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XOM KAR BP/ CNE DNO ENI ENQ EQNR GENL HUR JSE LUPE NOG OMV PTAL REP RDSA SAVE SEPL SOU TTA TLW VOG
Auctus on Friday - 31/07/2020

PetroTal (PTAL LN)C; Target price £0.45: Production at Bretana restarts – In anticipation of the re-opening of the ONP, Bretana oil production recommenced on July 15, 2020 and achieved over 12,000 bbl/d when all seven wells were online. Oil deliveries have also already commenced to the Iquitos refinery and approximately 40,000 bbl are expected be delivered during July 2020. Oil is being barged to the Saramuro Pump Station and will be delivered into the ONP immediately after it reopens , now expected in early August 2020. To manage the company’s inventory and barge storage capacity, Bretana production has been reduced to approximately 8,000 bbl/d pending the restart of the pipeline. While the share price has already increased 30% over the last three weeks, we continue to see PetroTal as a value and growth stock. The company’s value based on its 2P reserves only (2P NAV of £0.28 per share) represents 2x the current share price and our Core NAV is 3x current levels. Assuming production of ~12 mbbl/d in 2021 (i.e. the level achieved when the field was restarted) PetroTal’s share price implies EV/DACF multiples of 1.7x in 2021 and 0.2x in 2022. On a production/capex low case, we estimate that PetroTal generates aggregate Free Cash Flow over 2021-2022 equal to the company’s market cap. IN OTHER NEWS ________________________________________ AMERICAS ExxonMobil (XOM US): Further volumes discovered in Guayana | Karoon Energy: Softening terms for acquisition of Brazilian asset | President Energy (PPC LN): Operational update in Argentina | Total (FP FP): Significant discovery in Suriname ASIA PACIFIC Jadestone Energy (JSE LN): 2Q20 update | Repsol (REP SM): Compensation in Vietnam | ENI (ENI IM): Large volume confirmed in Vietnam EUROPE ADX Energy (ADX AU): Operational update in Austria and Romania | ENI (ENI IM): 2Q20 results, lower capex | EnQuest (ENQ LN): UK Acquisition | Equinor (EQNR NO): Dry hole in Norway | Hurricane Energy (HUR LN): Operational update in the UK | Lundin Energy (LUNE SS): 2Q20 results | OMV (OMV AG): 2Q20 results/dividend reduction/Volumes discovered at Hades (Norway) reduced | Royal Dutch Shell (RDSA/B LN): 2Q20 results | Total (FP FP): 2Q20 results, Dividend distributions maintained | Zenith Energy (ZEN LN): Acquisition of Italian assets terminated FORMER SOVIET UNION Enwell Energy (ENW LN): Negative licence update | Nostrum Oil & Gas (NOG LN): 1H20 trading update in Kazakhstan MIDDLE EAST AND NORTH AFRICA BP (BP LN), ENI (ENI IM), Total (FP FP): Discovery in Egypt | DNO (DNO NO): 2Q20 results | ShaMaran Petroleum (SNM CN), Gulf Keystone Petroleum (GKP LN) and Genel Energy (GENL LN): Payment in Kurdistan | Sound Energy (SOU LN)C: Raising up to £4.5 mm of new equity SUB-SAHARAN AFRICA Angola lowering tax | Cairn Energy (CNE LN): Divesting Senegal and returning cash to shareholders | Total (FP FP): Divesting mature assets in Gabon | Savannah Energy (SAVE LN): FY20 results and update in Nigeria | Seplat Petroleum (SEPL LN): 1H20 results | Tullow Oil (TLW LN): 1H20 update | Victoria Oil & Gas (VOG LN): 2Q20 update in Cameroon EVENTS TO WATCH NEXT WEEK ________________________________________ 04/08/2020: BP (BP LN) – 2Q20 results 04/08/2020: GeoPark (GPRK US) – 2Q20 results 04/08/2020: Gran Tierra Energy (GTE LN/CN) – 2Q20 results 05/08/2020: Parex Resources (PXT CN) – 2Q20 results 07/08/2020: Frontera Energy (FEC CN) – 2Q20 results

