UK Oil & Gas aims to drill nine wells between 2019 and 2020, move Horse Hill into permanent production Wed, 23 Jan 2019 14:31:00 +0000 Oil price, Genel, IGas, Block, Zenith, Petro Matad And finally… Wed, 23 Jan 2019 12:38:00 +0000 Oil price, Genel, IGas, Block, Zenith, Petro Matad And finally…



WTI $52.57 -$1.23, Brent $61.50 -$1.20, Diff -$8.93 +3c, NG $3.04 -44c

Oil price

After the Monday holiday yesterday was a bit mixed but definitely weaker for choice. In a feeble attempt to justify their own flagrant abuse of company money and a desire to mix with British royalty and Will i am, delegates at Dav-oh have been endeavouring to see who could get most bearish about global GDP. The IMF, always ready to take centre stage reduced their numbers although belief in forecasts from that lot is a touch wobbly. Having said that, there is no doubt that with recent Chinese data showing some signs of weakness there will be some sharpening of pencils for oil demand I suspect.

Alexander Novak, being a wise man didn’t turn up at Dav-oh so his meeting with al-Falih hasn’t happened yet, he is probably avoiding the Saudi until his production figures are down a bit…Finally with no sign of any agreement between the US and China over trade, and with time running out, perhaps the two countries might put together a deal whereby the US supplies China with oil as exports from America continue to rise, just a thought…

Genel Energy

I had the opportunity to sit down with the COO, CFO and IR Chief of Genel yesterday to chat about the recent Chevron deal. There is no doubt that this is a very important piece of business and may turn out to be a fair bit bigger and better than analysts have so far credited the company with. The capital profile fits extremely well as does the cash flow which will see the medium and longer term balance well matched. Expect more information as the deal closes etc and I understand that a longer presentation on the deal is planned around results time in March.

IGas Energy

IGas has spudded the Springs Road -1 exploration well (IGas 32%, Egdon Resources 14.5%) in North Notts. Targeting the Bowland Shale it will reach a depth of c. 3,500 and complete in around 110 days.

Block Energy

Block Energy is slowly coming onto the radar screens with an increasing flow of information and some quite interesting potential. When I met the company last year I was impressed with the management and their plans, and whilst the extremely modest production didn’t blow the doors off, the outlook was credible.

Today the company announce that the side-tracking on the West Rustavi field in the Republic of Georgia has commenced, thus propelling that potential from the future into the present. 16a is the first of a two well horizontal side-track programme targeting combined gross production of 650 b/d of oil from the Middle Eocene formation by the end of 2019. Following these wells, as part of the earn-in agreement Block will go from 25% to a 75% WI and and an estimated 38 MMbbls of gross contingent resources and there are four other wells at West Rustavi with similar opportunities for re-entry and sidetracking.

Clearly this is still early days for Block but I have been most impressed by their progress so far, indeed from times of very modest production things are clearly looking interesting, definitely one to keep on the radar screens and with plenty of upside.

Zenith Energy

Zenith has announced that the BD-260 drilling rig is now ready to be shipped to Azerbaijan and will depart Italy on 28th January 2019. This is a key element that Zenith is putting together and with a new team of people things really should start to deliver now, the rest of the RNS appeared to show a shopping list that the new head of exploration left in the B Robotics shop.

Petro Matad

I met up with Mike Buck, CEO of Petro Matad last week whilst he was in London and it seems that preparations for the summer drilling campaign are very much up and running. Despite the misfortune of last year’s drilling programme there appears to be perhaps more confidence about this year and this time with a potential four well programme.

Fully funded by the $35m capital raise last year, drilling will start in Q2 this year targeting 277 MMbo mean prospective recoverable resources with a likely three wells in block XX and a fourth well in block V. Going into block XX first is common sense, the Chinese data from their discovery on block 19 indicates that it is very close to the block boundary and enters MATD acreage to the south and thus makes their Heron well to be effectively an appraisal prospect. Opening up the campaign in this manner gives the company pretty much every option and assuming success it can not only bring forward work to ensure early production but to make the rest of the programme more de-risked.

Should this be the case then one can imagine that a well might next be drilled on the Gazelle prospect which is adjacent, before contemplating further options. Staying on block XX gives the company a short (by Mongolia standards) move to the Red Deer prospect, assuming that Antelope doesnt shout loudly to be drilled.

The company have made it quite clear that however prospective the block XX seems, they are definitely going to drill one well on block V this season and following post Snow Leopard studies will drill either Fox or Raptor  as the last well in the campaign and the weather window runs well into Q4.

So in conclusion I am surprisingly happy to see MATD pursuing the plan of action that it has staked out for this year. It is fully funded for the remaining four wells and has adopted a sensible approach of going to block XX first and then finishing with block V. There is no magic to this selection but it is one with which I concur, getting under way with a potential development at Heron early in the season makes plenty of sense and block V can go ahead after evaluation of the ‘encouraging results of Snow Leopard’. The balance in the summer’s programme is clear and shareholders need not worry about further capital raising, in the case of success nearby infrastructure has adequate spare capacity giving straight forward early test production and ‘rapid commercial development’.

And finally…

Tonight Burton Albion welcome the Noisy Neighbours back to their place for the second leg of the Haribo sweeties  Cup. Trailing 0-9 from the first leg it is important that they score early to make sure they stay in the game.

Today is the first day of the three test series against the West Indies, always a magical fixture and the Kensington Oval in Barbados has been a historically hard fixture for England. With a 2 Pm start to ensure plenty of UK supporters who are watching back at home it will be a proper challenge. No invitations from any of the UK quoted West Indies oil and gas stocks, at least for me, mean that a first class chance has gone begging…


]]> Tlou Energy highlights “excellent progress” at Botswana coal bed methane project Wed, 23 Jan 2019 12:25:00 +0000 Block Energy kicks off sidetrack in West Rustavi well Wed, 23 Jan 2019 12:05:00 +0000 Berkeley Energia updates on Salamanca project and highlights uranium market strength Wed, 23 Jan 2019 11:15:00 +0000 British Gas parent Centrica downgraded to ‘neutral’ by Credit Suisse amid “tight” dividend outlook Wed, 23 Jan 2019 10:55:00 +0000 Petro Matad presents plenty of bang for buck with lower risk appraisal as well as high impact exploration Wed, 23 Jan 2019 10:42:00 +0000 Quadrise offers clarity on what investors can expect for 2019 Wed, 23 Jan 2019 08:36:00 +0000 Quadrise Fuels International PLC (LON:QFI) talks to Proactive Investors London about the new opportunities for business as the company puts a 'challenging year' behind them.

Executive Chairman Mike Kirk has a reputation for being a plain speaker and says he likes to be honest with investors. After the November AGM Kirk repeats the answers to the tough questions on his company and gives new detail on why he believes 2019 will be so different.

There's no doubt been question marks over Quadrise but Kirk says looking at the pedigree and experience of the board, investors can judge for themselves what 2019 will hold for the emulsion fuel business, particularly with the critical bringing forward of new regulations on emissions.

]]> Greenland Minerals largest shareholder forms JV in China to import radioactive rare earths Wed, 23 Jan 2019 00:59:00 +0000 Amerisur, Cairn Tue, 22 Jan 2019 14:14:00 +0000 Amerisur, Cairn



Amerisur Resources

A full update today from AMER which highlights quite what a good position the company is in. Q4 production was 4,602 b/d with a peak of 5,405 b/d, current production is 5,426 b/d.

The company has had an independent reserves report done which gives preliminary results on CPO-5 of gross 2P reserves of 22.7 mmbo at Indico-1X and 2.9 mmbo at Mariposa. Mean gross prospective resources of 49.3 mmbo are attributed to the LS3 play around the Indico and Mariposa discoveries which is right where the upcoming drilling programme is situated and there is plenty of upside.

Currently Indico is producing 5,130 b/d under choked natural flow whilst Mariposa continues to produce at 3,150 b/d and the operator is now preparing the FDP.

The company has an active drilling programme all of which is fully funded from internal resources and positive cash flow from internal producing assets and the company is debt free. Expect at least four wells on the Indico pad, as well as six wells on the Coendu structure (Put9 and 12) as well as the now infamous Miraparriba-1 well on Put 8. Given the partnership with Occidental Andina which adds a colossal amount of grunt in the south and has brought forward that drilling programme and with ONGC in the north where even more wells are being considered, activity in the portfolio has the opportunity to ‘transform Amerisur’ in the words of CEO John Wardle.

The last time I looked the shares were around 18.5p which is an astonishingly big discount to where the true valuation of AMER really lies. The company is creating shareholder value across the board with ‘material upside’ in the portfolio and an active programme with the drill bit across a number of prospects. The last year or so of throwing off cash will now enable the company to make substantial returns for shareholders, no wonder Mr Wardle says ‘ I have never been more excited by, or optimistic about the company’s future ‘. Time to follow the directors and buy the shares.

Cairn Energy

Today’s operational update from Cairn includes much good news on production, drilling programme and even upcoming developments but will surely be remembered for the optimism on the international arbitration with regard to India. In this respect they expect a final decision ‘in the near term’ and a positive result on their claim for $1.4bn which they are ‘confident’ about would surely reboot Cairn for the long term.

Back to basics, both SNE and Nova developments are on track and the Agar discovery evaluation  is ‘ongoing’. The drilling programme is ‘material’ with up to seven exciting wells in Mexico, the UK and Norway expected to spud with a combined target of over a billion barrels of oil.

Priduction last year was 17;500 b/d and guidance for 2019 is 19-22/- b/d net to Cairn. This gave revenue of $395m at $68pb and with cash of $66m and a draw of $75m of the $575m RBL a strong position after capex of $335m.

Cairn are in a strong position operationally and have a decent portfolio of assets in all areas of exploration, appraisal and development but for the time being the shares will be driven by India, like it or not…


]]> Point Loma Resources' Rex well test opens up 'significant' new oil play, says broker Mackie Tue, 22 Jan 2019 13:30:00 +0000 Easy paydays are over for big oil majors but Deutsche Bank sees upside for BP Tue, 22 Jan 2019 11:50:00 +0000 Royal Dutch Shell weak as Morgan Stanley downgrades to ‘underweight’ on capex concerns Tue, 22 Jan 2019 11:47:00 +0000 EQTEC jumps as it increases and consolidates loan facility with Altair Group Tue, 22 Jan 2019 11:06:00 +0000 Amerisur Resources details reserves and updates on production Tue, 22 Jan 2019 10:42:00 +0000 VSA CAPITAL MARKET MOVERS - Egdon Resources Tue, 22 Jan 2019 09:25:00 +0000

VSA Morning Flow Test, 22/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2

Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced that the Springs Road well operated by IGas (IGAS LN) has successfully spudded. EDR holds a 14.5% interest in the license are which forms a core part of its shale portfolio in the Gainsborough Trough of around 82,000 acres. This well targeting the centre of the play is the first which will provide modern data on shale and tight gas targets in this play.

This is the second well in IGAS current Gainsborough trough exploration programme, although the first in which EDR has held an interest. Although only a vertical exploration well positive results could potentially open up the wider play.

We reiterate our Buy recommendation and 50p target price.




]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt Tue, 22 Jan 2019 09:23:00 +0000

VSA Morning Miner, 22/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


M2 Cobalt (CVE:MC)

M2 Cobalt (MC CN) and ASX listed Jervois Mining (JRV AU) have announced a friendly at market merger to be completed as a Plan or Arrangement whereby JRV will acquire all of the outstanding share capital of M2. Each common share of M2 will be exchanged for one common share of JRV giving an implied offer price of C$0.262/sh for JRV shares and C$0.247/sh. for M2 based on the 10 day VWAP ending 21 January 2019. This results in pro forma ownership of the enlarged entity of 77.9% for existing JRV holders and 22.1% M2 holders. In addition JRV has provided a convertible bridging loan of C$3m to support M2 during the process; the terms of the loan indicate a 15%pa interest rate with a strike of C$0.245/sh.  

The transaction remains subject to regulatory approval and the new BoD of the enlarged group will consist of three JRV directors and one M2. JRV has a board consisting of former Glencore Xstrata executives whose recent focus has been on the Nico Young nickel cobalt project in New South Wales on which a JORC compliant resource of 167.8mnt at 0.59% Ni and 0.06% Co has been defined. A PFS to confirm the viability of a heap leach flowsheet is being finalised currently which is anticipated to demonstrate a low capital intensity project.

We have highlighted the scale of the anomalies that have been discovered by M2 in Uganda to date as well as the geological similarities between Uganda and the DRC. Given the scale of the advanced project in JRV’s portfolio this suggests that the JRV management team has recognised the potential for Uganda as the next major cobalt district and we believe that a combination of M2’s in country experience and JRV’s commercial and development expertise could see that realised.     




]]> Cairn Energy boasts “balance sheet strength” as it eyes growth opportunities Tue, 22 Jan 2019 08:27:00 +0000 Artemis Resources' executive director updates on gold and base metals projects Tue, 22 Jan 2019 04:27:00 +0000 Artemis Resources (ASX:ARV) (FRA:ATY) (OTC:ARTFF) executive director Ed Mead updates Proactive Investors on progress across the company's portfolio of projects in Western Australia, and lays out the next key news flows for shareholders to stay tuned for.

A resource upgrade and metallurgy results are due out on the flagship Carlow Castle project imminently. Also a topic of discussion is the identification of eight new targets through an airborne magnetic survey at the Armada Prospect within Patterson Range.

]]> Azincourt Energy sees big upside with their East Preston uranium project Mon, 21 Jan 2019 23:33:00 +0000 Azincourt Energy President and CEO Alex Klenman spoke with Steve Darling from Proactive Investors at the Vancouver Resource Investment Conference. The company focuses on strategic acquisition, exploration and development of alternative energy and fuel projects. 

]]> Perseus Mining 'well on the way' to funding third gold mine in West Africa Mon, 21 Jan 2019 23:30:00 +0000 Perseus Mining Limited (ASX:PRU) (TSX:PRU) chief executive Jeff Quartermaine talks Proactive Investors through the gold producer's just-released Quarterly Report.

The company "produced strongly" from both the Edikan and Sissingue mines, and is progressing funding for its third mine in West Africa, Yaouré.

]]> Point Loma Resources shares flow higher as it posts successful test results for Rex play well Mon, 21 Jan 2019 20:00:00 +0000 Oil price, Hurricane, Genel, VOG, Falcon, Empyrean And finally... Mon, 21 Jan 2019 15:02:00 +0000 Oil price, Hurricane, Genel, VOG, Falcon, Empyrean And finally…



WTI $53.80 +$1.73, Brent $62.70 +$1.52, Diff -$8.90 -20c, NG $3.48 +7c

Oil price

With the better than expected rise on Friday, oil had a better week than even I expected in Friday’s blog. As usual a combination of factors served up the conditions for the rally to continue. Firstly, better news on the US /Sino trade talks came by way of an offer by China to inject $1tn pa in US goods to reduce the trade surplus, secondly the Baker Hughes rig count showed a fall of 25 rigs overall to 1050 and by 21 in oil to 852, as if the 4Q fall in the oil price is just being felt in the US. Finally, December Opec production fell by 750/- a day, somewhat higher than expected and with more to come this month some degree of tightness may work its way into the market.

Lower than expected Chinese GDP numbers this morning has only taken  matter of cents off the oil price from the above levels.

Tomorrow sees the start of Dav-oh, the nauseating knees up of politicians and business ‘leaders’ who spend millions of other peoples money pontificating to the world about stuff. A ticket for the event costs as much as $50,000 per person but many companies sponsor events and of course it’s not the cheapest place for CEO’s to stay…Watch this space as we spot oil companies who can afford to throw good money after bad…

Hurricane Energy

The operation to hook up the Aoka Mizu FPSO to the Lancaster EPS system on Friday went awry as a rope being used to pull in a buoy snagged and the operation was not possible to be completed. Although the rope was freed and the buoy returned to its starting position, with deteriorating weather forecast, the Aoka Mizu returned to its temporary mooring in the Cromarty Firth to wait for the next opportunity for tie-up.

With a preference for less than two metres of swell and given that the entire process is well ahead of schedule it seems like a wise decision not to take any undue risks at this stage. Accordingly shareholders need not panic and any fall in the share-price should be treated as an opportunity.


Genel Energy

Hot on the heels of a very satisfactory update last week Genel has announced that it is acquiring stakes in two Chevron operated blocks in the Kurdistan region of Iraq. The Sarta and Qara Dagh both offer the opportunity for GENL to participate in imminent production and appraisal respectively and with minimum risk associated.

Sarta has had two wells drilled recently, both of which tested at around 7,500 b/d  and the first phase of the development will see these both on production. Genel are paying 50% of the development costs until a certain production level is reached followed by a success fee on reaching a production milestone, at which stage they will own a 30% in the licence, this work is anticipated to cost around $60m and leave Chevron with 50%.

The Qara Dagh licence has had a well drilled in 2011 which tested oil in two zones from the Shiranish formation and here Genel will earn a 40% stake, and operatorship through a carry arrangement leaving Chevron with 40% and the KRG with 20% as at Sarta.

This seems like an eminently sensible deal, certainly one that might have been put together by a COO who spent 23 years with Chevron. The capital profile of the acquisitions fits well with that of Genel and will bring extra cash flow when it is needed. Finally it brings to Genel commercially and technically expert partners on both sides, I agree with the Genel CEO who says ‘the additions to our portfolio are an important step in our diversification strategy, offering a further opportunity for near-term production and cash-generation’. Buying into these assets are exactly what Genel needs to be doing at this time and it looks like a smart move to me.

Victoria Oil & Gas

Life at VOG has been pretty tough in the last year and whilst I should have cut it from the bucket list the day of the contract loss, yet again I misjudged the time it would take to recover. Indeed, if I had known that it would continue to fall even after the resumption of the Logbaba gas contract with ENEO then I would have avoided another halving of the share price.

Today the company has announced that production has averaged 8.5 mmscfd in the month to date in January, taken at the 19th and that is 91% up on Q4 daily average production levels. Indeed in the seven days to January 19th the average was 9.9 mmscfd with a peak of 12.96 mmscfd reached on the 18th and consumption levels at the Logbaba Power Station have doubled since the contract has been resumed.

As I have said, 2018 was indeed a shocker for VOG but things do look significantly brighter from here on in. They have acknowledged that whilst sales to power generation are important, diversification of the customer base is important to reduce the dependence on any one customer. Accordingly, the relationships built up with industrial customers over the years has been crucial and that now their contribution is at record levels. In addition to that the company has opened up the possibility of sales to a number of other third parties which will hopefully diversify and enhance the margin of the company. Finally, with the recent completion of the Matanda transaction there will be vast scope within the company to build from here.

Falcon Oil & Gas

As Philip O’Quigley said to me this morning, ‘ I wouldnt normally put out an RNS just for a rig contract but this is more than just this’. Indeed after a two year moratorium into fraccing this announcement shows that FOG is back in business and how. The ‘significant’ contract is by JV partner and operator Origin who has signed up with Ensign for drilling operations for this year and an option on next.

As soon as the dry season starts, likely in June, the drill bit will start turning on two horizontal fracced wells targeting the Kyalla and Velkerri liquids rich gas fairways. Dont forget that for this year Falcon is carried by Origin to a cap of A$65m which comes down to A$48m in 2020 so few worries about funding on that front for FOG.

Whilst there are no preconditions about the order of drilling this year for the JV we do know that these results, and those from previous drilling, will determine the most commercially prospective play to be drilled in 2020. With the mess that is Australian domestic oil policy the wait for FOG may well prove to have been worth the while.

Empyrean Energy

News from EME this morning continues to be good with GCA providing an independent resource audit of the Mako gas field in the West Natuna Basin, offshore Indonesia. Gross 2D  (contingent) resources are deemed to be  276 Bcf of recoverable dry gas and gross 3C resources of 392 Bcf representing additional field upside. There are also substantial identified exploration targets beneath the field in the Tambak prospect, formerly called the Mako Deep.

The Duyung PSC has been converted to the new GOI contractor Gross Split PSC scheme which is deemed by operators to be more flexible and helpful to operators which apparently strengthens project economics by lessening the bureaucratic burden on the project. More after I next see or speak to Tom Kelly.

And finally…

In the Premiership Liverpool, the Noisy Neighbours and Spurs all won to maintain their spots at the top of the league while the Gooners beat Chelski to make up some ground on them. The Red Devils won again putting them level with the Gooners.

For the first time in Superbowl history both semi-finals went to overtime, Tom Brady heads to his 9th final after the Patriots eventually saw off Kansas. In the other game the Saints, never behind in the game until overtime,when the LA Rams, who had never led the game won the tie.


]]> Victoria Oil & Gas looks ahead to increased cash flow and market recognition after ENEO renewal Mon, 21 Jan 2019 13:23:00 +0000 Victoria Oil & Gas plc (LON:VOG) chairman Kevin Foo tells Proactive London's Andrew Scott its power generation customer ENEO has now doubled its consumption levels, following December’s gas sales deal, and, its power station is operating at full capacity at 30 megawatts.

Foo says the average gas production rate measured 8.5mln cubic feet per day for the month to date (as of 19 January) ... and in the seven days ended January 19, the average rate was marked at 9.9mln cubic feet.

He adds that ENEO has expressed interest in increasing power generation levels – 20 megawatts from its Bassa Power Station – creating additional gas demand of around 4mln cubic feet per day.

Foo says talks are continuing with other independent power producers who are evaluating additional power supply options to meet the electricity shortfalls in the City of Duala.

]]> Victoria Oil & Gas highlights ramp up at Cameroon gas-fired power station Mon, 21 Jan 2019 13:00:00 +0000 Hurricane Energy updates on operations amid predictions of worsening weather conditions Mon, 21 Jan 2019 12:50:00 +0000 Falcon Oil & Gas Ltd back to drilling and 'full steam ahead' as rig contract signed Mon, 21 Jan 2019 10:37:00 +0000 Philip O’Quigley, chief executive of Falcon Oil & Gas Ltd (LON:FOG), tells Proactive London's Andrew Scott a rig contract's been signed for the Stage 2 work programme that will advance its potentially world class shale project in Australia.

The exploration and appraisal programme will include the drilling and hydraulic fracture stimulation of two horizontal wells, with drilling slated to start in June.

It will be a particularly significant project milestone as it will see Falcon finally get back to drilling after a 2 year delay imposed by the fracking moratorium in Australia’s Northern Territory.

]]> Empyrean Energy reveals findings of Mako resource report Mon, 21 Jan 2019 09:47:00 +0000 Nostra Terra Oil and Gas shares rise as it gives Mesquite insights Mon, 21 Jan 2019 09:33:00 +0000 Genel Energy agrees deal to partner Chevron in Kurdistan growth projects Mon, 21 Jan 2019 08:30:00 +0000 Falcon Oil & Gas eyes June start to new drill campaign at Beetaloo shale project Mon, 21 Jan 2019 07:26:00 +0000 Carnarvon Petroleum readies Dorado appraisal for final investment decision in 2020 Mon, 21 Jan 2019 05:02:00 +0000 Whitebark Energy targeting commercial oil production from Wizard Lake in Q2 this year Mon, 21 Jan 2019 03:56:00 +0000 Whitebark Energy (ASX:WBE) managing director David Messina speaks to Proactive Investors about the confirmed commercial oil discovery at the Wizard Lake project in Canada, which the oil & gas explorer & producer holds a 30% stake in under the Point Loma Joint Venture (PLJV).

Messina also speaks more broadly about global markets and the favourable operating environment the company has experienced in Canada.

He says, "We'll be getting production on board in Q2. We'll also simultaneously be panning to drill new wells. We'll be getting Wizard lake into high commercial volumes very quickly, and we certainly look forward to our shareholders having a very strong 2019 with us as we embark on developing this exciting field."

]]> Whitebark Energy confirms commercial oil discovery at Wizard Lake Sun, 20 Jan 2019 22:36:00 +0000 Daily Blog: Oil price, Anglo African Oil & Gas And finally... Fri, 18 Jan 2019 11:27:00 +0000 Oil price, Anglo African Oil & Gas And finally…



WTI $52.07 -24c, Brent $61.18 -14c, Diff -$9.11 +10c, NG $3.41 +3c

Oil price

The oil price vacillated yesterday, after a weak start the rally nearly took crude into positive territory but not quite. As usual newsflow was mixed, better news on the US/Sino trade front where chatter lead people to think that some tariffs might be eased. With Opec+ saying that cuts were being adhered to Russia said that they would fully commit to cuts but they would take a little time. In Libya trouble subsided and apparently exports are increasing, you pays your money….

Anglo African Oil and Gas

I was invited in to meet David Sefton, Executive Chairman who talked me through what’s going on at the company at the moment. I have seen a number of companies this week but am writing up AAOG first as it is drilling at the moment and a result looks to be imminent. BTW, I have a slight difficulty where companies have both an executive Chairman and a CEO, the important defining of lines as to who calls the shots and has final responsibility can get clouded.

AAOG has, it should be said, just raised £6m at 10p which during such a high profile well as this indicates a considerable degree of faith from both company and investors. I was told that the three largest institutions invested in the company all participated and that there was excess demand which pushed the raise up modestly when they did it very recently. There is some concern that some of the shares taken in that raise may still be floating about, if so it is somewhat concerning on a technical basis.

The only asset of the company is the Tilapia field in the Lower Congo Basin which is offshore but drilled from land where all the facilities are. AAOG own 56% and SNPC, the Congolese NOC holds the balance of 44%. There is no doubt that the success or otherwise of the well drilling at the moment will be of supreme importance but the fact that there are three horizons with differing risk and potential size complicates matters. The well is already through the R1/R2/R3 sands where the nearby 101 well produces 55 b/d, probably not enough reward for such an expensive well. The lower Mengo Sands are thicker than nearby discoveries and whilst no tests have been done, on the way down decent hydrocarbon pay was encountered and if this is to be relied on the company suggest that it may produce up to 500 b/d.

Much more importantly is the deeper, Djeno sands where the drill bit is just approaching, if all goes according to plan news from this formation should be known any day now, hence writing this up first. There is little doubt that if the Djeno sands come in it will be transformational for the company, they say that it could be 5/- b/d per well and that they could drill six wells from the pad. Although we have been talking oil here it is not out of the question that it could be gas and/or condensate bearing, both I’m told would be equally welcome…

I mentioned the cost of the well which is of an historically enormous amount. Endless technical problems have beset the company and this well has been extremely expensive, further wells should be around $8m a go or about $3.5m net to AAOG (It is worth noting that SNPC owes AAOG some $10 which can either be paid in cash or by being granted a larger percentage of the field, a tricky conundrum either way) which would still mean finding more money to drill out the prospect but if they are in the Djeno that is no problem. The company are however not bigging this up, they cautiously are hoping that should the Djeno be dry then on the way back up will test the Mengo sands and produce profitably from there.

The decision therefore is somewhat tricky, an Aladdin’s cave awaits if the Djeno Sands come good with the drill bit which may be happening right now. Whilst the company are playing this down and accentuating the Mengo Sands I’m sure that an announcement that the Djeno was dry would probably not please the market whatever the company say. This weekend won’t make or break AAOG but it will certainly decide whether that transformation is imminent, as they say in the movies, do you feel lucky…?

And finally…

This weekend in the Premiership Liverpool host the Eagles, historically one that Palace enjoy, the Noisy Neighbours are at the Terriers which is the last thing they want. Spurs are at the Cottage, also a must win game for the Cottagers. The stand out tie is probably the Gooners hosting Chelski, both sides need three points whilst the Red Devils host their nemesis the Seagulls.

A really amazing weekend for rugby fans where there are some really crucial fixtures as the group stage come to a close…

And good jumping too, you can see Altior at Ascot or go to Haydock and watch the Peter Marsh, some great names out as we start thinking about Cheltenham more seriously..


]]> Hillcrest Petroleum kicks off oil production at West Hazel field after upgrade Fri, 18 Jan 2019 10:15:00 +0000 AFC Energy successfully tests world first hydrogen electric vehicle charger Fri, 18 Jan 2019 08:51:00 +0000 AFC Energy PLC's (LON:AFC) Adam Bond spoke to Proactive London's Andrew Scott after announcing they'd successfully demonstrated the world’s first electric vehicle charger based on hydrogen fuel-cell technology.

Dubbed CH2ARGE, the technology was put through its paces at Dunsfold Aerodrome.

The demonstration was the culmination of 10 years of fuel cell research development at the AFC Energy laboratories.

]]> Greencoat UK Wind higher as it reports rise in fourth quarter net asset value, hike in 2019 target dividend Fri, 18 Jan 2019 08:50:00 +0000 Providence Resources upgrades Avalon to frontier exploration licence Fri, 18 Jan 2019 07:18:00 +0000 Brookside Energy Ltd "looking forward to an exciting 2019", says MD David Prentice Thu, 17 Jan 2019 22:42:00 +0000 Brookside Energy focused on increasing landholding and reserves amid global hydrocarbon growth Thu, 17 Jan 2019 22:38:00 +0000 Brookside Energy Ltd (ASX:BRK) managing director David Prentice speaks to Proactive Investors about the company’s oil assets in the Anadarko basin and the impact of markets on its business model.

“We’re seeing a shift in the way that we store and then discharge energy and the uptake in the electric vehicle space and improvements in battery technology have been impressive,” Prentice says.

He continues, “but I think in the medium to long-term, the hydrocarbon story is really about global growth and consumption and the outlook looks strong … from the petrochemical sector all the way through to the fuel sector.

“We’ll continue to focus on increasing our landholding but also increasing our reserves – ultimately that will be the factor that unlocks the value that’s already built into the business.”

]]> Iofina Plc sets record-breaking year in 2018 Thu, 17 Jan 2019 14:52:00 +0000 Tom Becker, chief executive of Iofina plc (LON:IOF), tells Proactive London's Andrew Scott they enjoyed a strong second half to what was a record-breaking year in 2018 in terms of crystalline iodine production.

The group produced 324.7 tonnes of crystalline iodine in the second half of last year, up 21% from 267.5 tonnes in the corresponding period of 2017.

]]> EQTEC Plc's Ian Price hails significant new contract with Phoenix Energy Thu, 17 Jan 2019 14:24:00 +0000 Ian Price, chief executive of EQTEC Plc (LON:EQT), discusses with Proactive London's Andrew Scott what's been described as a “landmark deal” with Phoenix Energy - signing a first equipment purchase contract in relation to the US company's first power plant in California.

Phoenix will be the first customer in the US to utilise EQTEC's gasification-to-energy technology and price reckons it will lead to further opportunities throughout the US market.

]]> AFC Energy demos world’s first EV charger based on hydrogen fuel-cell technology Thu, 17 Jan 2019 12:25:00 +0000 ADES International launches integration project for recent acquisitions Thu, 17 Jan 2019 12:04:00 +0000 Touchstone Exploration is setting up future growth broker says Thu, 17 Jan 2019 11:12:00 +0000 Jersey Oil & Gas, President Energy Thu, 17 Jan 2019 10:50:00 +0000 Jersey Oil & Gas, President Energy



Jersey Oil & Gas

JOG announced yesterday that the West Phoenix rig will shortly move to Equinor UK and start a three well programme of which the Verbier appraisal is the third. This should give the company a good idea when drilling is imminent as they look to define the numbers at Verbier. The company also announced that the fast track data from the 3D seismic run over the enlarged area was delivered in December and interpretation is already under way. In my view this is as exciting as anything, given the exciting nature of potential in the area.

President Energy

I caught up with Peter Levine, Chairman of President Energy yesterday and the link to the interview is below. As usual it was a fascinating discussion with no holes barred and shareholders should find it most interesting.

Core Finance CEO interview: Peter Levine of President Energy

Voxmarkets Podcast

Slightly delayed as I’ve been away from the office a lot this week meeting companies here is my podcast from Monday morning.

VOX Markets podcast: Malcy on Faroe Petroleum, Ophir Energy, SDX Energy, President Energy, Amerisur Resources and Premier Oil

I will catch up with VOG and Lamprell tomorrow although both announcements seem to be satisfactory.


]]> VSA CAPITAL MARKET MOVERS - Lake Resources Thu, 17 Jan 2019 09:05:00 +0000

VSA Morning Miner, 17/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Lake Resources (ASX:LKE

Lake Resources (LKE AU) has provided an update on its Cauchari projects in Argentina. LKE owns 100% of the licenses adjacent to those of more advanced projects which have demonstrated high grades and strong flow rates to date with the latest results from peers of up to 611mg/l Li. LKE’s drilling programme is designed to demonstrate that the lithium bearing brine horizons proven on these licenses extends into those of LKE.

LKE has confirmed that the sandy horizons which contain the high grades in adjacent license areas extend into LKE’s license area. However, high fluid pressure downhole has prevented LKE from reaching the target horizons for the initial holes so far for brine sampling. This is indicative of the high flow rates mentioned. With adjusted drilling methods now being utilised LKE believe they can now obtain the necessary samples.

Although LKE shares and those across the lithium space have been particularly weak in the past few months we note the acquisition of LSC Lithium (LSC CN) which confirms the ongoing strategic importance of lithium. LSC had amassed an acreage of around 149,000ha with total contained resources of around 2.62mnt LCE. On the basis of the license areas it is the only other junior of comparable size to LKE, however, on a contained LCE basis its resources were spread over multiple projects also in Argentina. At 4.4mnt LCE in one location so far LKE is perhaps more attractive in that respect. The valuation on a EV/resource basis of approximately US$14/t is a significant premium to LKE’s current US$4/t highlighting the ongoing value opportunity.

We reiterate our Buy recommendation and target price of A$0.36/sh.




]]> 88 Energy secures permit for upcoming Winx-1 exploration well Thu, 17 Jan 2019 08:46:00 +0000 Victoria Oil & Gas reveals production and sales boost as power station supply resumed Thu, 17 Jan 2019 08:17:00 +0000 Base Resources' MD updates on quarterly highlights, production, and projects Thu, 17 Jan 2019 08:15:00 +0000 Base Resources Limited (ASX:BSE, LON:BSE) managing director Tim Carstens speaks to Proactive Investors about the key outtakes from the quarterly update for Q4 2018, released today.

Carstens also details the latest on the Kwale Mineral Sands Operations in Kenya, and teases some of the content that will be included in the Pre Feasibility Study due out this quarter on the Toliara Project in Madagascar.

He says, "It's a very significant study; it's a bit of a misnomer calling it a pre feasibility study... This is about getting the configuration right. A lot of good work had been done on this project before we acquired it, we're really building on that good work and doing a lot of the final test work that underpins the flow sheet design."

]]> Iofina continues in record-busting form Thu, 17 Jan 2019 08:02:00 +0000 Touchstone Exploration kicks off 2019 with a bang as it confirms potential of Ortoire project Thu, 17 Jan 2019 07:39:00 +0000 Touchstone Exploration details Ortoire block’s resource potential Thu, 17 Jan 2019 07:38:00 +0000 Anglo African O&G's David Sefton updates on drilling & 'game-changing' Mengo reservoir Wed, 16 Jan 2019 15:34:00 +0000 David Sefton, executive chairman of Anglo African Oil & Gas PLC (LON:AAOG), dropped into the Proactive London studio to update on the drilling of well TLP-103C at their Tilapia field in the Republic of the Congo.

It follows last week's well-supported fundraise which brought in £6mln.

Sefton says they're nearing the Djeno reservoir and a success there could prove even more significant than the 'excellent' results achieved so far in the R2 and the Mengo.

