https://www.oilcapital.com/companies/news/209404/tecogen-blazes-a-greener-path-in-the-energy-space-209404.html Tecogen blazes a greener path in the energy space https://www.oilcapital.com/companies/news/209404/tecogen-blazes-a-greener-path-in-the-energy-space-209404.html Fri, 16 Nov 2018 19:50:00 +0000 https://www.oilcapital.com/companies/news/209388/cadogan-petroleums-vovche-2-well-shown-to-be-sub-commercial-209388.html Cadogan Petroleum’s Vovche-2 well shown to be sub-commercial https://www.oilcapital.com/companies/news/209388/cadogan-petroleums-vovche-2-well-shown-to-be-sub-commercial-209388.html Fri, 16 Nov 2018 14:38:00 +0000 https://www.oilcapital.com/columns/the-pay-zone/30294/oil-price-empyrean-energy-and-finally-30294.html Oil price, Empyrean Energy And finally... https://www.oilcapital.com/columns/the-pay-zone/30294/oil-price-empyrean-energy-and-finally-30294.html 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….

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https://www.oilcapital.com/companies/news/209362/parkmead-posts-70-jump-in-full-year-revenue-gross-profit-more-than-trebles-209362.html Parkmead posts 70% jump in full-year revenue, gross profit more than trebles https://www.oilcapital.com/companies/news/209362/parkmead-posts-70-jump-in-full-year-revenue-gross-profit-more-than-trebles-209362.html Fri, 16 Nov 2018 08:55:00 +0000 https://www.oilcapital.com/companies/news/209356/tomco-energy-trading-suspended-and-broker-quits-after-holliday-field-test-delay-209356.html TomCo Energy trading suspended and broker quits after Holliday field test delay https://www.oilcapital.com/companies/news/209356/tomco-energy-trading-suspended-and-broker-quits-after-holliday-field-test-delay-209356.html Fri, 16 Nov 2018 08:33:00 +0000 https://www.oilcapital.com/companies/news/209354/good-energy-group-boosted-by-strong-cash-generation-trading-slightly-ahead-209354.html Good Energy Group boosted by strong cash generation, trading ‘slightly ahead’ https://www.oilcapital.com/companies/news/209354/good-energy-group-boosted-by-strong-cash-generation-trading-slightly-ahead-209354.html Fri, 16 Nov 2018 07:54:00 +0000 https://www.oilcapital.com/companies/news/209345/eland-oil-gas-advancing-towards-gbetiokun-field-start-up-209345.html Eland Oil & Gas advancing towards Gbetiokun field start-up https://www.oilcapital.com/companies/news/209345/eland-oil-gas-advancing-towards-gbetiokun-field-start-up-209345.html Fri, 16 Nov 2018 07:27:00 +0000 https://www.oilcapital.com/companies/stocktube/11218/hexagon-resources-absolutely-focused-on-commercialisation-financing-graphite-project-11218.html Hexagon Resources 'absolutely focused on commercialisation,' financing graphite project https://www.oilcapital.com/companies/stocktube/11218/hexagon-resources-absolutely-focused-on-commercialisation-financing-graphite-project-11218.html 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."

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https://www.oilcapital.com/companies/news/209319/union-jack-oil-shares-jump-as-planning-permission-for-west-newton-a-wellsite-extended-209319.html Union Jack Oil shares jump as planning permission for West Newton-A wellsite extended https://www.oilcapital.com/companies/news/209319/union-jack-oil-shares-jump-as-planning-permission-for-west-newton-a-wellsite-extended-209319.html Thu, 15 Nov 2018 16:06:00 +0000 https://www.oilcapital.com/columns/the-pay-zone/30288/oil-price-sound-echo-zenith-faroecairn-premier-wentworth-enteq-and-finally-30288.html Oil price, Sound, Echo, Zenith, Faroe/Cairn, Premier, Wentworth, Enteq And finally... https://www.oilcapital.com/columns/the-pay-zone/30288/oil-price-sound-echo-zenith-faroecairn-premier-wentworth-enteq-and-finally-30288.html 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.

