UK equity research

Explore the most viewed and latest equity research and media content we have for listed companies based in the UK.


UK Equity Research

Broker research, valuations, and analysis on UK stocks


Latest Content

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

I3E MAHAA JKX PHAR EQNR AKERBP ENI HUR PTAL REP RRE SOU TPL VOG OMV

  • 10 Jul 20
  • -
PetroTal Corp (AIM: PTAL): Production re-start expected 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. Recovery, value and cashflow PetroTal is a recovery story that we continue to like. It offers a combination of value, production and cash flow growth and reserves upside. PetroTal’s shares continue to trade at around one quarter of our Core NAV of £0.47 per share and at less than half of the company’s value based on its 2P reserves only (2P NAV of £0.28 per share). This reflects Brent price assumptions in line with what BP, Shell and ENI are using. This is important because the commodity prices assumptions of the Majors have often been more conservative than those used by smaller companies that could see PetroTal as an acquisition target. On flat production, PetroTal’s share price implies EV/DACF multiples of 1.0x in 2021 turning negative in 2022. In 2021, we forecast PetroTal generates ~US$90 mm cash flow with ~US$35 mm cash capex (incl. servicing the payables). Our target price of £0.45 per share (~our Core NAV) represents 4.5x the current share price. Looking beyond the restart of the field We anticipate that the imminent reopening of the field will be an important catalyst to the share price with 4Q20 production expected to be over 12 mbbl/d. This is however just a first step and there are multiple areas of additional value creation. (1) The story would strongly benefit from a further increase in oil prices. At US$50/bbl for Brent, the Petroperu US$25 mm contingent liability would be reduced to

Petrotal

  • 10 Jul 20
  • -