]]> Jersey Oil & Gas looks forward to Verbier drilling as Equinor picks up rig Wed, 16 Jan 2019 13:38:00 +0000 UK Oil & Gas investors unimpressed by Horse Hill testing update Wed, 16 Jan 2019 12:27:00 +0000 Oil price, Reabold, Eco Atlantic, Ophir, Touchstone And finally… Wed, 16 Jan 2019 11:38:00 +0000 Oil price, Reabold, Eco Atlantic, Ophir, Touchstone And finally…



WTI $52.11 +$1.60, Brent $60.64 +$1.65, Diff -$8.53 +5c, NG $3.50 -9c


Oil price

Oil rallied after the panic over the Chinese economic data as the Government stepped in to stabilise the economy, as it does. Opec+ announced a series of meetings to remind the world that it is serious about the cuts, March 17th to monitor progress and April to consider extending the time-frame.

Reabold Resources/Upland Resources

Reabold has announced that the Wick well is a duster with the target sands being water bearing. Whilst this is a disappointment it should be remembered that it was an exploration well and whilst its COS was at 30-40%, a little higher than some it still had no reason to be a banker.

RBD has said this morning that it was the highest risk in the portfolio and happy to go ahead as Corallian was carries and costs were low, as such it was ‘not representative of a typical RBD appraisal target’. The rig will now move to the Colter target which is not only has a better COS but should it come in be close to development infrastructure. RBD has this prospect as well as California, Romania and UK onshore either ongoing or imminent and the modest fall in the share price to a large extent validates the model and is why investors should not panic out of the company.

For Upland it was also a disappointment but they too point out exciting prospects in the portfolio including Tunisia and Sarawak.


Eco Atlantic Oil & Gas

Further good news for Eco Atlantic this morning in the shape of the Tullow trading statement in which it confirms that Guyana is to be the focus for its exploration programme in 2019. The company confirm that it is to drill the Jethro well on the Orinduik block in Q2 followed by at least one more likely this year, this is extremely good news for Eco who’s share price still does not anywhere near reflect the potential in the area.


Missed out from yesterday the Ophir statement or as I described it on Monday, the shadow defence document. The starter pack was certainly there to repel boarders with the announcement of ‘rationalising frontier exploration portfolio’ (I thought they had done that already) to bring in some cash and to reduce commitments.

There is little doubt that the Santos deal has performed better than expectations, not surprising to those of us who applauded the deal when it was done. Reducing capex has cut net debt quite nicely to $35m and will be $70 this year against previous expectations of $105m. Production guidance remains at a cautious 25/- after well beating the forecast this year and looks conservative to me. A good stab at a dummy defence document but whether it will scare off the PT Medco bid is yet to be seen…


An update from Touchstone as well yesterday where they announced that 4Q production was 1,851 b/d and annually registered 1,718 b/d up 25% y/y. In the year they drilled 11 wells in Trinidad with 28 RCP’s. For 2019 they intend to focus on the Ortoire block exploration prospect and remain confident of success in the area.

And finally…

The Magpies eventually beat Blackburn in the FA Cup replay but not without extra time, going through 2-4 in the end.


]]> SSE shares could slump if a UK general election is called Wed, 16 Jan 2019 10:56:00 +0000 Petro Matad Ltd's Mike Buck details fully funded 2019 drill programme Wed, 16 Jan 2019 09:13:00 +0000 Mike Buck, chief executive of Petro Matad Ltd (LON:MATD), discusses with Proactive London's Andrew Scott the new targets for this year’s campaign in Mongolia.

Following a prospect ranking exercise, the explorer expects to decide on its drill targets by mid-2019.

Buck says this year will be a key period for the company as they look ahead to delivering on the four well drilling programme and, with success, moving the company towards commercialisation.

]]> Trio of small cap oiler slide on dud Scottish exploration well result Wed, 16 Jan 2019 09:10:00 +0000 Energean Oil & Gas sets sights on production growth, looks forward to 2019 drill programmes Wed, 16 Jan 2019 08:37:00 +0000 Tullow Oil eyes growth this year as 2018 production lands in line with expectations Wed, 16 Jan 2019 08:17:00 +0000 Cadogan Petroleum beats production target for 2018 Wed, 16 Jan 2019 08:01:00 +0000 Leigh Creek Energy signs a deal to monetise its pre-commercial demonstration plant Wed, 16 Jan 2019 06:48:00 +0000 Permex Petroleum positioned for growth in the world’s hottest oil and gas region Tue, 15 Jan 2019 23:46:00 +0000 United Oil & Gas kicks off “exciting” 2019 with key milestone for Italian gas project Tue, 15 Jan 2019 14:25:00 +0000 Eland Oil & Gas higher as it sees further production growth after “exceptional” year Tue, 15 Jan 2019 14:15:00 +0000 Touchstone Exploration reveals positive start to 2019 Tue, 15 Jan 2019 13:35:00 +0000 Alternus Energy completes acquisition of three solar parks in Italy from Liquid Sun Srl Tue, 15 Jan 2019 13:20:00 +0000 Tlou Energy finds gains as it restarts lateral drilling in coal bed methane wells Tue, 15 Jan 2019 13:15:00 +0000 Touchstone Exploration looking forward to 'true exploration drilling' in Trinidad Tue, 15 Jan 2019 12:41:00 +0000 Paul Baay, president and chief executive of Touchstone Exploration Inc (LON:TXP, CVE:TXP), caught up with Proactive London's Andrew Scott to discuss what's been a positive start to 2019, in terms of production as well as highlighting plans for further well drilling operations.

Touchstone drilled three wells in the fourth quarter of 2018, taking its tally for the year to eleven, and, it also performed twenty-eight well recompletions during the twelve months.

Baay says 2019 is going to be a very exciting year as it's the first time they'll be doing some true exploration drilling in Trinidad ..... ''This is kind of thing where you really game-change from around 2000 barrels a day to where you can get visibility to 5,000 or 10,000 barrels a day if we're successful''.

]]> Genel Energy shares drop despite cash flow boast Tue, 15 Jan 2019 09:58:00 +0000 EQTEC jumps as it signs “landmark deal” for a first equipment purchase contract with US firm Phoenix Energy Tue, 15 Jan 2019 09:44:00 +0000 Ophir Energy says its positioned for significant cash flow Tue, 15 Jan 2019 09:43:00 +0000 Po Valley Energy’s first gas production well at Italian field gains preliminary approval Tue, 15 Jan 2019 06:19:00 +0000 Red Sky Energy agrees to extension of agreement to obtain oil & gas project Tue, 15 Jan 2019 04:50:00 +0000 Whitebark Energy continues Wizard Lake Rex well flowback, gathers data on long-term production Tue, 15 Jan 2019 02:01:00 +0000 Bass Oil continues to deliver strong monthly oil production in Indonesia Tue, 15 Jan 2019 01:26:00 +0000 SDX Energy kicks off 2019 with SRM well success Mon, 14 Jan 2019 15:35:00 +0000 Premier Oil falls on speculation over US$1.5bn acquisition and equity ‘cash call’ Mon, 14 Jan 2019 15:05:00 +0000 Block Energy reveals “excellent” production result at Norio Mon, 14 Jan 2019 14:43:00 +0000 Daily Blog: Oil price, SDX, Ophir, Premier, Rose Petroleum And finally... Mon, 14 Jan 2019 13:44:00 +0000 Oil price, SDX, Ophir, Premier, Rose Petroleum And finally…



WTI $51.59 -$1.00, Brent $60.48 -$1.20, Diff -$8.89 -20c, NG $3.10 +13c

Oil price

The nine day oil price rally ended on Friday but not before smashing a few records en route. The price rallied around 18% in that time and last week alone WTI was up 7.6% while Brent rose 6%. As usual a combination of reasons cover the market movement, one was actual as the production reduction numbers are coming through thick and fast and may well be enough to settle the market for a little while.

Other reasons are more obscure, two bids in the UK sector indicate that companies with plenty of cash are seeing the stock market as a cheaper place to find oil than drilling for it themselves, it certainly looks that way for DNO and maybe PT Medco as well. With net long positions sharply down in recent months and increased shorts it is also possible that the last week has seen a fair bit of covering of these positions. Finally it only took a shake out like this to see a number of investment banks lose their bottle and G Sachs, Morgan Stanley, Soc Gen and Berenberg as usual, rang the bell and cut their oil price forecasts.

SDX Energy

News from Egypt this morning although a fuller report is expected later in the month. The SRM-3 well at South Ramadan, is at TD and has encountered pay in the Matulla Section, its primary target, in the Brown Limestone formation and also net conventional pay in the Sudr section. The well will be completed in the Matulla section before testing to see if it will flow at a commercial rate.

It would probably be wise for investors to wait for the full results before getting too excited about the potential of this well as I have spoken to Paul about this area in the past and he has always been a bit cautious because of the tricky seismic interpretation and the faulted nature of the reservoir sections encountered.  I know that he’s encouraged by the log results but as he puts in his quote, he awaits the well test results to determine what he has.  I had a brief exchange with him this morning and he reiterated this point.  Really waiting for the test to be completed before he can get a good understanding of the potential here.

Meanwhile at South Disouq all is in full swing, the development lease application has been approved by the authorities and construction of the pipeline and central facility has commenced. First production is still on track to commence towards the end of H1 and SDX is expecting to achieve a gross plateau of conventional natural gas of 50-60 MMscfd. Elsewhere the 3D seismic is 50% complete and expected to conclude in February when it will be processed and interpreted by the end of 3Q 2019 after which drilling on the licence can resume.

Encouraging signs then from Egypt and with an analysts visit scheduled there for April the spotlight will certainly be on it, I for one am very much looking forward to seeing South Disouq and the plans for drilling once the seismic has been interpreted. A very positive start to the year for SDX in all regards.

Ophir Energy

Ophir has received an indicated bid from PT Medco of 48.5p, this has been reduced twice presumably as a result of the company losing the Fortuna licence. Anyway, the board of Ophir has met and unsurprisingly dismissed the potential offer as undervaluing the company. PT Medco has until 28th of January to formalise the bid or walk away.

I fully agree with the board that the bid does not reflect the value in the company at the moment and should it be formally made can be dismissed reasonably readily. Unfortunately this bid defence, should it come down to it, will not be the easiest to write what with the disaster that Fortuna has been in the last two years. Clearly the former CEO is going to take plenty for the team but the board also carries much responsibility which goes with the territory as with the $300m impairment charge. The defence document should be able to put a reasonable value on the portfolio but given that it is 8 months since the former CEO was despatched the question of who will run the business must be a tricky one. The best answer would be if Alan Booth elected to remain in charge for a defined term which would certainly ease any worries, plan B is the announcement of a new CEO, well overdue but probably not possible in the circumstances.

Given that tomorrow sees the pre-close trading update from Ophir it would probably be wise to expect some sort of ‘shadow defence’ which will give shareholders an idea of what to expect on this front and may stimulate discussion re the above. Either way all is not lost yet for Ophir.

Premier Oil

Yesterday’s Sunday Times had what looked like a well informed ‘scoop’ suggesting that Premier were looking to buy a package of North Sea assets from Chevron for around $1.5bn and to fund it in cash. Given that its market cap is only a shade north of £500m and it has a well publicised debt mountain, even selling all or part of its Latin American business, which I think they would be loathe to do, would not square the circle.

I’m sure that Premier have looked at this asset package, as they would anything in their back yard, but surely a combination of the difficulty of rationalising their existing asset base with financing such a huge package would be bordering on the impossible. However if you do see an advert for an oil company with assets in Mexico, South East Asia and the North Falklands Basin in the trade press you will know what it is…

Rose Petroleum- Erratum

On Friday I commented about Rose Petroleum which has successfully acquired additional acreage in the Paradox Basin in Utah. Unfortunately I got into a proper mess in the opening paragraph describing it as having ‘acquired the acquisition of additional acreage’ when I had planned to change it to ‘acquiring by way of lease sale’. My changes didn’t make it and I was quite correctly ticked off by the IR supremo. Either way, Rose has done a great job in picking up adjacent acreage for next to nothing and I look forward to the next few months with alacrity.


And finally…

The top of the Premiership just got a bit more exclusive, and if the Noisy Neighbours don’t beat Wolves tonight it could be another big gap. Liverpool got over their bad week by beating the Seagulls but Spurs lost 0-1 at Wembley to the Red Devils. Chelski beat the Magpies keeping them above the Gooners who lost to the Hammers, at the bottom it is looking bad for the Terriers and the Cottagers for that matter.

And the Australian Open tennis started at Melbourne Park this morning and Andy Murray went out in a five set thriller to Roberto Bautista Agut, whether that is the end for him is not certain at this stage.


]]> SDX Energy's Paul Welch updates on Egypt operations from Cairo Mon, 14 Jan 2019 10:57:00 +0000 Paul Welch, chief executive of SDX Energy Inc (LON:SDX, CVE:SDX), tells Proactive London's Andrew Scott that 2019 has got off to a positive start for them with the SRM-3 well, at the South Ramadan project in Egypt, unearthing oil pay in multiple reservoir zones.

Welch adds that the South Disouq project remains on track for first production later this year – towards the end of the first half – after which it will ramp up to a plateau rate of 50-60mln cubic feet of gas per day.

]]> Pantheon Resources shares rise as it lands Texas asset deal Mon, 14 Jan 2019 10:29:00 +0000 Zenith Energy CEO confident of achieving production targets ahead of drill campaign Mon, 14 Jan 2019 09:48:00 +0000 Andrea Cattaneo, CEO of Zenith Energy Ltd (LON:ZEN), spoke to Proactive London's Andrew Scott ahead of the start of the company's 2019 workover and drilling activities.

Zenith's current production from its three fields in Azerbaijan is around 270 barrels per day - the oil production target for 2019 is 1,000 barrels per day.

]]> VSA CAPITAL MARKET MOVERS - Tectonic Gold Mon, 14 Jan 2019 09:19:00 +0000

VSA Morning Miner, 14/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Tectonic Gold (LON:TTAU)

Tectonic Gold (TTAU LN) has provided an update on the recent exploration programme. 75% of the assay results have been returned with the full results expected to be received before the end of January 2019 which will then be verified, collated and modelled and announced shortly after.

Australian exploration activity has picked up markedly with the rally in the AUD gold price to in excess of A$1,800/oz to close to record highs. Consequently, the assay labs are far busier than in recent years hence the longer than expected wait for the completion of testwork and the return of the full dataset.

The latest grades announced, albeit reported without full assay data, have demonstrated grades in line with historic mining at Specimen Hill at up to 35.2g/t Au from 90m depth. TTAU has also reported silver grades of up to 37g/t Ag, tellurium grades of up to 15 g/t and copper grades of up 1.45%. Intercepts of key signature elements of IRGS deposits are encouraging and we await the detailed results announcement to fully understand the context of the initial drilling programme.    

We reiterate our Speculative Buy recommendation.




]]> Ophir rejects £360mln takeover offer from Indonesian oil giant Mon, 14 Jan 2019 09:10:00 +0000 Europa Oil & Gas highlights Irish partnering progress Mon, 14 Jan 2019 08:41:00 +0000 Plexus Holdings to expedite Russia push with new Gusar transaction Mon, 14 Jan 2019 07:56:00 +0000 Highlands Natural Resources says all eight new East Denver wells are now online Mon, 14 Jan 2019 07:36:00 +0000 Global Energy Ventures granted US approval for ship construction Sun, 13 Jan 2019 22:06:00 +0000 Gulf Keystone: Multiple M&A angles Sat, 12 Jan 2019 09:19:00 +0000 Permex Petroleum announces non-brokered private placement financing to raise 1.5M Fri, 11 Jan 2019 18:27:00 +0000 Permex Petroleaum (CSE:OIL) CEO Mehran Ehsan joined Steve Darling from Proactive Investors Vancouver to discuss Permex's fund raise of 1.5 million in a non-brokered private placement.

The capital will be used to start new waterfloods, bringing online shut-in wells, and general working capital purposes.

]]> Flotek Industries stock soars after deal to sell Florida Chemical to Archer Daniels Midland for $175M Fri, 11 Jan 2019 18:00:00 +0000 i3 Energy team discuss multi-well drill campaign and development plans for 2019 Fri, 11 Jan 2019 13:23:00 +0000 i3 Energy plc's (LON:i3E) CEO Majid Shafiq and CFO Graham Heath discuss with Proactive London's Andrew Scott a letter of intent that's been signed for a multi-well drill programme that’s intended to take the Liberator field to the cusp of production.

The company's received proposals regarding offtake terms for Liberator’s future production plus they also give an update as to the ongoing project financing work.

They're presently negotiating terms for US$100-130mln of debt to fund appraisal drilling and the Phase 1 Liberator development capital expenditure with an agreement expected in the near-term.

]]> Eco Atlantic Oil & Gas tipped for 140% upside as Guyana exploration wells come into focus Fri, 11 Jan 2019 11:08:00 +0000 EQTEC agrees to amend loan facility as it pursues contract opportunities Fri, 11 Jan 2019 09:54:00 +0000 Rose Petroleum expands footprint in Paradox Basin with further 'high quality acreage' Fri, 11 Jan 2019 09:51:00 +0000 Matt Idiens, chief executive of Rose Petroleum PLC (LON:ROSE), tells Proactive London's Andrew Scott they've expanded their footprint In the Paradox basin, in Utah, with a deal to acquire around 1,920 acres.

The new acreage was secured through the December 2018 Bureau of Land Management Utah lease sale.

Rose will own 75% alongside partner Rockies Standard Oil Company (RSOC).

]]> Berkeley Energia jumps as it refutes media reports surrounding Salamanca approvals Fri, 11 Jan 2019 09:27:00 +0000 Block Energy upbeat as it heads into 2019 after busy December Fri, 11 Jan 2019 09:00:00 +0000 Wentworth Resources comfortably beats production guidance amid rising gas demand in Tanzania Fri, 11 Jan 2019 08:52:00 +0000 Active Energy Group looking to get Coalswitch cracking ASAP Fri, 11 Jan 2019 07:55:00 +0000 US Oil & Gas tops up working capital with share sale Fri, 11 Jan 2019 07:43:00 +0000 Rose Petroleum adds acreage to expand Utah footprint Fri, 11 Jan 2019 07:27:00 +0000 Australian Vanadium's MD discusses plans for Gabanintha project with cash just raised Thu, 10 Jan 2019 23:00:00 +0000 Australian Vanadium Ltd (ASX:AVL) managing director Vincent Algar tells Proactive Investors that the company is well-funded to completes its definitive feasibility study (DFS) on the Gabanintha Vanadium Project in Western Australia, now that it has secured $6.16 million from an option conversion.

Algar discusses a pilot metallurgical test program, and securing further funding for the project.

]]> FuelCell Energy beats 4Q revenue expectations, has a full order book Thu, 10 Jan 2019 16:00:00 +0000 Daily Blog: Oil price, Premier, PetroMatad, Angus, Aminex And finally... Thu, 10 Jan 2019 14:57:00 +0000 Oil price, Premier, PetroMatad, Angus, Aminex And finally…



WTI $52.36 +$2.58, Brent $61.44 +$2.72, Diff -$9.08 +14c, NG $2.98 +2c

Oil price

The oil price has had a good run, up nearly 20% since the low on December 28th or thereabouts and due to a combination of Opec+ production cuts and ongoing trade talks. This morning it takes a breather, off about a dollar but both grades remain above their crucial ‘big figures’.

The above havent changed but the EIA inventory stats were again mixed last night, overall the bears had it small time, crude drew but at 1.7m, less than forecast and the API number. Products, which I continue to argue are difficult to read at this time of the year, did rise, gasoline by 8.1m which was higher than the API number and distillates by 10.6m which was marginally above the API data. I will worry about the distillates number if there isnt a cold snap which is about as likely as Lord Lucan appearing on the board of Angus Energy…

Premier Oil

The Premier updates continue to please and today is no exception. All the boxes are being ticked, starting with production which came in at 80.5 kboepd up 7% y/y and a group record. With November and December averaging 92/- b/d and Catcher doing a gross number of 66/- b/d the year ended well. Guidance for 2019 is 75/- b/d which seems cautious but they do lose a short 10/- b/d from disposals and the 97% uptime can hardly be maintained for ever.

So to the debt, which remains high but is coming down faster than expected, at year end it was $2.33bn which was down $390m on 2017 and below guidance of $2.4bn. The Tolmount Main gas project received sanction in the period and the platform is already under construction. With the Tolmount East appraisal well to be drilled in ‘mid 2019’ first gas is still on track for Q4 2020. In Mexico the Zama appraisal well is drilling now, it is at the top of the reservoir looking for the oil water contact (OWC) and then will checkout the deeper exploration prospect before testing the sidetrack, expect a result soon followed by Zama-3 in March.

Elsewhere the Sea Lion project financing continues, LOI’s to contractors have been converted to contracts, a good deal of the environmental, fiscal and admin paperwork is ‘far advanced’. Paperwork is being prepared for the lenders and given that the UK Government has potential exposure too one can understand that they have a lot on their plate at the moment.

This is a good operational announcement ahead of the figures on March 7th where the full presentation will be made. The debt reduction is welcome and more than expected, I like the hedging programme and the pulling in of cash to cut the borrowings. Despite that it is continuing with Tolmount, Zama and even Sea Lion to add to the existing good quality portfolio which gives confidence for the future.

Petro Matad

A brief comment on MATD this morning as I have a meeting with CEO Mike Buck in the book for next week where I hope to get chapter and verse. Talking post well analyses after two high profile dusters is brave but demonstrates a deal of optimism for the remaining programme. In block V they like the light oil from the drilling fluid in the dry holes and they like the Taats Basin especially the Raptor and will next drill Fox or Raptor. In Block XX they have mapped the Heron, Gazelle and Antelope prospects and with Heron being deemed to be an extension to the Petro China discovery it becomes an appraisal well. Apart from that it will be more exploration and the high risk/reward that goes with that…More next week.

Angus Energy- You couldn’t make it up…

When I read the Angus announcement I thought that I was in some parallel universe, I’ve heard a  lot of pony in my near 40 years in the sector but this takes the bacon. Ex Chairman, who left for a good reason as I remember, trying to sack CEO and replace him with Lord Lucan and Adam Habib which immediately prompted the resignation of Rob Shepherd (which is a very telling indeed). As for the financing and the £3m facility the less said about that the better. What a total shambles, whatever the quality of the asset this looks like being as close to uninvestable as it gets, your call…

Aminex- Adding some beef…

I wouldn’t normally comment on Non-Exec or broking appointments but the announcement that AEX has appointed Linda Beal as an independent NED is encouraging for shareholders and provides much needed backbone to the board. I don’t comment on broker quality as such but the addition of a good city and oil industry name as an advisor can also only help the process for the company. All they need to do now is to fill the Chairman role, I’m sure that the usual headhunters are on the case…

And finally…

The disruption on the M6 last night prevented most of the Burton fans from getting to the first leg of the Haribo Cup semi-final and quite a good thing too. When they are at home for the second leg I hope that they are singing that old football song, we’re going to win 10-9, we’re going to win 10-9…..


]]> Eland Oil & Gas shares advance as explorer confirms Gbetiokun-3 drilling success Thu, 10 Jan 2019 13:55:00 +0000 Cantor says remaining Faroe Petroleum shareholders should cash out Thu, 10 Jan 2019 11:22:00 +0000 Petro Matad sets sights on Raptor prospects as it weighs plans for 2019 Thu, 10 Jan 2019 10:17:00 +0000 VSA CAPITAL MARKET MOVERS - M2 Cobalt Thu, 10 Jan 2019 09:40:00 +0000

VSA Morning Miner, 10/01/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


M2 Cobalt (CVE:MC)

M2 Cobalt (MC CN) has announced the completion of the initial 2km of diamond drilling across 15 holes prior to its winter break in mid-December. Samples are now at the ALS Chemex South African Ltd labs for assay analysis with results currently anticipated by mid-February 2019.

The exploration programme as a whole covers the three distinct styles of mineralisation discovered across the major targets identified in the Phase 1 programme. Extensive anomalies of VMS copper cobalt mineralisation were identified at the Kilembe properties in south western Uganda as well as ultramafic nickel, copper, cobalt mineralisation and Katanga style sediment hosted copper cobalt mineralisation at the Bujagali properties in central Uganda. This initial programme was largely focused at Kilembe with the rig planned to follow onto Bujagali after.

We reiterate our Speculative Buy recommendation.




]]> i3 Energy shares rise as it sets up an active programme for 2019 Thu, 10 Jan 2019 09:31:00 +0000 VSA CAPITAL MARKET MOVERS - DekelOil Public Limited Thu, 10 Jan 2019 09:18:00 +0000

VSA Morning Agri Comment, 10/01/19

PDF Version

Keep reading VSA research for free – Click here for our position on MIFID2


DekelOil Public Limited - Q4 Production & Sales Update

Côte d'Ivoire agricultural company DekelOil Public Limited (LON:DKL) has announced a production update for Q4 2018.

  • Fresh Fruit Bunches (FFB) Collected: 24,903t, -23.1% YoY (Q4 2017: 32,364t)
  • Crude Palm Oil (CPO) Production: 5,464t, -22.6% YoY (Q4 2017: 7,055t)
  • CPO Sales: 4,950t, -24.8% YoY (Q4 2017: 6,586t)
  • Average CPO Selling Price: €517/t, -14.8% YoY (Q4 2017: €607/t)

VSA Comment

Following a 15% YoY increase in FFB collected in Q3, we were hopeful that Q4 would provide continued evidence of a strong recovery in crop levels and provide upside to our forecasts. Unfortunately, today’s data confirms that this was not the case. However, it should be noted that the comparable period appears to have been an exceptionally good quarter for cropping and Q4 CPO production was more than 15% ahead of production in Q4 2016.

Over the full-year, DKL collected 146,036t of FFB and produced 33,077t of CPO, in-line with our forecasts of 147,525t and 33,341t, respectively. Palm kernel oil (PKO) sales (2,861t sold vs. 2,124t estimate) and palm kernel cake (PKC) sales (3,795t sold vs. 2,950t estimate) were significantly higher than we had estimated.

Pricing premiums over the European benchmark in H2 (+19% in Q4, +11% in Q3) allowed DKL to secure an average FY CPO selling price above our forecasts (€543/t vs. €523/t estimated). Along with the higher-than-forecast PKO and PKC sales, this may provide slight upside to our financial forecasts for FY 2018 (revenue of c€20m and net loss of c€3m). Given strong regional demand, we expect premium pricing to persist through FY 2019.

In terms of CPO pricing outlook, the European benchmark price has increased more than 20% since mid-November to US$535/t (€465/t). Although South East Asian palm oil stocks are currently high, we are now entering the low production season for that region, with Chinese and Indian demand expected to increase, and Malaysian and Indonesian domestic demand also likely to rise as higher biodiesel blending regulations are rolled out. In addition, the US National Oceanic and Atmospheric Administration has put a 90% chance of an El Niño forming in Q1. A strong El Niño has the potential to depress palm oil production and boost pricing.

On the bearish side, recent crude oil price falls have eliminated the premium of gasoil over Malaysian CPO (having been US$200/t+ in October). This will reduce discretionary palm-based biodiesel demand and could delay the implementation of further biodiesel blending regulations.

With 2018 now behind it, attention will turn to 2019, particularly with regards to the upcoming high season. In anticipation of this, DKL has established a fourth FFB collection centre near to its mill. Although never guaranteed, low production years are often followed by high production years, so we are hopeful that H1 2019 will be a positive one for DKL in terms of production. We look forward to a Q1 2019 production update in early April to confirm this either way. Recent CPO price increases, if sustained, could also help deliver an improved financial performance in FY 2019.

We maintain our BUY recommendation and target price of 12p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Company Name





Company Name





Company Name







Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Company Name





Company Name





Company Name








]]> Premier Oil beats debt reduction expectations in year of strong production Thu, 10 Jan 2019 08:53:00 +0000 Greenland Minerals simplifies processing circuit for Kvanefjeld Wed, 09 Jan 2019 23:47:00 +0000 Permex Petroleum unveils plans for placing to raise up to $1.5M to advance business Wed, 09 Jan 2019 19:37:00 +0000 Plug Power says it will swing into profitability in 2019 as it signs on large customers Wed, 09 Jan 2019 19:10:00 +0000 'It's the year we've been waiting for' - Columbus Energy's Leo Koot on 2019 Wed, 09 Jan 2019 15:15:00 +0000 Leo Koot, chairman of Columbus Energy Resources PLC (LON:CERP), tells Proactive London's Andrew Scott the company achieved its targeted end of year peak production rate of 1,000 barrels of oil per day.

Koot says output hit 1,021 bopd in late December while the average rate for the fourth quarter amounted to 670 bopd.

He adds they're continuing to pursue mergers and acquisition opportunities, in Trinidad and South America, which are value accretive with several formal proposals under consideration.

]]> Tecogen sells two 200-ton chillers to indoor marijuana-growing facility in Massachusetts Wed, 09 Jan 2019 15:06:00 +0000 Faroe Petroleum taken out by DNO, could more North Sea oilers follow? Wed, 09 Jan 2019 14:47:00 +0000 Columbus Energy achieves production target for 2018 exit Wed, 09 Jan 2019 14:30:00 +0000 Anglo African O&G taps shareholders for £6.0mln to complete drilling of TLP-103C well Wed, 09 Jan 2019 11:52:00 +0000 Norway’s DNO gains control of Faroe Petroleum after increasing hostile takeover bid Wed, 09 Jan 2019 11:03:00 +0000 VSA CAPITAL MARKET MOVERS - Central Asia Metals Wed, 09 Jan 2019 09:23:00 +0000

VSA Morning Miner, 09/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Central Asia Metals (LON:CAML)

Central Asia Metals (CAML LN) has announced strong production results for 2018 in line with company guidance and marginally ahead of our estimates across copper, lead and zinc. Copper production of 3.4kt in Q4 2018 resulted in full year 2018 production of 14kt which was flat YoY, despite the impact of severe weather in Q1 2018, and the company was able to make up the shortfall through the balance of the year. Having forecast 13.8kt copper output was 2% ahead of our forecasts while average LME copper prices of US$6,544/t were in line. Guidance for 2019 of 12.5-13.5kt copper output is marginally lower than our estimate of 13.8kt although remains in line with historical production levels.

At Sasa zinc production of 22.5kt was up 4% YoY with Q4 2018 production of 5.8kt up 8% YoY. Full year production was broadly in line with our estimate of 22.3kt as a combination of consistently stronger grades through the year along with rising recoveries to 85% in Q4 2018. The latter followed the commissioning of the new SMD mill earlier in the year. Lead production of 29.4kt was 2% lower YoY, however, it was 2% ahead of our estimate of 28.8kt and comfortably within the guidance range of 28-30kt. The lower YoY output was largely driven by a modest decline in lead grades from 3.98% to 3.90% and a 1pp decline in recoveries to 93.6%. This, therefore represents a strong first full year of operations at Sasa, in our view, and with zinc and lead guidance maintained at Sasa of between 22-24kt and 28-30kt respectively for 2019 CAML is set to maintain the established stable operational track record at Sasa. Updated production guidance remains in line with our estimates for 2019 onwards.

The tailings storage facility at Sasa is now largely complete which will provide storage at Sasa for a further seven years meaning that near term capital requirements at Sasa are largely confined to sustaining capex. Additionally, CAML commenced a life of mine study and resource infill drilling programme. The updated JORC resource is expected to be completed during Q1 2019. Our current model is based only on the existing JORC resources for Svinja Reka and Golema Reka; announced drilling results demonstrate extensions of mineralisation at depth for both ore bodies while at Svinja Reka grades below the 830m level are stronger than the inferred resource which stands at 2.7mnt at 3.2% lead and 2.1% zinc. Exploration at Sasa continues to provide material upside potential versus our mine life estimates while infill drilling  will likely provide greater confidence in the near term mine plan.

CAML has continued to make progress in identifying growth opportunities screening 22 projects in the period with three site visits. However, exploration results from Shuak have been deemed not to warrant further development by the company and we highlight that having successfully integrated Sasa, CAML has transformed to a larger multi asset operator since it acquired the assets in 2016.

Having beaten our production estimates in copper, zinc and lead CAML has again demonstrated its ability to consistently deliver strong operational performance. Although broader market volatility has meant the share performance has been rangebound over the past quarter we believe that the shares remain attractive trading on a 7% yield for 2018 based on our estimates. A core asset base able to deliver consistent strong free cash flow provides a robust platform to grow the business and we believe the shares offer an attractive entry point.

We reiterate our Buy recommendation and 309p target price.



]]> VSA CAPITAL MARKET MOVERS - Colombus Energy Resources Wed, 09 Jan 2019 09:16:00 +0000

VSA Morning Flow Test, 09/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (CERP LN) reported Q4 2018 production averaging 670bopd resulting in full year average production of 615bopd in 2018 which was up 67% YoY and ahead of our full year estimate of 600bopd despite the impact of severe weather and record rainfall in Q4 2018. Quarterly production was 9% lower QoQ as moving workover rigs and routine operations were prevented by flooding which made roads impassable in Trinidad. Gross revenues of US$3.23m were down 16% QoQ owing to lower production and lower oil prices which averaged 5% lower QoQ at US$57.58/bbl.

That said, CERP achieved its year end target of 1,000bopd with peak production of 1,021bopd in the quarter. This included the initial production from the Snowcap 1 & 2 wells which achieved 70bopd after three years of shut in status. CERP had guided to an expected 100bfpd with part of the appraisal intended to assess the volumes of water production. After a successful appraisal we now expect pumped production to commence at Cory Moruga. We expect CERP production to bounce back from the impact of severe weather in Q1 2019 and workovers are continuing to progress across the operating fields, indeed the second pilot injection well at Goudron is ready for conversion to water injection in Q1 2019. CERP has guided that average production is likely to remain within the recent peak level in the near term which is line with our current expectations.
This unseasonably severe weather does in fact demonstrate clearly the importance of CERP’s acquisitions through 2018, at attractive valuations, which have diversified the operating base to six operating fields. With a reduced reliance on Goudron the company is better placed to withstand one-off shocks such as this while the investment made in operating infrastructure such as backup generators has meant that production was able to continue despite a temporary loss of grid power. Indeed, despite the reduction in output CERP continued to generate positive operational cashflow from its Trinidad operations of US$0.37m (US$0.54m in Q3 2018) which is a strong positive, in our view, and a clear demonstration of the company’s capital discipline and more robust asset base.
Cash at year end 2018 of US$2.6m (£1.7m) was broadly in line with our estimate of £1.5m while gross debt was further reduced to US$0.4m. This includes the net impact of the £2.5m fundraise in Q4 and repayment of the US$1.25m loan associated with the Steeldrum acquisition. This leaves CERP well placed to continue the optimisation of the six operating fields as well as make preparations for the major catalyst for the shares in 2019; exploration of the SWP. Based on our forecasts, CERP is fully funded for planned operations and drilling at SWP represents a potentially transformational event for the company given the estimated prospective resources of 1.3Bboe.

In addition, CERP is the operator of the Innis Trinity field and the current work programme is funded by Predator Oil and Gas (PRD LN) through a farm in agreement. Workovers in the quarter continued to make progress although CO2 injection has not yet commenced with the submission of the Certificate of Environmental Compliance completed in Q4 2018.

Recent share price performance has been soft and while we believe a combination of broad-based equity market volatility and a reduction in WTI oil prices have exacerbated the weakness the progress that management has made operationally and financially was not fairly reflected in the share price performance in 2018. A 67% YoY increase in production is an impressive and significant achievement and we expect continued progress in 2019. Although this was lower than originally anticipated at the start of the year and legacy costs associated with Spain have hampered financial performance we continue to forecast a reduction in the net loss from £5m to £3.4m in 2018 and a return to profit in 2019 demonstrating that the operational improvements are having a meaningful and tangible positive impact on the group financials.  We believe that at the current share price CERP’s production potential, exploration upside and capital discipline is simply not reflected and continue to see significant upside potential.

We reiterate our Buy recommendation and 21.4p target price.