  • 31 Jul 20
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Petrotal
PetroTal Corp (AIM: PTAL): Production re-start

• In anticipation of the re-opening of the ONP, Bretana oil production recommenced on July 15, 2020 and achieved over 12,000 bbl/d when all seven wells were online. • Oil deliveries have also already commenced to the Iquitos refinery and approximately 40,000 bbl are expected be delivered during July 2020. • Oil is being barged to the Saramuro Pump Station and will be delivered into the ONP immediately at its recommencement of its operations, now expected in early August 2020. • To manage the company’s inventory and barge storage capacity, Bretana production has been reduced to approximately 8,000 bbl/d pending the restart of the pipeline. • Re-starting production is the first step to unlock the value embedded in the shares. The next step will be the imminent reopening of the pipeline. At current oil price, the derivative liability with Petroperu will be reduced and the company will progressively refocus on growth. Cash engine with 2021-2022 free cash flow in line with current market cap While the share price has already increased 30% over the last three weeks, we continue to see PetroTal as a value and growth stock. The company’s value based on its 2P reserves only (2P NAV of £0.28 per share) represents 2x the current share price and our Core NAV is 3x current levels. Assuming production of ~12 mbbl/d in 2021 (i.e. the level achieved when the field was restarted) PetroTal’s share price implies EV/DACF multiples of 1.7x in 2021 and 0.2x in 2022. On a production/capex low case, we estimate that PetroTal generates aggregate Free Cash Flow over 2021-2022 equal to the company’s market cap. Our target price of £0.45 per share (~our Core NAV) represents 4.5x the current share price. Redeploying cash to boost growth Boosting spending in 2021 could take production to 20 mbbl/d by YE21. Converting 50% of the possible reserves into the 2P category would add £0.18 per share to our £0.28 per share 2P NAV. PetroTal is also looking to drill the ~70 mmbbl Constitucion prospect on Block 107 in 2021 with an unrisked value of £0.40 per share. A success at this well would derisk some follow-on giant prospects on the block.

  • 28 Jul 20
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MAU UKOG REP EQNR NBL TXP CVX
Auctus on Friday - 24/07/2020

AMERICAS Chevron (CVX US) buying Noble Energy (NBL US) – Chevron is buying Noble for US$5 bn in shares. Chevron is also assuming Noble’s US$8 bn debt. The premium paid by Chevron on Noble’s share price is only 7% compares to the last trading day before the acquisition was announced. Touchstone Exploration (TXP LN/CN): Material reserves estimates in Trinidad – Touchstone’s WI 2P reserves at Cascadura are estimated at 45 mmboe (including 234 bcf) with 3P reserves of 73 mmboe (including 381 bcf). Net peak production from Cascadura is forecasted at 15.1 mboe/d in the 2P case (22.6 mboe/d in the 3P case). 2P NPV10 in the 1P, 2P and 3P cases are respectively US$288 mm, US$519 mm and US$803 mm with net development costs of US$11.6-15.8 mm. EUROPE Equinor (EQNR NO): 2Q20 results – Adjusted net earnings were US$0.65 bn with 2,011 mbooe/d production over the period. The company has declared a quarterly dividend of US$0.09 per share in line with guidance. Repsol (REP SM): 1H20 results – 1H20 production was 675 mboe/d with adjusted net income over the period of EUR0.2 bn and net debt at the end of June of EUR4.0 bn (down EUR0.5 bn compared to the end of March). UK Oil & Gas (UKOG LN): Entry into Turkey – UK Oil & Gas is looking to acquire 50% non-operated working interest in the 305 km² Resan Licence in Eastern Turkey from Aladdin Middle East. Two geological targets have been identified within the Licence's Cretaceous Mardin limestones. The undeveloped Basur oil discovery and the Resan missed oil pay opportunity contain an aggregate unrisked gross mean oil in place of ~253 mmbbl with an upside case at 495 mmbbl. An undrilled exploration target in the shallower Garzan limestones adds further unrisked upside Oil in Place potential of 68-112 mmbbl. To earn its 50% interest in the Licence, UK Oil & Gas will fund 100% of the first of 5 commitment wells in the Licence's 5-year exploration term, together with a small 2D seismic survey with an expected cost of US$1.0-$1.5 mm. UKOG's net expenditure for the one well plus seismic programme is capped at US$5 mm maximum expenditure. SUB-SAHARAN AFRICA Global Petroleum (GBP LN/AU): Resources estimates in Namibia – A total of 881 mmbbl of unrisked gross Prospective Resources (Best Estimate) has been estimated in PEL0094 in two prospects, of which 687 mmbbl barrels are net to Global. The associated geological chance of success is 17-19%. Maurel & Prom (MAU FP): 2Q20 update in Africa – 2Q WI production was 24,919 boe/d including 4,003 bbl/d in Angola, 16,675 bbl/d in Gabon and 24.4 mmcf/d in Tanzania. EVENTS TO WATCH NEXT WEEK ________________________________________ 29/07/2020: Seplat Petroleum (SEPL LN) – 2Q20 results 29/07/2020: Lundin Energy (LUNE SS) – 2Q20 results 29/07/2020: Tullow Oil (TLW LN) – 1H20 update 30/07/2020: Royal Dutch Shell (RDSA/B LN) – 2Q20 results 30/07/2020: DNO ASA (DNO NO) – 2Q20 results 30/07/2020: ENI (ENI IM) – 2Q20 results

