi Aramco said Friday that it will reduce supply to 8.5 million barrels a day from 1 May.
Saudi Arabia and Russia ended their oil price war on Sunday, by finalising a deal to make the biggest oil production cuts in history. OPEC said it would cut 9.7mmbbls/d in oil production in May and June, equivalent to almost 10% of daily global supply, after June the 10mmbbls/d cut will be tapered to 7.6mmbbls/d until the end of the year and then 5.6mmbbls/d through 2021 until April 2022 in an effort to stabilise global crude markets. The cuts would be more than twice those made by OPEC during the global financial crisis. OPEC added that the cuts could end up being much greater, at around a fifth of global supply, with 3.7mmbbls/d of potential cuts from the US, Brazil and Canada.
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.
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
Companies: FOG PVR 88E DGOC EME UKOG TRIN UOG
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 AKERBP BP/ CASP COPL DNO ENOG GENL GKP JKX MAHAA NOG PMO PXT PVR RDSA RRE TGL TLW UOG VLU
It's fair to say that the Covid-19 outbreak and the Saudi/Russia oil price war has led to a perfect storm in the oil and gas sector, with WTI and Brent futures falling to their lowest levels since 2002 and 2003 respectively. Whilst the near-term pain is very real for investors, there are opportunities to pick up some incredible bargains if they stick to those companies. We believe United are built to survive in a highly cyclical commodity. The Company's key Egyptian assets have one of the lowest costs of production globally, with operating costs of just US$6.5/boe. Combine this with a 2020 capex campaign which is entirely discretionary, gas production which is sold via long-term sales contracts at cUS$2.7/mmbtu and a BP facility hedging c217bopd at US$60/bbl and United is well positioned to weather the current low commodity prices. We update our valuation to 6.5p per share (a 322% premium to the current share price) and reiterate our BUY recommendation.
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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
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
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.
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
Bushveld Minerals, is an integrated vanadium mining, processing and technology businesses. The South African group owns 74% of Vametco and 100% of the Vanchem. 26% of Vametco is held by a Black Economic Empowerment group. Bushveld Energy (84%) is developing vanadium redox batteries for grid use in SA.
Companies: Bushveld Minerals
Shearwater is on track to meet our FY19E estimates. The acquisition of Brookcourt completed post the balance sheet date and so does not feature in the interim results. The integration is going well and underlying cash generation is positive. The recent sell-off in the shares leaves the stock trading at a 15% discount to the recent Placing price. Buy.