]]> SOCO International counts down to Egyptian acquisition Wed, 09 Jan 2019 08:23:00 +0000 Anfield Energy inks deal to acquire uranium projects in Wyoming and Colorado Tue, 08 Jan 2019 19:32:00 +0000 Oil price, Independent Oil & Gas, Zenith Energy And finally… Tue, 08 Jan 2019 14:08:00 +0000 WTI $48.52 +56c, Brent $57.33 +27c, Diff -$8.81 -29c, NG $2.94 -10c

Oil price

Oil gradually recovers, production stats are showing that just like they overproduced in October pre-sanctions Opec+ had already started to trim even before the last meeting. Agencies differ slightly but Reuters go with a 460/- b/d cut and Bloomberg suggest 530/-, either way and with more coming off some inventory will be coming off the market as suggested by Genscape who called Cushing stocks down by 560/- b/d last week.

According to the BBC Africa today, last night the attempted Coup in Gabon was put down after Government troops took back the radio station and arrested the leader and killed two ‘rebels’. Apparently the coup was a surprise which took place when the President Ali Bongo was out of the country receiving medical attention.

Independent Oil & Gas

IOG has announced an SNS core project upgrade adding the significant Goddard discovery, awarded in the 30th round, to the project. The discovery has been assessed by ERC Equipoise at 108 BCF of 2C contingent resource of discovered gas. The discovery, which is expecting to receive FDP in 1H 2019, will be reclassified as reserves at that time according to the company.

So, with the pre-FID complete, next action will be the Harvey appraisal well where drilling is imminent and will put the project in readiness. After that all you need is the money to develop it, and again according to the company ‘financing plans are advancing’ and we can expect the FID in under twelve weeks from now, and with  first gas 20 months after FID, the clock is ticking. Excitement levels are rising and with the expectation of the whole project delivering a 77% IRR and £668m of post tax NPV 10 on peak production of over 230 MMcf/d the economics surely do stack up. For those with the patience to have hung on for the ride, it may just be the actual beginning of this project.

Zenith Energy

I ran out of time yesterday but Zenith announced a debt restructuring having renegotiated $1.5m of unsecured convertible facility now not converting before 3/19 and at $1.05m. They have repaid the previous £230/- loan and entered into a new £1m convertible with warrants at 4.4p.

Operationally, C37 is now ready for deepening after an intensive work programme and that contract award is imminent and will be followed by C37 lookalikes also ready for deepening. The target production of 1/- b/d is still in place and with a new team and decent kit on site there is no reason it shouldnt be met.

And finally…

Well, they did, Wolves knocked Liverpool out of the FA Cup last night with a goal that would have befitted the final.

The stand out fixture in the fourth round is the Gooners v the Red Devils which pits the cup’s two most winning sides together.

And Stoke City have sacked Gary Rowett as manager after recent under-performance.

]]> RBC takes back EnQuest debt warning but keeps heavy downgrade Tue, 08 Jan 2019 12:18:00 +0000 Chariot Oil & Gas turns focus to Moroccan and Brazilian assets Tue, 08 Jan 2019 12:00:00 +0000 Red Emperor shares rise on ‘oversubscribed’ placing ahead of Alaska well Tue, 08 Jan 2019 10:16:00 +0000 VSA CAPITAL MARKET MOVERS - Egdon Resources Tue, 08 Jan 2019 09:31:00 +0000

VSA Morning Flow Test, 08/01/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) announced yesterday that the Biscathorpe exploration well has now been spudded in line with the previously set out timetable. Preliminary results are now expected in early February.

EDR holds a net interest of 35.8% and 22.5% share of the well cost. Currently we value the asset at 6.7p/sh. on a risked basis using a 40% CoS against the mean prospective resources of 14mmbo (5mmbo net to EDR) highlighting the current value potential given the current share price of 8p/sh.

This appraisal well will test whether the geology at Biscathorpe is comparable to that of the Reepham oilfield around 20km south west of Biscathorpe. At Reepham the Basal Westphalian sandstone reservoir experiences significant lateral thickening down dip, however, this is not directly visible on seismic data. From this well EDR will therefore aim to establish the extent of reservoir thickening beyond a small known local fault. Once the extent of thickening is better understood EDR will be better able to determine the quality and extent of the reservoir; currently the resource ranges from 1.8mmbo (P90) to 35.3mmbo (P10).

EDR has a number of catalysts across both its conventional assets, as at Biscathorpe, and unconventional assets with drilling at Springs Road upcoming where EDR has a direct interest. While results are also expected from Cuadrilla’s testing at Preston New Road which are important for the UK shale industry. Positive results for each of these could, in our view, drive a strong rerating for the shares which are currently deeply discounted, in our view.

We reiterate our Speculative Buy recommendation and 50p target price.



]]> National Grid reaches “satisfactory agreement” with two US unions to end lock-out at its Massachusetts Gas business Tue, 08 Jan 2019 07:43:00 +0000 Leigh Creek Energy produces commercial quality syngas at South Australian plant Tue, 08 Jan 2019 03:07:00 +0000 Brookside Energy rewards long term shareholders with listed options Mon, 07 Jan 2019 23:54:00 +0000 Whitebark Energy’s Wizard Lake Rex well flowback continues Mon, 07 Jan 2019 22:23:00 +0000 Anglo African Oil & Gas confirms multiple discoveries in TLP-103 well Mon, 07 Jan 2019 16:02:00 +0000 Anglo African Oil & Gas PLC (LON:AAOG) gives investors more detail on the Schlumberger wireline logging of the recently drilled TLP-103C well in the Republic of Congo. Executive Chairman David Sefton could barely disguise his excitement as he hot-footed it to the Proactive Investors London studio to give more details on the recent RNS. News here too updating investors on oil flow rates and what to expect in 2019. Logging has measured a total of 44 metres of oil column – with 26 metres in the Mengo reservoir (primary target), 13 metres in newly found horizons between the R3 and the Mengo, and, 5 metres in the R2 reservoir. Djeno drilling is already underway and will become the primary focus leaving Mengo far behind as, according to Sefton, "There's only so much oil we can handle!".

]]> Rose Petroleum boosted by corroborating Schlumberger study at Paradox project Mon, 07 Jan 2019 14:50:00 +0000 Union Jack Oil’s Biscathorpe-2 drilling kicks off Mon, 07 Jan 2019 13:53:00 +0000 88 Energy counting down to Winx-1 spud in mid-February Mon, 07 Jan 2019 13:28:00 +0000 Rose Petroleum boosted by Schlumberger study at Paradox Mon, 07 Jan 2019 11:04:00 +0000 Rose Petroleum PLC (LON:ROSE) has highlighted the findings of a Schlumberger study of the Gunnison Valley Unit (GVU) project area in Utah’s Paradox basin. Rose CEO Matt Idiens tells Proactive London what this means for the company and offers a timeline for production as well as detailing news on the significant interests in the mulit-stacked play at Paradox, which has done so well in this latest study.
The fracture characterisation analysis of the proposed GVU22-1 well location concluded that it would be situated optimally leading to the commissioning of rigs and spudding and eventually production in Q1/Q2 2019. Idiens says a further five plays could potentially be commercial looking at the 3D date alone.

]]> VSA CAPITAL MARKET MOVERS - Shefa Yamim Mon, 07 Jan 2019 09:35:00 +0000

VSA Morning Miner, 07/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Shefa Yamim (LON:SEFA)

Shefa Yamim (SEFA LN) has announced the discovery of a new mineral found as inclusions in the Carmel Sapphire prevalent at its alluvial gemstone project in Northern Israel. The new mineral with major chemical components of titanium, aluminium and zirconium has been named carmeltazite and has been recognised and approved as a new mineral by the International Mineralogical Association following the publication of a paper by a team from the Macquarie University in Australia led by Bill Griffin.

The discovery of another new mineral by SEFA highlights the unique nature of the collection of rare gemstones present at the Kishon Mid Reach project and the company continues to progress towards trial mining in 2019.
We reiterate our Speculative Buy recommendation.




]]> Faroe offer extension is 'low ball' says Cavendish Fri, 04 Jan 2019 12:14:00 +0000 Paul Mumford of Cavendish Asset Management tells Proactive London why he thinks the offer extension on Faroe Petroleum is low ball, and why the company is for a number of reasons undervalued. News here too on what investors should consider a more realistic share price would be.

]]> VSA CAPITAL MARKET MOVERS - Central Asia Metals Fri, 04 Jan 2019 10:46:00 +0000

VSA Morning Miner, 04/01/19

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Central Asia Metals (LON:CAML)

Central Asia Metals (CAML LN) has announced that it has refinanced and consolidated its corporate debt as of December 2018. The Sasa mine had gross debt of US$67m at the time of the acquisition by CAML in November 2017. As part of the acquisition financing CAML raised US$120m in debt from its offtake partner, Traxys. In order to simplify the outstanding corporate debt CAML has increased the size of the Traxys facility by US$60m to US$151m and repaid the outstanding Sasa debt plus accrued interest.

The Traxys facility carries 4.75% interest plus 1-month US Libor and is to be repaid monthly on a straight-line basis within four years without the previous requirement for cash sweeps. Our current estimates based on prior guidance assume that gross debt would be repaid by the end of 2021 and we forecast year end 2018 gross debt of around US$132m. Given the removal of the cash sweep constraint this likely gives CAML more flexibility over repayments and use of cash which may prompt a less aggressive deleveraging programme particularly since our current forecasts suggest net debt to EBITDA of 0.8x at year end 2018.

The shares have traded within a narrow range over the past three months despite commodity price volatility, however, given the strong free cash flow outlook which is highlighted by the ability to rapidly deleverage whilst continuing to pay a robust dividend the shares remain attractive, in our view. At the current price we anticipate a dividend yield of around 7% in 2018.

We reiterate our Buy recommendation and target price of 309p.




]]> Anglo African Oil & Gas eyes upgrade to production as TLP-101 well restarts Thu, 03 Jan 2019 13:13:00 +0000 Anglo African Oil & Gas PLC (LON:AAOG) tells Proactive London how it has reinstated production from the TLP-101 well at the Tilapia field, as operations on the new TLP-103 well continue. Executive Chairman David Sefton looks like the cat that got the cream as he enthuses about tjhis morning's RNS and the 'oil columns turning out to be a lot better than any of us expected' but he refuses to give too much detail, leaving investors waiting until Monday before the official RNS is released. News here too on the wireline results for 103.
Sefton explains that TLP-101 had been producing around 30 barrels of oil per day before the TLP-103 programme got underway, but, production had to be paused due to the proximity of the gas flare to drilling apparatus.

]]> VSA CAPITAL MARKET MOVERS - DekelOil Fri, 21 Dec 2018 09:55:00 +0000

VSA Morning Agri Comment, 21/12/18

PDF Version

Keep reading VSA research for free – Click here for our position on MIFID2


DKL Takes 43.8% Stake in Cashew Project

West African agricultural company DekelOil Public (LON:DKL) has taken a 43.8% equity stake in the 10,000tpa (expandable to 30,000tpa) Tiebissou cashew processing project in Cote d'Ivoire.

  • Consideration to be satisfied via the issuance of DKL shares at 4.5p per share, a 46% premium to its last closing price
  • Implied current valuation of €6m
  • Retains an option to acquire a further 20.5% interest on same terms as original option agreement signed on 26 June 2018

VSA Comment

The Tiebissou project is scheduled to become operational in early 2020 in time for the Côte d’Ivoire cashew season that typically starts in February and ends in June. Assuming DKL exercises its option to take majority control, this will be its second majority-owned operational project in Côte d’Ivoire.

With this equity investment, DKL is now sharing some of the development risk. However, it believes that this is minimal given senior management have been appointed, a 13-year tax exemption has been granted, key construction contracts are now in place and project debt financing has been secured (meaning no material cash contribution will be required by DKL for the project).

The original option agreement valued the project at a minimum of €18m once operational with the option only exercisable from H1 2021. With cashew processing facilities typically valued at around US$1m per 1,000tpa capacity, we believe this valuation seems fair (for a 10,000tpa-30,000tpa facility).

DKL reports that PKF Littlejohn LLP believes that the valuation of this specific transaction (€6m) "appears reasonable and on an arm's length basis" and this was supported by independent NED opinion and a recent independent investment into the project by an unrelated investor.

As we outlined in our initiation report on DKL, this cashew project will provide DKL with sensible diversification given its expertise in the processing of agricommodities, smallholder relations and operating in-country.

We estimate the project could deliver an additional c€3m in attributable profit to DKL by 2022 (depending on its final equity stake when operational).

We maintain our BUY recommendation and target price of 12p.


Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

NWF Group










Eden Research







Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Plant Health Care





Anglo-Eastern Plantations












]]> VSA CAPITAL MARKET MOVERS - Tectonic Gold Fri, 21 Dec 2018 09:52:00 +0000

VSA Morning Miner, 21/12/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Tectonic Gold (LON:TTAU)

Yesterday Tectonic Gold (TTAU LN) provided initial assay results from its recent drilling campaign at Specimen Hill in Queensland, Australia. These results are based on the first 25% of the assays and are encouraging in our opinion. It appears that the aims of the drilling campaign - to verify known near surface mineralisation and extend the depth of this mineralisation as well as test the potential for porphyry style mineralisation at depth - have been positively fulfilled.

Widths have not been reported, however, assays from the near surface targets intercepted grades of up to 5.14g/t Au from 118.6m and up to 6.06g/t Au from 96m. Historic drilling intercepted mineralisation around 50m from surface and these latest holes were intended to extend this known mineralisation at depth.

Whilst these results are positive, the largest potential upside for TTAU lies in discovering major porphyry style deposits. The fact that initial results suggest that porphyry mineralisation has been intercepted is highly encouraging, in our view, and appears to confirm the company’s exploration model. Porphyry style mineralisation was intercepted 230m from surface, although grades are not yet available. TTAU has indicated that full results are likely to be available in early 2019.

The verification aspect of the drilling programme was a useful tool for assessing the effectiveness of modern geophysics techniques which have been used by TTAU to date. Given that both lode extensions have been found as part of the near-surface mineralisation as well as intercepts of porphyry style mineralisation at depth it suggests that these methods are effective and will be used to identify new targets. 

We reiterate our Speculative Buy recommendation.



]]> 'Well going well' for Anglo African Oil & Gas Wed, 19 Dec 2018 15:00:00 +0000 Anglo African Oil & Gas PLC (LON:AAOG) tells Proactive London that their TLP-103C well last weekend encountered hydrocarbons in three other words, 'the well is going well' says Executive Chairman David Sefton with a broad smile.
The company said that the R1, R2 and R3 horizons were intersected, and they were as expected/in line with its geological models. Sefton talks us through his expectations for the three horizons now and counters some of those rumours swirling aboout on social media.

]]> Lithium Australia's MD reviews progress throughout the supply chain in 2018 Wed, 19 Dec 2018 04:18:00 +0000 Adrian Griffin, managing director of Lithium Australia NL (ASX:LIT), provides Proactive Investors with an overview of progress made throughout 2018 towards the company's stated strategic goal of closing the loop on lithium supply.

Topics of discussion include exploration projects, the acquisition of VSPC Ltd and development of the SiLeach® process for extracting lithium chemicals from mica, the production of both cathode and anode powders, development of the LieNA lithium extraction from spodumene process, and recycling works.

Speaking about the latter, Griffin says, "If you look at current processing technologies on a global basis, only [about 9%] of lithium ion batteries ever get back into the supply chain via recycling route and the rest go to landfill. In Australia, the proportion that gets back into the recycling chain is diminishing [currently around 2%]... the material in those lithium ion batteries has a grade that is about 100 times higher than an ore body that's required to produce a battery in the first place. So it should be very cheap material."

]]> Theta Gold Mines’ name change reflects focus on first gold at South African open cut project Wed, 19 Dec 2018 01:04:00 +0000 Theta Gold Mines Ltd (ASX:TGM) non-executive chairman Bill Guy and other directors and senior management speak to Proactive Investors from site in South Africa about the company’s recent name change and its drive towards gold production at its Theta Hill Open Cut Project in South Africa. The company was previously known as Stonewall Resources (ASX:SWJ).

“The near-term focus is to convert this large resource into a reserve,” says Guy.

He continues, “in the New Year we will have an exploration update which will be part of the Columbia Hill-Theta Hill drilling update; essentially then we’ll move through to reserve statements and feasibility study completion.”

“That process has already been funded, so then the next phase will be permitting, more drilling and upgrading the plant and getting it operational.”

]]> VSA CAPITAL MARKET MOVERS - Exore Resources Tue, 18 Dec 2018 09:41:00 +0000

VSA Morning Miner, 18/12/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Exore Resources (ASX:ERX)

With drilling well underway the initial aircore results have yielded highly encouraging intercepts which capitalise on the early work carried out by the vendors. Aircore drilling has expanded the known shallow mineralisation at the Liberty 2 prospect by 60% to a 1.6km strike running NE to SW and dipping to the East. It remains open in all directions and ERX will now commence resource definition RC drilling commencing Q1 2019.

At Liberty 2 Exore Resources (ERX AU) carried out a 7,500m programme across 57 holes averaging 47m depth. The fact that aircore could operate to this depth indicates significant surface weathering and therefore potentially higher grades in unweathered bedrock. The programme covered eight new traverses each of which intercepted gold mineralisation hosted in deformed sedimentary and mafic rocks as well as in quartz veins which typically host higher grades. Significant intercepts in this programme included:

  • 12m at 3.3g/t Au from 4m
  • 12m at 1.88g/t Au from 8m
  • 18m at 2.15g/t Au from 36m
  • 8m at 1.73g/t Au from 32m
  • 4m at 4.45g/t Au from 44m

This significant expansion of shallow mineralisation demonstrates the potential of the Liberty 2 prospect which is contained within a broader 20km in soil anomaly. In addition, RC drilling is underway at Antoinette and first pass aircore drilling is underway at Veronique. However, these three large scale anomalies cover only a small portion of the 830km2 license area and ERX have initiated a regional geochemical soil sampling programme to explore the further potential.

We therefore expect significant upcoming newsflow from ERX to build on these initial strong results. With A$15m in cash ERX is fully funded for its exploration activities and is in a strong position to fully capitalise on the clear significant potential which exists at its licenses in Cote d’Ivoire.

We reiterate our Speculative Buy recommendation.





]]> VSA CAPITAL MARKET MOVERS - Egdon Resources Tue, 18 Dec 2018 09:36:00 +0000

VSA Morning Flow Test, 18/12/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Egdon Resources (LON:EDR)

We note from the IGas (LON:IGAS) announcement that having reached the target depth of 1,810m the Tinker Lane well, spudded in late November, did not encounter the Bowland shales; the key target for shale gas. Although Egdon Resouces (LON:EDR) has significant interest in the central part of the Gainsborough Trough it does not have an interest at Tinker Lane as this well was always designed to test the lateral extent of the Bowland shale and was therefore a bull case well for IGAS if successful.

In our view, we see this as a vindication of EDR’s strategy to focus on the central areas of the play highlighting why EDR is our preferred exposure to UK shale potential. Indeed, EDR have a 14.5% interest at Spring’s Road in the central areas of the Gainsborough Trough; IGAS is also the operator. With the Tinker Lane well completed ahead of schedule the focus will now be on Spring’s Road which IGAS expect to spud in Q1 2019.

We reiterate our Buy recommendation and target price of 50p.




]]> VSA CAPITAL MARKET MOVERS - redT energy Tue, 18 Dec 2018 09:33:00 +0000

VSA Morning Alternative Energy Comment, 18/12/18

PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


redT energy#: Year-End Update

redT energy (LON:RED), an energy storage solutions company, has released an update that summarises its key achievements during FY 2018.

  • Gross pipeline continues to stand above £1bn
  • Risk-weighted development pipeline now at “more than 1,500” tank unit modules (was reported as 1,687 units on 13 September)

VSA Comment

RED has released a summary of its activity in FY 2018. In terms of new information, the company has revealed that it is in final discussions for a multi-MWh project in the UK market, in late stage negotiations for a number of high profile projects in South Africa and that it intends to offer an electrolyte rental option to its customers (we have assumed in our modelling that this will occur for sales completed over the next two years, as the vanadium price remains elevated).

The company also stated that it continues to progress towards financial close on the first 40MWh project of its 700MWh German project portfolio. In our recent note on the company we stated that we now expected this to close in early 2019 (from end 2018) and this has been confirmed by the company this morning.

There are therefore several potential share price catalysts due early next year - closing of the financing for the initial German project, first commercial delivery of a Gen3 machine (for Anglian Water), progress on seeking one or more strategic partners, and the winning of significant new projects in both South Africa and the UK.

We recently released an updated note on RED, where we made some adjustments to our near-term forecasts and updated our valuation. As such, we now have a BUY recommendation and target price of 21p on the stock.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg






Sabien Technology





redT energy







Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Aggregated Micro Power





Advanced Power Components












]]> Resolute Mining has commenced ore production from Syama Underground Gold Mine Mon, 17 Dec 2018 02:48:00 +0000 Resolute Mining Ltd (ASX:RSG) managing director and chief executive John Welborn updates Proactive Investors on the gold producer's achievements in 2018 and goals for 2019; touching on developments at the Syama Gold Mine in Mali, the Bibiani Gold Mine in Ghana, the Ravenswood Gold Mine in Queensland, Australia, and the wider exploration portfolio.

Welborn says, "We have an organic pathway to 500,000 ounces of gold production a year from our existing assets of Syama, a recommissioned Bibiani and Ravenswood, so that's a near term development plan for Resolute, to go beyond the 500,000 ounce per annum production mark. Beyond that, we're a company that has proven to be capable of operating multiple assets in Africa, and we're looking to be the right partner for both African governments and potentially exploration companies. We'd like to operate four to six gold mines over the next three to five years, and bring down our average portfolio gold production to below US$750 an ounce."

]]> Blackham Resources aims to produce over 200,000 ounces gold per year from one site Thu, 13 Dec 2018 22:53:00 +0000 Blackham Resources Ltd (ASX:BLK) executive chairman Milan Jerkovic introduces Proactive Investors to the company's Matilda-Wiluna Gold Operation, and refined strategy for gold production from the prolific Wiluna Mine & Coles Find Shear areas in Western Australia.

Jerkovic explains "Our aim is to consolidate the current production, increase our short term cash flow, reduce our debt, and essentially put the company in a position where it could unlock a much larger inventory of gold and hopefully put us in the rank of the top 15 producers in Australia in a single location... short term it's all about production stability and repairing the balance sheet to a point where we have a very solid base from which to launch our next growth stage."

]]> Arafura Resources' latest pilot plant results are 'very significant and quite unique' Thu, 13 Dec 2018 22:40:00 +0000 Arafura Resources Ltd (ASX:ARU) CEO Gavin Lockyer updates Proactive Investors on flowsheet development, following news that a phase 6 pilot plant successfully extracted low-value, high-volume cerium from rare earth hydroxide to produce rare earth chloride.

This week the company raised over $3 million in an oversubscribed share purchase plan (SPP). That cash will be used to advance a definitive feasibility study (DFS) on the Nolans Neodymium Praseodymium (NdPr) Project in the Northern Territory.

]]> United Oil & Gas fired up after a gushing 2018 Thu, 13 Dec 2018 15:50:00 +0000 United Oil & Gas Plc CEO Brian Larkin tells Proactive Investors that it's been a phenomenal 2018 for the independent oil and gas start up who have added six acquisitions from the original two when United completed their IPO in July 2017.

With a strong balance sheet, rapid growth remains United’s primary focus and Brian states that there are several deals at which United are looking that have the potential to add significant value for shareholders in 2019.

]]> VSA CAPITAL MARKET MOVERS - Bacanora Lithium: Back Sonora; Convinced by Site Visit Thu, 13 Dec 2018 09:23:00 +0000

Bacanora Lithium#: Back Sonora; Convinced by Site Visit

For the full report, please click here. 

Keep reading VSA research for free – Click here for our position on MIFID2


Pilot Plant and Offtakes De-Risk Sonora

Bacanora Lithium (LON:BCN) has developed and proven through three years of pilot plant operations that it has a viable extraction process for its soft rock polylithionite project in Sonora, Mexico. BCN has consistently produced a 99.5% lithium carbonate and the strategic investment from Hanwa Co. and 10-year offtake for 100% of stage one output verifies this process and confirms that the pilot plant has significantly derisked the process design. This confidence is further underpinned by the commitment of strategic, specialist investors RK Mining and State General Reserve Fund of Oman.

Fundamentals, however, remain at the forefront of our investment case and based on a WACC of 8.2% we derive an attributable NPV of US$935m for the two-phase project capable of producing 17.9ktpa and 36ktpa Li2CO3 respectively requiring upfront capex of US$420m. Cash costs of US$4,350/t (before by product credits) place the project attractively within the global cost curve implying strong margins. The initial 20-year mine life uses just 7% of the Sonora resource, on our estimates, and remains open to expansion. Consequently, we believe that one of the most attractive aspects of the project for offtakers (and why it will be successful) is the ability to replicate the modular design and scale production in line with rising global demand.

Lithium Fundamentals Continue to Strengthen

The lithium market is expected to grow 25% YoY in 2018 to 260kt LCE as demand for lithium ion batteries continues to grow. The demand outlook remains strong and consensus demand for 2025 is now at 1mntpa LCE. Benchmark Mineral Intelligence now estimate 1,148GWh of battery manufacturing capacity by 2025. Supply growth is, however, struggling to keep up. SQM (SQM US) will now produce 45kt LCE in 2018, -7% YoY, having initially guided to reaching a run rate of 70ktpa by year-end. Prices have therefore remained supported above US$16,000/t through 2018 for battery-grade lithium carbonate, while the medium term outlook has been strengthened by the rejection of Albemarle (ALB US) and SQM’s plans to raise output at the Salar de Atacama. End users are therefore compelled to seek supply outside of Chile to meet their needs.

Recommendation and Target Price

The shares are down 76% YTD as weak lithium sentiment has driven lithium equities lower globally while BCN performance was compounded by the pulled financing. However, following our site visit we are convinced of the viability of the Sonora project and that BCN has the expertise to deliver the attractive returns and the high quality LCE production promised.

We initiate coverage with a Buy recommendation and target price of 115p/sh.



]]> Block Energy fully prepped to run its exclusive new tech on two Norio wells Wed, 12 Dec 2018 13:02:00 +0000 Paul Haywood, director at Block Energy Plc (LON:BLOE), discusses with Proactive London's Andrew Scott a service agreement that's been signed for the provision of downhole perforation technology.

Haywood says conventional perforation technologies have had mixed success in Georgia so they've opted for this advanced technology, which has a proven record of significantly enhancing recovery rates.

]]> Tlou Energy's Tony Gilby updates on Lesedi drilling and Request for Proposal Wed, 12 Dec 2018 10:18:00 +0000 Tony Gilby, managing director of Tlou Energy Ltd (LON:TLOU), tells Proactive London's Andrew Scott all of the ‘top hole’ drilling operations are now complete for the Lesedi-3, Lesedi-4 and the ‘optional’ Lesedi- 5 wells.

He says preparations are now being made to drill the lateral well sections, to be referred to as Lesedi 3A, 3B, 4A, and 4B.

]]> Hexagon Resources targets high-tech graphite markets with scale & premium pricing Tue, 11 Dec 2018 00:01:00 +0000 Hexagon Resources Ltd (ASX:HXG) managing director Mike Rosenstreich speaks to Proactive Investors about achieving 99.999% (also known as 'five nines') graphite purity from a large 20 kilogram sample from the McIntosh Graphite Project in Western Australia’s East Kimberley.

Rosenstreich says, "There is a standard that describes nuclear grade graphite materials, and we hit and indeed exceed their standard. I'm not suggesting that our markets are all destined for the nuclear industry; what our products are destined for is deep markets. We're looking for markets with scale and premium pricing."

He also updates on upstream activities, sharing the latest progress made by partner MinRes (ASX:MIN) on DFS works. A resource upgrade is slated for early next year.

]]> VSA CAPITAL MARKET MOVERS - Exore, Lake Mon, 10 Dec 2018 09:34:00 +0000

VSA Morning Miner, 10/12/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Exore Resources (ASX:ERX)

Exore Resources (ERX AU) has announced the successful first renewal of the Boundiali and Korhogo exploration permits and the start of the 30km drilling programme which is now underway. With the permits now renewed for an initial three years ahead of the next renewal ERX is well placed to capitalise on the initial encouraging discoveries made by the vendor Apollo Consolidated (AOP AU). ERX will now issue 90mn shares to AOP shareholders after conditional approval was granted pending the renewal of the permits.

The 30km drill programme is underway with two drill rigs, able to carry out aircore, RC and diamond drilling. The drilling will cover the three major in soil gold anomalies which have been identified within the 830km2 that has only been partially explored and are adjacent to Randgold Resources (RRS LN) Fonondara licenses. AC drilling at the Liberty 2 prospect which covers 1km of a 20km anomalous trend has previously yielded results of up to 12m at 2.27g/t Au from surface and initial results are expected in late December 2018. Resource definition drilling at Antoinette will commence imminently with results due in early 2019 in order to build on prior results of 17m at 22.5g/t Au from 8m and 14m at 11.24g/t Au from 12m. The third prospect, Veronique, has yet to be drilled and ERX will conduct AC drilling here initially.

With A$15m in cash the exploration programme is fully funded and we believe there is significant exploration potential given the extensive, shallow nature of the anomalies and the high grade results yielded to date.

Please click here to read our recent report on the transaction.

We reiterate our Speculative Buy recommendation.

Lake Resources (LKE AU)#

Lithium equities have been under pressure over the past few weeks in line with the global correction in equities, despite the secular nature of the market drivers. However, Lake Resources (LKE AU) has continued to make strong progress with its partner Lilac Solutions whose initial test work has shown the potential for first quartile cash costs following testwork on brine samples from LKE’s wholly owned Kachi project in Argentina.

The testwork using the Lilac process and evaporative dewatering yielded recoveries of 85-90% lithium producing a concentrate of 25,000mg/l Li from samples of 300mg/l Li. From this concentrate a lithium carbonate or hydroxide product could then be produced within a conventional plant. The major advantages of the Lilac process are that it reduces the production time from months to hours and dramatically increases recoveries from 40-50% to 85-90% as well as having a lower environmental impact compared to traditional techniques.

Having applied these impressive results to the development of a flowsheet for a 25ktpa lithium carbonate plant Lilac has obtained potential cash costs of around US$2,600/t with a ±30% margin for error which on the upper end implies US$3,380/t. This upper figure is also highly attractive in terms of the global cost curve currently where recent supply growth has been focused on the upper end. Furthermore, the environmental impact of lithium brine production is currently hampering growth in Chile, from the Salar de Atacama in particular and therefore Lilac’s technique which avoids evaporation ponds enables the reinjection of the remaining brine without significantly impacting water quality.

LKE are now working with Lilac to develop a pilot plant to be installed in 2019 to further the development and capitalise on these results which have transformative potential for Kachi’s returns. The pilot plant will focus on produced a concentrated brine using Lilac’s techniques although LKE will also progress testwork for production via traditional evaporation processes. As a first mover in this technology we believe this is a prudent approach, however, this also means that LKE is well placed to benefit from the potential success of this extraction technique.

Please click here to read our recent report on LKE’s maiden resource announcement.

We reiterate our Buy recommendation and target price of A$0.36/sh.





]]> High Peak Royalties chairman discusses US acquisition and upcoming Australian news Sun, 09 Dec 2018 22:24:00 +0000 High Peak Royalties Ltd (ASX:HPR) chairman Andrew Carroll speaks to Proactive Investors upon the successful completion of the Planet Gas USA Inc acquisition, which includes a US$15 million debt facility with Macquarie Bank.

Carroll also discusses upcoming activities in Australia with Origin Energy (ASX:ORG) and Santos Limited (ASX:STO).

High Peak Royalties' share price has approximately doubled over the past twelve months.

]]> Rose Petroleum set to spud in Utah Fri, 07 Dec 2018 13:52:00 +0000 Rose Petroleum PLC (LON:ROSE) confirmed it is lined up to drill a well in the first quarter of 2019 after it agreed an updated operational plan with the Utah Bureau of Land Management. Rose's Matt Idiens tells Proactive London how as part of the agreement, the boundary of the Gunnison Valley Unit (GVU), in the Paradox Basin, has been extended to include acreage acquired in the US by Rose earlier this year.
That acreage is host to the proposed GVU 22-1 well which, based on 3D seismics, is considered to be a promising well location. Matt explains how among the other stacked plays in their new acreage why this is now their highest-ranked target.

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources Fri, 07 Dec 2018 10:26:00 +0000

VSA Morning Flow Test, 07/12/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Egdon Resources (EDR LN)#

Egdon Resources (EDR LN) has provided an update on conventional appraisal drilling at Biscathorpe where strong progress is being made and with the site close to completion the drilling rig is expected to mobilise in early January 2019. Well completion will likely be in mid-February 2019.

EDR holds a net interest of 35.8% and 22.5% share of the well cost. Currently we value the asset at 6.7p/sh. on a risked basis using a 40% CoS against the mean prospective resources of 14mmbo (5mmbo net to EDR). This highlights once again how undervalued the company currently is trading at 7.4p/sh.  
This appraisal well will test whether the geology at Biscathorpe is comparable to that of the Reepham oilfield around 20km south west of Biscathorpe. At Reepham the Basal Westphalian sandstone reservoir experiences significant lateral thickening down dip, however, this is not directly visible on seismic data. From this well EDR will therefore aim to establish the extent of reservoir thickening beyond a small known local fault. Once the extent of thickening is better understood EDR will be better able to determine the quality and extent of the reservoir; currently the resource ranges from 1.8mmbo (P90) to 35.3mmbo (P10).

We reiterate our Buy recommendation and target price of 50p.



]]> Ceres Power hits significant milestones with two key strategic partners Thu, 06 Dec 2018 12:50:00 +0000 Phil Caldwell, chief executive of Ceres Power Holdings PLC (LON:CWR), tells Proactive London's Andrew Scott they're expecting full-year revenues to more than double after hitting two key commercial milestones with partners Bosch and Weichai Power.

Caldwell says revenues and other operating income are expected to reach £15mln in the year, up from £7mln in 2017.

]]> VSA CAPITAL MARKET MOVERS - redT energy Thu, 06 Dec 2018 11:56:00 +0000

redT energy#: Valuation Update

Click here for full report.

Keep reading VSA research for free – Click here for our position on MIFID2


In September, energy storage company redT energy (LON:RED) released results for the six months ended 30 June 2018 showing revenue of £1.2m (84% from its US carbon business) and a loss before interest and tax of £5.7m, largely in-line with our expectations. This was followed in early October by a £5m placing and an announcement that it was seeking strategic partners to support and finance the continued growth of the business. Since then it has also confirmed that its flagship 1MWh Australian project is now operational.

Key Orders Point to Growing Market Acceptance

In H2 2018 RED has made considerable in-roads into its key target markets of Commercial & Industrial, Grid-Scale and Large-scale Solar, all of which have the potential to lead to significant orders for RED’s flow machines over the next few years.

Pipeline Has Increased Threefold

The company’s gross order pipeline now sits at more than one billion pounds, having increased more than three times since the €357m reported in December 2017. This has been conservatively risk-weighted by the company to £188m, an amount that almost covers our revenue forecasts for the next four years. In its interim results, the company also provided a split of its gross pipeline across its three key target sectors – Commercial & Industrial (£115m), Grid-Scale (£702m) and Large-scale Solar (£256m).

RED has enough orders in its pipeline to deliver on our forecasts for the next couple of years and as such much of the company’s effort will now be focused on securing infrastructure financing for key orders, scaling up production via its manufacturing partners, and striking one or more strategic partnerships, to satisfy these.

Recommendation and Target Price

We have made some adjustments to our near-term forecasts (see page 7). We maintain our BUY recommendation but move our target price to 21p.



