Latest Content

TXP ALV ALVOF A6Y DETNOR AKERBP DETNOR DETNF ARC RO1 CASP ROXIF GPRK KOS 7M7 0GEA MAHAA PANR P3K PTHRF TETY TETY UKOG 0UK UKLLF
Auctus on Friday - 16/10/2020

GeoPark (GPRK US)C; Target price US$20 per share: Drilling at CPO-5 has started - The 3Q20 operating update did not contain any surprises, with overall production increasing by 5% vs the previous quarter, reflecting higher sales in Brazil, Argentina and Chile. Importantly, gross production at Llanos-34 is back to 60 mbbl/d with some work-over backlog and development drilling having restarted. Overall net production (across all of GeoPark’s assets) was 40 mboe/d at the end of September and FY20 production guidance of 40-42 mboe/d has been reiterated (2H20 capex guidance of US$25-35 mm). Drilling at CPO-5 (GeoPark WI: 30%) has now commenced with the Indico-2 appraisal well. With the Indico-1 well still producing 5,169 bbl/d since first oil in December 2018, Indico-2 could add 60% to CPO-5 overall production by YE20 in a success case. GeoPark will publish its 2021 capex budget on 4 November. We view this as an important event as this will provide further visibility on a very exciting drilling programme with 5-7 wells at CPO-5 and 1-2 wells in Ecuador. The exploration program for 2021 will likely test the continuity of the Guadalupe play encountered on Llanos-34 into CPO-5. Tethys Oil (TETY SS)C; Target price SEK75.00 per share: Initiating coverage - Tethys Oil is a well-funded, dividend-paying, Sweden listed US$160 mm market cap E&P with ~25 mmbbl 2P reserves in Oman and ~10 mbbl/d WI production. The company stands apart from its peers in three principal ways: (1) It has achieved “textbook” execution, turning what was initially a small uncommercial onshore discovery on a tiny portion of Blocks 3&4 into a large field that has already produced ~100 mmbbl with a further ~120 mmbbl 3P reserves. (2) The production is very cash generative even at US$40/bbl. At US$45/bbl, even at the currently OPEC constrained production rate, operating cashflow funds all development plus some exploration activities and allows Tethys to pay a 5% dividend. (3) Tethys is conservatively run with US$60 mm in cash and no debt. Historically, the story was about steady y-on-y production, reserves and dividend growth. While these features are still present, an investment in Tethys now also offers diverse exposure to high impact exploration with drilling activities on recently acquired onshore blocks expected to start before YE20. Our target price of SEK75 per share reflects ReNAV and implies over 70% upside. IN OTHER NEWS ________________________________________ AMERICAS Alvopetro (ALV CN): Production update in Brazil – 3Q20 sales were 1,764 boe/d at the Caburé Project. Maha Energy (MAHA-A SS): Production and capex guidance update – FY20 production (mostly in Brazil) is expected to stand at 3,700–4,000 boe/d (4,000-5,000 boe/d previously). The FY20 capex budget increased by US$8.7 mm to US$24 mm. YE20 production is expected to be 5,200 – 5,700 boe/d. Pantheon Resources (PANR LN): Resources update in Alaska – The Kuparuk formation at the Talitha project is estimated to contain 1.4 billion bbl of oil in place (OIP) and a Prospective Resource of 341 mmbbl as a most likely case. Touchstone Exploration (TXP LN): Discovery in Trinidad – The Chinook well encountered 589 net feet of gas pay in three unique thrust sheets in the Herrera sands. Additional natural gas pay of ~20 net feet was encountered in the shallower Cruse formation. Completion and testing of the well is expected to be undertaken in 1Q21. Trinity Exploration and Production (TRIN LN): 3Q20 operational update in Trinidad – 3Q20 production was 3,135 bbl/d. The company held US$22.2 mm in cash as at 30 September. FY20 production guidance remains 3,100-3,300 bbl/d. EUROPE Aker Bp (AKERBP NO): 3Q20 update in Norway – Aker BP produced 201.6 mboe/d in 3Q20. The FY20 production guidance of 205-220 mboe/d is reiterated. UK Oil & Gas (UKOG LN), Angus Energy (ANG LN) and Egdon Resources (EDR LN): Onshore UK licence relinquished – Long-reach/shallow wells at the Holmwood prospects are neither technically viable nor economically feasible. The licence has been relinquished. FORMER SOVIET UNION Caspian Sunrise (CASP LN): Operating update in Kazakhstan – Production at the MJF structure averaged ~1,340 bbl/d. The completion of maintenance activities, the return to production of Well 141 and the installation of a pump at Well 151 are expected to increase production capacity to 2,200 - 2,500 bbl/d. Enwell Energy (ENW LN): Ukraine update – 3Q20 production in Ukraine was 4,629 boe/d. The company held US$55.7 mm in cash at the end of September. SUB-SAHARAN AFRICA Kosmos Energy (KOS US/ LN): RBL Redetermination – Kosmos’ RBL credit facility has been redetermined with US$1.32 billion, a reduction of US$130 mm from the previous drawn amount of US$1.45 billion. Repayment of the reduction in borrowing base will be made from available liquidity in 4Q20. EVENTS TO WATCH NEXT WEEK ________________________________________ 20/10/2020: Touchstone Exploration (TXP LN) - Webinar