  • 24 Jul 20
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SDX PMO AKERBP EQNR GPRK RBD
Auctus on Friday - 17/07/2020

GeoPark (GPRK US)C; Target price US$20: Strong quarter, more drilling than expected – 2Q20 production of 36.9 mboe/d was slightly ahead of our expectations (35.8 mboe/d). Importantly the company ended the period with ~US$158 mm in line with the end of March. 70-80% of the 6.5-7.5 mboe/d production that had been temporarily shut down has been restored. GeoPark is also accelerating drilling activities in 2H20 beyond the level previously indicated by Parex Resources. GeoPark, the operator of Llanos-34, anticipates drilling 6-8 wells on the licence (Parex had previously indicated 4-6 wells only at Llanos-34 and Cabrestero) and 1-2 wells at CPO-5. As a result, we are increasing our 2H20 production from 41 mboe/d to 42 mboe/d. This has also positive implications for 2021 production that we now forecast at 47.7 mhoe/d (+1.7 mboe/d). The new drilling programme will probably include some exploration wells at CPO-5 and Llanos-34. Overall FY20 capex budget is increased from US$45-50 mm to US$65-75 mm. Unsurprisingly, given the challenging environment at the Morona block, the company is exiting Peru. GeoPark was very quick to react to the fall in oil prices with steeper reductions in activities than expected. Equally, GeoPark is re-instating drilling activities faster than expected. This reflects the combination of a strong balance sheet, operatorship and the low cost and flexible nature of GeoPark’s onshore operations. These continue to be key features of GeoPark’s business. GeoPark is now part of a very small group of companies offering exposure to exploration upside. Our unrisked value for the FY20 exploration programme is ~US$3.30/share. Our Core NAV is ~ US$18 per share, ~100% above the current share price. Echo Energy (ECHO LN): Restructuring of Argentine asset | President Energy (PPC LN): Drilling programme in Argentina | Trinity Exploration and Production (TRIN LN): 2Q20 operating update in Trinidad | Aker BP (AKERBP NO): 2Q20 results | Equinor (EQNR NO): Small discovery in Norway | OKEA Energy (OKEA NO): 2Q19 results | Premier Oil (PMO LN): 1H20 update | Reabold Resources (RBD LN): Potential offer to acquire Deltic Energy (DELT LN) rejected | Valeura Energy (VLU LN): Trading update in Turkey | Tethys Petroleum (TPL.H CN): Well test results at exploration well in Kazakhstan

  • 17 Jul 20
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Geopark
GeoPark Limited (NYSE: GPRK): Strong quarter, more drilling than expected