]]> Brookside Energy's maiden reserves bode well for remaining 80% of growing portfolio Thu, 06 Dec 2018 05:40:00 +0000 Brookside Energy Ltd (ASX:BRK) managing director David Prentice catches up with Proactive's Danielle Doporto to discuss today's announced maiden reserves of 3.45 million barrels of oil equivalent at the prolific Anadarko Basin in Oklahoma, USA.

Prentice says the combined Net Present Value (NPV) of US$12.5 million with forecast future net revenues of US$37.75 million, at an NPV per acre of around US$30,000, prove both the strength of the business model and the quality of the acreage. Brookside is actively working to add land in the area to its portfolio.

]]> Fertoz progressing first-ever global organic fertiliser supply chain on multiple fronts Thu, 06 Dec 2018 04:32:00 +0000 Pat Avery, executive chairman of Fertoz Ltd (ASX:FTZ), provides Proactive Investors with an overview of progress at each stage of the value chain; from mining to product lines, through to distribution and sales. The agribusiness is establishing the first-ever global supply chain for organic fertilisers, with end users spanning conventional and organic growers, wholesalers and stores.

"The key is to execute in every area, and I think we're executing in mining by getting more supply and getting our permitting system going, we're executing in logistics and supply chain and processing, and then really in sales... We have essentially located all the high quality phosphate in the Western US and in Canada, and have attempted to tie that up, so we think we've got real strategic strength," says Avery.

]]> Eco Atlantic's Gil Holzman outlines big plans for next year's drilling offshore Guyana Wed, 05 Dec 2018 15:47:00 +0000 Gil Holzman, chief executive of Eco Atlantic Oil & Gas Ltd (LON:ECO) (CVE:EOG), discusses with Proactive London's Andrew Scott the 2019 plans for drilling in the Orinduik block offshore Guyana.

Holzman confirms there'll be at least one exploration well with the drilling of the Jethro-Lobe prospect slated for ‘late May / early June’.

The prospect, described as “an Upper Tertiary stratigraphically trapped canyon turbidite”, is estimated to host a potential 250mln barrels of crude resources and it is situated in 1,350 metres of water and will be executed using a conventional drill ship.

]]> Bass Oil delivers record oil production at Indonesian operation amid focus on growth Wed, 05 Dec 2018 09:19:00 +0000 Bass Oil Ltd (ASX:BAS) managing director Tino Guglielmo speaks to Proactive Investors about the oil company’s Tangau Sukananti joint venture operation in Indonesia’s South Sumatra region.
“We’re a 55% participant in this joint venture … [and] last month in fact we had record production levels at the joint venture level of nearly 900 barrels of oil a day,” Guglielmo says.
He continues, “we were able to identify, without drilling, a number of production optimisation opportunities which could take production [up] from 300 or 400 barrels a day.
“This property, that was only supposed to generate cashflow … is actually the first step on our growth journey in Indonesia.”
]]> Carnarvon Petroleum bringing both Dorado and Buffalo oilfields into production ASAP Wed, 05 Dec 2018 03:19:00 +0000 Carnarvon Petroleum Ltd (ASX:CVN) managing director Adrian Cook updates Proactive Investors on progress with Dorado and Buffalo, also touching on the oil & gas company's exploration works.

Cook says that the fourth area of focus is financial capital management, and that the company sees opportunities rather than cause for concern in the recent oil price and stock market volatility.

]]> Torchlight Energy drilling at flagship project and set for a busy 2019 Tue, 04 Dec 2018 16:40:00 +0000 Torchlight Energy Resources, Inc. (NASDAQ:TRCH) CEO John Brda sat down with Proactive Investors at the 11th Annual LD Micro Main Event in Los Angeles. Based in Plano, Texas, is an oil and gas Exploration and Production (E&P) company with a primary focus on acquisition and development of highly profitable domestic oil fields. The company currently holds interests in Texas where their targets are established plays such as the Permian Basin and the Eagle Ford Shale.

]]> Argosy Minerals' Rincon PEA shows low production costs for battery quality product Tue, 04 Dec 2018 00:37:00 +0000 Argosy Minerals Limited (ASX:AGY) managing director Jerko Zuvela catches up with Proactive Investors to detail the preliminary economic assessment (PEA) recently published on the Rincon Lithium Project in Argentina. The fast-tracked project is quite advanced, with an industrial pilot plant and significant pond development already on site.

The company is in advanced talks with a number of potential offtakers to finance development of the project.

]]> Emmerson Resources announces new deal for accelerated gold production Mon, 03 Dec 2018 22:00:00 +0000 Emmerson Resources Ltd (ASX:ERM) MD & CEO Rob Bills talks to Proactive Investors about a new agreement with Territory Resources (ASX:TTY) centred on the Edna Beryl Mine in the Northern Territory's Tennant Creek Mineral Field.

Territory is purchasing the Edna Beryl Mining Company and refurbishing the Warrego Mill, in a move that should accelerate mining and gold production from a number of small mines in the area.

]]> Union Jack Oil completes on West Newton deal ahead of Q1 2019 spud Mon, 03 Dec 2018 14:39:00 +0000 David Bramhill, executive chairman of Union Jack Oil PLC (LON:UJO), tells Proactive London's Andrew Scott they've now completed on the deal to acquire a 16.665% interest in the West Newton project, in Yorkshire.

It comes ahead of an appraisal well drilling programme which is due to spud in the first quarter of 2019.

Bramhill says drilling of West Newton will follow the planned commencement of drilling of the conventional Biscathorpe-2 appraisal well on PEDL253 by year end 2018.

]]> Oil price, Reabold, DGO, Lekoil And finally... Mon, 03 Dec 2018 12:12:00 +0000 Oil price

Friday was listless, no news had started to come out of G20 so no positions were taken as a result. All is different this morning though as risk is being taken off in most markets. This is for two reasons, firstly there was a better meeting between President Trump and the Chinese delegation than had been expected, resulting in a 90 day postponement of the latest tariff increases and optimism for the future.

Secondly the rapturous greeting between Putin and MbS was significant if not in its warmth but in reminding the world that the Saudi/Russian axis is very much still in play. Later in the weekend word came from Russia that a cut at the Opec+ meeting was likely although quite how much is uncertain, assuming we find out that is. As I write Brent is up$2.39 and WTI +$2.24.

Reabold Resources

Reabold has completed the acquisition of 37.08% of Rathlin Energy, this was conditional on Connaught settling its liabilities and the farm-out of PEDL 183 to Union Jack and Humber Oil & Gas. The next few months are going to be most exciting for RBD with the drill bit spinning all over the world. They will drill the West Newton gas discovery appraisal as above, the Parta appraisal, more in California as well as the long awaited Wick and Colter wells, busy boys Stephen and Sachin will be…

Diversified Gas & Oil

A financial update from DGO this morning in which they say that their results are going to be ‘materially ahead’ of current market expectations. This is due to acquisitions such as Core as well as ‘asset integration and associated operating efficiencies’. Now this is just fine and whilst the market expect benefits from the asset integrations, of which there are many I’m not sure that there are any current market expectations to be ‘materially ahead’ of.

I like the DGO model and it gives investors a unique and low beta way of investing in the oil & gas sector in addition to paying a dividend into the bargain. The shares have not suffered as badly as most in the recent sector carnage and should be treated as low risk exposure but to say that out of the blue things are looking materially better than expected is a tad disingenuous…


One of the advantages of Africa Oil Week was that I was invited to meet with Lekan Akinyanmi the CEO of Lekoil something I had been trying to do for some time. I hope to be commenting on the company a bit more in the future after a good run through its history and up to date model.

The news from the company is somewhat less attractive as they continue to try and gain consent for the increased stake in the OPL 310 licence which has been dragging on somewhat despite the company ticking all the required exploration and appraisal boxes. It looks like the best way is go for a court hearing on January 9th at which some sort of closure may be achieved, maybe not best to expect anything too soon…

And finally…

For those of us watching at 5am on Sunday the big fight was definitely reminiscent of the better heavyweight bouts of the past, it had it all, including a highly questionable decision from a judge who gave the first five rounds to Beyonce although some claim that the ref might have stopped the fight thinking that Fury was out cold…

In the Prem the eye-catcher was the North London Derby which provided plenty of spills and thrills and very un Wenger like the Gooners seemed to enjoy it and won 4-2.  Liverpool beat the Toffees with a 96th minute goal and in the other Derby Chelksi beat the Cottagers 2-0. With the Noisy Neighbours beating the Cherries 3-1 and the Red Devils coming back from 2-0 down to draw at the Saints not enough to save Mark Hughes from being sacked this morning….

Buveur D’Air went past Samcro as if it was a tree in the Fighting Fifth even though the Gordon Elliot wonder horse had been backed off the boards…

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources Mon, 03 Dec 2018 10:01:00 +0000 Egdon Resources (LON:EDR)
Egdon Resources (LON:EDR) has announced a positive production update from Ceres where the first full month’s production averaged 1.16mncbfd (193boepd). For November alone, EDR anticipate gas revenues of at least £235k not including the sale of 17bpd of condensate over the same period. 

Whilst Ceres, in which EDR has a 10% stake, has been shut-in the reservoir pressure has been able to recover hence this strong initial production level. EDR guided to an average for group production of 150-180boepd in the first half of the financial year. With our full year forecast at 210boepd, which is driven in part by a full contribution of Ceres in H2 along with recent oil market volatility we leave our estimates unchanged at this time. Gas prices have pulled back from Q3 2018 highs of approximately 84p/therm, however, now at around 68p/therm they remain well supported versus recent prior trading range.

We reiterate our Buy recommendation and target price of 50p.

]]> OPG Power Ventures fired up and focused on profitable Chennai project Mon, 03 Dec 2018 08:22:00 +0000 Dmitri Tsvetkov, chief financial officer at OPG Power Ventures Plc (LON:OPG), caught up with Proactive London's Andrew Scott to discuss the group's results for the six months to September 2018.

OPG generated 1.55bn units in the half, up 9% from 1.42bn units in the comparative period of last year.

It reported a £6.5mln profit from continuing operations, from £2.1mln, helped by improved tariff prices and market coal prices.

]]> Power Clouds Inc changes its name to Alternus Energy Inc Fri, 30 Nov 2018 18:24:00 +0000 Alternus Energy Inc (OTCMKTS:ALTN) CEO Vincent Browne tells Proactive Investors the renewable energy company has made a name change, shifting away from Power Clouds Inc to Alternus Energy Inc.

Browne says Alternus is latin for Alternative, which gives the company scope into markets not only into solar but building a global business in various elements of alternative energy.

Browne adds that the company is pleased with the company's expansion with its solar park in Germany, expanding to a 200MW target from the 10MW already in place.

]]> VSA Capital Market Movers - M2 Cobalt (CVE:MC) Fri, 30 Nov 2018 10:14:00 +0000 M2 Cobalt (CVE:MC)
M2 Cobalt (CVE:MC) has provided an update on exploration at its Bujagali licences in Central Uganda. The regional targets that were previously announced as part of the systematic phase one exploration programme have now been expanded through further infill sampling while additional targets have also been discovered in the new licenses. 

To date the company has received results for 12,116 soil and 1,347 rock samples at Bujagali. Results in Els 1665 and 1683 have yielded five discrete targets with up to 1.25% Co and 1.2% Cu soil anomalies. At EL 1666 three discrete anomalies have been identified with up to 1% Cu, 0.5% Ni and 0.68% Co. There are three further targets at EL 1682 and EL 1686 which require further sampling although so far have yielded up to 0.28% Cu and 0.48% Co as well as 0.1% Cu respectively in rock grab samples.

Most recently exploration in the newly acquired EL 1827 limited sampling has already returned results of 0.65% Co and 0.18% Cu along strike from the Waraji and Nile targets. The additional anomalies in the expanded license area as well as the expansion of known targets is providing greater weight to the view that M2 are exploring a regional Katanga style play with significant exploration upside potential. The discoveries lie on a regional trend and whilst drilling is underway at the Bombo target, also within the Bujagali licenses, M2 will carry out IP surveys to finalise drill targeting before the rig moves to drill Nile and Waraji.

We reiterate our Speculative Buy recommendation.

]]> Cluff Natural Resources delighted with major oil interest and licence extensions Fri, 30 Nov 2018 08:09:00 +0000 Graham Swindells, chief executive of Cluff Natural Resources PLC (LON:CLNR), discusses with Proactive London the signing of an exclusivity agreement with a major international oil and gas company as well as updates on their two 100% owned Southern North Sea Gas licences.

Swindells says exclusivity has been granted subject to a definitive farm out agreement being entered by the end of January next year and completion by the end of February.

]]> Peninsula Energy's MD/CEO gives progress update with more key news expected soon Fri, 30 Nov 2018 04:01:00 +0000 Wayne Heili, managing director and CEO of Peninsula Energy Ltd (ASX:PEN), talks to Proactive Investors about fully-owned subsidiary Strata Energy Inc receiving approval to advance to the next stage of the Permit to Mine major revision process at the Lance Project in Wyoming by proceeding with public notice activities.

Heili also updates on various developments happening on site and with permitting. Field leach trials of a new low pH lixiviant are expected to commence at the start of December.

]]> Lithium Australia revising Sadisdorf scoping study following processing 'breakthrough' Fri, 30 Nov 2018 03:32:00 +0000 Lithium Australia NL (ASX:LIT) managing director Adrian Griffin speaks to Proactive Investors about the company's recent world first; producing lithium-ion batteries using cathode powder made from lithium-iron-phosphate material derived from mine waste using the proprietary SiLeach® process.

The batteries performed on par with standard lithium carbonate batteries, and have a superior safety profile as they tend to not overheat during charging, amongst other benefits.

This latest achievement demonstrates Lithium Australia's strategy of 'closing the loop' on the lithium value chain.

]]> Oil price, IOG, Eco Atlantic, Egdon/Europa/Union Jack And finally… Thu, 29 Nov 2018 09:59:00 +0000 Oil price

More grief in the oil markets yesterday as the concerns about the G20 meeting and next week’s Opec+ meeting worry the market. Will Putin turn into a low oil price market share bully and will Trump exert so much pressure on MbS that the mighty Kingdom bows to Washington? Uncertainty is the market’s worst enemy and we may have another week of concern about the destiny of the oil price…

Independent Oil & Gas - LON:IOG

IOG has announced this morning that the core project for the two phase development at the Blythe and Vulcan hubs is now technically ready to enter the execution phase. However, due to current oil price volatility and capital market conditions, which are ‘not conducive’ to delivering financing before the year end there is to be a further delay. Accordingly the company has received the OK from patient lenders LOG to use part of the Harvey loan for ‘corporate and development purposes’ and will refinance the loan when Harvey comes to be drilled.

The company say that this delay will not be long and that the financing, both equity and senior debt, should go ahead early in the new year. The good news is that this project is without doubt full of merits on both an operational and strategic level and should be able to achieve funding from appropriate markets when the time comes, the bad news is that having telegraphed this the company may have built in a discount all of its own making. Given that the project does have considerable appeal and that after today’s price reaction its market cap is only just north of £30m, the company itself must have attractions as a target for a corporate keen to pick up an oven ready SNS gas project with all the benefits that brings. Shareholders in IOG have been patient and rightly so, the management is doing a good job with the project and should be rewarded one way or another…

Eco Atlantic -LON:ECO

Results for Eco Atlantic are even more meaningless than usual but the statement does bring further exciting news on the Guyana front where activity is planned for next year. With the Tullow Capital Markets Day undoubtedly likely to blow more smoke up Orinduik, this project will inevitably be one of the most exciting in the sector next year. With cash at the year end of CAD$11.3m having grown to CAD$27.3m following the Total injection Eco is well placed to deliver significant value increases as the year progresses.

Egdon -LON:EDR /Europa LON:EOG/ Union Jack LON:UJO

My cynicism of the local Council process the last time I wrote about Wressle was I’m afraid fully justified as yesterday the consortium announced that the North Lincs Council planning committee had overruled the professional planning officer and refused planning again. If ever there was an example of why these buffoons should not be put in charge of much more than road-sweeping this is surely it. Egdon and partners will surely get their permission but probably when the national authorities are put in charge but it is a shame that it should reach this state of affairs…

]]> VSA CAPITAL MARKET MOVERS - Shefa Yamim Thu, 29 Nov 2018 09:11:00 +0000 Shefa Yamim (LON:SEFA)#

Shefa Yamim has announced an increase estimated mineralised placer gravels at its Kishon Mid Reach project in Northern Israel. Zone 1 hosts approximately 1.1mnt of placer gravels which host the broad range of gemstones the company has discovered to date while following the initial bulk sampling at Zone 2 and early exploration at Zone 3 (the most downstream of the target areas) has resulted in an increase in placer gravel tonnes to 4.98mnt. Zone 2 target has 0.87mnt while Zone 3 is estimated to host 2.9mnt.

Given the nature of alluvial style deposits it is difficult to extrapolate prior results in terms of grade from one zone to another, however, confirmation of the added potential is positive, in our view.

]]> Infinity Lithium’s scoping study highlights low-cost advantages of San Jose Lithium Project Thu, 29 Nov 2018 01:26:00 +0000 Infinity Lithium Corporation Ltd (ASX:INF) managing director & CEO Ryan Parkin updates Proactive Investors on the lithium developer’s completed scoping study into the production of battery-grade lithium hydroxide at its San Jose Lithium Project in Spain.

“[The study has] been a response to the evolving battery chemicals market and more specifically the movement towards high-nickel content, greater energy range and greater energy-density cathodes,” Parkin says.

He continues, “We’ve had a great result with our scoping study – an NPV (net present value) in excess of US$715 million and an IRR (internal rate of return) of 51%.

“It’s a long-life, robust and exciting project for us there in Europe.”

]]> ‘Tonne of exploration upside’ at GoviEx Uranium’s Madouela project in Niger Wed, 28 Nov 2018 14:15:00 +0000 Daniel Major, the chief executive of Africa-focused GoviEx Uranium Inc (CVE:GXU), spoke to Proactive London at the Mines and Money event.

GoviEx reckons there is more than 260mln pounds (Mlbs) of uranium underfoot at its three projects, with its asset in Niger responsible for around half of that.

“Despite the fact we’ve got such a big resource, there is a tonne of exploration upside there as well,” Major told Proactive’s Andrew Scott.

]]> Powerhouse in partnership talks with Toyota Tsusho in Japan Wed, 28 Nov 2018 11:39:00 +0000 PowerHouse Energy Group PLC (LON:PHE) has been invited to engage in “advanced commercial discussions” over its waste-to-hydrogen DMG technology with Toyota Tsusho – a trading subsidiary of the Japanese conglomerate, Toyota Group. CEO Keith Allaun can barely conceal his excitement as he tells Proactive London about the company-transforming potential of the forthcoming negotiations in early December for PowerHouse in Japan. AIM-quoted PowerHouse said Toyota Tsusho had carried out an “extensive review” of the DMG technology, which converts plastic and tyre residue into syngas that can be converted easily into hydrogen to power buses, lorries or cars using a fuel cell.

]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt & Lake Resources. Wed, 28 Nov 2018 09:40:00 +0000

VSA Morning Miner, 28/18/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


M2 Cobalt (CVE:MC)

M2 Cobalt (MC CN) announced that it has mobilised a second drill rig to drill its Bombo target in Central Uganda within its Bujagali license area. M2 anticipate that around 1km of diamond core drilling will be undertaken in this programme. M2 conducted significant local geochemical analysis as well as geophysics and IP to determine initial drill collars having yielded large scale anomalies.

There are expected to be multiple styles of mineralisation at the Bujagali licenses. At Bombo specifically a series of ultramafic bodies have been identified with anomalous nickel, copper and cobalt all yielded through the systematic phase one exploration programme.

With drilling at its both its major license area, M2 is in a strong position with multiple near-term catalysts. Nickel sulphides have been highlighted as a particularly attractive source for battery manufacturers looking to secure nickel and cobalt sulphates supply and M2 is positioning Uganda as a major source of ethical battery minerals.

We reiterate our Speculative Buy recommendation.  

NuLegacy Gold (CVE:NUG

NuLegacy Gold (NUG CN) has announced that it has received final approval to commence a ten hole exploration programme from the state authorities. The programme will begin immediately and will focus on the Avocado and Serena zones. These latest permits enable NUG to drill over a significantly wider area as part of this plan at Avocado.

The second area of focus steps out around 1,450m to the west of Serena testing the intersection of the major northwest and east-west structural trends associated with Carlin style gold systems.
Following the success of the exploration programmes earlier this year we are looking for NUG to capitalise on the high grade results previously achieved enabling the company to confirm the validity of its updated exploration targeting methodology.

We reiterate our Speculative Buy recommendation.



]]> Whitebark Energy starts drilling at Wizard Lake project and reacts to major news in Australia Tue, 27 Nov 2018 18:58:00 +0000 Whitebark Energy (ASX-WBE) Managing Director David Messina joined Steve Daring from Proactive Investors in Vancouver with news Whitebark has started their drilling program at the Wizard Lake Exploration Well just outside Leduc, Alberta, Canada That program expected to continue in to December where he hopes to have a test well in operation by mid month. .

Messina also talked about a major development in Western Australia where Premier Mark McGowan has lifted a statewide moratorium on fracking.  Fracking will now be allowed in areas with existing petroleum licenses.

]]> SDX Energy 'seeing the benefits of both high production and higher prices' Mon, 26 Nov 2018 13:08:00 +0000 Paul Welch, chief executive of SDX Energy Inc (LON:SDX, CVE:SDX), caught up with Proactive London's Andrew Scott to discuss their update for Q3 as well as the nine months to the end of September 2018.

Net production averaged 3,889 barrels oil equivalent per day over the first nine months of 2018 - the North West Gemsa field yielded 2,471 boepd (4,944 gross), the Meseda field had 802 bpd (gross 4,207), while the Morocco operations achieved 615 boepd (820 gross).

By November 23, however, as a result of successful well programmes delivering new producers, the group’s output had grown to measure 4,156 boepd.

]]> SIMEC Atlantis adds hydro to portfolio with Green Highland Renewables acquisition Mon, 26 Nov 2018 10:18:00 +0000 Tim Cornelius, chief executive of SIMEC Atlantis Energy Limited (LON:SAE), tells Proactive London's Andrew Scott they're to diversify into hydro generation through the acquisition of a portfolio of assets from its major shareholder for £124.7mln in total.

A conditional agreement has been reached to acquire Green Highland Renewables from SIMEC group, part of the GFG Alliance that owns 49.99% of Atlantis.

Cornelius says the proposed acquisition is one of the most exciting developments in the recent history of Atlantis.

]]> Nabors and Kuwait acquisitions gives ADES International a boost in its third quarter Thu, 22 Nov 2018 15:59:00 +0000 Alex Brooks, analyst at Canaccord Genuity Limited, discusses rig operator ADES International PLC's (LON:ADES) Q3 update.

Utilisation rates rose to 83% helped also by the acquisition of three jack-up rigs from Nabors.

Revenues, meanwhile, rose 23% quarter -on- quarter to US$47mln with a 52% increase over the same period a year ago.

For the nine months of the year so far, revenues have risen by 7% to US$127mln.

]]> Analyst Barney Gray suspects Wressle application could be 'in with a shot' this time Thu, 22 Nov 2018 11:46:00 +0000 Independent oil and gas analyst Barney Gray spoke to Proactive London's Andrew Scott following the news that North Lincolnshire’s planning officer has recommended local councillors approve planning consent for the development of the Wressle oil field, in which Union Jack Oil PLC (LON:UJO) and Europa Oil & Gas (Holdings) PLC (LON:EOG) have sizeable stakes.

''Yes I can [see the council giving the green light] because the partners in Wressle have done more work, there's been additional ground investigations, site reconfigurations ... I think they've answered as many questions  as can be asked for a planning approval'', Gray says.

''There's only so much you can do to submit the perfect planning application and this one's going to be more detailed than the previous ones .. so how many refusals can you go through''.

]]> Baron Oil Plc soon to be 'rolling the dice for shareholders' at Wick and Colter Thu, 22 Nov 2018 11:03:00 +0000 Malcolm Butler, Chairman and CEO of Baron Oil Plc (LON:BOIL), tells Proactive London's Andrew Scott there are a number of approvals and notifications still required before drilling can kick off at its Colter and Wick wells however he's optimistic Wick can be drilled before Christmas.

Butler also discusses the plans for their 100% owned onshore exploration block in Peru. He says they've identified a new prospect close to the 1954 Minchales-1X well that encountered a small gas accumulation.

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources Thu, 22 Nov 2018 09:45:00 +0000 Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced positive progress at its Wressle development. North Lincolnshire Council’s Planning Officer, having reviewed EDR’s submission, has recommended approval of the development stating that the new application has addressed concerns raised previously and the reasons for prior refusal have now been overcome. EDR has strengthened its submission through additional groundwater testwork and proposed monitoring as well as a redesigned site. While this is a positive step for EDR it remains for the planning committee to approve the application at next week’s meeting.

We currently include estimates for Wressle production in FY 2020 and anticipate annual production of 125bopd net to EDR providing significant cashflow. With the incremental production from Ceres now benefitting EDR and likely to result in a net profit for EDR in FY 2019 we expect Wressle to further strengthen EDR’s earnings outlook.

Cuadrilla continue to make progress at Preston New Road, however, media attention has faded since the initial micro seismic events which briefly halted production. With results upcoming, EDR continue to offer the most attractive exposure to UK shale in our view with significant shale acreage, a robust earnings outlook and upcoming drilling within both its conventional and unconventional portfolio.

We reiterate our Buy recommendation and target price of 50p.

]]> Jindalee Resources 'very confident in conservative exploration target' for lithium in US Wed, 21 Nov 2018 22:00:00 +0000 Jindalee Resources Ltd (ASX:JRL) managing director Pip Darvall tells Proactive Investors that the company is currently prioritising its US lithium strategy; detailing the recent results of a drilling program on the McDermitt project, and discussing the exploration target range.

"We really like this theme of lithium in the US. It's such a huge economy with massively growing demand for lithium, and already their import reliance for lithium is over 50%," says Darvall.

]]> Equitex input can shorten timeline for Uskmouth conversion says Simec Atlantis' Cornelius Wed, 21 Nov 2018 15:07:00 +0000 Equitex’s input can shorten the build time for Uskmouth says Tim Cornelius, CEO of Simec Atlantis (LON:SAE).

The infrastructure fund is investing £33mln for a 25% stake of the Uskmouth waste to power plant in Wales, but in addition to financial support Equitex can bring huge experience to bear, Cornelius says.

That can help reduce the estimated 12 month timeline for the front end design (FEED) work and potentially shorten the time for Uskmouth to be up and running.

Elsewhere, Simec Atlantis has just signed a joint venture agreement with the Region of Normandy for tidal power projects.

Normandy has a lot of tidal power resource, spare grid capacity, a feed-in tariff for tidal power and importantly by being in France the joint venture can access EU funds, says Cornelius.

]]> VSA CAPITAL MARKET MOVERS - Tectonic Gold Wed, 21 Nov 2018 09:28:00 +0000

VSA Morning Miner, 21/11/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Tectonic Gold (LON:TTAU)

Tectonic Gold (TTAU LN) announced that it has received approximately A$0.6m under the Australian Federal Government R&D Tax Incentive Scheme in a rebate for the year end 30 June 2018. The company has previously highlighted its eligibility for a 43.5% cash rebate on all qualifying technical expenditure. This covers a significant portion of TTAU’s recent expenditure and the company remains eligible for further rebates.

TTAU has qualified through its significant work in reinterpreting regional geological history and applying this to the exploration strategy identifying IRGS systems in Queensland. Furthermore, by using modern and innovative techniques for deep penetrating geophysics the company is pushing its credentials as a modern explorer.

The incentive is a welcome benefit which maximises TTAU’s exploration programme. With the recent drilling programme completed we await the results of assay particularly since mineralisation was intersected with every hole. This programme not only validated known near surface mineralisation from historic drilling but also intersected porphyry mineralisation at depths of more than 250m. We therefore see significant near term potential catalysts for the shares.

We reiterate our Speculative Buy recommendation.  




]]> OriginClear has 'slate of acquisitions' lined up for 2019 Tue, 20 Nov 2018 20:19:00 +0000 OriginClear Inc (OTCQB:OCLN) CEO Riggs Eckelberry tells Proactive Investors the water treatment company is focused on its 'slate of acquisitions' lined up for next year.

Eckelberry says the company licenses its Electro Water Separation technology using Advanced Oxidation to water treatment equipment manufacturers, and is growing the business by acquiring water treatment companies.

]]> Europa Oil & Gas CEO discusses £5mln fundraise, farm-in discussions and Morocco venture Tue, 20 Nov 2018 12:20:00 +0000 Hugh Mackay, chief executive of Europa Oil & Gas (Holdings) PLC (LON:EOG), tells Proactive London's Andrew Scott they're looking to raise up to £5mln to fund their Irish Atlantic Margin projects and also a new venture in Morocco.

A firm placing will provide £4mln at 3p per share while existing shareholders can subscribe up to another £1mln through an open offer at the same price.

Europa has exploration licences off the west coast of Ireland, where it is currently negotiating farm-in agreements with a major international oil and gas company over three of these - LO 16/20, FEL 1/17 and FEL 3/13.

]]> VSA CAPITAL MARKET MOVERS - redT energy Mon, 19 Nov 2018 10:13:00 +0000

VSA Morning Alternative Energy Comment, 19/11/18

PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


redT#: Australian Project Now Operational

redT energy (RED LN)#, an energy storage solutions company, has announced that its 1MWh hybrid energy storage system located on the Clayton, Victoria campus of Monash University in Australia is now operational.

  • System comprises a 900kWh vanadium flow system (12 tank unit modules) and a 120kW lithium-ion battery.
  • The system has been integrated into the campus micro-grid, which includes 1MW of solar PV generation assets as well as EV charging stations and building management systems.
  • The system is the largest behind-the-meter commercial and industrial energy storage system to be installed in Australia.  
  • The Australian energy storage market is estimated to be worth cA$30bn by 2030 with almost 400MWh of energy storage projects estimated to be installed in behind-the-meter commercial and industrial applications nationwide by 2022 according to industry consultants Delta-ee.

VSA Comment

In October 2017 RED announced this first order in the Australian market, which we estimated would deliver cUS$1m (cA$1.3m) in revenues to the company. It is therefore positive to see the project become operational a little over a year later.

The project builds on the hybrid energy storage work carried out by the company in partnership with the University of Newcastle (UK) as part of a three-year programme announced in September 2016. The basic premise of such a system is that the lithium-ion battery component provides high power, when required, over a short duration (c20% of a customer’s overall requirements) with the vanadium flow machine providing the long duration output due to its much higher energy storage capability and lack of degradation (c80% of a customer’s overall requirements).

This project will become an important marketing site for the company as it seeks further orders in an Australian market forecast for explosive growth (400 energy storage systems of this size are estimated to be installed by 2022).

We maintain our BUY recommendation and target price of 22p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Good Energy










Ceres Power







Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Sabien Technologies





Biome Technologies





Plutus PowerGen







]]> VSA CAPITAL MARKET MOVERS - DekelOil Mon, 19 Nov 2018 10:08:00 +0000

VSA Morning Agri Comment, 19/11/18

PDF Version

Keep reading VSA research for free – Click here for our position on MIFID2

DekelOil#: Cashew Project Contract

Côte d'Ivoire palm oil producer DekelOil Public Limited (DKL LN)# has announced that Capro CI, a wholly-owned subsidiary of Pearlside Holdings (a vehicle DKL has an option to acquire a 58.5% interest in) has awarded a €2.2m contract for the civil works and associated infrastructure for its large-scale cashew processing project at Tiébissou in Côte d'Ivoire to Entreprise Kone Daouda Soukpafolo Nouvelle (lead contractor), an established civil engineering company in Cote d'Ivoire, and Société Internationale d'Ingénierie en Structures et Assemblages Métalliques, an associate company of EKDS which specialises in metal and civil works.

VSA Comment

This announcement follows on from the €6.5m construction contract awarded at the end of October and means that installation of the water system and connection to the electricity grid are the only two major pieces of work yet to be contracted out for this project. Civil works are expected to begin in early 2019 and should take between six and eight months to complete.

As we outlined in our initiation report on DKL, we believe (assuming it exercises its option) that this cashew project provides DKL with sensible diversification given its expertise in the processing of agricommodities, smallholder relations and operating in-country. The structure of the deal also allows DKL to eliminate its exposure to the riskier construction stage of the project, while maintaining an attractive entry price to benefit from the project’s expansion stage.

We estimate the project could deliver an additional €3m in attributable profit to DKL by 2022 (although we are not including this in our forecasts until the option is exercised).

We maintain our BUY recommendation and target price of 12p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Accsys Technologies





Plant Health Care












Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Produce Investments





Anglo-Eastern Plantations





NWF Group







]]> Oil price, Empyrean Energy And finally... Fri, 16 Nov 2018 13:44:00 +0000

Oil price

Hardly a word to say this morning after eight companies in the blog yesterday, the and finally might be the longest part!

Interestingly the oil price was up yesterday in spite of what looked like awful EIA inventory stats. A build of 10.3m barrels of crude was higher than the API number by 2 1/2 m barrels and actually pushed crude inventories above the magic 5 year average much toted by Opec+. The fact that oil ended up on the day was primarily due to the product numbers, gasoline drew 1.4m b’s and distillates 3.6m and with the addition of the other products category total stocks actually drew. This morning both WTI and Brent are up around a dollar, let’s see how it ends up.

Empyrean Energy

Empyrean has raised £1m at 10p, a premium of 3.7% to the 20 day VWAP and 4.9% to yesterday’s prices a commendable achievement. The reason for the raise is for ‘general working capital purposes’ which normally hides all manner of things but at EME it seems fair. For choice I would have thought they might have raised a bit more but if they only need the money to run the business then fair dinkum as they say in all the best Aussie bars. I will update further after my next chat with Tom Kelly which must be coming up soon.

And finally…

The autumn internationals continue, England host Japan at Twickenham, Tonga go to Wales, the Springboks are at Murrayfield and Ireland welcome the All Blacks.

In the cricket England have persevered and at the early close due to rain are 324-9, ahead by 278 runs which might be enough. A century by skipper Joe Root and 50’s from the Surrey pair of Burns and Foakes got England out of a tricky situation.

With three days of fantastic racing starting today at Cheltenham jumps fans will be well looked after this weekend.

With the international break rather ruining the football fans will probably watch England play Croatia at Wembley on Sunday. The prize to the winner is group success and maybe a bye to the Euros, to the losers relegation, what a pullava….

And after 19 years of very well paid work as Chairman of the Premier League ( he reportedly earns £2.5m pa) Richard Scudamore is leaving and the clubs are being told to chip in for a £5m leaving bonus. Except that he’s not even leaving but staying on ‘in an advisory capacity’, I bet he is….

]]> Hexagon Resources 'absolutely focused on commercialisation,' financing graphite project Fri, 16 Nov 2018 00:48:00 +0000 Hexagon Resources Ltd (ASX:HXG) managing director Mike Rosenstreich introduces Provocative Investors to the graphite company's vertically integrated operations, discussing the McIntosh project in Western Australia as well as processing test work that has achieved high nines purity levels.

"It's exciting to have a foot in both that traditional application [the steel industry], but also the high-growth topical aspect of energy storage [batteries]... the thing that enables us to have that dual focus is the quality of the graphite at McIntosh," says Rosenstreich.

He continues, "We recognise that graphite's not a commodity: it's an industrial mineral. The secret to getting an industrial mineral up and commercialised is to find the markets for it. Rather than spend a lot of money on drilling and building the biggest resource, which is a very mining company approach, we've been focusing our funding on understanding the markets and understanding the technical attributes of our material; and then working from that customer and technical understanding of the market back into the resource."

