Cenkos Securities

Delivering capital and corporate advice to support sustainable growth

We are an independent specialist securities firm focused on UK small and mid-cap companies and investment funds.
Visit provider site at http://www.cenkos.com/

Latest Content

Diversified Gas & Oil

Cenkos: Diversified Gas & Oil Plc -- Covid-19 Update

Despite the severe effect of Covid-19 in the United States, normal operations continue for Diversified Gas & Oil (DGO), with little or no impact as a result of the virus. DGO's low decline production, low operating costs and proactive hedging programme, mitigate the impact of the low commodity prices, locking in cash flows and protecting the dividend. With rigs, capital and companies abandoning US oil shale, production is expected to plateau in May 2020 before declining. The decline in US oil shale production will also translate into lower associated gas production. Whilst existing stockpiles may be large enough to prevent a rally in gas prices this year, it sets the stage for a tighter market in 2021 as gas production continues to fall as demand rebounds. Whilst many of its North American and London listed peers have reduced, suspended or cancelled their dividend, DGO remains committed to maintaining its dividend to its shareholders. We reiterate our BUY recommendation and our 148p/share price target.

View

06 Apr 20
-
-

Corero Network Security

Cenkos: Corero Network Security plc -- Big move to a recurring model

The FY19A results show both very strong growth in recurring revenues. These recurring revenues now form a substantial majority of Group sales. This transition in the business model reduces reliance on lumpy hardware sales and helps de-risk the investment. The macro environment lends caution but Corero is in its best shape for years.

View

06 Apr 20
-
-

FOG PVR 88E DGOC EME UKOG TRIN UOG

Cenkos: Oil & Gas Sector -- 88 Energy, Premier Oil, United Oil & Gas, UK Oil & Gas Plc, Empyrean Energy, Apache Corporation, Total SA, Tullow Oil, Neptune Energy, Equinor ASA, Westmount Energy, FAR, Energean Oil & Gas, BP Plc, TransGlobe Energy, JKX Oil &

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. Prices:  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

View

06 Apr 20
-
-

Salt Lake Potash

Cenkos: Salt Lake Potash Ltd --Still Making Progress

Salt Lake Potash has completed the civil earthworks for the process plant and non-process infrastructure site at the Lake Way Project. Early process plant construction work has now commenced, and Salt Lake is still on track for plant commissioning in December 2020, with first SOP sales in the March 2021 quarter. The next step is finalising the main Project Development 'Funding' Facility. Salt Lake have not seen any significant impact from Coronavirus to date. The company has implemented plans to mitigate the potential impact on its site operations with non-critical movement to and from site minimised. All interaction with the local Wiluna community has ceased. So far, there have been no major issues with procurement. The Company has received no information from suppliers to suggest delays to any items ordered for the process plant and non-process infrastructure.

View

03 Apr 20
-
-

United Oil & Gas

Cenkos: United Oil & Gas Plc -- Robust Economics

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.

View

03 Apr 20
-
-

Mercantile Ports & Logistics

Cenkos: Mercantile Ports & Logistics Ltd -- Access to £20.5m

The Indian Government and Reserve Bank of India has announced several relief packages to combat the adverse impacts of COVID-19 and the lockdown implemented last week. The lockdown encompasses all non-essential industries and has resulted in Mercantile shutting down operations. As a result of the current market uncertainty, we are withdrawing our forecasts from the market and move our recommendation to Under Review until macroeconomic conditions stabilise. We believe the long-term prospects for Mercantile remain unchanged and expect management to continue to convert pipeline customers.

View

02 Apr 20
-
-