• 2Q20 production of 36.9 mboe/d was slightly ahead of our expectations (35.8 mboe/d). Importantly the company ended the period with ~US$158 mm in line with the end of March. • 70-80% of the 6.5-7.5 mboe/d production that had been temporarily shutdown has been restored. • GeoPark is also accelerating drilling activities in 2H20 beyond the level previously indicated by Parex Resources. GeoPark, the operator of Llanos-34, anticipates drilling 6-8 wells on the licence (Parex had previously indicated 4-6 wells only at Llanos-34 and Cabrestero) and 1-2 wells at CPO-5. • As a result, FY20 production guidance is now 40-42 mboe/d and we are increasing our 2H20 production from 41 mboe/d to 42 mboe/d. This has also positive implications for 2021 production that we now forecast at 47.7 mhoe/d (+1.7 mboe/d). • The new drilling programme will probably include some exploration wells at CPO-5 and Llanos-34. Overall FY20 capex budget is increased from US$45-50 mm to US$65-75 mm. • Unsurprisingly, given the challenging environment at the Morona block, the company is exiting Peru. Showcasing GeoPark business model and return to exploration GeoPark was very quick to react to the fall in oil prices with steeper reductions in activities than expected. Equally, GeoPark is re-instating drilling activities faster than expected. This reflects the combination of a strong balance sheet, operatorship and the low cost and flexible nature of GeoPark’s onshore operations. These continue to be key features of GeoPark’s business. GeoPark is now part of a very small group of companies offering exposure to exploration upside. Our unrisked value for the FY20 exploration programme is ~US$3.30/share. Value and leveraged play to oil price recovery GeoPark shares are listed in New York and the share price probably suffers from the general malaise that has impacted the overall domestic oil industry in the USA. With none of these issues (US elections, challenges faced by the shale players) related to GeoPark, the shares offer deep value with our Core NAV of ~US$18 per share (~100% above the current share price) that still conservatively assumes only US$37.5/bbl over 2H20. We have now taken out Peru from our ReNAV (~US$0.90 per share), which is offset by adding back FY20 exploration upside in Colombia. Our target price of US$20 per share reflects our ReNAV and represents over 100% upside to the current levels. If oil prices were to recover to US$70/bbl, our ReNAV would be >US$30 per share.

  • 17 Jul 20
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I3E MAHAA JKX PHAR EQNR AKERBP ENI HUR TAL REP RRE SOU TPL VOG OMV
Auctus on Friday - 10/07/2020

PetroTal (PTAL LN/TAL CN)C; Target price £0.45: 1Q20 results/Bretaña expected to restart in July – 1Q20 financials are in line with expectations and 1Q20 production had been reported previously. At the end of 1Q20, current trade and other payables had been reduced to ~US$45 mm compared to ~US$55 mm at YE19. Most importantly. PetroTal continues to expect the Bretaña field to be re-opened this month. The contingent liability with Petroperu is estimated at US$25 mm at the current oil price and the company has entered into a financial swap for 0.46 mmbbl of oil with an ICE Brent reference price of US $40.58/bbl to cover the upcoming sale by Petroperu at the Bayovar port. This is a recovery story that we continue to like. It offers a combination of value, production and cash flow growth and reserves upside. We anticipate that the imminent reopening of the field with be an important catalyst to the share price. i3 Energy (I3E LN): Reveals takeover target in Canada | Maha Energy (MAHA-A SS): Production update | Aker BB (AKERBP NO): 2Q20 update in Norway | Energy (RRE LN): Recommended offer by Viaro Energy | Spirit Energy: Dry hole in Norway | Enwell Energy (ENW LN): Ukraine update | JKX Oil & Gas (JKX LN): 2Q20 update in Ukraine and Russia | Pharos Energy (PHAR LN): Operating update in Egypt and Vietnam | Sound Energy (SOU LN)C: Terms of Moroccan licence renegotiated | Tethys Oil (TETY SS): June production in Oman | Victoria Oil & Gas (VOG LN): Gas sales contract with ENEO in Cameroon terminated EVENTS TO WATCH NEXT WEEK ________________________________________ 14/07/2020: Aker BP (AKERBP NO) – 2Q20 results 15/07/2020: Premier Oil (PMO LN) – 1H20 update 13-17/07/2020: GeoPark (GPRK US) – 2Q20 update

  • 10 Jul 20
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