]]> Oil price, Sound, Echo, Zenith, Faroe/Cairn, Premier, Wentworth, Enteq And finally... Thu, 15 Nov 2018 14:18:00 +0000 Oil price

A modest rally in crude yesterday but at one stage it was way better, a two dollar rise was eaten into and although today is better again there is little trust in the commodity at the moment. Having said that, word coming out of Opec+ sources suggests that the cuts might be nearer to 1.4m b/d at the Dec 6 meeting, at this rate even that might not be enough. The IEA also gave a small fillip to matters leaving global demand growth for next year unchanged at +1.4m b/d in their monthly. EIA inventory figures are today after the Monday holiday for Veterans day, expect around +3m bbls if estimates are accurate…

I mentioned natural gas the other day and it now deserves another call out, yesterday it almost reached 5 bucks intra day and is up 50% or nearly two dollars in no time. This is for two reasons, the first cold snap of the year in the US has arrived and weather forecasts for the next fortnight are for more cold conditions. Readers may also note that I noticed that the summer injection season was a bit light, that means that if they start drawing before the end of November the warning signs are there. For those who watch the weekly gas inventory stats (like me, dreadful habit) today’s number and for the next few weeks will be more interesting than usual…

Sound Energy

Sound announced yesterday that the TE-9 well has arrived at TD of 2925m where the wireline logging suite will be acquired over the TAGI and Palaeozoic targets and shareholders will be informed as soon as appropriate.

Echo Energy

Echo has announced an operational update from Argentina, following the successful wells at ELM 1004 and EMS 1001 the promised stimulation programme is scheduled to start in the next 3-4 weeks. This is good news and is high value marginal barrels accretive to shareholders. The company has announced a production update with stabilised production of 876 boe/d and has also identified a number of additional candidates for well interventions expected to start 1Q 2019.

On the gas side the company is continuing to evaluate the potential within Fracción D with a view to monetising its existing undeveloped 2C resources. Finally, with regard to the jewel in the crown, Tapi Aike, seismic work is scheduled to start in December 2018 and an exploration programme of four wells is expected in the second half of 2019 targeting ‘multi TCF potential’. All in all the report card for a very busy first year in Argentina is going to look very good, with a lot of ground work done, better results than might have been expected and a highly promising outlook.

Zenith Energy

Zenith interims are pretty basic but moving in the right direction. Revenue was up 12.8% and was a record for the company and production from Azerbaijan was 45,000 barrels. This is a crucial quarter for Zenith as new kit and new personnel are established in country to develop the substantial asset base.

Faroe Petroleum/ Cairn Energy

The Agar/Plantain well (Cairn 50% wider licence 25%, Faroe 25%, 12.5%) has come in as a success with recoverable resources in Agar expected to be 15-50 mmboe gross. The reservoir encountered 20m of gross hydrocarbon-bearing section with excellent reservoir quality and high net to gross ratio. The advantages to both are that the discovery is near to infrastructure with at least two export options and for Faroe are high value barrels due to their UK tax losses. Cairn also tucked into their announcement a dry hole at the Ekland prospect and a farm-out at Chimera.

Premier Oil

Today’s update from Premier was very much more of the same, an excellent operational performance, despite a couple of irritating unplanned shut downs production is 78.4 kboepd up from 76.2 in the first half and the guidance for the year of 80 will be hit. Catcher remains a real star, over 70/- b/d is not unusual and contractual production rate is going up to 66/-b/d. Elsewhere Tolmount is going ahead fast with the rig construction due to start in Italy very soon and the Tolmount East appraisal well is scheduled for next year.

A rig has been signed for the Zama appraisal well and this should spud before the end of this month, Mexico will remain in appraisal mode for the time being giving Prems the optionality so many people like. Elsewhere there is seismic activity around the world coming up in Indonesia, at Tolmount, in Brazil and Mexico so the pipeline remains very positive. As for Sea Lion, activity continues, whilst the LOI’s are converted to contracts and many reports are written on a number of technical and environmental subjects there is still the matter of Governmental assistance and as can be imagined they are quite busy at the moment. However there is no divergence from the plans for Sea Lion despite the rather laborious nature of the process.

Debt is falling, the target of $300-400m is only dependent of timings of cargoes sold and the year end target of $2.4bn is perfectly achievable. (Think $400m at $80 oil, nearer $270m at $65) With the company generating decent free cash flow and with production solidly increasing the opportunities at Catcher,Tolmount and in Mexico give some room for further upside. Sea Lion is crucial to this company in the next decade and even at $65 is a surefire winner so must be pursued at rapidly as possible. Company opex stays at $17-18 and F/Y capex is down to $365 from a planned $380m also helping the numbers including of course significant debt reduction.

Wentworth Resources

A corporate and trading update from WEN today (note the change from WRL…), approval to delist from Oslo has been approved. Payments from Mnazi Bay in October were $3.78m from both TPDC and TANESCO for the month’s gas sales. Production was down in the month due to several maintenance activities and averaged 82 MMscf/d but we are assured that it will return to 90 in 2H November.

As a holding statement this is fine, all the paperwork has to be done and Mnazi Bay continues as usual, however 2019 will be when we hear what Eskil Jersing and his new team have in store for us, doing nothing is not an option so it should be an exciting ride.

Enteq Upstream

For Enteq this is a very positive set of figures, with revenue showing ‘steady improvement’ and progressive growth in adjusted EBITDA the company are almost buoyant but as always keeping the powder dry. There has been significant investment in technology and the rental fleet of MWD systems from existing cash reserves which will hopefully increase market share.  It still leaves the company with $11.6m of cash ($15.3m) and whilst obviously North America is the key area international opportunities are always being addressed. Enteq is a good company, it deserves a greater coverage and CEO Martin Perry has impeccable qualifications to grow the business after what was an almost impossible start.


And finally…

England had every opportunity to take a first innings lead against Sri Lanka but didn’t as the spin bowling was horribly inconsistent. They seem to think that they can offer a gift every over and only the occasional ripper so they go in at 0-0 in the second innings 46 runs behind.

International friendly weeks drive me bonkers especially when two of the matches are Germany v Russia and Poland v Czech Republic… England, including Rooney for some peculiar reason, take on the USA where Rooney now plies his trade and it’s The ROI v NI which again can’t always be described as a friendly especially during Brexit.

]]> VSA Capital Market Movers - M2 Cobalt (CVE:MC) Thu, 15 Nov 2018 10:17:00 +0000 M2 Cobalt (CVE:MC)


M2 Cobalt announces it will be mobilizing a second drill rig shortly to begin testing Cu-Ni-Co targets identified upon the Bombo license at Bujagali in Uganda.

Three key target areas (Bombo, Bombo NW, and Bombo Central) with highly anomalous soils and trench results containing nickel, copper, and cobalt will be tested in coming days. An IP geophysical survey will be completed prior to drilling to help pinpoint the placement of the sites for drill collars. Helicopter borne VTEM geophysics preceded this.  All three areas are coincident geochemical and geophysical anomalies.

The Bombo target is a 1km by 1.15km size target, the Bombo NW area is a 950m by 650m anomaly, and the Bombo Central area is still open ended and of undetermined limits.

Drilling is already underway at the Kilembe project area with the first drill rig.

We’re happy to see the exploration work proceeding into the discovery and definition stages on these exciting Uganda properties.  Initial drill results should be rather rapid to be released we believe, particularly if indicative of strong mineralization present.

We re-iterate our SPEC BUY recommendation.

]]> VSA Capital Market Movers - Genus: AGM Statement Thu, 15 Nov 2018 10:16:00 +0000 Genus: AGM Statement

Genus (LON:GNS), the developer and marketer of animal breeding and genetic products for the porcine and bovine industries, has announced a trading update for the period 1 July to 14 November 2018, ahead of its AGM later today.

  • Continued good progress in Genus ABS (beef and dairy). Genus ABS revenue and adjusted operating profit higher YoY.
  • Genus PIC (porcine) volumes grew in North America, Latin America and Europe but the impact of African Swine Fever impacted Asian volumes. Genus PIC revenue and adjusted operating profit lower YoY.
  • Group adjusted PBT for the first four months of the year lower YoY.
  • Board expects to perform in-line with its growth expectations for FY 2019 (Y/E June 2019). FactSet consensus is currently revenues of £493.9m, +5% YoY and adjusted operating profit of £64.1m, +11%.

VSA Comment

GNS’s bovine division continues to build on its significant turnaround, which was originally evidenced in its H2 2017 results (CY H1 2017). However, focus this year will surely be more on its porcine division, where the spread of African Swine Fever (ASF) will continue to have an impact on the global pork market.

The 50th reported case of ASF in China was confirmed last Monday but the true scale of the issue is likely much larger. Approximately 45% of the Chinese pig herd is currently located in ASF states, with a further 53% in neighbouring states. Over the weekend, ASF was confirmed in animal feed produced by the Tangrenshen Group, confirming what many had suspected that the disease had entered the feed supply.

For GNS specifically, ASF is impacting the ability of Genus PIC to fulfil customer orders in the country due to restrictions on pig movements. The resulting lower Chinese pig prices (as farmers rush to slaughter animals before restrictions are put in place/forced slaughter occurs) will also impact market demand and share of profitability from its Besun JV (China sales typically make up around 10% of its total porcine division profit).

However, there are some positives for GNS from the outbreak. Over the longer-term it is likely to accelerate the modernisation and consolidation of the Chinese pig farming sector in a similar way to what has occurred in Russia since its own outbreak 10 years ago (although the Russian case does also demonstrate that this outbreak will likely not be over quickly). This will provide a longer-term benefit for GNS as larger customers are much more economic for the company. Pork imports should also increase from outside of China, which should benefit GNS’ customers in other regions.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Plant Health Care





Avon Rubber












Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Carr's Group










Eden Research







]]> VSA Capital Market Movers - redT energy: Management Team Update Thu, 15 Nov 2018 10:10:00 +0000 redT energy#: Management Team Update

redT energy (LON:RED)#, an energy storage solutions company, has announced the appointment of Ed Porter as Energy Assets Director and the stepping down of David Stewart as Chief Operating Officer.


  • Ed will take responsibility for business development activity for new grid-scale energy storage projects and will lead the asset and revenue optimisation efforts for redT’s energy storage assets under management. He joins from Gazprom where he was most recently Power Portfolio Manager, responsible for 1GW of UK assets under management.
  • David will remain as Non-Executive Director until 7 January 2019. His executive duties will be assumed by Paul Docherty, Operations Director and Jean-Louis Cols, Technology Director.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

SSE plc





Proton Power Systems





PV Crystalox Solar






]]> Triton Minerals positioning to fulfil growing global demand for large flake graphite Wed, 14 Nov 2018 22:15:00 +0000 Triton Minerals Ltd (ASX:TON) managing director Peter Canterbury tells Proactive Investors that the Mozambique-focused graphite explorer is working to take it's flagship Ancuabe project into production in 2020, in addition to having two projects in the Balama District that are also earmarked to eventually supply global graphite markets.

The Ancuabe project has been fast-tracked, with a definitive feasibility study published last year, offtake agreements in place for 50% of production and MoU's in place for a further 25%, and an EPC contractor appointed. The project is in its final financing stage, with construction slated to commence in May 2019.

]]> Touchstone declare 'solid quarter production' in Q3 results. Wed, 14 Nov 2018 16:07:00 +0000 Trinidad-focused Touchstone Exploration  (LON:TXP, TSE:TXP) tell Proactive London investors that Q3 results are impressive with strong cashflow and good production in the field backing it up.
Crude oil production averaged 1,758 barrels per day in the third quarter as the group's successful well programmes continued to deliver. The third quarter production measure represented a 22% improvement from the comparative period the previous year.

]]> Oil price, Faroe Petroleum, Jersey Oil & Gas And finally… Wed, 14 Nov 2018 10:20:00 +0000 Oil price

Another bad day at the office, primarily led by the Opec monthly report which cut demand forecasts, even the much touted 100m b/d demand figure has been pushed back to 3Q 2019. The Opec meeting is 3 weeks tomorrow, time to dust off the 11/16 quota document as it will be needed pdq.

Faroe Petroleum

A dry hole, just when the market is least forgiving but you have to cut some slack to FPM who are amongst the most successful explorers in the sector. The Rungne exploration well in the Norwegian North Sea was water bearing in the primary Oseberg formation target and whilst the secondary Ness interval had a 56m gross gas/condensate column the potential of 12-75 bscf and 0.5-3.9 mmbbls make it sub-commercial in isolation.

Faroe have a substantial ongoing work programme with Agar/Plantain due shortly and two further wells upcoming in Norway. As I said, not a good day in the market to deliver the news but for FPM with its successful long term record of delivery it is onwards and upwards. As CEO Graham Stewart said ‘some disappointing outcomes are inevitable’ which is correct and the company remains right at the top of the bucket list.

Jersey Oil & Gas 

JOG has announced that Vicary Gibbs has been appointed as CFO with immediate effect. Scott Richardson Brown, who was with Trap when JOG was created and has been at the company since is off to pursue ‘other directorships and business interests’. This is a statement of intent from JOG who are clearly not content to sit on its Verbier discovery and plan to grow the operation substantially in due course.

And finally…

England again won the toss in the second Test in Sri Lanka but have had a poor day, as I write they are 216-8.

Fulham have sacked Slavisa Jokanovic this morning and have already appointed Claudio Ranieri as their new manager.

]]> FAR Ltd still has high hopes for Gambian blocks with several prospects identified Wed, 14 Nov 2018 04:18:00 +0000 FAR Ltd (ASX:FAR) managing director Cath Norman speaks to Proactive Investors about the disappointing results of the Samo-1 well offshore The Gambia, explaining that the oil & gas explorer still has high hopes for the acreage and wider area.

"The results of the Samo well are going to give us a new data point in the basin that is going to help us better place the next well we drill. We have to keep reminding ourselves that we've got 5 billion barrels of oil in place just 20 kilometres north in the SNE Field, and it's highly unlikely that with such a prolific oil-generating source rock that we're only going to have one working trap. What's encouraging for us is that we did see some hydrocarbon shows in the well," says Norman.

Norman also outlines the financial arrangements between FAR Ltd and it's JV partners, saying "I think that any company would have paid $1 million to drill an 800 million barrel prospect; and in fact it's exactly what our shareholders want us to do - capture these types of opportunity and get paid to drill them."

FAR is looking to drill again elsewhere next year.

]]> Greenfields Petroleum Corp looks to list on the AIM to attract European investors Tue, 13 Nov 2018 11:25:00 +0000 Greenfields Petroleum Corp (TSX-V:GNF) CEO John Harkins tells Proactive Investors' Christine Corrado the oil and gas company plans to list on the London Stock Exchange's AIM Market under the ticker GNF.L

Harkins, who says the company is currently developing 150 million boe reserves in Azerbaijan, says the company has decided to list in London to attract European-based investors looking to back international development stories.

]]> Oil price, President, Hurricane, Reabold/Upland/United, Providence, Velocys And finally… Tue, 13 Nov 2018 10:54:00 +0000 Oil price

The rally that started yesterday morning failed to take any hold and oil prices ended down on the day and today has started weak again. There is little doubt that the December 6th meeting is going to be crucial as the 500/- b/d reduction from the KSA will not be enough even if another half a million barrels are found. Opec+ know what they have to do, fighting it out for market share doesn’t work as they found out before, it is time to revisit 11/16.

President Energy

Another excellent update from President this morning as we have another update from Argentina. The PFO 1001 well is completed and tested and is flowing from the deeper, secondary target at over 200 b/d, ahead of expectations for the whole well. The company will return to the primary target at a later date, this discovery will undoubtedly increase proven oil reserves.

Meanwhile the PFE 1001 well is at TD on time and budget and has exhibited oil and gas shows in mud logs in all three target formations which is highly encouraging. The new concessions are expected to complete in early December, oil prices in country and currencies are stable, giving netbacks of $40 at Puesto Flores. With year end target production rate of ‘in excess of 3,000 b/d’ giving commensurate increase in free cash flow and financial strength President is performing very well indeed.

Hurricane Energy

Hurricane has announced that the Aoka Mizu, on passage to Lancaster, has stopped at Algeciras in Spain for planned personnel changes and bunkering. The stop will include a repair to an auxiliary system ‘associated with power generation’ before heading to Rotterdam. Commissioning activities will continue en route so that as little downtime as possible is likely on arrival.

Oil shares are under some pressure at the moment which is unsurprising given recent oil price weakness, but back at nearly 40p, Hurricane which is a company that will truly make a difference, is significantly undervalued as we approach first oil in the not too distant future.

Reabold Resources/Upland Resources/United Oil & Gas

It has been a longer wait than planned but it looks like action is about to commence with the drill bit for the companies above. Wick has received OPRED approval and is expected to spud in December for RBD and UPL after which the Colter well is expected to follow on. This is an exciting time for all concerned but for Reabold, with a number of irons currently in the fire, looks to be what we have all been waiting for.

Providence Resources

Providence has announced that FEL 3/04, which contains the Dunquin South carbonate exploration prospect and the adjacent Dunquin North build-up and hydrocarbon column has been given partner budget approval. This is really only procedural in terms of an announcement but important for shareholders to know that this high impact exploration prospect is being prepared for drilling.

Velocys- Changing the guard…

Velocys has announced that the CEO and COO have been removed from office and a new CEO and a CFO have been recruited internally. There have been so many changes at Velocys over the years that it comes as no surprise to see this, stand by for the ‘strategic review’ and assessment of the company’s activities ‘going forward’. The shares have fallen from 32.45p to the current 5.42p this year where it now has a market cap of c £20m and looks to be underfunded at present as it is in the process of ‘introducing strategic investors’ for both its projects. The announcement also states that the company is looking for two new non-executive directors to provide support, funny that, they did have one of the wisest NED’s on the team before losing him which might be described as being ‘ a misfortune’.


Here is the link to yesterday’s VoxMarkets podcast.

VOX Markets podcast: Malcy on Jersey O&G, Rockhopper, Empyrean Energy, Trinity E&P, Infrastrata, Far & Zenith Energy

And finally…

A quiet morning but I’m sure everyone is looking forward to seeing Harry Redknapp in the jungle on Sunday..

And interestingly in golf’s Race to Dubai, virtually the last tournament for the season has thrown up the bromance brothers of Molinari and Fleetwood but, as in the Ryder Cup I would suspect that Francesco will take the $1.25m bonus…


]]> VSA Capital Market Movers - Columbus Energy Resources: Building the Foundations Mon, 12 Nov 2018 12:22:00 +0000 Columbus Energy Resources: Building the Foundations

Acquisition and Fundraise 

Having recently completed a £2.5m fundraise and closed the Steeldrum acquisition, Columbus Energy Resources (LON:CERP) has diversified its production base setting the company up for a strong 2019F where CERP will begin to test the full potential of the South West Peninsula. The acquisition brings immediate production along with upside potential from low cost optimisation as well as new drilling. The shares have been range bound recently, however, we believe that CERP now has a stronger platform for achieving its combined organic and acquisitive growth strategy which will deliver the expected rerating, in our view.

Q3 2018 Update; Focus on Profitable Barrels

The acquisition of Steeldrum resulted in a 33% QoQ increase in production to 735bopd alongside the continued ramp up at Goudron. Although the Goudron ramp up has been slower than expected we highlight that CERP have been prioritising adding profitable barrels which provide a stable footing for cash flow generation over the longer term rather than the short termism approach of chasing production targets at the expense of cash resources. We expect CERP to reach its 1,000bopd in 2018 and the ramp up to continue averaging 1,300bopd through 2019F.  

Steeldrum Completed

Completion of the Steeldrum acquisition diversifies CERP’s production base with immediate additional production of 200-250bopd with near term upside potential, including new production from the Snowcap well in the Cory Moruga field during Q4 2018. With 2P reserves of 5.6mmbbl the implied all share transaction is valued at just U$1/bbl highlighting Leo Koot’s deal making credentials which bodes well for the planned growth strategy. Additionally, through a subsidiary of Steeldrum, which will be carved out of the transaction, means that CERP will have preferential access to two drill rigs suitable for the SWP exploration programme now intended to commence in mid-2019.

Recommendation and Target Price


We have adjusted our risked valuation in order to reflect the impact of increased share capital from the Steeldrum acquisition and the recent fundraise. Our earnings estimates are updated to reflect the acquisition and updated timeline for SWP development and we remain convinced of the considerable upside potential in the shares with production growth and drilling upcoming in the next period. 

We reiterate our Buy recommendation although adjust our target price to 21.4p.

]]> VSA Capital Market Movers - Carr's Group Mon, 12 Nov 2018 10:34:00 +0000 Carr’s Group: FY 2018 Results

Carr’s Group (LON:CARR), the agricultural and engineering group, has released results for the year ended 2 September 2018 (FY 2018).

  • Revenue: £403.2m, +17% YoY, (FY 2017: £346.2m), FactSet consensus was £380.7m
  • Adjusted PBT: £16.6m, +45% YoY (FY 2017: £11.4m), FactSet consensus was £16.2m
  • Total Dividend for FY 2018: 4.5p, +13% YoY (FY 2017: 4.0p)
  • Agriculture: Revenue £359.6m, +14% YoY, adjusted EBIT £13.4m, +17% YoY (FY 2017: Revenue £315.9m, adjusted EBIT £11.5m)
  • Engineering: Revenue £43.6m, +43% YoY, adjusted EBIT £4.1m, +580% YoY (FY 2017: Revenue £30.4m, adjusted EBIT £0.6m)
  • Net Debt: £15.4m (2017: £14.1m)

VSA Comment

Following a tough FY 2017, it was clear from an early stage that CARR would deliver a much-improved result in FY 2018. This was confirmed most recently in its mid-July trading update, which highlighted that the group was trading significantly ahead YoY (and slightly ahead of expectations) in both its agriculture and engineering divisions. These results are even slightly ahead of the updated consensus expectations following the July trading update, highlighting just how strongly the company ended the year.  

In engineering, the group began to deliver on its delayed large UK manufacturing contract, secured substantial remote handling contracts into the Chinese market, and benefited from the first full year of consolidation of its US nuclear business, NuVision.

In agriculture, underlying conditions in both the US and UK were much more positive, with US feedblock volumes bouncing back particularly strongly and faster than anticipated, as US cattle prices recovered and CARR’s new feed block plant in Shelbyville, Tennessee began operations. US feed block volumes increased 18% in FY 2018, compared to a 4.1% decrease in FY 2017.

On top of this marked improvement in the US, the two bright spots from FY 2017, increasing UK feed volumes and UK machinery sales, both continued in FY 2018. The UK compound feed market increased 9% over CARR’s FY 2018 period (source: AHDB) in-line with the YoY increase for CARR’s own manufactured feed volumes (vs. 4% and 11% respectively last year) with CARR’s UK feedblock volumes increasing by 9%. CARR’s UK machinery sales increased 8% YoY to a record level, following a 28% YoY increase last year.

In terms of its outlook, although global milk prices are looking a little fragile with a sixth straight decrease reported in the last GlobalDairyTrade auction in New Zealand, UK pricing remains high with DEFRA revealing the average UK milk price increased to 30.6ppl in September. Although several UK milk processors have announced a 1ppl cut for supplier farmers from December and the New Zealand auctions point to weaker global pricing ahead, it is clear the UK dairy sector remains in pretty good shape. US cattle prices have come off a little in the last month but remain at elevated levels. We believe CARR’s US and UK operations should be supported in both markets in FY 2019.

In terms of new operational activities in FY 2019, we expect that management will be focused on improving sales distribution, manufacturing efficiencies and international growth at its recently acquired trace element supplement business Animax, as well as deciding on whether to build its own feed block plant in New Zealand, as sales volumes through distributors continue to increase in that country.  

Current FactSet consensus forecast for FY 2019 (Y/E 1 September 2019) is for revenue of £399m and an EBITDA of £20.3m.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Carr's Group





Eden Research





REA Holdings







Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg






MP Evans





Anglo-Eastern Plantations







]]> Duxton Water 'only pure water business on ASX' and 'yet to find a counterpart globally' Mon, 12 Nov 2018 00:30:00 +0000 Alister Walsh, director of water assets at Duxton Capital introduces Proactive Investors to Duxton Water Limited (ASX:D2O), and speaks about the cash raise happening now.

"We're looking to grow the business through further capital injection... we've just paid our third dividend since our listing in September 2016. Revenue will be net passed through to investors. We certainly see the capital growth of the long term rights providing that value growth," says Walsh.

]]> PowerHouse gets Green Light for Green Technology!” Thu, 08 Nov 2018 15:15:00 +0000 PowerHouse Energy Group (PHE), leader in low-cost, high-efficiency, ultra high temperature gasification in the Waste-to-Energy market tells Proactive Investors London how business is shaping up. Tech Director Dave Ryan discusses converting waste plastic into energy and their newly acquired Statement of Feasibility from world renowned DNV-GL.

They target single use plastics bound for landfill and develop projects for 'gasification' and energy extraction of difficult to manage waste-streams... generating clean synthesis gas- with zero emissions - and no smokestack.

Powerhouse's Ryan (a man with 38 years engineering experience) tells Proactive why the future's bright for rubbish.

]]> VSA CAPITAL MARKET MOVERS - NuLegacy Gold Thu, 08 Nov 2018 10:41:00 +0000 NuLegacy Gold (CVE:NUG


NuLegacy (NUG CN) has announced that it has staked additional acreage contiguous to its Red Hill property in Nevada. The additional 64 claims cover 5.1km2 taking the total land package to 108km2. It is a rare opportunity that such claims become available and it strengthens NUG’s position in close proximity to the south of Barrick’s (ABX US) Goldrush deposit (10mnoz).  

Within the Red Hill license area NUG has identified both Carlin style gold and epithermal gold-silver mineralisation and this new area which covers the Coal Canyon window is also prospective for both types of mineralisation. The Coal Canyon area is host to the carbonate sedimentary rocks strongly associated with the major gold formations in the region; Horse Canyon, Wenban, Roberts Mountains and Hanson Creek Formations. This additional acreage therefore strongly ties in with the existing land package strengthening the company’s exploration position in the region. 

We reiterate our Speculative Buy recommendation.  

]]> VSA Capital Market Movers - Lake Resources Wed, 07 Nov 2018 10:01:00 +0000 Lake Resources (ASX:LKE)


Lake Resources (ASX:LKE) has announced an exploration target in relation to its Kachi project, highlighting its significant scalable potential. The exploration target has a range of 8 -17mnt lithium carbonate equivalent (LCE) meaning LKE has 100% ownership of one of the largest lithium projects globally. However, the initial maiden resource is likely to focus on a smaller higher confidence area within the exploration target which currently has a range of 1.6-3.4mnt LCE. The grades used to determine the target range from 250-310mg/l Li in the upper range scenario and 150-210mg/l Li in the lower range scenario.

The current target extends only to the depth of drilling. In the key western zone where grades have been strongest seismic work suggests that the basin extends to a depth of 700-800m while drilling to date has only tested to maximum depths of around 400m. LKE therefore plans to carry out additional drilling before announcing a maiden resource. In addition, samples have also been collected to carry out porosity tests to determine specific yield. LKE has also expanded its footprint of mining licenses with applications for a further 15,000ha of mining lease area, an increase of 25%.

The higher confidence zone where drilling to date has been concentrated and has yielded stronger grades provides a strong starting point in our view for assessing potential economics and the scale of this target in terms of contained LCE is comparable to other developing lithium brine projects which have already gained offtakers. Given the size of the lithium market currently and the growth potential longer term we see this optionality to extend into the wider target area as highly attractive for strategic investors and offtakers.

The grade range when taken as a standalone figure is towards the lower end of the peer group, however, it is important to consider grade in the context of other factors such as impurities and Kachi has very low magnesium content of as low as 3.8. In comparison we highlight Lithium X purchased by Tibet Summit Resources for US$206m which has grades of around 387mg/l Li with a magnesium ratio of 5.5. Furthermore, LKE test results from work with Lilac Solutions yielded lithium recoveries of 70-80% which is potentially transformative for grades and costs when compared to an average 50% for traditional processes.

This announcement provides the first quantitative assessment for Kachi, clearly demonstrating its potential scale. LKE will now work towards a maiden resource which fits more in line with the near term demands of the lithium market.  Currently, lithium projects globally are valued on around US$70/t on an EV/t LCE basis. This exploration target implies that LKE is currently valued on US$10-20/t for the high confidence zone and US$2-4/t for the wider target. This excludes LKE’s other projects and shows how much value potential exists.

We reiterate our Speculative Buy recommendation. 

]]> W Resources CEO Michael Masterman updates on tungsten projects and markets Tue, 06 Nov 2018 07:00:00 +0000 W Resources (LON:WRES) CEO Michael Masterman updates Proactive Investors on the emerging producer's flagship La Parrilla tungsten and tin project in Spain, as well as its Portuguese Régua tungsten and Tarouca tungsten and tin projects.

Demand for tungsten is being driven by strong US and Chinese consumption, whilst supply has been affected by recent mine closures.

Masterman says, "La Parrilla is very nicely timed in terms of coming into the market; being able to supply those shortfalls and also make sure that we can keep the market with long term stable supply."

]]> Base Resources 'unique in sector' with 'defined earnings engine and future growth' Tue, 06 Nov 2018 04:16:00 +0000 Tim Carstens, managing director of Base Resources Limited (ASX:BSE, LON:BSE), speaks to Proactive Investors about the profitable mineral sands company's wholly-owned Kwale project in Kenya, and Toliara project in Madagascar.

"We've got a business model that's been very successful in Kenya and we believe has application generally in Africa. We've got a fantastic project to move onto in Toliara that's going to provide a real long life and similar earnings profile to Kwale. We've got a team that's done it before, and we've got the financial platform to execute it and execute it well," says Carstens.

]]> Tlou Energy team update on pilot production well drilling at Lesedi Mon, 05 Nov 2018 13:05:00 +0000 Tlou Energy PLC's (LON:TLOU) Tony Gilby and Gabaake Gabaake spoke to Proactive London's Andrew Scott to update on the current drill programme as well as the tender re-submission.

Tlou has started to drill pilot production wells at Lesedi, which would form part of the gas-to-power project.

]]> 'Christmas comes early' for Tower Resources as reserves report beats expectations Mon, 05 Nov 2018 12:36:00 +0000 Jeremy Asher, chairman of Tower Resources PLC (LON:TRP), caught up with Proactive Investors to discuss a reserves report for their Thali licence, offshore Cameroon.

The report's identified gross mean contingent resources of 18mln barrels (MMbbl) of oil across the proven Njonji-1 and Njonji-2 fault blocks with low/best/high estimates of 5/15/34 MMbbls respectively and a development contingency probability of 80% on the first phase and 70% on the second phase.

Asher says they've received a financing offer from an industry partner for the Thali licence and it's being considered alongside other funding options.

]]> West Newton farm-in has 'all the right ingredients' - Union Jack Oil's David Bramhill Mon, 05 Nov 2018 11:18:00 +0000 David Bramhill, executive chairman of Union Jack Oil PLC (LON:UJO), discusses with Proactive London's Andrew Scott the acquisition of a 16.667% stake in the West Newton gas discovery, in Yorkshire.

West Newton, located on the western sector of the southern Zechstein basin in east Yorkshire, is a conventional operation.

It is on trend with the prolific Hewett gas field complex which had 419bn cubic feet of original in place gas.

]]> VSA CAPITAL MARKET MOVERS - Lake Resources Fri, 02 Nov 2018 11:41:00 +0000 Lake Resources (ASX:LKE)

Lake Resources (LKE AU) has announced that it is making progress with drilling at Cauchari with two rigs now on site. The diamond drill rig has completed around 110m of the first hole while the rotary rig which is drilling pre collar holes to a depth of 100m has moved onto hole two. This is due to the gravels near surface and this approach prevents caving before entering the brine sequence. The first two holes are 2,500m apart which highlights the scale of this license area. LKE’s Cauchari license is adjacent to licenses held by Ganfeng and Lithium Americas (LAC CN), and Advantage Lithium (AAL CN) and Orocobre (ORE AU) where drilling has yielded grades of 600-705mg/l Li.

We also note that LKE has secured an additional A$0.5m via an unsecured lending facility from an existing shareholder which will support near term exploration activity. Furthermore, LKE has reported positive progress regarding identifying long term strategic investors in Asia.

Lithium stocks globally have despite improving fundamentals remained range bound within recent weeks. However, fundamentals appear to be strengthening in line with our outlook that the risk of oversupply is overblown. SQM (SQM US) upgraded Q3 2018 guidance announcing that pricing would be flat as well as highlighting the challenges they face in ramping up production at the Salar de Atacama. Although we have highlighted that the off-contract price in China should not be seen as a market bell whether we note that the MB index was up 3% last week which should support sentiment given how its decline has impacted lithium shares over recent months.

Yesterday’s comments from Trump regarding trade talks with China resulted in a sharp rally which seemed to benefit lithium stocks globally and sharp daily moves such as this highlight to us the oversold nature of the sector currently and that a sustained recovery in sentiment is likely to result in a significant rally benefitting ex-Chile projects in particular.

We reiterate our Speculative Buy recommendation.

]]> New Hazer Group CEO says pilot project tripled production expectations Thu, 01 Nov 2018 22:00:00 +0000 New Hazer (ASX: HZR) CEO Geoff Ward says getting involved with graphite and hydrogen markets is a "fascinating and exciting opportunity".

The veteran oil and gas executive says Hazer's technology produces two valuable products at low cost, and a recent pilot project exceeded expected production.

]]> VSA CAPITAL MARKET MOVERS - Edgon Resources: FY 2018 Results Thu, 01 Nov 2018 14:20:00 +0000

Egdon Resources#: FY 2018 Results

For the full report, please click here. 

Keep reading VSA research for free – Click here for our position on MIFID2

Financial Performance

Egdon Resources (LON:EDR) has announced full year results for 2018. Production in H2 FY 2018 was 70bopd, down 41% YoY, resulting in full year production of 84boepd, down 20% YoY. The impact on production was due to the timing of maintenance at Ceres as previously announced. Gross revenue was flat YoY at £1m although due to an accrued revenue write off net revenue of £0.78m was 25% lower YoY.

Total cost of sales were up 11% YoY due to an increase in net one offs with pre license and exploration costs of £1m more than offsetting impairment reversals of £0.65m, both having been immaterial in the prior year. Direct production costs of £0.82m were up 9% YoY. The net loss therefore widened from £1.7m to £2.0m. Capex of £1.8m was up from £1m YoY in the prior year. EDR finished the year with a robust cash position of £2.8m and continues to be debt free.   

Key Catalysts in FY 2019

With primary production now back online at Ceres, the company has guided to 125boepd in H1 2019 from Ceres alone and group production of 150-180boepd. We therefore anticipate a more than doubling in full year average production to 210boepd and a return to profit for EDR of £0.8m. In addition, an appraisal well is due to be drilled at Biscathorpe in the coming period which is a major step for EDR, who is operator, while at Springs Road IGas (IGAS LN) has completed site construction and is due to drill in early calendar 2019.

Developments for UK Shale

Cuadrilla have now begun testing at Preston New Road. Results are likely to be announced in late 2018 or early 2019. We note that three stoppages have already been forced due to the low 0.5ML limit, however, these remain well below what could be felt at surface.

Recommendation and Target Price

With a positive near term earnings outlook and upcoming drilling there are key near term catalysts which we believe can drive a rerating of the shares to breakout from the recent rangebound trading. We reiterate our Buy recommendation and target price of 50p.