  • 16 Oct 20
  • -
  • -
GeoPark Ltd
GeoPark Limited (NYSE: GPRK): Drilling at CPO-5 has started

• The 3Q20 operating update did not contain any surprises, with overall production increasing by 5% vs the previous quarter, reflecting higher sales in Brazil, Argentina and Chile. • Importantly, however, gross production at Llanos-34 is back to 60 mbbl/d with some work-over backlog and development drilling having restarted. Overall net production (across all of GeoPark’s assets) was 40 mboe/d at the end of September and FY20 production guidance of 40-42 mboe/d has been reiterated (2H20 capex guidance of US$25-35 mm). • Drilling at CPO-5 (GeoPark WI: 30%) has now commenced with the Indico-2 appraisal well. With the Indico-1 well still producing 5,169 bbl/d since first oil in December 2018, Indico-2 could add 60% to CPO-5 overall production by YE20 in a success case. • Civil works at the Aguila exploration well (also at CPO-5) were completed in 3Q20 and drilling operations will start before the end of the year. • At Llanos-94 (50% WI), GeoPark will re-enter the Grulla-1 well that was never tested. Llanos-94 is the license to the west of Llanos-34. FY21 budget expected in early November GeoPark will publish its 2021 capex budget on 4 November. We view this as an important event as this will provide further visibility on a very exciting drilling programme with 5-7 wells at CPO-5 and 1-2 wells in Ecuador. The exploration program for 2021 will likely test the continuity of the Guadalupe play encountered on Llanos-34 into CPO-5. Value and big exploration The shares trade at ~50% discount to our Core NAV of ~US$16. Overall there could be 350-700 mmboe gross prospective resources across the Llanos blocks (including CPO-5) that GeoPark is imminently starting to explore. Our target price of US$20 per share reflects our ReNAV. It represents ~150% upside to the current levels.

  • 15 Oct 20
  • -
  • -
Tethys Oil Ab (TETY:STO)Tethys Oil AB (TETY:OME)
Tethys Oil AB (SSE: TETY): Initiating Coverage

Tethys Oil is a very well-funded, dividend-paying, Sweden listed US$160 mm market cap E&P with ~25 mmbbl 2P reserves in Oman and ~10 mbbl/d WI production. The company stands apart from its peers on three principal ways: (1) It has achieved “textbook” execution, turning what was initially a small uncommercial onshore discovery on a tiny portion of Blocks 3&4 into a large field that has already produced ~100 mmbbl with a further ~120 mmbbl 3P reserves. (2) The production is very cash generative even at US$40/bbl. At US$45/bbl, even at the currently OPEC-constrained production rate, operating cashflow funds all development plus some exploration activities and allows Tethys to pay a 5% dividend. (3) Tethys is conservatively run with US$60 mm in cash and no debt. Historically, the story was about steady y-on-y production, reserves and dividend growth. While these features are still present, an investment in Tethys now also offers diverse exposure to high impact exploration with drilling activities on recently acquired onshore blocks expected to start before YE20. Our target price SEK75 per share reflects ReNAV and implies over 70% upside. Block 3&4: Steady growth at low cost asset with running room Tethys holds 30% WI in Blocks 3&4. Since the field was developed in 2009, production has increased every year to reach 45 mbbl/d in late 2019, before OPEC-related curtailments. A development well costs US$1.0-2.5 mm and opex+drillex are