Oliver O'Donnell, CFA, Natural Resources & China | T: +44 (0)20 3617 5180 | E:

VSA Capital Limited, New Liverpool House, 15-17 Eldon Street, London EC2M 7LD |

This email is intended solely for the named recipient. It may contain privileged and/or confidential information. If you are not one of the intended recipients, please notify the sender immediately, and destroy this email: any disclosure, copying to any person or any action taken or omitted to be taken in reliance on this e-mail, is prohibited and may be unlawful. Any views expressed in this message are those of the individual sender, except where specifically stated to be the view of VSA Capital Limited, its subsidiaries or associates. Whilst all efforts are made to safeguard inbound and outbound emails, VSA Capital Limited and its subsidiaries or associates cannot guarantee that attachments are virus-free or compatible with your systems and do not accept any liability in respect of viruses or computer problems experienced.

VSA Capital Limited will use your personal information to administer your account in order to provide any products and services you have requested from us. Your personal information will be kept secure and will not be shared with any other party unless you provide consent to that effect.

VSA Capital Limited is Authorised and Regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.
The Company is registered in England with company number 2405923 at New Liverpool House, 15-17 Eldon Street, London EC2M 7LD.

Please consider the environment before printing this e-mail

unsubscribe from this list    update subscription preferences 


]]> CUI Global's quarterly results will reflect 'a great deal of expansion on the energy side' Thu, 01 Nov 2018 11:59:00 +0000 Bill Clough, chief executive of CUI Global Inc. (NASDAQ:CUI), updates Proactive Investors on the energy specialist's advancement into China, and discusses the positive impacts of the UK's new Domestic and Non-Domestic Renewable Heat Incentive (RHI) scheme.

Clough says that the company will be reporting it's third quarter results next week, teasing that "the market will be quite pleased with those numbers."

]]> Rose Petroleum now fully permitted for its first well in the Paradox Basin Thu, 01 Nov 2018 09:44:00 +0000 Rose Petroleum PLC's (LON:ROSE) CEO Matt Idiens tells Proactive London's Andrew Scott they're to drill the GV 22-1 well at their Paradox acreage in Utah “as soon as possible” after being given the green light from US authorities.

The application for a permit to drill was approved by the US Bureau of Land Management and is valid for an initial two-year period.

In order for GV 22-1 to be the next obligation well, Rose has had to extend the boundary of the Gunnison Valley Unit, changes which are expected to take about 45 days to complete.

]]> Eco (Atlantic) has bagged an 'elephant' at Orinduik, offshore Guyana, believes CEO Holzman Wed, 31 Oct 2018 15:58:00 +0000 Gil Holzman, Eco (Atlantic)’s chief executive (LON:ECO) is super-excited about the start of drilling at Orinduik next year, with offshore Guyana set to become a huge new oil address he believes.

It’s the ‘elephant -size’ asset we were looking for when we took on the licence, he says, adding that if a well is drilled next year it will be three and half years ahead of schedule.

With an estimated 3bn barrels of recoverable, Eco’s 15% take is worth roughly US$2bn at currently prices.

Operator Tullow and Total, its other partner, are keen to move forward as fast as possible, which might even mean more than one well being drilled and tested in 2019.

]]> i3 Energy team suspect Liberator potential much bigger than current estimates Wed, 31 Oct 2018 11:22:00 +0000 i3 Energy PLC's (LON:I3E) chief executive Majid Shafiq and CFO Graham Heath speak to Proactive London's Andrew Scott as efforts to secure a joint venture partner for the Liberator field officially gets underway.

''The data room will be opening shortly and we've started the marketing process, we've approached counter-parties and had a good response to date'', Shafiq says.

i3's looking to submit an enlarged field development plan (FDP) to the UK Oil & Gas Authority for two North Sea blocks by the end of the year.

Based on the company’s mapping and analysis, the previous mid-case stock tank oil-initially-in-place (STOIIP) estimate of 237mln barrels pertaining to the company’s wholly-owned UK North Sea blocks 13/23d and 13/23c has been revised to 314mln barrels.

]]> VSA CAPITAL MARKET MOVERS - DekelOil Wed, 31 Oct 2018 10:37:00 +0000 DekelOil#: Cashew Project Contract

Côte d'Ivoire palm oil producer DekelOil Public Limited (LON:DKL) has announced that Capro CI, a wholly-owned subsidiary of Pearlside Holdings (a vehicle DKL has an option to acquire a 58.5% interest in) has awarded a €6.5m turnkey contract for the construction of its large-scale cashew processing project at Tiébissou in Côte d'Ivoire to Overseas Projects & Services Limited (OPSL).

  • OPSL is a related entity of Oltremare, an established Italian company that is acting as guarantor of OPSL for the contract.
  • OPSL will assume responsibility for engineering, manufacture, delivery, installation and commissioning of the project.
  • Following testing and commissioning of the 10,000t (c€20m sales) per annum facility (expandable to 30,000tpa), delivery of the project to Capro CI is expected in late 2019.

VSA Comment

As we outlined in our initiation report on DKL, we believe (assuming it exercises its option) that this cashew project provides DKL with sensible diversification given its expertise in the processing of agricommodities, smallholder relations and operating in-country.

The structure of the deal also allows DKL to eliminate its exposure to the riskier construction stage of the project, while maintaining an attractive entry price to benefit from the project’s expansion stage.

We estimate the project could deliver an additional €3m in attributable profit to DKL by 2022 (although we are not including this in our forecasts until the option is exercised).

We maintain our BUY recommendation and target price of 12p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Obtala Limited





Carr's Group





Origin Enterprises







Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg






Avon Rubber





NWF Group







]]> Sonorex Oil & Gas seeking £2.3mln to drill 'highly prospective' Bristol Channel Basin Tue, 30 Oct 2018 15:15:00 +0000 Sonorex Oil & Gas Ltd managing director David Barker and consultant John Elsden tell Proactive Investors that the exploration company is now looking to raise £2.3 million in order to drill in the Bristol Channel Basin, onshore in South Wales.

Licenses to do so have been obtained, although it is unlikely many more will be granted by the government given the global movement towards renewable energy sources and away from hydrocarbons.  

The pair explain that it is a conventional oil & gas play which will require straightforward vertical drilling of about 4000 feet to investigate. The investment is EIS compliant.

]]> Gresham House Energy Storage Fund leveraged to evolving energy markets Tue, 30 Oct 2018 11:07:00 +0000 Ben Guest, head of the New Energy Division at Gresham House Asset Management, speaks to Proactive Investors about the new Energy Storage Fund that is due to be floated on the London Stock Exchange under the ticker GRID in early November.

A total £200 million is being sought, including £30 million already raised, for investment in battery storage facilities which will support national and local grids in Great Britain.

]]> SIMEC Atlantis eyes £4.8mln annual revenue from Meygen with more to come Tue, 30 Oct 2018 11:01:00 +0000 Tim Cornelius, Simec Atlantis PLC’s (LON:SAE) chief executive, says the ‘complete dislocation’ between the value of its renewable power portfolio and market price is setting the shares up for an ‘almighty rebound’.

At Meygen, two tidal power turbines are back onstream generating revenues of £100,000 per month each.

Atlantis will participate in the UK’s 2019 renewable power CFD auctions and look to add between 40-80 turbines at MeyGen dependent on the outcome, he says.

Talks to finalise a joint venture for the world’s largest tidal power array between France and the Channel Island are also underway.

That will initially produce 1Gw of power, but with the possibility to double that.

Finally, an engineering and design contract (FEED) for the Uskmouth (FEED) is imminent he says, something that will kick-start the huge power from waste conversion project.

Key to this has been the appointment of Andy Richardson as COO and Ernie Rowe to handle the Uskmouth conversion.

]]> Predator Oil & Gas Holdings Plc presents at Oil Capital - October 2018 Tue, 30 Oct 2018 07:10:00 +0000 Paul Griffiths, chief executive of Predator Oil & Gas Holdings PLC (LON:PRD), presents to investors at the Proactive Investors Oil Capital conference in London.

]]> Wentworth Resources' restructure allows 'easier execution of growth opportunities' Mon, 29 Oct 2018 16:24:00 +0000 Wentworth Resources (LON:WRL) CEO Eskil Jersing and CFO katherine Roe speak to Proactive Investors about the corporate changes the Tanzania and Mozambique-focused energy company is undergoing.

"There's a huge amount of opportunity, the whole point of the corporate simplification is to generate a platform for growth. We have one asset that's spinning off regular revenue. Our strategic mandate is to materially grow the business through M&A-led activities; we will be looking both in our back yard, Tanzania and Mozambique... but more importantly I think what we'll also try to do is offset our jurisdictional risk with regards to revenue and landscape and look elsewhere in Africa and possibly the Middle East," explains Jersing.

]]> Touchstone Exploration looks ahead to 'game-changing' 2019 plans Mon, 29 Oct 2018 11:29:00 +0000 Paul Baay, president and chief executive of Touchstone Exploration Inc (LON:TXP, CVE:TXP), caught up with Proactive London's Andrew Scott to discuss current production and the ongoing 14 well drill programme.

Baay also looks ahead to 2019 and their plans for exploration on the Ortoire block in which they've now got eleven prospective drill targets.

]]> VSA CAPITAL MARKET MOVERS - Lake Resources Mon, 29 Oct 2018 09:34:00 +0000 Lake Resources (ASX:LKE)


Lake Resources (LKE AU) has announced strong results from the laboratory testwork in conjunction with Lilac Solutions who have been testing brine samples from the Kachi project in Argentina. The testwork yielded recoveries of 80-90% in just a few hours compared to traditional brine recoveries of around 50% in months for operations in the Salar de Atacama. Lilac utilises an ion exchange extraction technology and the demonstrated yields effectively mean that 300mg/l Li grades using Lilac’s technology produce the same as 600mg/l Li grades using a traditional evaporation approach.

This is potentially transformative for the economics of Kachi and represents a significant first step in exploring this process route. The announcement is particularly significant given the current scrutiny on the environmental impact of traditional evaporation techniques and the knock-on impacts on forecast supply growth from Chile and the Salar de Atacama in particular. Lilac is now assessing the operating costs for this production technique, which directly produces lithium carbonate and/or hydroxide. Costs will of course fundamentally determine the success of the process; however, these initial results are encouraging and Lilac has guided to a competitive position on the global cost curve.

We reiterate our Speculative Buy recommendation. 

]]> Petsec Energy Ltd presents at Oil Capital - October 2018 Mon, 29 Oct 2018 08:43:00 +0000 Terrence Fern, chairman and chief executive of Petsec Energy Ltd (ASX:PSA), presents to investors at the Proactive Investors Oil Capital Conference in London.

]]> Providence Resources presents at Oil Capital - October 2018 Mon, 29 Oct 2018 08:35:00 +0000 Tony O'Reilly, chief executive of Providence Resources PLC (LON:PVR),  presents to investors at the Proactive Investors Oil Capital Conference in London.

]]> Wentworth Resources presents at Oil Capital - October 2018 Mon, 29 Oct 2018 07:58:00 +0000 Wentworth Resources (LON:WRL) CEO Eskil Jersing presents to investors at the Proactive Investors Oil Capital conference in London.

]]> Sonorex Oil & Gas Ltd presents at Oil Capital - October 2018 Mon, 29 Oct 2018 07:47:00 +0000 The team at Sonorex Oil & Gas Ltd present to investors at the Proactive Investors Oil Capital conference in London.

]]> United Oil & Gas Plc presents at Oil Capital - October 2018 Fri, 26 Oct 2018 13:35:00 +0100 United Oil & Gas Plc (LON:UOG) chief executive Brian Larkin and chief operating officer Jonathan Leather present to investors at the Proactive Investors Oil Capital Conference in London.

]]> Simec Atlantis shares set for 'almighty rebound' on MeyGen and Uskmouth potential Fri, 26 Oct 2018 11:59:00 +0100 Tim Cornelius, Simec Atlantis PLC’s (LON:SAE) chief executive, says the ‘complete dislocation’ between the value of its renewable power portfolio and market price is setting the shares up for an ‘almighty rebound’.

At Meygen, two tidal power turbines are back onstream generating revenues of £100,000 per month each.

Atlantis will participate in the UK’s 2019 renewable power CFD auctions and look to add between 40-80 turbines at MeyGen dependent on the outcome, he says.

Talks to finalise a joint venture for the world’s largest tidal power array between France and the Channel Island are also underway.

That will initially produce 1Gw of power, but with the possibility to double that.

Finally, an engineering and design contract (FEED) for the Uskmouth (FEED) is imminent he says, something that will kick-start the huge power from waste conversion project.

Key to this has been the appointment of Andy Richardson as COO and Ernie Rowe to handle the Uskmouth conversion.

]]> Oil price, President, Savannah, Sound, Reabold, Eco Atlantic, Afren And finally… Fri, 26 Oct 2018 09:41:00 +0100 WTI $67.33 +51c, Brent $76.89 +72c, Diff -$9.56 +21c, NG $3.20 +4c

Oil price
Oil prices rallied modestly yesterday after a mixed set of inventory stats from the EIA. Whilst stocks  continued to build, 6m barrels up it wasn’t as bad as the API report and products were actually pretty bullish. Gasoline drew 4.8m b’s and distillates 2.3m whilst ‘others’ drew by 7.3m giving the market a push.

Also mixed were the comments from the Saudis yesterday, not surprising under current circumstances. However the main message was pretty much in line with what I have been saying lately, ie that ‘there will be a need for Opec+ to reduce the recent rise in inventories’ and that ‘further action may be required’ from the group. They too are now looking out to 1H 2019 supply and demand stats…

President Energy - LON:PPC
President has announced that their development well PFE 1001 has spudded at the Puesto Flores/ Estancia Vieja concession in the Rio Negro Province in Argentina. The well, the second of three in the programme will take 21 days to drill and a further 10 days to complete if successful. At that time it is envisaged that the successful PFO 1001 well will be put on stream.

Savannah Petroleum - LON:SAVP
SAVP has announced that it has submitted the pre-feasibility study to the Niger Ministry with regard to the EPS on R3 of the R3/R4 PSC in the Agadem Rift Basin. It sets out Savannah’s plans for the Amdigh-1 well test, resource volumes and the potential production profile. All seems to be moving ahead as planned for the company’s R3 early production solution which will add another cash flow leg to the Savannah story.

Sound Energy - LON:SOU
Sound has announced that the TE-9 well has been drilled to its first casing point at 352m and that the casing has been set and cemented. The next casing point is 2,300m when the market will be updated again.

Reabold Resources - LON:RBD
Reabold, which owns 32.9% of Corallian Energy has announced that it, Corallian, has signed a farm-out with Talon for a 10% interest in the licence P2396 which contains the Curlew-A discovery offshore the UKCS, the well will be drilled in 2H 2019.

Eco Atlantic Oil & Gas- What comes first, the chicken or the golden egg? LON:ECO
Two pieces of news from Eco Atlantic this morning both concerning Tullow in a round about way. With Tullow prioritising its budget towards the potentially huge opportunity in Guyana, Eco Atlantic are unsurprisingly following the leader. The idea of Tullow, along with Total and Eco accelerating the programme in Guyana as well as adding another well in 2019 is just too good an opportunity to be missed so the focus inevitably shifts from Namibia across the ocean. I suspect that we will hear much more news about the project at its (Tullow) Capital Markets Day which is scheduled for 29th November but accelerating the programme that could bring first oil very quickly is indeed a no-brainer.

Whilst this does push Eco’s plans for Namibia somewhat down the road it would be folly, nay madness not to follow fast in the footprints of Exxon who must consider the data coming in from Hammerhead to be truly exceptional. In the Cooper block in Namibia, where Eco now have a 57.5% stake to farm down, they have three and a half years in which to partner up and see how the many new entrants in the area, ironically Exxon and Total amongst them get on. For Eco this is a win-win situation and bringing forward Guyana makes a mockery of its market cap of only £65m…..

It was reported yesterday that former CEO of Afren, Osman Shahenshah and ex COO Shahid Ullah had been found guilty of fraud and money laundering to the tune of $45m. The pair will be sentenced at Southwark Crown Court on the 29th of October and this may not be the end of the legal process regarding Afren.


And finally…
The big Premier League fixture this weekend is actually on Monday night when Spurs take on the Noisy Neighbours. Over the weekend there are fewer big matches, Liverpool are hosting the Bluebirds which makes me worry, Chelski are at Burnley and the Gooners are at the Eagles.

The flat season having finished in a  blaze of glory last weekend at Ascot we can now look forward to the jumping equivalent, this weekend at Cheltenham. A few old favourites are on the card and maybe we will find some new ones to follow.

The F1 circus is in Mexico this weekend where Lewis has every chance to wrap up the title, providing he finishes that is. Vettel has very little chance with 75 points left to fight over and being 70 points behind.

The MotoGP continues in the Southern Hemisphere with the Australian GP this weekend. Whilst Marquez has wrapped up the Championship, British interest is still alive with Cal Crutchlow looking to become leading Independent rider

]]> Whitebark Energy sells Xanadu to focus on Canada Fri, 26 Oct 2018 00:32:00 +0100 Whitebark Energy (ASX: WBE) has sold its Xanadu project in Western Australia to focus on Canadian opportunities.

The oil and gas explorer's managing director David Messina says Whitebark has identified exploration opportunities of over 100 million barrels of oil in new Canadian projects, and while selling Xanadu was a difficult decision, the potential of the Great White North is substantial.

]]> Cairn/Far, Range Thu, 25 Oct 2018 08:57:00 +0100 Cairn/Far

Cairn has announced that the Development and Exploitation plan for the SNE field offshore Senegal  has been submitted on schedule to the Government of Senegal with approval targeted later this year. Interestingly it also announces that JV partner (subject to international arbitration) has exercised its option to become operator of the development. This is subject to Government consent but must be a very high risk strategy under the circumstances but clearly the Australian company fancy the bet and maybe even want to load more onto the court, we shall see. Either way the news is good for what is a truly huge, world class development and both Cairn and Far Limited will benefit significantly whatever happens.

Range Resources 

Range has announced its quarterly activities report in which it shows average daily production of 594 b/d of oil which is still below the company’s expectations.  The Beach Marcelle waterflood project expansion is underway which will increase the number of active producer and injector wells and over 50 workovers and reactivations are planned before the end of the year. The management admit to being ‘disappointed’ with the delay in the infrastructure upgrade programme and the knock-on effect it is having on the drilling programme and production in Trinidad and hope to complete the upgrades as quickly as possible. It is disappointing but there is clearly value to be unlocked in Range but shareholders are going to have to be patient yet again but despite the delay real value does look achievable in the company long term.

]]> Brookside takes on property investor as Oklahoma wells come online Thu, 25 Oct 2018 03:18:00 +0100 Brookside Energy Ltd (ASX:BRK) managing director David Prentice says the energy explorer and producer is sharpening its focus on real estate, even as more of its Oklahoma oil wells come online.

Prentice says its new Woodford well has shown promising results in the early going.

The oil and gas explorer and producer has also made Australian property investor Casey Capital a substantial shareholder, adding Mark Casey to Brookside's advisory board.

]]> Bright Innovations heads for ASX listing with investment from Mayfair 101 Wed, 24 Oct 2018 18:01:00 +0100 Bright Innovations chairman Jon Brett and CEO Rami Mirksy speak to Proactive Investors about the future of smart cities; and introduce the Israeli technology company's cloud-based Coral Reef™ platform and devices for urban streetlight networks.

The technology has already been deployed in Singapore, and will be installed in Melbourne, Australia, within a month.

"We already demonstrated around ten different applications. It's important to mention that the applications don't need to come from Bright; it's an open platform for third parties to run and upload their applications on the system. It's really like an app store concept, but taking it from cellphones to everywhere," says Mirksy.

Brett is a former director of Vocus Communications, an ASX top 100 company.

]]> Oil price, Far Limited, RockRose Energy, Petro Matad And finally… Tue, 23 Oct 2018 10:43:00 +0100 WTI $69.36 +8c, Brent $79.83 +5c, Diff -$10.47  -19c, NG $3.14 -11c

Oil price

Dangerous times we live in especially when one of the hands on the wheel of international diplomacy is President Erdogan, let alone MbS and Mr Trump. despite all this turmoil the oil price is weak for choice, down another dollar this morning following Khalid Al-Falih’s comments to TASS yesterday where he said that he could raise output to 11m b/d in the near future and 12m b/d would not be a problem. Indeed in the winter when exports grow as a proportion of production a shortage of oil is unlikely.

Far Limited

Far has announced that its Samo-1 well offshore The Gambia commenced drilling on block A2 yesterday. The Samo prospect has two key reservoir intervals and is assessed to contain a combined prospective resource of 825m barrels of oil. Any success here would not just be transformational for Far, who own 40% of block 2 as well as the same in the adjacent southerly block 5,  but pour oil on the fire of what is already a very hot region in West Africa.

RockRose Energy

RRE has announced a tender offer to buy in 20% of the issued share capital at 560p which is a 20% premium to the 60 day VWAP. The management are absolutely clear that the shares are seriously undervalued and that by hopefully taking out as many sellers around these levels as they can they can achieve a re-rating of the stock.

This does indeed provide a very decent liquidity event for shareholders and it is worth looking at the process from two angles. For someone with say, for arguments sake, 3.1m shares to sell this year they would have had to start on May 23rd, do 50% of the daily volume every day for the five months and would have received an average price of 434p. (Also bearing in mind that companies can only deal in 25% of the VWAP) The other angle is that for the company, who’s last cargo of oil went out at $88, would only have to part with four months worth of cashflow above budget to come up with the £17m needed to buy the shares in.

This is the sign of an aggressive management team that has done deals in the last two years or so that have significantly increased the value of the company to a level that they believe is not appreciated in the market. They are saying that they will offer a liquidity event to those who may not be able to sell in large numbers and then see how the value settles. If it remains too low then this may prompt the directors to take further action, one could not rule out the company going private in a move to capture value…

Petro Matad

Over in Western Mongolia Petro Matad have spudded the Wild Horse-1 well in the Baatsagaan Basin in block IV of the country. The target is substantial prospective resources of 480m barrels of oil and the rig has been modified to enhance its operability in the low temperatures expected as the 30-45 days needed to drill and log the well will take them into December. Just like the last well, should this come in it will be a game changer for MATD with a current market cap of just £44m….

And finally…

The Gooners beat the Foxes 3-1 last night winning their 10th game in a row and going above Spurs in the table…

Tonight the Noisy Neighbours travel to Shakhtar Donetsk whilst the Red Devils welcome what is probably the best Juventus side ever, just what they needed…

England are playing the dead rubber in the ODI series against Sri Lanka and have started badly as is often the case when there’s nothing to gain, SL are 132-0 after 18 overs.

]]> Fluence Corporation 'on track' for 80% growth this year, quarterly EBITA profits in 2019 Mon, 22 Oct 2018 15:03:00 +0100 Henry Charrabé, managing director and CEO of Fluence Corporation (ASX:FLC) introduces Proactive Investors to the global company and its proprietary technology for water and wastewater treatment solutions.

"We have guided the market to an about 80% growth this year, and we're forecasting to be EBITA profitable on a quarterly basis some time in 2019. Right now we're tracking very much to that goal, and we're pretty bullish that we can meet and exceed our targets by continuously hitting our sales goals and proliferating our technology, both from a solutions as well as a technology point of view," Charrabé says.

]]> Oil price, President, Echo, VOG, Zenith, And finally… Mon, 22 Oct 2018 13:35:00 +0100 WTI $69.12 +47c, Brent $79.78 +47c, Diff -$10.66 +2c, NG $3.25 +5c

Oil price

With various pulls on the oil price exerting their pressure last week oil prices fell again, WTI by $2.22 but Brent was only off 65c, this morning both have rallied modestly. We still have the Khashoggi incident overhanging the market with most parties unsure that they know the truth, or for that matter what they would do if they did know. With the Saudis reminding Mr Trump that if he thought $80 was high how did he fancy $200 and the mid term elections on the way the US has to pick its enemies here very carefully.

Another factor, also positive for oil was the Chinese data from last Friday which was followed by a big rise in their indices, refinery throughput indicated substantial domestic demand however temporary it might be. On the downside whilst I was away the EIA inventory stocks rose again and are now above the five year average that I talked about recently, this is OK this quarter but it won’t be in 1H 2019. This led to the expected CFTC numbers showing that money managers and traders were continuing to cut back on long positions. Finally the Baker Hughes rig count showed another rise, +4 overall to 1067 units, in oil also up 4 at 873 units.

President Energy

More excellent news from President who have announced an update from the Puesto Flores well, PFO 1001 which is the first of a three well sequence and has now been successfully drilled, cased, cemented and logged on time and within budget and awaiting completion. Results so far are at the upper end of expectations with oil shows at three different formations and live oil coming to the surface over the shakers. The company also said that ‘commendable peak gas readings while drilling reached up to nearly 1 million ppm with the range of C1 to C5 gas present’. Having such good pay in the shallower and deeper target formations is extremely exciting and bodes well for the programme.

Indeed, at the beginning this programme was intended to be targeting  an aggregate 600 b/d, and whilst all the wells have to be completed successfully “based on the evidence to date, we now view the achievement of this target with increasing confidence.” Existing production of 2,700 b/d should be significantly increased and the company’s target of 5,000 b/d by the end of 2019 already looks eminently achievable.


Echo Energy

Echo has announced that it has been able to boost production at FD, the Cañadon Salto field from 5 b/d to 115 b/d following four successful pilot well interventions. These results are very encouraging as the wells are improving as they ‘oil in’ and pumps and facilities are optimised. At a very modest cost of in the range $100-150 net to Echo, and despite this being only a pilot project  there seems to be significant potential upside.

With a large well stock to evaluate for well interventions, re completing  a good number of them could put Echo well on the way to producing say, up to 400 b/d which would have the doubly positive effect of increasing contingent resources as well as providing good, stable cash generation. This is already demonstrating how upside from this field can be achieved and with so much potential it looks like showing how Echo can add something with little spend and using the significant experience they bring to the party in Argentina.

Victoria Oil & Gas

VOG has announced its Q3 2018 operational update and Non-Grid Business development. In the quarter gross gas sales were up 11%on Q2 to 356 mmscf with gas production up 12% to 3.7 mmscf/d. Four additional thermal customers, two new, two former consumed gas in Q3 with one connected just after the quarter end. GDC signed GSA’s with four new customers for industrial power in the quarter.

With regard to the suspension of sales to the ENEO owned Logbaba and Bassa power stations in Douala, GDC remains confident that a solution can be found but that ‘a resolution has been further delayed due to the recent Presidential elections in Cameroon’.

As a result of this the company is concentrating on the Non-Grid Business Development to reduce dependence on any single customer although they do say that grid supply will always be a key strategy. They are aware that existing and new customers need power due to recurrent power shortages so they have developed a solution called the GDC Industrial Power Unit. Most of these customers are already connected to the GDC gas pipeline and just need a generator which can be supplied at a minimal cost to GDC. They are in discussions and contract negotiations with a large number already and plan to have 18 gas to power customers by the end of 2019. These customers will pay 13MMBtu and consume 4.5 MMscf/d with no seasonality and in addition to thermal demand. Finally VOG are still in commercial negotiations with regard to CNG and these are expected to close during Q4 2018 and the company are also progressing its ‘Energy well’ concept to roll out gas sales into the large part of the Cameroon population that has no access to gas.

Whilst it is disappointing that the ENEO contract has yet to be signed after positive noises during the summer, it looks like VOG have really got their act together to supply gas to those customers who need thermal or industrial power and yet still find many hours of blackouts in Douala. This higher margin business, often not so seasonal as before should go a long way to replacing the ENEO business and assuming it does return, should lead to a bigger, more rounded and less cyclical company capable of making up for recent events.

Zenith Energy

Zenith has announced this morning that it has identified a new structure in the Middle Eocene and Upper Cretaceous formations of the Jafarli field in Azerbaijan. It measures 3km² with a significant degree of closure indicated by the thickness of approximately 100m. The company will deepen the C-37 well to penetrate sandstone layers and the Mesozoic formation not previously tested here.

This is potentially very exciting news as the company is now getting to grips with the asset base that I visited some months ago. With a new Senior Reservoir Engineer with what looks like over 30 years of experience and of course all the new kit bought by the company recently Zenith do look like they are about to get very serious in country.

And finally…

A mixed weekend of sport but no doubting that Liverpool and the Noisy Neighbours are heading the way at the top of the Prem. Chelski unexpectedly dropped points at home to the Red Devils who nearly made off with the points.

At Ascot the Champions Day was really worth it with Frankie and John Gosden sharing a number of spoils including Stradivarius and Cracksman and OM on Roaring Lion.

In Austen, Texas it looked like for all the world that Lewis was going to conquer but a combination of Raikkonen and then Verstappen make him wait until at least next week in Mexico.

In the Japanese MotoGP Marc Marquez stormed to his 8th win this season and his 5th. MotoGP World Title . With Lorenzo sidelined through injury the race was only between Dovizioso’s Ducati and Marquez’s Honda until the penultimate lap when Dovi slid into the gravel whilst trying to find a way past, leaving Marquez to claim the win. Determined Brit Cal Crutchlow, on a satellite Honda, was a superb 2nd and Alex Rins Suzuki 3rd.

]]> VSA CAPITAL MARKET MOVERS - Lake Resources Mon, 22 Oct 2018 13:24:00 +0100

VSA Morning Miner, 22/10/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Lake Resources (ASX:LKE)

Lake Resources (LKE AU)# has announced the results of further drilling at Kachi as it approaches declaration of a maiden resource. This is now expected in late October, early November with an exploration target expected to be announced ahead of this.
The additional three holes each demonstrated robust grades and were all focused on the north western area of the salar. Hole K03R03 yielded 306mg/l Li from 213m and nearby hole K03R12 yielded 42m at 267mg/l Li from 358m. K08R14 intercepted 326mg/l Li from 301m. These results confirm initial findings that this area of the salar has the stronger grades of lithium bearing brines as well as robust and consistent thickness and we anticipate that this area will be the focus of the resource estimate.
As well as the confirmation of consistent grades across this part of the salar the results have also demonstrated consistently low magnesium ratios in line with top tier projects. In this latest round of drilling the magnesium lithium ratio ranged between 3.8-4.4.

With further results due from the remaining outstanding drill holes from this round there is likely to be further encouraging news flow as LKE approaches announcing its maiden resource at Kachi. In addition, we await results from Cauchari where drilling is also underway.
We reiterate our Speculative Buy recommendation.


]]> VSA CAPITAL MARKET MOVERS - Lake Resources Mon, 22 Oct 2018 13:24:00 +0100

VSA Morning Miner, 22/10/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2


Lake Resources (ASX:LKE)

Lake Resources (LKE AU)# has announced the results of further drilling at Kachi as it approaches declaration of a maiden resource. This is now expected in late October, early November with an exploration target expected to be announced ahead of this.
The additional three holes each demonstrated robust grades and were all focused on the north western area of the salar. Hole K03R03 yielded 306mg/l Li from 213m and nearby hole K03R12 yielded 42m at 267mg/l Li from 358m. K08R14 intercepted 326mg/l Li from 301m. These results confirm initial findings that this area of the salar has the stronger grades of lithium bearing brines as well as robust and consistent thickness and we anticipate that this area will be the focus of the resource estimate.
As well as the confirmation of consistent grades across this part of the salar the results have also demonstrated consistently low magnesium ratios in line with top tier projects. In this latest round of drilling the magnesium lithium ratio ranged between 3.8-4.4.

With further results due from the remaining outstanding drill holes from this round there is likely to be further encouraging news flow as LKE approaches announcing its maiden resource at Kachi. In addition, we await results from Cauchari where drilling is also underway.
We reiterate our Speculative Buy recommendation.


]]> Victoria Oil & Gas advancing its non-grid solutions as gas sales rise Mon, 22 Oct 2018 13:17:00 +0100 Kevin Foo, chairman of Victoria Oil & Gas plc (LON:VOG), tells Proactive London's Andrew Scott they've started to grow sales again even though supplies to Cameroon power group ENEO have yet to resume.

The contract was suspended last December and Foo said it was a shock when it was not renewed.

Gross sales in the three months to September rose 11% at 356million cubic metres of gas or an average 3.72mln per day.

]]> SDX Energy, Far Ltd Thu, 18 Oct 2018 14:08:00 +0100 SDX Energy

SDX has announced that the discussions with BP re a significant package of assets have been terminated by ‘mutual agreement’ and the suspension of the shares has been lifted.

Paul Welch, CEO said he was ‘clearly disappointed that the transaction had not materialised’ and that ‘we are screening potential deals all the time’. He added that, ‘we know that there will be others to fast track our stated goal to be a North African focused E&P of scale and that we will continue to build value from our existing business ‘.

Whilst disappointed, I’m sure that the SDX team will not only continue to build the business in Egypt notably with South Disouq coming on stream by the end of the year but also to find other add-on opportunities. In Morocco the outlook for next year is equally bright and highly profitable with high margin production building and an exciting exploration programme in prospect. Accordingly SDX remains an outstandingly cheap stock and a worthy member of the bucket list.

Far Ltd

Very good news to report from down under this morning from Far who have announced that the Stena Drillmax drillship has begun its journey to the Samo prospect in Block A2, The Gambia to drill the Samo-1 exploration well.

The well is aiming for two key reservoir intervals assessed to contain a combined natural resource of 825m bbls of oil. Good quality reserves have been interpreted at both levels at the Samo-1 well location and the well is to be drilled near the crest of the structure.

The well is expected to commence ‘within a couple of weeks’ and will take approximately 40 days to complete followed by wireline logging. Far, following the farm-out to Petronas has a 40% interest and is carried for the cost of drilling up to a cap of $45m.

Being so close to the world class discovery in Senegal Far has, unsurprisingly, seen ‘world-wide interest’ in this well as The Gambia is one of the hottest postcodes in West Africa at the moment. Any discovery here would dwarf the current market cap of A$628m and at a price of A11c at the moment the upside would undoubtedly breach my target of A35c. No wonder the mood in the Far office is of intense excitement as the denouement of the programme approaches.

]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt Thu, 18 Oct 2018 08:18:00 +0100

VSA Morning Miner, 18/10/18

Click here for PDF version

Keep reading VSA research for free – Click here for our position on MIFID2

M2 Cobalt (CVE:MC)

M2 Cobalt (MC CN) has announced that drilling is underway having secured a contract for up to 3km of diamond core drilling with an East African drilling company. Having identified multiple large scale targets and three distinct styles of mineralisation the drilling will assess key targets across the license areas to assess the potential and identify future targets for follow up drilling.

We anticipate that drilling will focus on the VMS style mineralisation identified at Kilembe which represent lower risk targets, in our view, given the proximity to the prior producing Kilembe mine. VTEM surveys identified at least two strongly conductive zones which we expect will be a high initial priority. Drilling will also be targeted at the Bujagali licenses where, M2 yesterday announced it had significantly enhanced its exploration area into a continuous land package. At Bujagali the Phase 1 work yielded multiple large-scale targets indicating a regional scale play of primarily Katanga style copper cobalt mineralisation. In addition, M2 also identified ultramafic nickel, copper and cobalt at the Bombo target.

With the announcement of the start of drilling this is a key period for M2. Initial assay results are expected in the coming weeks which represent key potential catalysts for the stock.

We reiterate our Speculative Buy recommendation.



]]> Sound, Trinity, Amerisur ............... Wed, 17 Oct 2018 15:41:00 +0100 Sound Energy (LON:SOU)

Sound has announced that its TE-9 well at Tendrara in Eastern Morocco will spud today. The first of a three well campaign it will test the A1 prospect and it is intended to drill both the TAGI as a primary target and also the underlying Paleozoic as a secondary and the well is expected to take between 35-45 days.


A Q3 update from Trinity this morning with production at 2,734 b/d, this is up 9% y/y but down 3% q/q due to a well being offline for two months.

There is much going on with 6 rcp’s, 38 workovers and 2 infill development spudded in the quarter which will be completed with first production in early Q4. Since the quarter end 2 new infill wells have been spudded with 2 more due in the latter part of the quarter. At the Trintes field the intensive workover and reactivation work done in the quarter has increased the number of wells on production from 17 to 31.

The outlook for Trinity is exceptional, by Q1 2019 all 6 wells are expected to be on production boosting production and profitability from what is very high quality organic growth. With the balance sheet decks cleared and moving forward debt free Trinity is in a very powerful position indeed.

Amerisur Resources (LON:AMER)

An update from AMER this morning as they first report that at CPO-5 the Indico-1 well is on track to spud in 2H of October and followed by Aguila-1 and Sol-1 after that.

September production was 4,974 b/d with a peak of 5,025 b/d in line with expectations. The company also say that the testing of the T sands continues and with the discovery being so low in the prospect will mean more appraisal drilling. The PUT 12 and PUT 9 seismic has been processed and is being interpreted prior to the finalisation of the Coendu drilling location.

]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt Wed, 17 Oct 2018 08:24:00 +0100 M2 Cobalt (CVE:MC)

M2 Cobalt (MC CN) has announced that it has acquired an additional four exploration licenses covering 850km2. Three licenses (515kmm2) are located in the area surrounding the Kilembe licenses while the fourth (335km2) is contiguous with one of the licenses in the Bujagali area.  The decision to include these additional license areas is based on a combination of historic findings and the recent successful Phase 1 work and M2 now has a very significant footprint of 1,564km2 across seven licenses. 

The consideration for the acquisition paid to Olympic, a private Ugandan company, consists of an upfront payment of US$150k and 350k shares in M2 on approval by the TSX-V. Latterly M2 will pay US$400k and 450k shares on the earlier of May 31 2019 or when the company raises a minimum of US$3m in new equity. All issued shares are subject to a four-month hold. Based on the last close the total value of the acquisition was US$810k which represents a highly attractive price, in our view, given the initial license areas were acquired for around US$2m.

The acquisition allows M2 to take full advantage of the developing regional play at the Bujagali licenses where the company recently announced that it has now discovered five large scale cobalt anomalies. The acquisition of the additional license area means a significantly increased and continuous land package which follows a major thrust and fold belt on which the anomalies have been identified. The work to date has demonstrated the potential for Katanga style sedimentary copper cobalt mineralisation and this is a key additional license which enables the company to fully exploit the area’s potential and we anticipate that M2 will carry out similar methodical geochemical and geophysical sampling across the new license.

At Kilembe two of the three new licenses are contiguous with the company’s existing licenses on the Western extent of the Eastern branch of the Great Rift Valley in close proximity to the past producing Kilembe mine. These additional licenses therefore strengthen the company’s presence in the region. The third license presents a new opportunity and is located on the Eastern escarpment of the Great Rift Valley on the opposite side to Kilembe. With examples of historic base metal workings there are known occurrences of mineralisation within this new license. The Great Rift Valley formed as the two plates drifted apart and the geology and mineralisation is therefore anticipated to be mirrored on opposite sides of the valley indicating significant potential akin to Kilembe.

We reiterate our Speculative Buy recommendation.

]]> Oil price, Sound Energy, Podcasts And finally... Tue, 16 Oct 2018 10:56:00 +0100 WTI $71.78 +44c, Brent $80.78 +35c, Diff -$9.00 -9c, NG $3.24 +8c

Oil price

The oil price did end up on the day yesterday but at one stage looked like it was going to be nearer two bucks rather than the change that it turned out to be. With ‘KhashoggiGate’ in full swing the worries about a full scale diplomatic feud between Washington and Riyadh heightened but towards the end of the day some pragmatism came into being as if the two big dogs realised that a fight was unwise.

What it does do is to serve to remind us, if any were ever needed in this game that geopolitical uncertainties persist and can come from left field very quickly. This market will normally behave sensibly when we talk about fundamentals but as I said yesterday it’s the unknown unknowns that are sent to try us.

Sound Energy

Sound has announced that it has received Moroccan Ministerial approval of the new 8 year Greater Tendrara Petroleum Agreement. CEO James Parsons commented ‘ this secures energy rights to potentially transformational acreage up to 2026’. As a result of this deal Sound holds an operated 47.5% position in the GTPA with partners Schlumberger (27.5%) and ONHYM (25%) holding the rest.

Sound is entering a busy time after a long period of behind the scenes activity from the exploration department. News from the company has exploded in recent months as they gear up to the autumn drilling programme in Eastern Morocco. I am expecting the well TE-9 to spud imminently and with a large group of investors visiting Tendrara this week for the spotlight to return on the company. #drillinginthedesertagain


Two links today, my Voxmarkets Podcast from yesterday…

VOX Markets podcast: Malcy on Columbus Energy Resources, Zenith Energy, Echo Energy, Hurricane Energy, Chariot Oil & Gas, Genel Energy, Sound Energy

And an interview I gave to Doc Holiday of Total Market Solutions on Friday…

Total Market Solutions interview: Malcy Talks Oil & Gas Part V

LSE Investor evening.

And I am very much looking forward to seeing a few of you at the LSE Investor event tonight, its a sell-out and we have three great companies presenting.

And finally…

Form from the World Cup returned to England last night as they beat Spain in their own back yard and completed a memorable victory against a leading nation under Gareth Southgate. Unfortunately Northern Ireland lost 2-0 to Bosnia-Herzegovina.

Tonight its the ROI v Wales in the same cup which is designed to secure qualification for the European Championship.

]]> Oil price, Hurricane, Echo, Zenith, President, Columbus And finally… Mon, 15 Oct 2018 13:39:00 +0100 WTI $71.34 +37c, Brent $80.43 +17c, Diff -$9.09 -20c, NG $3.16 -6c

Oil price

I’m not sure that I can add much to what I have already opined on the oil price. It went up preparing for US sanctions on Iran but that was pretty much in the price when it peaked at around $85, Opec+had met but had already decided to produce more, at least those that could do. So when the Saudis told Mr Trump, and anyone else who was listening, that there was crude for anyone who wanted cargoes they were probably right.

Combine that with seasonal stock-build and last week became a shake out, nothing more, nothing less. This quarter is going to be a bit tight but in the absence of an unknown unknown the market will cope, it’s next year you should be worrying about. If you, like me, believe that Opec+ will work in all market conditions then expect them to cut back when the 1Q starts to look oversupplied, which it will. If you don’t believe that their discipline will hold then you should be having a look at the shorts available in the market.

Hurricane Energy

News that the Aoka Mizu FPSO has sailed-away from Dubai and is headed to the Lancaster EPS via Rotterdam is almost the final piece in the jigsaw that Hurricane can announce before hook-up and then hopefully first oil in H1 2019. There is now no reason to believe that the hooking up of the wells and final commissioning will not be in place on time allowing several months for production to fully get under way.

Echo Energy

Two pieces of news from Echo this morning, from Argentina and from Bolivia. In Argentina the rig has been used to perforate the EMS well prior to the rigless mechanical stimulation and the results show no moveable formation water which is a very good sign. They will now proceed to frac both this well and the ELM gas well, which seems to be in good condition, consecutively.

In Bolivia the company has signed a TEA with YPFB on the Rio Salado Block which compliments their existing stake in the Huayco block which management consider  have a potential of 1.75 TCF mean for the whole structure over both blocks. There are two not insignificant fringe benefits to this deal, firstly for about $30/- they get access to the very expensive 2D seismic data shot by BG not long ago and rumoured to have cost a lot of dough and secondly that the acreage is between two wells being drilled by Shell and Repsol in the  region, if either of them came in…..

Zenith Energy

Zenith announces that operations are under way to prepare to drill the C-37 well in the Jafarli field in Azerbaijan where they are aiming for a highly prospective, unexploited structure of Upper Cretaceous carbonates formations. The well will initially test the Middle Eocene formation which also has the opportunity to hold significant oil reserves.

Following that the company are planning to drill the Z-21 well on the Zardab block which has become the second well in the programme as it will involve a certain amount of fishing out of tubing from the wellbore. This is an important time for Zenith as it returns to the drilling programme but as it brings on new kit, and another new drilling manager the opportunities are very much still there.

President Energy

President has added a 20% stake in a 693 acre block at Jefferson Island to its Louisiana acreage at a cost of $175/-. The area has ‘significant undrained low risk potential’ and a four well programme will commence towards the end of Q2 2019. The acquisition compliments the existing asset base in Louisiana and the wells cost around $2m completed or a net $400/- to PPC who will pay out of existing resources. Whilst there are no working wells there at present, the old ones had ‘compelling economics’ and with modern techniques being able to extract more efficiently and with good routes to market it looks like substantial upside could be proved.

Columbus Energy Resources

Columbus has raised £2.5m in a placing at 3.5p (a 6.8% discount) with new and existing shareholders. Half of the proceeds will be used to repay the North Energy Capital facility ($1.25m)  and the rest to establish a multi-well drilling campaign on the Steeldrum assets and in the south-west peninsular facilities. The raise has been brought on by existing shareholders who approached the company asking it to use the money for an ‘accelerated growth strategy’, rather than be paying back monthly debt repayments.

The raise is a good thing and with CERP’s problem being one of how to ‘bulk up’ the business is a reasonable start in that process. I have written many times about how ambitious Leo Koot is and clearly his shareholders want to participate in that which is admirable, maybe once this bulks up a bit more there might be an M&A opportunity available for the next stage…


I wrote an article for Master Investor magazine last month, it is very broad brush on recent oil price history and some company stuff, here it is.

Master Investor magazine article: “Black Gold Shines Again”

And finally…

As international week continues with yet another Mickey Mouse Cup England B are in Spain with a somewhat less than slim chance. Northern Ireland travel to Bosnia-Herzegovina for their night out.

The racing was good at the weekend, might we have seen another wonder horse in Too Darn Hot?

In the baseball, the Red Sox won at Fenway last night but they lost the first game in Boston over the weekend. They now head to Houston having given up home-field advantage. The same is true of the Brewers who lost game 2 to the Dodgers on Saturday night. A repeat of last years World Series is now very possible…

]]> VSA CAPITAL MARKET MOVERS - DekelOil Wed, 10 Oct 2018 08:17:00 +0100 DekelOil Q3 Production and Sales Update

Côte d'Ivoire palm oil producer DekelOil Public Limited (LON:DKL)# has announced a production and sales update for Q3 2018.

  • FFB Collected: 24,938t, +15.3% YoY (Q3 2017: 21,626t)
  • CPO Production: 5,371t, +13.5% YoY (Q3 2017: 4,734t)
  • CPO Sales: 5,471t, -24.2% YoY (Q3 2017: 7,217t)
  • Average CPO Selling Price: €544/t, -16.9% YoY (€655/t)

VSA Comment

Having reported signs of stabilisation in regional fruit availability when it released its H1 2018 results last month, DKL has confirmed this morning that FFB crops have started to recover, recording an increase of more than 15% YoY in Q3. However, this was still below the levels recorded in Q3 2015 and Q3 2016, suggesting further recovery is likely.

DKL entered Q3 with little inventory on hand so was unable to smooth out its CPO sales for one of its quieter quarters (as it has done in previous years). We look forward to its Q4 production figures to confirm further evidence of a recovery in regional cropping levels, prior to its high season early next year.

In terms of palm oil pricing, we are hopeful that the current level of cUS$530/t in Rotterdam represents a bottom in the current cycle, due to an improved crude oil price making palm-based biodiesel more economic, more positive US soybean oil pricing over the last month and much stronger palm oil exports in South East Asia in recent weeks (Malaysian exports increased almost 50% MoM in September). However, we would also highlight that we have now entered the peak production season for South East Asian palm oil production, which may moderate some of these factors.   

DKL has now collected 121,133t of FFB and produced 27,613t of CPO YTD. Assuming the company manages to achieve at least the levels reached in Q4 2017, the company remains on track to reach our forecasts of 147,525t FFB and 33,341t CPO production for FY 2018.

We are currently assuming an average achieved CPO sales price for the year of €523/t. DKL has achieved €548/t YTD (due to achieving a premium over the European benchmark price), so this may provide slight upside to our FY forecasts (depending on Q4 pricing).

We are currently forecasting revenues of €20.2m and net loss of €2.8m for FY 2018. We maintain our BUY recommendation and target price of 12p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Eden Research





Zambeef Products












Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg






Sirius Minerals





Produce Investments






]]> VSA CAPITAL MARKET MOVERS - Central Asia Metals Thu, 04 Oct 2018 10:52:00 +0100 Strong Copper Production at Kounrad

Q3 2018 copper production was up 2% YoY and 7% QoQ to 3,938t with 9mo18 production of 10.7kt down 1.7% YoY. This YoY difference over 9mo18 of just 183t of copper was due to a particularly harsh winter which impacted production in Q1 2018. However, Central Asia Metals (LON:CAML)# remains well on track to meet company guidance of 13-14kt copper over the full year and to meet our estimates of 13.75kt.

Robust Output at Sasa

The update also demonstrates a robust quarter at the Sasa mine with zinc production up 4% YoY and QoQ to 5,742t while lead production was unchanged YoY although up 3% QoQ at 7,602t. Sasa was not yet operated by CAML in Q3 2017, however, the comparison to prior periods clearly demonstrates the successful transition of ownership. Production appears on track for our full year zinc forecast of 22.3kt although with 9mo18 lead production of 22kt the risk now appears to be to the upside given our full year forecast of 28.8kt.

Shares Rallying Post Interims

Since the interim results the shares are up 11% on the back of two factors, in our view; the recovery in commodity prices along with CAML’s first full period of results reflecting the successful integration of Sasa. This first full period has provided clarity over both operational performance and the significant positive earnings impact of the acquisition. We believe that the rerating in terms of EV/EBITDA multiple from 4.8x at our initiation in August 2018 to 5.1x currently reflects greater confidence from the market.

Recommendation and Target Price


The quarterly update demonstrates continued robust operational performance with the company well on track to meet full year operational guidance and our estimates. The shares continue to offer attractive value, in our view, particularly with further confirmation that consistent results can also be delivered at Sasa.

We reiterate our Buy recommendation and target price of 309p which implies 27% upside and 33% on a total return basis. 

]]> VSA CAPITAL MARKET MOVERS - Lake Resources Thu, 04 Oct 2018 08:07:00 +0100 Lake Resources (ASX:LKE)#


Lake Resources (ASX:LKE) has announced that it has mobilised a rig to drill its Cauchari lithium brine project in Argentina. Four holes over 1,500m are expected to be drilled over the next four months with first results due towards the end of October. Recent drill results from Advantage Lithium (CVE:AAL) on the north west of its license area adjacent to LKE yielded results of over 600mg/l Li while prior testwork indicated strong flow rates.

Given the strong drilling results from the adjacent properties, on which significant reserves and resources have been confirmed by AAL, Lithium Americas , Ganfeng Lithium and Orocobre (ASX:ORE), LKE carried out seismic lines to understand the extension of these high-grade lithium bearing brine aquifers. The results demonstrated extensions into the LKE license area with the brine bearing sediments estimated to extend to 300-400m depth within LKE’s license area and this testwork has helped to identify suitable drill targets.

In addition to positive newsflow from LKE we also note that the company’s partner Lilac Solutions has announced positive results and the successful production of lithium hydroxide from a 1,000 litre brine bulk sample at Anson Resources (ASN AU) brine project in Utah. Lilac uses an ion exchange extraction technique which dramatically reduces the time taken to produce lithium compared to traditional evaporation techniques. Lilac have agreed to partner with LKE and assess the potential for the process at Kachi.

With a resource announcement upcoming on the Kachi project, today’s announcement regarding drilling at Cauchari and the exercise of the pegmatite option in Ancasti where initial exploration work is due to begin LKE is entering a period of heavy newsflow with significant potential catalysts upcoming as results are announced.

We reiterate our Speculative Buy recommendation.

]]> VSA CAPITAL MARKET MOVERS - Central Asia Metals Mon, 24 Sep 2018 08:51:00 +0100 Higher Commodity Prices and Robust Cost Control

Central Asia Metals (LON:CAML) announced strong H1 2018 results in the first full period reflecting the contribution from Sasa. Revenue was up 160% YoY to US$96.6m primarily driven by the acquisition as well as an 18% YoY increase in realised copper prices. EBITDA of US$64.6m was up 166% YoY as costs at Kounrad were in line with expectations and Sasa unit costs were held flat. With no significant non-cash charges net income of US$28.5m reflected the benefit of the acquisition also, up 88% YoY. 

Sasa Integration Driving Strong Returns

Although the results demonstrate strong performance in H1 2018, in our view, the impact of the acquisition makes comparability difficult. However, the 19% 27% and 68% increase in EPS, FCF/sh and EBITDA/sh. to US$0.16/sh., US$0.19/sh and US$0.37/sh. respectively highlight the accretive nature of the transaction. Furthermore, despite the transaction the interim dividend of 6.5p/sh. has been maintained which is impressive and marks CAML out against its peers. 

Low Cost Base Protects Against Metals Volatility

The shares have sold off sharply from March highs, down 31%, on the back of metals market volatility which is excessive, in our view, given CAML’s relatively low operational leverage. The share are, however, up 13% from recent lows. The low-cost nature of the operations provides significant protection to the earnings outlook, in our view, and we have made only modest adjustments to our forecasts in 2018F. We now expect a dividend of around 14.5p/sh. implying a yield of 6% which remains amongst the highest in the peer group.

Recommendation and Target Price


Although we have made only modest adjustments amidst the recent commodity price sell-off the peer group has corrected and we have reduced our target EV/EBITDA multiple from 5.0x to 4.9x. However, we remain persuaded that commodity markets and equities are oversold and that there is currently a significant value opportunity.

We reiterate our Buy recommendation although adjust our target price down by 4% to 309p which implies 33% upside and 39% on a total return basis. 

]]> VSA CAPITAL MARKET MOVERS - NuLegacy Gold Thu, 20 Sep 2018 08:05:00 +0100 NuLegacy Gold (CVE:NUG)

NuLegacy Gold (CVE:NUG) has announced that Ed Cope who has been on the BoD since 2017 has now joined the management team to oversee exploration efforts and take responsibility for property evaluation and acquisition. Mr Cope has already contributed significantly to NUG, playing a key role in the discovery of Iceberg and Avocado as well as in the appointment of key personnel including Charles Weakly who has led the recent reinterpretation work.

As VP Exploration for Barrick (ABX US), Mr. Cope was instrumental in recognizing and attracting the exploration team that was responsible for the significant growth in Barrick’s Nevada reserves and resources.  In 2014, Mr. Cope was, along with his team members, co-recipient of the Prospectors & Developers Association of Canada’s “Thaver Lindsley International Mineral Discovery of the Year” award for the discovery of the 10+ million ounce Goldrush deposit, located adjacent to NUG's Red Hill Property. He is therefore one of the foremost experts in the regions geology and exploration.

Following the geological reinterpretation work NUG delivered its best drilling results to date which included 22.1m at 6.59g/t Au and 8.7m at 16.92g/t Au. With follow up drilling planned to further validate the reinterpretation we believe that the increased focus from Mr Cope will be a valuable addition.

We reiterate our Speculative Buy recommendation.

]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt Tue, 18 Sep 2018 08:27:00 +0100 M2 Cobalt (MC CN)#


M2 Cobalt (MC CN) has announced that it has appointed Mahendra Naik to the BoD with immediate effect. Mr Naik was previously a consultant to M2 and will now act as audit chair. He has experience of developing projects in Africa as well as in cobalt and related markets and we view his decision to join M2 as a positive endorsement of the assets and strategy.

Mr Naik is a Chartered Professional Accountant and is one of the founding directors and key executives who started IAMGOLD Corporation (“IAMGOLD”), a TSX and NYSE listed gold mining company. As Chief Financial Officer of IMAGOLD from 1990 to 1999, he was involved in the negotiation of a number of mine joint ventures with Anglo American and was instrumental in arranging over $550m in debt and equity financings for IAMGOLD including its IPO. Since 2000, Mahendra has been a Director and member of the Audit and Compensation committees for IAMGOLD. Today IAMGOLD has a market capitalization of approximately C$2.4bn.

Mr. Naik is also the Chairman of the Board, Audit and Compensation Committees of Fortune Minerals Limited, a TSX listed company focused on the NICO cobaltgoldbismuthcopper Project in the North West Territories. As Chairman of Fortune, Mr. Naik has been actively involved in helping to raise in excess of C$100 million for Fortune and in the negotiation of several joint ventures. Mr. Naik is also a Director of Goldmoney Inc, a TSX listed precious metals financial services company and is involved in number of non-profit organizations including the Indus Entrepreneurs and Trillium Hospital Foundation.

We reiterate our Speculative Buy recommendation.

]]> VSA CAPITAL MARKET MOVERS - Novo Lítio Mon, 17 Sep 2018 10:38:00 +0100

Novo Lítio#: Gold Project Acquisition


Acquisition of Highly Prospective Gold Project

Novo Lítio (ASX:NLI) has agreed to acquire two granted licenses and one license application in northern Côte d’Ivoire, from Apollo Consolidated (AOP AU) who have decided to focus their efforts on their Australian gold and nickel sulphide assets. With a strong cash position of A$16m NLI is well placed to advance exploration and has committed to a A$5m initial exploration programme.

Within the 830km2 license areas, which have largely not been explored, three major gold-in-soil anomalies have been identified within the highly prospective Birimian greenstone trends which host the world class Tongon (Randgold Resources) and Syama (Resolute Mining) mines. Limited RC drilling has been carried out although notable results include 17m at 22.52g/t Au from 8m whilst aircore drilling at two of the three anomalies has yielded consistent grades of 2-5g/t Au at shallow depths.

NLI intend to issue 90m shares to complete the acquisition (this requires approval from shareholders at a meeting scheduled for September 28 2018) implying a valuation of A$4.6m (100%) using A$0.041/sh. at the time of announcement.

Sepeda Update

NLI continues to reserve its legal rights in relation to the Sepeda Lithium Project in Portugal. The company has engaged a new legal firm in Portugal; Coelho Ribeiro & Associados, to advise it on the dispute going forward. If NLI is unable to reach a commercial settlement it intends to pursue its rights in the Portuguese courts. No further exploration work has been carried out on the company’s lithium assets in Sweden.


Although this marks a significant change of direction from the lithium strategy these assets are highly attractive, in our view, with significant exploration potential and located in a highly prospective region. We believe the terms of the acquisition are attractive offering NLI shareholders exposure to attractive gold assets while providing AOP shareholders with continued exposure to future upside potential.   

We reiterate our Speculative Buy recommendation although withdraw our target price based on the lithium assets given the planned acquisition.


]]> VSA CAPITAL MARKET MOVERS - redT Energy Mon, 17 Sep 2018 08:42:00 +0100 redT Energy (LON:RED)#

redT energy (LON:RED)#, an energy storage solutions company, has received a conditional commitment letter from an energy infrastructure fund to invest €37m, alongside partners, for full rights to the first phase deployment of a 700MWh portfolio of grid-scale energy storage projects in Germany, which was previously announced on 26 July 2018.

  • The first phase of the project will see the deployment of 800 tank unit modules for a total capacity of 60MWh to supply Secondary Control Reserve (SCR) and other grid services to the German and Austrian market.
  • Full financial close is targeted for 31 December 2018.
  • Financing will form part of an overall US$120m initial development portfolio across RED’s three target sectors - Commercial & Industrial, Grid-scale and Large-scale Solar – for which it remains in active discussions with a number of infrastructure investors.

VSA Comment

Following on from the announcement in July that it had signed an exclusive deal to develop energy storage projects to support the German electricity grid, RED is now well advanced in securing the financing for funding the initial stage of this project. With financing expected to be secured by year-end, this project should deliver significant revenues for RED over its FY 2019 and FY 2020.
With the potential securing of a number of large-scale projects, RED has identified a need for the provision of infrastructure finance, in a similar vein to what has been seen in the wider renewable energy sector. Although flow machines have yet to be financed in this way, we believe the technology is ideally suited to such financing, as the machines suffer from very little degradation and offer significant flexibility in an era of constantly changing energy regulation.

Recent regulatory changes in Germany, which have also been seen in the UK, are clearly favouring long-duration storage technology, as opposed to lithium-ion battery projects that are targeting short-term grid service revenue streams in what is an increasingly crowded and much smaller market. In comparison, this first German project is expected to make-up just 1% of the entire German SCR market, which clearly highlights the significant potential for expansion if this initial project proves successful.

We maintain our BUY recommendation and target price of 22p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Biome Technologies plc





Powerhouse Energy Group PLC





Plutus PowerGen plc








Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

SSE plc





redT Energy PLC





Good Energy Group PLC






]]> DekelOil Public Limited#: H1 2018 Results Fri, 14 Sep 2018 07:56:00 +0100 On 13 September Côte d'Ivoire palm oil producer DekelOil Public Limited (DKL LN)# announced interim results for the period ended 30 June, reporting revenue of €14.1m (H1 2017: €19.6m) and a net loss of €0.5m (H1 2017: profit of €2.4m).

Results As Expected After July Production Update

DKL’s interim results were disappointing given its record of improvement since the Ayenouan mill begun processing crude palm oil in 2014. However, operations during the period were impacted by regional-specific climatic issues and lower CPO prices, both factors which are outside of the control of management. The lower availability of fruit for processing also led to increased competition from mills, which impacted margins.

However, we were encouraged by management’s aggressive move to acquire additional palm kernels for processing into palm kernel oil (PKO production +9% YoY, compared with a 18% YoY drop in CPO production) as well as a YoY reduction in general and administrative costs of more than 7%, which helped partially offset some of the financial weakness arising from the factors that the group could not control.    

Early Positive Signs for Future Fruit Levels

With a difficult 2018 high season behind it (albeit FY 2018 results will of course be impacted) DKL can now look forward to 2019. In this regard, an elevated high season tends to follow a lower one, as last seen in Côte d'Ivoire in 2010/2011. Therefore, we are hopeful that this will indeed be the case in H1 2019, although it is by no means guaranteed. Early July production was previously reported ahead YoY and in its interim results DKL has stated fruit levels have “shown signs of stabilising” in Q3.

Recommendation and Target Price

We initiated on DKL with a BUY recommendation and a target price of 12p on 6 August 2018. Following these results, we maintain both our recommendation and target price. 


For full report click here

]]> VSA CAPITAL MARKET MOVERS - redT energy Thu, 13 Sep 2018 08:24:00 +0100 redT energy: H1 2018 Results

redT energy (LON:RED), an energy storage solutions company, has announced its interim results for the six months ended 30 June 2018.

  • Revenue: £1.2m, +33.3% YoY (H1 2017: £0.9m), VSA FY estimate is £4.1m
  • EBIT: loss of £5.7m (H1 2017: loss of £3.1m), VSA FY estimate is a loss of £11.9m
  • Net Cash as of 30 June 2018: £3.9m (31 December 2017: £6.6m)

VSA Comment

RED has revealed results for H1 in-line with our expectations for the FY. More importantly, since the period end RED has made considerable in-roads into key markets, all of which have the potential to lead to significant orders for RED’s flow machines over the next few years.

In July, the company announced an exclusive deal to develop 690MWh of energy storage projects to support the German electricity grid (with finance to be secured – no update in these results, but we would expect progress by the end of the year).

This was followed in August by an order from Anglian Water for one of its 60kW-300kWh flow machines, alongside a collaborative partnership to optimise energy storage across all of its sites, and most recently by the announcement that it had been selected as a preferred supplier of energy storage solutions to the public sector under Essentia’s Battery Storage Framework.

These agreements suggest a growing acceptance of the suitability of deploying flow machines in large-scale energy storage infrastructure applications.

The company has also revealed that its overall pipeline has grown by more than three times since it last reported (to £1bn+ from €357m in December 2017) - see attached pdf for more detail.

The company has also provided a split of the total gross pipeline across its three key target sectors – Commercial & industrial (£115m), Grid-Scale (£702m) and Large Solar & Storage (£256m).

It is clear that RED now has enough orders in its pipeline to deliver on our forecasts for the next couple of years and as such the company will now be focused on scaling up production via its manufacturing partners in order to satisfy these.

We maintain our BUY recommendation and target price of 22p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg






redT energy





Solid State








Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg











AFC Energy






]]> VSA CAPITAL MARKET MOVERS - Genus Thu, 06 Sep 2018 07:57:00 +0100 Genus: FY 2018 Results

Genus (LON:GNS), the developer and marketer of animal breeding and genetic products for the porcine and bovine industries, has announced its full year results for the period ended 30 June 2018 (FY 2018).

  • Revenue: £470.3m, +2.4% YoY, (FY 2017: £459.1m); FactSet FY 2018 consensus revenue was £476.0m, +3.7% YoY.
  • Adjusted PBT*: £58.5m, +3.7% YoY (FY 2017: £56.4m); FactSet FY 2018 consensus PBT was £58.3m, +3.4% YoY.
  • Net Debt: £108.5m, -2.8% YoY (30 June 2017: £111.6m); FactSet FY 2018 consensus net debt was £114.3m, +6.0% YoY.
  • Total Dividend: 26.0p, +10.2% YoY (FY 2017: 23.6p)
  • Genus PIC (Porcine Division) Adjusted PBT (inc. JV): £94.8m, flat YoY (FY 2017: £94.8m).
  • Genus ABS (Bovine Division) Adjusted PBT (exc. non-controlling interest): £26.1m, +22.5% YoY (FY 2017: £21.3m).
  • R&D Investment: £46.8m, +6.8% YoY (FY 2017: £43.8m)

* Excluding IAS 41 valuation movement on biological assets, amortisation of acquired intangible assets, share-based payment expense and exceptional items.

VSA Comment

In February, GNS revealed strong interims (revenues +7.4%; adjusted PBT +15.5%), despite a strengthening GBP during H1 (+4.6% against USD), with continued recovery in Genus ABS and a solid performance in Genus PIC reported. Although GNS failed to maintain this level of growth over the FY, these divisional trends continued and its FY results have been delivered in-line with consensus expectations. However, its outlook statement for FY 2019 was weak and we would expect share price weakness today as a result.

In terms of currency, the GBP reversed against the USD in H2 (-2.4%) but still strengthened 2.1% over FY 2018. This provided a modest operational headwind for the group over the year (although it was beneficial for its net debt position). Although early in FY 2019, GNS is currently operating with slight currency tailwind as the GBP has weakened c2.6% against the USD over July and August.

In terms of the GNS operations, we would highlight its bovine division in particular, which posted an almost 23% YoY increase in adjusted PBT over the period (+29% in constant currency) as well as the group’s strong cash conversion (101%). Overall volumes in the bovine division increased 5% YoY with sexed volumes increasing 25% supported by strong demand for its proprietary Sexcel product, which has traded ahead of expectations since its launch in September 2017.

In terms of underlying market conditions, global and UK milk prices (c28.5ppl) remain elevated and are likely to remain high with recent increases in input costs (UK feed wheat +20% YoY) due to excessive heat in key feed wheat regions and milk production flat or showing a slight YoY increase in key producing regions (NZ flat YoY, Europe +3% YoY, Australia +3% YoY, US +1% YoY, UK +0.5% YoY).

US live cattle prices have increased almost 10% in the last four months and although pork prices have been weaker than that, the recent outbreaks of African swine fever in China and Eastern Europe have started to influence pricing in the last few months. We believe there is significant potential for further price increases if the disease fails to be contained quickly in key markets, particularly in China (c50% of global pork production and consumption).

However, any wider outbreak of the disease would also impact the level of demand from its customers in the affected regions. Growing barriers to trade are also a concern in underlying agricultural markets, particularly around the international trade of pork products between China, Mexico and the US.

Tellingly, the Board made no direct comment on FY 2019 consensus expectations only saying that it expected “further financial and strategic progress” during FY 2019 and highlighting the more challenging external environment that its customers face in the short-term (Current FactSet FY 2019 consensus: revenues: £500.6m, +6.4% YoY; adjusted PBT: £63.9m, +9.2% YoY).

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Obtala Limited





Carr's Group





Plant Health Care








Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Sirius Minerals










Anglo-Eastern Plantations






]]> VSA CAPITAL MARKET MOVERS - Lake Resources Thu, 06 Sep 2018 07:53:00 +0100 Lake Resources (ASX:LKE)#


Lake Resources (ASX:LKE) has provided an update on planned drilling at its Cauchari project now expected to commence in early October following positive discussions with local authorities. The programme is likely to consist of three holes, with a possible fourth, drilled to depths of 400m targeting extensions of the known high grade lithium bearing brines on adjacent leases.

These targets extend from the resources defined by Advantage Lithium (AAL CN) and Orocobre (ORE AU) as well as Lithium Americas (LAC CN) whose JV partner is soon to switch from SQM (SQM US) to Ganfeng Lithium) following the recently announced transaction.

We also highlight the recent concern over export taxes in Argentina following the decline of the Peso. This is primarily targeted at the agricultural sector and LKE have confirmed that they are not affected by these changes.

We reiterate our Speculative Buy recommendation. 

]]> VSA CAPITAL MARKET MOVERS - Lake Resources Wed, 05 Sep 2018 07:55:00 +0100 Lake Resources (CVE:LKE)#


Lake Resources (LKE AU) has announced that it has agreed a partnership with US based Lilac Solutions to utilise Lilac’s innovative ion exchange technology which could potentially significantly reduce extraction time for lithium brines, reduce costs and the environmental impact of lithium from conventional brine production. The partnership will focus on the development of LKE’s Kachi project although LKE will, out of prudence, continue to concurrently assess the potential for production via conventional methods.

Lilac have established a team of chemical experts and lithium industry professionals who will now work to establish a flowsheet for the Kachi brine, attractive to them due to its scale and 100% ownership by LKE. The technology Lilac has developed is a one step, ion-exchange, process which absorbs lithium from a brine and releases lithium at a high concentration. Whilst conventional evaporation processes take between 9-24 months to achieve around a 40% recovery Lilac’s approach achieves a 95% recovery in less than two hours. This could potentially significantly enhance the economics of lower grade projects and Lilac have indicated that their technology is suitable where high concentrations of other salts such as magnesium. Although we highlight that LKE’s results so far have demonstrated low magnesium ratios.

The other benefit is the potentially lower environmental impact from Lilac’s technology and the partnership represents a proactive step from LKE’s management team following the announcements in Chile that lithium brine production expansions using conventional evaporation processes may be constrained due to their impact on groundwater. Lilac’s approach would reduce the overall footprint of the operations and the methodology means that brine could be re-injected into the same aquifer it was extracted from without significantly impacting the water quality. Although Argentina has not proposed similar constraints this is a prudent step from LKE, in our view.

The announcement represents a promising step with other industry experts providing greater credibility to the Kachi project whilst also providing an opportunity which could significantly enhance the economics of its development. LKE has also indicated that it intends to announce the maiden resource for Kachi within the next eight weeks.

We reiterate our Speculative Buy recommendation.

]]> VSA Capital Market Movers - M2 Cobalt Tue, 04 Sep 2018 08:49:00 +0100 M2 Cobalt (CVE:MC)#


M2 Cobalt (MC CN) has announced the discovery of six additional major anomalies at its Bujagali licenses in central Uganda. The infill sampling programme and first phase of exploration has yielded significant large-scale results. We had previously indicated that the Waraji target, which has now been expanded from 750mx550m to 1,000mx900m, within the Bujagali licenses appeared to be host to Katanga style sediment hosted cobalt-copper mineralisation and with these additional anomalies identified this is now building towards what could be a much larger regional play. Given that this style of mineralisation is the most important geological source of cobalt globally, M2’s ability to demonstrate scale brings greater credibility to our view that Uganda offers an attractive route for investors to gain exposure to DRC style cobalt projects without the high associated political risk.