  • 15 Oct 20
  • -
  • -
UKOG TLW SDX REP PXT PMO PGR OMV 0GEA LYV JKX HUR GTC DGOC
Auctus on Friday - 09/10/2020

SDX Energy (SDX LN)C; Target price £0.45 per share: Growing the prize, accelerating drilling - Sales in Morocco are now almost back to pre COVID 19 levels (90%). This is important for cash flow. SDX has now mapped additional prospects on the South Disouq license, resulting in gross prospective resources increasing by 139 bcf to 233 bcf. Drilling in Egypt is being accelerated to start in 2Q21 with two initial wells targeting 165 bcf, including the new Hanut prospect with 139 bcf gross prospective resources and a 33% Chance of Success. The volumes targeted by the first part of the programme are 5x larger than what we were previously anticipating (34 bcf). At the end of September, SDX held US$9.2 mm in cash with the majority of the 2020 capex programme having already been incurred. With no debt and expected FY21 cashflow of ~US$30 mm (largely unaffected by oil price movements), this leaves the company with ample liquidity to fund the upcoming drilling programme. Overall, we estimate the prospects the company will target with the drill bit over the next twelve months at £0.38 per share, which represents 2.4x the current share price. The main items are the LMS-2 well test in Morocco (£0.14 per share) and the Hanut well in Egypt (£0.16 per share). This does not include the potential for additional look-alike prospects to LMS-2 to be drilled in 2021. While the company continues to deliver positive updates and the materiality of the upcoming drilling is growing, the shares continue to trade at EV/DACF multiples of only 1.3x in 2020 and 0.5x in 2021. IN OTHER NEWS ________________________________________ AMERICAS Diversified Gas & Oil (DGOC LN): Partnership agreement with Oaktree Capital – Diversified and Oaktree are partnering to jointly pursue US PDP acquisitions with individual transaction valuations over US$250 mm. Oaktree and Diversified will fund equal portions of any acquisitions, however Oaktree will provide Diversified a 5.0% upfront promote of its funded working interest (2.5% incremental) at the time of an acquisition. In addition, upon achieving a 10.0% unlevered IRR on its investment, Oaktree will convey to Diversified 15.0% of its working interest (7.125% incremental). Maha Energy (MAHA-A SS): Production update in Brazil – Sales production for the month of September totalled ~ 3,255 boe/d, During the month of September the dual GTE-4 oil producing well was shut down for 14 days, due to workover operations. Fishing operations to date have been unsuccessful and a more rigorous workover operation is now scheduled during the fourth quarter to restore production from the AG zone. Production from the GTE-4 well (Sergi zone) resumed on the 28th of September. Tartaruga had issues during the month with unreliable power from the local grid – back up generation has been is installed and production is stabilizing. Parex Resources (PXT CN): Buy back and operation update in Colombia – Parex plans to buy back up to a further 10% of its share capital by YE20. 3Q20 production was 44.2 mboe/d and 4Q20 production is expected to be 44-48 mboe/d with US$40-50 mm capex. The company plans to drill the Cayena horizontal exploration well on the Fortuna block and one appraisal well at the Boranda Block. At Block LLA-94, the Grulla well will be re-entered. The company held US$350 mm in cash at the end of September. Phoenix Global Resources (PGR LN): 1H20 results – 1H20 production in Argentina was 4,369 boe/d. At 30 June 2020 the group had cash of US$1.4 mm and total borrowing US$317.7 mm. Proposed changes in Trinidad’s fiscal regime - The government of Trinidad is proposing to lift the threshold for the imposition of the very punitive Supplemental Petroleum Tax (SPT) from US$50/bbl to U$75/bbl. EUROPE Getech (GTC LN): 1H20 results – 1H20 revenue totalled £2.1 mm. The orderbook was £2.9 mm at the end of June. The company held £2.8 in cash at the end of June. Getech is currently negotiating with two potential Energy Transition acquisition targets. Key sectors of focus are mining, geothermal energy and the hydrogen economy. Hurricane Energy (HUR LN): Update in the UK – 3Q20 production averaged 13,600 bbl/d with current production of 14,500 bbl/d. Independent Oil & Gas (IOG LN): No offer to buy Deltic Energy (DELT LN) – Independent will not make an offer to acquire Deltic with two approaches rejected by Deltic. Lundin Energy (LUNE SS): Acquisition of exploration licences in Norway – Lundin is acquiring from Idemitsu interests in a portfolio of licences in the Barents Sea, including a 10% WI in the Wisting oil discovery and a further 15% WI in the Alta oil discovery with an overall 70 mmboe net contingent resources. The proceeds consist of US$125 mm in cash. OMV (OMV AG): 3Q20 update – 3Q20 production was 444 mboe/d. Premier Oil (PMO LN): Merger with Chrysaor – Premier Oil is merging with Chrysaor. The Transaction is expected to result in Premier’s stakeholders owning up to 23% (including 5.45% by Premier’s shareholders) of the combined group. A cash payment of US$1.23 bn will be made to financial creditors of Premier. The transaction provides ~US$0.61 on the dollar cash recovery for existing creditors plus US$0.14 in shares for an overall recovery of 75%. The combined entity had >250 mboe/d at the end of June and 2P reserves of 717 mmboe as YE19. The acquisition of the BP assets by Premier will not go ahead. Repsol (REP SM): 3Q update – 3Q20 production was 615 mboe/d. UK Oil & Gas (UKOG LN): Raising £2.2 mm of new equity – UK Oil & Gas has raised £2.2 mm of new equity priced at 0.16 p per share to fund its share of initial drilling and seismic costs in Turkey. FORMER SOVIET UNION JKX Oil & Gas (JKX LN): Operating update in Russia and Ukraine – 3Q20 WI production was 10,245 boe/d including 4,727 boe/d in Ukraine and 5,519 boe/d. The company held US$18.8 mm net cash at the end of September. SUB-SAHARAN AFRICA Tullow Oil (TLW LN): RBL Redetermination – Tullow’s RBL credit facility has been redetermined with US$1.8 bn of debt capacity. As a result, the Group retains ~US$500 mm liquidity headroom of undrawn facilities. The next redetermination will commence at the end of November and is expected to be completed in January 2020.

  • 09 Oct 20
  • -
  • -
SDX Energy PLC
SDX Energy (AIM: SDX): Growing the prize, accelerating drilling

• Production is slightly over guidance with a particular strong performance at South Disouq. • Importantly, sales in Morocco are now almost back to pre COVID 19 levels (90%). This is important for cash flow. • SDX has now mapped additional prospects on the South Disouq license, resulting in gross prospective resources increasing by 139 bcf to 233 bcf. • Drilling in Egypt is being accelerated to start in 2Q21 with two initial wells targeting 165 bcf, including the new Hanut prospect with 139 bcf gross prospective resources and a 33% Chance of Success. The volumes targeted by the first part of the programme are 5x larger than what we were previously anticipating (34 bcf). • In Morocco, further analysis of the LMS-2 well results and a re interpretation of the 3D seismic across SDX’s concessions has revealed that larger structures similar to LMS-2 are present throughout the Company’s acreage, including in horizons slightly deeper than the core production and development areas which are close to infrastructure. The Company is evaluating options to target these structures with dual target wells in the core production area as part of the 2021 drilling programme, which the company is also seeking to accelerate to 1H21. 12 months of high impact drilling At the end of September, SDX held US$9.2 mm in cash with the majority of the 2020 capex programme having already been incurred. With no debt and expected FY21 cashflow of ~US$30 mm (largely unaffected by oil price movements), this leaves the company with ample liquidity to fund the upcoming drilling programme. Overall we estimate the prospects the company will target with the drill bit over the next twelve months at £0.38 per share, which represents 2.4x the current share price. The main items are the LMS-2 well test in Morocco (£0.14 per share) and the Hanut well in Egypt (£0.16 per share). This does not include the potential for additional look-alike prospects to LMS-2 to be drilled in 2021. EV/DACF

  • 05 Oct 20
  • -
  • -
 

Auctus Advisors Research and Daily Commentaries

Research Tree offers Auctus Advisors research, providing ongoing coverage of 123 shares. We offer 60 reports from Auctus Advisors on Research Tree.

  • Research reports provided by Auctus Advisors

  • Companies covered by Auctus Advisors

  • Sectors covered by Auctus Advisors