The overall results have so far demonstrated a significant number of high grade cobalt and copper samples with 51 rock grab samples of 0.1%-1.75% Co, 39 of between 0.1%-0.8% Cu, 141 samples of between 0.01%-0.13% Co and 236 samples of 0.01%-0.05% Cu. Although rock samples are not sufficient to be considered representative given the level of weathering at surface in tropical regions like Uganda these surface grades are encouraging, in our view.

These soil samples have confirmed the presence of mineralisation following anomalies shown by high resolution ground magnetics and VTEM surveys. The largest of the anomalies revealed by geophysics is the Club anomaly which is 2kmx1.7km.

In addition to the sediment hosted anomalies M2 has made further progress at Bombo with further ultramafic style mineralisation identified and an additional 2.1kmx1.0km anomaly containing up to 0.08% Ni, 0.03% Cu and 0.05% Co in soil. The original Bombo target has been expanded via the trenching programme from 1.2kmx0.9km to 2.2kmx1km.

M2 has made real progress in the last few months demonstrating extensive mineralisation of cobalt, copper and nickel and is now in a strong position to begin initial drilling of its more advanced targets.   

We reiterate our Speculative Buy recommendation.

]]> VSA Capital Market Movers - Egdon Resources Tue, 04 Sep 2018 08:47:00 +0100 Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has provided an update following the announcement by Europa Oil & Gas (LON:EOG) that it intends to withdraw its planning application to drill the Holmwood prospect from the Bury Hill Wood Site. The lease is due to expire on the 18th September 2018 and the Minister for the Environment, Food and Rural Affairs has decided not to renew the lease. However, the PEDL 143 license has recently been extended to 30th September 2020 and EOG will now consider alternative sites from which to target the Holmwood prospect.

Whilst the site is being re-evaluated for testing we withdraw Holmwood from our valuation, which on a risked basis contributed just 0.4p/sh. indicating a lower target price of 51.6p with the valuation continuing to be dominated by EDR’s shale acreage.

We reiterate our Buy recommendation although reduce our target price by 1% to 51.6p/sh.

]]> VSA Capital Market Movers - Altyn, Shefa Yamim.. Mon, 03 Sep 2018 07:59:00 +0100 Altyn (LON:ALTN)

Altyn (LON:ALTN) has announced robust results for H1 2018 with the company making the significant step of returning to net profitability driven by a recovery in gold prices and stronger production. Gold production of 8.4koz was up 15% YoY largely due to a higher run rate of ore processed which included low grade stockpiled ore. Consequently, ore milled was up 39% to 182kt although ore mined was largely flat YoY at 152kt. As a result of stronger production, revenue of US$10.9m was up 18% YoY, the received gold price in the period was up 7% YoY to US$1,323/oz.
Mined ore grades were marginally lower in H1 2018 at 1.96g/t and milled grades, which are diluted by the lower grade stockpiled ore were down 16.5% YoY which placed upward pressure on costs, despite a modest improvement in gold recoveries to 83.65%. Unit costs at ALTN of US$731/oz were up 11% YoY, however, on an all in basis and due to capital discipline total cash costs were slightly lower YoY at US$883/oz versus US$899/oz. Overall this resulted in gross profit of US$2.7m, up 69% YoY which along with the reduction in finance expenses, now that ALTN has significantly reduced its net debt, meant that the company generated a small net profit of US$0.6m.

ALTN currently has net debt of US$4.2m, down from US$14m in H1 2017 and although production remains constrained, ALTN have now demonstrated that they can operate profitably and effectively at this lower run rate. The financing for expansion remains the key catalyst for the shares and this has been further delayed, however, given that the operational performance has now been stabilised this provides a robust platform to build on, in our view.

We reiterate our Buy recommendation and target price of 3.54p

Shefa Yamim (LON:SEFA)

Shefa Yamim (SEFA LN) has announced the signing of an LoI with world renowned jewellery designer Yossi Harari to create jewellery using gemstones from the Kishon Mid Reach project in Northern Israel. Yossi Harari features in 40 high end jewellery stores globally although is perhaps best known for his bespoke pieces. A key attraction for Yossi Harari in choosing SEFA’s gemstones is the heritage and unique backstory behind their discovery.

We have indicated previously that we believe that SEFA’s location in Israel could result in premium pricing for its gemstones as has happened elsewhere in the gemstone market where regional significance has been attached to gemstones. As yet there has been little to give investors firm indication as to the gem quality nature of the stones found to date, however, we believe that today’s announcement should act as a significant endorsement of the quality of the wide range of stones that have been found by SEFA to date.

We reiterate our Speculative Buy recommendation. 

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources Thu, 30 Aug 2018 08:33:00 +0100 Production Update

Egdon Resources (LON:EDR) has provided an operational update ahead of full year results which are due to be announced on 30 October 2018. Production in H2 FY 2018 was 70bopd, down 41% YoY, resulting in full year production of 84boepd, down 20% YoY and below our estimate of 100boepd. This was largely due to the summer maintenance shutdown at Ceres (operated by Spirit Energy) which was brought forward into FY 2018 and extended due to additional unforeseen maintenance requirements. Due to the lower than expected production in FY 2018 we have lowered our earnings estimates for FY 2018 although these are partially offset by higher oil and gas prices as we mark to market for H2.

The impact at Ceres was, however, on the backout gas that has been producing whilst primary production has been offline. Primary production is expected to resume in October 2018 providing EDR with an incremental net 125boepd in H1 FY 2019. With EDR’s other production performing in line with guidance we anticipate H1 FY 2019 production of 168boepd and FY 2019 production of 200boepd.

Developments for UK Shale

IGas has made significant progress at Springs Road, where EDR is fully carried on its 14.5% interest, and is close to completing wellsite preparations, ahead of drilling. Drilling is due to take place first at IGas’ Tinker Lane site, also on the Gainsborough Trough where EDR’s core shale acreage is located.  

Cuadrilla have made significant progress at Preston New Road with the completion of two horizontal wells and receipt of approval for hydraulic fracturing and testing. With results due later this year we highlight the important industry newsflow coming up and that EDR as one of two UK listed plays with exposure to UK shale is well placed to benefit.

Recommendation and Target Price

We reiterate our Buy recommendation and target price of 52p.

]]> VSA CAPITAL MARKET MOVERS - Colombus Energy Resources Thu, 30 Aug 2018 08:27:00 +0100 Columbus Energy Resources (LON:CERP)


Columbus Energy Resources (LON:CERP) has provided an update in relation to the decision made by the Trinidad government to restructure Petrotrin which will involve the closure of the Point-a-Pierre refinery. Transition to a new structure for Petrotrin will begin as early as October 2018 although CERP have indicated that they do not expect any adverse impacts from the decision. We also note that there were no negative impacts to CERP’s operations from the recent earthquake in Venezuela which impacted Trinidad.

The restructuring which includes the phasing out of oil refining and restructuring of the exploration and production operations is part of a major overhaul to return Petrotrin to profitability. Since 2006 production at the refinery has fallen from full capacity of 165kbbls/d by almost half with almost two thirds of output made up from importing crude oil from international markets. This has meant using valuable foreign currency reserves to support the refinery which has now been deemed as unsustainable and a negative long term drag on the wider economy.

CERP has highlighted that currently it receives a discount to WTI of between 4-6% in the current price environment under the production contract between CERP and Petrotrin for Goudron. This is despite the fact that Goudron produces a 38 API product which in the broader market would typically trade at a premium to other Trinidad crude oil. Given that Trinidad will now be selling crude directly into international markets, likely via global traders, this opens up the potential for a renegotiation of pricing. Given Leo Koot’s track record in this regard we believe that CERP would be well placed to benefit in this case.

Furthermore, we believe that the closure of the refinery is likely to be an initial step of a new more commercial strategy at Petrotrin potentially opening up Trinidad which has been underexplored to date.
We reiterate our Buy recommendation and 25p target price.

]]> VSA CAPITAL MARKET MOVERS - Shefa Yamim Thu, 23 Aug 2018 08:04:00 +0100 Shefa Yamim (LON:SEFA)


Shefa Yamim (LON:SEFA) has announced interim results for H1 2018 highlighting the progress that has been made since listing on the LSE in December 2017. The completion of the 6.4kt bulk sampling campaign which yielded 9,733ct of gemstones in the Zone 1 area of the Kishon Mid Reach was an important step towards trial mining in 2019. Shefa commenced the period with a cash position of NIS6.5m and ended the period with NIS 1.7m.  

Post period end the company received its first Prospecting License which enables the company to carry out its next steps. In H2 2018, SEFA appointed Paradigm Project Management to conduct a Technical Economic Evaluation to better understand the capital and operating costs associated with the alluvial mining project. SEFA will continue to advance the mine to market strategy that the company intends to follow to take gemstones through to jewellery. This is made possible by the management team’s experience in all aspects of the gemstone industry and the strong local infrastructure, in this regard. We also note that the company has expanded its Gem Box suite of precious stones with three further minerals including spinel.

Gem prices have continued to strengthen in 2018 according to the Gemval Index and SEFA remains one of the few companies to offer investors exposure to this growing market.

We reiterate our Speculative Buy recommendation.

]]> VSA CAPITAL MARKET MOVERS - Lithium Americas, Lake Resources, SQM.. Tue, 21 Aug 2018 07:57:00 +0100 Lake Resources (LKE AU)#

Lake Resources (ASX:LKE) has announced geophysical study results, from its Cauchari license area, which provide a strong indication that as expected, the known brine aquifers which form the 3mnt LCE resource of Advantage Lithium (CVE:AAL) and Orocobre (ASX:ORE) extend into LKE’s leases. Drilling by AAL/ORE has been carried out as close as 350m from LKE’s lease areas intercepting high grade lithium bearing brine aquifers.

The passive seismic techniques, which have proven successful at identifying distinctions between unconsolidated sediments and harder cemented sediments and basement rocks at other salt lakes, have indicated that coarse sediments and brines extend into LKE’s license. AAL/ORE intercepted sandy sediments in the West Fan Unit which directly extends into LKE’s license area and have demonstrated high pumping rates and permeabilities. These sandy sediments show distinct patterns within LKE’s license to a depth of 400m and since LKE carried out the survey along a provincial road which crosses both third party licenses and LKE’s own, the company has been able to directly compare the survey results between known resources and the expected extensions. The ability to directly compare this data provides strong evidence of the potential, in our view.  

With recent announcements demonstrating strong economics on AAL’s resource and the corporate transaction between Lithium Americas (NYSE:LAC), Ganfeng Lithium and SQM (NYSE:SQM) the Cauchari basin is proving to be one of the most attractive future lithium sources globally. LKE has recently secured a drill rig enabling it to test key targets identified via the geophysical survey. Given the interest in the basin the timing for drilling and derisking of the license area means the shares are well placed to react from near term positive catalysts from drilling.  

We reiterate our Speculative Buy recommendation.

]]> VSA CAPITAL MARKET MOVERS - Energy Storage Briefing Mon, 20 Aug 2018 14:43:00 +0100 This report is designed to be used as an easy-to-reference marketing briefing for investors interested in the rapidly emerging energy storage sector. It contains contributions from across our London-based natural resources and alternative energy research teams as well as input from our China office, combining our expertise across both sectors and geographies, and providing a holistic view of both the upstream and downstream markets.

In the report we outline a number of areas that we believe investors interested in the sector should be looking at. It also sets out our house view on a number of strategically important commodities and emerging energy storage sub-sectors.

Emerging Applications – Grid Storage, Electric Vehicles and IoT

- UK Grid Storage – Serious Money into the Wrong Technology
- Electric Vehicles – Chinese Dominance
- Micro Storage – Key to Development of IoT Sector

Battery Technologies

- Lithium-ion
- Selected Emerging Lithium-ion Technologies
- Selected Post Lithium-ion Technologies
- Solid-state Batteries
- Flow Batteries

Battery Raw Materials

- Battery Raw Material Requirements per KWh
- Lithium – Battery Quality Market to Stay Tight
- Copper – Oversold But EV Impact Will Take Time
- Nickel – EVs to Create an Inflection Point for Demand
- Graphite – China’s Environmental Crackdown Shakes up Market
- Cobalt – Restricted Sources Make It Highly Volatile
- Vanadium – Spikes Have Historically Been Short-lived

VSA Shanghai Office – The Chinese Perspective


- China – Positioning for Global Leadership of the Battery Sector

]]> VSA CAPITAL MARKET MOVERS - Independent Oil & Gas Fri, 17 Aug 2018 08:30:00 +0100 Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (LON:IOG) has announced a non-binding term sheet for a new non-convertible loan facility for £15m with the use of proceeds primarily attributable to the Harvey appraisal well. In addition, the funds would also be used to repay in full the remaining liabilities relating to Skipper and other working capital.

The loan will carry interest of LIBOR plus 9%pa, repayable 36 months after drawdown and secured against IOG and its assets. In addition IOG will issue 20m warrants to London Oil & Gas (the lender) at a price of 32.18p, a 10% premium to the last close, with an expiry of five years.

We assume that given the support of LOG to date that the terms will be successfully finalised and funding secured. The funding using our fully diluted target price methodology equates to 5p/sh and we reduce our target price accordingly.

The Harvey appraisal well is targeted for December 2018 and initial preparatory work is ongoing. Seismic reinterpretation is expected to conclude in August 2018.

Drilling at Harvey presents a significant potential catalyst for the shares, in our view. The high case of 286BCF in terms of prospective resources would significantly increase the company’s reserve base whilst the mid case of 114BCF would mean Harvey was IOG’s largest single asset. The field is situated close to the Vulcan Satellites hub and the Blythe hub and could therefore potentially be tied into the Southern North Sea gas project and the Thames Pipeline export route.

Although we have valued the project using the adjacent Blythe hub as an analogue and currently attribute a target value of 6p/sh. there is clear further upside should drilling be successful alongside the fact that the economics of extraction are potentially higher at Harvey. A fault line divides Harvey and Elgood which means that permeability is significantly higher on the Harvey prospect. Consequently, the appraisal well at Harvey represents an important milestone for IOG which could materially enhance the Southern North Sea Gas project.

We reiterate our Buy recommendation and adjust our target price to 91p to reflect the additional funding.

]]> VSA CAPITAL MARKET MOVERS - Shefa Yamim Thu, 16 Aug 2018 09:15:00 +0100 Shefa Yamim (LON:SEFA)

Shefa Yamim (LON:SEFA) has provided an update on its licenses at its assets in Northern Israel. SEFA has had one exploration permit renewed and for the area known as the Kishon Mid Reach Zone 1, where the majority of bulk sampling to date has taken place, a Prospecting License has been awarded. This license is an upgrade on the exploration permit previously issued and enables the company to carry out the next phase of the work programme.

The programme included in the Prospecting License phase includes a conceptual mining plan and the completion of a Technical Economic Evaluation which will provide the company with key information on parameters such as capital costs to bring the Kishon Mid Reach into production. This is an important step for SEFA as once the work programme is completed it will be in a position to apply for a Certificate of Discovery which gives the company exclusive rights over a mining license.   

We reiterate our Speculative Buy recommendation.

]]> VSA CAPITAL MARKET MOVERS - NuLegacy Gold Wed, 15 Aug 2018 08:08:00 +0100 NuLegacy Gold (CVE:NUG) (OTCMKTS:NULGF)


NuLegacy (CVE:NUG) has announced the completion of the second tranche of its announced financing, raising a total of C$2.5m for 12.7mn units at C$0.20/sh. The placing received strong support from OceanaGold Corporation (OGC CN) who maintained their equity position in NUG at 16.2% whilst directors also provided strong support.

The net proceeds will be used to support further exploration at the Red Hill property where a summer exploration programme is currently underway. The shares have pulled back as the gold price has dipped below US$1,200/oz as the dollar has strengthened in the face of weak EM currencies, notably the Turkish lira. However, with CFTC data showing net shorts increasing from record positions there is potential for a strong short covering rally ahead. With this in mind and further newsflow expected from NUG as the exploration programme continues we remain positive on the outlook for NUG.    
We reiterate our Speculative Buy recommendation.

]]> VSA Capital Market Movers - Lake Resources, Ganfeng Lithium, Lithium Americas.. Tue, 14 Aug 2018 08:00:00 +0100 Lake Resources (ASX:LKE)

Lake Resources (LKE AU) has announced that having secured a drill rig it intends to commence drilling next month at its wholly owned licenses at the Cauchari project in Argentina. These licenses cover approximately 18,000ha and LKE is targeting a direct extension of the lithium bearing brine aquifers with contiguous reserves and resources that have been proven by SQM (SQM US), Lithium Americas (LAC CN) and Advantage Lithium (AAL CN). AAL recently announced an expanded resource of 3mnt LCE at 450mg/L Li in these adjoining licenses and gravity surveys have indicated that the density patterns exhibited by the lithium bearing brines extend into LKE’s license area. Indeed, drill results from the margins of LKE’s resource have yielded grades of up to 600mg/L Li and high flow rates.

Aside from AAL, the other major project on Cauchari is the SQM and LAC project which has total LCE reserves and resources of 14.8mnt. LAC yesterday announced a major transaction with Ganfeng Lithium (GFL) who have agreed to purchase SQM’s interest in the project. LAC will increase its stake to 62.5% while GFL will purchase the remaining 37.5% for US$87.5m plus a deferred payment of US$50m contingent on the successful completion of certain milestones. GFL will also provide a US$100m subordinated loan facility to be repaid from LAC’s proceeds from the project.

The transaction highlights the ongoing disparity between recent weak lithium equities performance, continued corporate activity and rising downstream demand. The fact that GFL is acquiring additional top tier lithium projects highlights to us that the demand outlook from China is far stronger than in the West and that lithium stocks are due a rerating. We also highlight that LAC and GFL have also entered into a strategic collaboration agreement to explore future opportunities and develop lithium resources.

LKE has direct exposure to the top tier lithium brine at Cauchari, a market capitalisation of just A$29m and a drilling programme due to commence in the coming weeks and we believe that the shares offer a highly attractive way to gain exposure to this play.

We reiterate our Speculative Buy recommendation.

]]> VSA Capital Market Movers - Lake Resources Mon, 13 Aug 2018 08:09:00 +0100 Lake Resources (ASX:LKE)

Lake Resources (ASX:LKE) has announced further results from its drilling programme at its Kachi lithium brine project in Argentina. The results build on the initial encouraging robust grades in the Northern area of the salar with K03R12 demonstrating 267mg/L Li from 358-400m depth with a low magnesium ratio of 4.4 Mg/Li. In terms of grade this is comparable to the best results achieved at K03R03 which yielded 306mg/L Li albeit from a depth of 3-242m. This confirms, in our view, that hole K03R03 was not a one off and that there is significant potential in the Northern area with robust grades and thick horizons of lithium bearing brines. Two further holes, one rotary and one diamond, are being drilling currently in the Northern area which should provide further clarity on the potential.

In the Southern area of the salar LKE has released the results of two further holes both of which intercepted lithium bearing brines. The Southern area has not previously demonstrated as strong results as the North, however, we note within hole K05D11 the significant intercepts of 175mg/L Li from 224-248m, 234mg/L Li from 291-334m and 185mg/L Li from 349-391m. These results demonstrate that there is potential across the entire Kachi target area which at 22km x 8km the latest results further confirm the scale of the project.

With the latest results the company demonstrates that it is on track for a maiden resource announcement in October 2018 while these results also confirm widespread robust lithium grades across a large scale salar.

]]> VSA CAPITAL MARKET MOVERS - DekelOil Public Limited Mon, 06 Aug 2018 13:00:00 +0100 Inherent Value Hidden by a Down Year

In five years DekelOil Public Limited (LON:DKL) has established itself as the fourth largest palm oil producer in Côte d'Ivoire through the successful development of a 60t/hr mill and smallholder project near Ayenouan in the South East of the country (expandable to 75t/hr in the high season). Building on the success of this first project, DKL has recently commenced work on a second palm oil project in Côte d'Ivoire and has also secured an option to acquire 58.5% of a cashew processing project in the country, both of which could eventually become more profitable than Ayenouan.

High Quality Mill Operation

DKL’s mill has achieved an average CPO extraction rate of c23% since starting operations in 2014. This is testament to the operational skill at the mill site and compares very well to other African mills and even those in the mature South East Asian palm oil sector. It is particularly impressive given that DKL almost exclusively processes smallholder fruit and is therefore unable to control the quality of fruit it receives, as opposed to peers that often have surrounding company-owned estates supplying their mills.

Current Share Price Provides Attractive Entry

DKL produced almost 40,000t of crude palm oil in 2017, generating sales of €30.2m, +13.5% YoY. Its reported EBITDA increased 10% YoY to €4.5m with its PAT increasing to €1.6m, +23% YoY. For the second year running, it paid £500k of its profits out as a dividend (dividend yield: c3.3%). Although ongoing climate-related issues and low CPO prices are likely to impact operational and financial results this year, an inevitable normalisation of both of these factors could mean that the current share price proves to be an extremely attractive entry price. Our conservative forecasts suggest a PAT of c€7m is possible for 2022, with the cashew project delivering an additional attributable profit of €3m, assuming the option is exercised.

Recommendation and Target Price

Having valued DKL using a five-year discontinued cash flow, we initiate research coverage with a BUY recommendation and target price of 12p.

]]> VSA CAPITAL MARKET MOVERS - CENTRAL ASIA METALS Thu, 02 Aug 2018 09:11:00 +0100 Strong Free Cash Flow and Stable Dividends

Following the acquisition of Lynx Resources’ Sasa mine in Macedonia, Central Asia Metals (LON:CAML) is now demonstrating the successful transition to an expanded group with not one but two well managed operations both with low operating cost bases, low capex demands and stable operational track records. We expect this performance to continue resulting in levered free cash flow generation of US$84-99m over the next three years, which underpins a “best in class” dividend yield of 7.5%, based on the stated 30-50% of free cash flow target payout range. 

Undemanding Valuation

Currently, the stock trades at a modest 6% discount to global small-mid cap mining peers on a 12-month forward EV/EBITDA of 4.7x. Following robust interim production results we anticipate production of 13.75kt Cu, 28.8kt Pb and 22.3kt Zn, well within the guidance range. Furthermore, CAML has the highest yield in our peer group at 7.5% and with other dividend paying peers typically trading on yields of 1-2% we believe that this highlights the value potential at CAML. We therefore believe that with a robust operational outlook, high dividend yield and strong balance sheet (we expect net debt/EBITDA of 0.7x by year end), the discount versus peers is unjustified.
Although the shares rallied 40% following the transaction which was completed in November 2017 the shares have pulled back 30% from March 2018 highs and we believe this provides an attractive entry point. As one of the lowest cost copper producers globally, US$0.52/lb in 2017, and with a first successful full year at the low cost Sasa mine likely to result in strong free cash flow generation and a doubling in group EBITDA YoY we believe that there are a number of catalysts to drive a rerating.   

Positive Commodity Outlook

We remain persuaded of the positive outlook for commodities and believe that the recent selloff has been excessive with copper, lead and zinc prices down 14%, 24% and 17% respectively YTD. We do not believe that prices currently reflect fundamentals which indicate finely balanced copper and zinc markets and a deficit in the lead market based on data from H1 2018 and therefore expect a recovery in H2.

Recommendation and Target Price

Our valuation produces a 12-month Target Price of 322p/sh, this implies 36% upside potential and 43% on a total return basis and we rate the stock a BUY.

]]> VSA CAPITAL MARKET MOVERS - NuLegacy Gold Thu, 02 Aug 2018 07:50:00 +0100 NuLegacy Gold (CVE:NUG

NuLegacy Gold (NUG CN) has announced the results of an induced polarisation (IP) gradient array survey at the VIO discovery. VIO hosts epithermal type mineralisation unlike the other targets at Red Hill and NUG has been utilising different exploration techniques that have proven successful at other epithermal discoveries along trend on the Northern Nevada Rift which occur in conjunction with Carlin style mineralisation such as Mule Canyon.

The IP survey was conducted over 2km2 starting to the west of the hole VIO17-01 which yielded 9.1m of 1.8g/t Au and 17.6g/t Ag. The results indicated four distinct areas of high chargeability. NUG will follow these results up with targeted sampling, mapping and modelling to best identify suitable drill locations. Following the initial encouraging discovery we believe that this is a positive step which should enable NUG to better capitalise on the results to date.

We also note the news from Barrick Gold (NYSE:ABX) which in its latest quarterly results upgraded its Fourmile exploration target to a discovery following recent impressive drilling results. The discovery drilling took place two years ago with senior NUG employees Ed Cope and Charles Weekly heavily involved. Fourmile is just 2km to the North of Goldrush and the latest drilling which included 13.9m at 56.8g/t Au, 16.6m at 71.6g/t Au and 16.8m at 57.9g/t Au has meant that ABX now considers the discovery a direct extension to the Goldrush deposit. This discovery yet again highlights the prospectivity of the Cortez Trend and the potential for Red Hill where the geology shares many of the characteristics of Goldrush and Fourmile. Indeed, the similarities in terms of structural geology and geochemistry are a key reason why NUG has attracted some of the most experienced geologists in the region.

The stock has been rangebound in recent months which given the softness in the gold price represents robust performance, in our view. The gold price has taken little notice of global trade concerns and lower industrial metal prices and been traded largely on the back of the Fed rate hiking cycle. However, with record net shorts reached on Friday the market is perhaps positioned for a more positive second half with a heightened risk of short covering.

We reiterate our Speculative Buy recommendation.  

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources Thu, 02 Aug 2018 07:47:00 +0100 Egdon Resources (LON:EDR)


Egdon Resources (LON:EDR) has announced that its application for an extension for planning consent from April 2018 to August 1 2019 was refused at yesterday’s meeting of the North Lincolnshire Council Planning Committee despite a positive recommendation by the Council’s planning officers. EDR will appeal this decision in light of the fact that they recently submitted an application which comprehensively addresses the issues that largely relate to the potential impact on groundwater at the site and that a previous appeal for a similar application was successful.

The shares were down sharply on the announcement, closing 14% lower at 8.65p. However, this represents a significant overreaction, in our view, given that we prescribe just 0.9p/sh. to Wressle in our current valuation. This remains unchanged. Although we recognise the benefit of additional cashflow and the consequent disappointment from the decision in terms of sentiment we also highlight that EDR will benefit in H2 2018 from the restart of the Ceres well which is currently producing from backout gas.

Aside from this we see a number of catalysts in the near term which are likely to provide catalysts for the stock. These include drilling at Springs Road in which EDR has a 14.5% interest and is a play opening well for the Gainsborough Trough whilst externally increased activity at IGas (LON:GAS), Cuadrilla, Third Energy and INEOS Shale indicate significant positive momentum for the UK shale industry. 

We reiterate our Buy recommendation and 52p target price.

]]> VSA CAPITAL MARKET MOVERS - Lake Resources, Orocobre, Advantage Lithium.. Wed, 01 Aug 2018 08:03:00 +0100 Lake Resources (ASX:LKE)


Lake Resources (ASX:LKE) has announced a quarterly update highlighting the recent progress including the maiden drilling programme at Kachi which confirmed the discovery of a large lithium brine deposit extending 22km x 8km to a depth of over 400m. Drilling and results are expected to continue ahead of a maiden resource statement which is likely to be released in October 2018. The most significant result was from the northern part of the salar where 300m of lithium bearing brines were intercepted with grades of 306mg/l Li and a low Mg/Li ratio of 4.3. We see significant potential at Kachi, given the early drilling results which demonstrated the scale of the project with seven holes over 11km yielding positive lithium results.

With regard to LKE’s other projects, the company is still awaiting permits to drill at its Olaroz – Cauchari and Paso brine projects. LKE have indicated that this will likely be soon with drilling ready to commence in the coming weeks, LKE also intend to carry out geophysical surveys across their license areas. The adjacent tenements are held by Orocobre (ASX:ORE), SQM (NYSE:SQM) and Advantage Lithium (AAL CN) whose recent drilling, close to LKE’s license area, has yielded strong lithium brine results of 450-600mg/L with high flow rates of 19-35litre/s.
LKE finished the period ending June 2018 with a cash position of A$1.7m although have subsequently announced an underwriting agreement for options valued at A$1.9m. Therefore, LKE is well positioned for its current planned activities, in our view.

Although sentiment towards lithium stocks remains weak, corporate activity continues and we highlight the May 2018 purchase of Galaxy’s (ASX:GXY) North tenements at the Salar del Hombre Muerto by POSCO for US$280m with a total resource containing 2.54mnt LCE implying a value of US$110/t. This is around 100km from Kachi.

Meanwhile, end users have also been active with BYD announcing a trebling of their incremental target capacity to 60GWh by 2020. BMW has signed a US$4.7bn contract with the recently Shenzhen listed CATL for lithium ion batteries as well as a 14GWh battery plant in Europe. Given this strong downstream activity and rising demand outlook we see the current weakness in lithium producer shares as an attractive entry point and believe that LKE is well placed to benefit.

We reiterate our Speculative Buy recommendation.  

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources, Alkane Energy Mon, 30 Jul 2018 08:16:00 +0100 Egdon Resources (LON:EDR) has announced that the sale of the holdings by Infinis Energy Services (100% owner of Alkane Energy Limited) to Petrichor Holdings Coӧperatief has been completed at a price of 12.8p. Petrichor now holds 29.99% of the outstanding share capital (259.9m shares).


The price of 12.8p represents a premium of 22% to the last close of 10.5p, however, this premium was narrowed in recent days by the news that Cuadrilla had been awarded final consent for hydraulic fracturing at its first horizontal shale gas exploration well at its Preston New Road; a lateral 800m well at a depth of around 2,300m. Although the geological read through in terms of test results is less apparent at Preston New Road in comparison to Thrid Energy’s Kirkby Misperton 8 well, the consent is an important step for the industry and successful results are likely to provide a significant boost for shale exploration in the UK. As one of two UK listed stocks which provide exposure to UK shale exploration we believe that EDR is well placed to benefit. We value EDR’s shale acreage alone at 14.8p/sh. which is based on past transactions and does not therefore substantially factor in the potential for exploration success given the stage of the industry. Therefore, although the premium in this transaction should provide some near term support for the shares we see significant further upside potential with the Preston New Road test just one of a number of industry catalysts alongside those relating to EDR’s own assets.



We reiterate our Buy recommendation and 52p/sh. target price. 

]]> VSA CAPITAL MARKET MOVERS - redT energy Thu, 26 Jul 2018 08:23:00 +0100

redT Signs €50m Project Agreement

redT energy (LON:RED), a developer of vanadium redox flow machines for large-scale energy storage infrastructure applications, has announced an exclusive deal to develop 690MWh of energy storage projects to support the German electricity grid, with an initial two 40MWh projects (1,066 tank unit modules) to be built in 2019 and 2020, subject to financing.

  • Based on the current Gen3 price for a 60-300kWh system, the initial two projects could result in revenues of c€50m for RED split across FY 2019 and FY 2020
  • The initial projects have planning approval, grid connection and approval to supply Secondary Control Reserve (SCR) to German and Austrian markets
  • The projects will replace coal-fired power plants which typically supply Secondary Control Reserve by ramping up generation when required  
  • Agreement signed with Energy System Management, a German energy development company, part of WWF solar
  • RED is confident that the projects will obtain the required funding in the near-term

VSA Comment

This is the first ‘mega project’ announced by the company and is clearly extremely significant in terms of the mid-term financial impact. Aside from the order value, this agreement also confirms the suitability of long-duration flow machines for grid supporting projects across Europe.

Recent regulatory changes in Germany, which have also been seen in the UK, are clearly favouring long-duration storage technology, as opposed to lithium-ion battery projects that are targeting short-term grid service revenue streams in what is an increasingly crowded sector.

Our current forecasts are for 500 tank unit sales in FY 2019 and 2,500 tank unit sales in FY 2020. Depending on the eventual split of delivered modules, this one order could potential satisfy our 2019 forecast as well as providing a solid underpinning for our sales forecast in 2020.

This is clearly a very positive announcement for the company and we would expect a strong share price reaction today. In addition, we are hopeful that further large-scale projects will be announced over the next few months. RED’s outsourced manufacturing model provides us with confidence that it will be able to deliver this German pipeline, on top of any additional orders that may be secured in the coming months.   

We maintain our BUY recommendation and target price of 22p.

Risers and Fallers (Last Close)


Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Advanced Power Components





Drax Group





Impax Environmental Markets







Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

China New Energy










Ceres Power








]]> The Pay Zone - Oil price, Savannah Petroleum, Reabold Resources, Cuadrilla/IGas And finally... Wed, 25 Jul 2018 12:55:00 +0100

WTI $68.52 +63c, Brent $73.44 +38c, Diff -$4.92 -25c, NG $2.73 +1c

Oil price

A slightly better day yesterday as better than expected Chinese demand numbers and a withering attack by the IMF on Venezuela (economy contracting by 18% this year and 1 million % inflation) steered the market up modestly.

After the close the API stats were pretty positive, crude drew 3.2m barrels with the scribblers looking for 2.3m, but even better gasoline drew 4.9m b’s and distillates an unexpected 1.3m draw. As always we await confirmation from the EIA tonight.

Savannah Petroleum

A most important MOU was signed yesterday between Niger and Nigeria in relation to development of the Agadem Rift Basin and its exports of crude oil. Oil Ministers from both countries signed the Memorandum watched on by their Presidents and of course representatives of both CNPC and SAVP. The deal envisages a pipeline from the ARB to a refinery at Katsima State in Northern Nigeria which will provide ‘one of the potential routes’ to market for discoveries so far and in the future.

For SAVP this is all excellent news, indeed as CEO Andrew Knott said ‘it compliments plans to initiate an early production system for the R3 East area of the ARB and hope that it will enable early monetisation of our recent discoveries’.

This deal should be considered a massive boost for SAVP in a number of ways, firstly it provides the answer to the first of two major export solutions and make no mistake, CNPC can and will deliver this project. Secondly it ticks all the boxes with regard to stranded hydrocarbons, there can be little, if any doubt that these significant discoveries will now come to market and in a short period of time. Finally, it answers the doubters big time in terms of Savannah’s ability to firstly find and then sell substantial amounts of oil, these early finds only scratch the surface of the opportunities in Niger.

Andrew Knott’s vision that I first saw on the wall of his office many years ago is is fast becoming a reality, the fact that the shares actually fell following this news is to be frank, ludicrous they offer an exceptional opportunity that should not be missed.

Reabold Resources

Reabold has announced that AFE’s have been signed for both the Wick well in the Inner Moray Firth and the Colter well in the Weald Basin. Wick is scheduled to spud in September and Colter, already much delayed, in the 4th quarter. As co-CEO Sachin Oza commented, these are two ‘potentially transformational wells within the next few months’ and fellow co-CEO Stephen Williams told me last week that these are two of six wells that RBD are expecting to drill by the year end. If some of these don’t come in and amply reward shareholders I will be astonished…


It was very pleasing, if years too late, that Cuadrilla yesterday was awarded consent to frac the first of two horizontal wells at Preston New Road. Whilst this is ironically still early days, (I seem to have been watching the Bowland shale for half of my life), it does at least put a marker down for the industry and is great news at a time when the UK and indeed the whole of Europe (note Germany/Russia pipeline deal) is becoming ever more dependent on imported gas.

The UK onshore industry has waited a long time to prove that it can safely and securely operate in sensitive areas and this will provide positive momentum as they move forward into appraisal/flow rates to prove the broader concept. It is just a shame that it has taken so long get to this stage and it is now crucial that this and future Governments maintain this appropriately positive stance, even now it will still take a long time to deliver but it is better than nothing.

And finally…

With another round of County Championship matches on the go Yorkshire easily beat Lancashire in the Roses match whilst up at Trent Bridge Surrey beat Notts by an innings and 183 runs…

And I’ve been watching with continued bemusement the football transfer market in recent years but 50 MILLION quid for Richarlison by the Toffees is surely total madness…..?