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https://www.oilcapital.com/companies/news/209303/canadian-overseas-petroleum-focused-on-finance-for-nigeria-licence-209303.html Canadian Overseas Petroleum focused on finance for Nigeria licence https://www.oilcapital.com/companies/news/209303/canadian-overseas-petroleum-focused-on-finance-for-nigeria-licence-209303.html Thu, 15 Nov 2018 11:51:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30285/vsa-capital-market-movers-m2-cobalt-cvemc-30285.html VSA Capital Market Movers - M2 Cobalt (CVE:MC) https://www.oilcapital.com/columns/vsa-capital-market-movers/30285/vsa-capital-market-movers-m2-cobalt-cvemc-30285.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30284/vsa-capital-market-movers-genus-agm-statement-30284.html VSA Capital Market Movers - Genus: AGM Statement https://www.oilcapital.com/columns/vsa-capital-market-movers/30284/vsa-capital-market-movers-genus-agm-statement-30284.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Plant Health Care

17.46

10.10

0.78

+8.3%

Avon Rubber

410.66

1,355.00

55.00

+4.2%

Devro

288.71

173.00

6.00

+3.6%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Carr's Group

144.43

158.00

(6.50)

-4.0%

Agriterra

2.23

10.50

(0.25)

-2.3%

Eden Research

25.38

12.25

(0.25)

-2.0%

 


 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30282/vsa-capital-market-movers-redt-energy-management-team-update-30282.html VSA Capital Market Movers - redT energy: Management Team Update https://www.oilcapital.com/columns/vsa-capital-market-movers/30282/vsa-capital-market-movers-redt-energy-management-team-update-30282.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

SSE plc

12,186.7

1,191.0

59.50

+5.3%

Proton Power Systems

54.0

8.4

0.38

+4.7%

PV Crystalox Solar

37.4

23.7

0.80

+3.5%

 

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https://www.oilcapital.com/companies/news/209274/premier-oil-boasts-significant-cash-flow-as-output-continues-to-rise-209274.html Premier Oil boasts significant cash flow as output continues to rise https://www.oilcapital.com/companies/news/209274/premier-oil-boasts-significant-cash-flow-as-output-continues-to-rise-209274.html Thu, 15 Nov 2018 09:43:00 +0000 https://www.oilcapital.com/companies/news/209278/tullow-oil-praises-very-solid-delivery-as-fields-produce-in-line-with-expectations-209278.html Tullow Oil praises “very solid delivery” as fields produce in line with expectations https://www.oilcapital.com/companies/news/209278/tullow-oil-praises-very-solid-delivery-as-fields-produce-in-line-with-expectations-209278.html Thu, 15 Nov 2018 09:42:00 +0000 https://www.oilcapital.com/companies/news/209272/cairn-energy-announces-new-north-sea-oil-discovery-209272.html Cairn Energy announces new North Sea oil discovery https://www.oilcapital.com/companies/news/209272/cairn-energy-announces-new-north-sea-oil-discovery-209272.html Thu, 15 Nov 2018 08:58:00 +0000 https://www.oilcapital.com/companies/news/209262/afc-energy-surges-after-upbeat-review-of-the-last-12-months-209262.html AFC Energy surges after upbeat review of the last 12 months https://www.oilcapital.com/companies/news/209262/afc-energy-surges-after-upbeat-review-of-the-last-12-months-209262.html Thu, 15 Nov 2018 08:20:00 +0000 https://www.oilcapital.com/companies/news/209258/echo-energy-looks-forward-to-december-start-for-argentina-well-stimulation-209258.html Echo Energy looks forward to December start for Argentina well stimulation https://www.oilcapital.com/companies/news/209258/echo-energy-looks-forward-to-december-start-for-argentina-well-stimulation-209258.html Thu, 15 Nov 2018 07:57:00 +0000 https://www.oilcapital.com/companies/news/209251/uk-oil-gas-deluge-of-date-shows-horse-hills-kimmeridge-is-commercially-viable-209251.html UK Oil & Gas: Deluge of date shows Horse Hill’s Kimmeridge is “commercially viable” https://www.oilcapital.com/companies/news/209251/uk-oil-gas-deluge-of-date-shows-horse-hills-kimmeridge-is-commercially-viable-209251.html Thu, 15 Nov 2018 07:31:00 +0000 https://www.oilcapital.com/companies/news/209231/whitebark-energy-is-one-of-the-asxs-newest-oil-and-gas-producers-209231.html Whitebark Energy is one of the ASX’s newest oil and gas producers https://www.oilcapital.com/companies/news/209231/whitebark-energy-is-one-of-the-asxs-newest-oil-and-gas-producers-209231.html Thu, 15 Nov 2018 00:00:00 +0000 https://www.oilcapital.com/companies/stocktube/11196/triton-minerals-positioning-to-fulfil-growing-global-demand-for-large-flake-graphite-11196.html Triton Minerals positioning to fulfil growing global demand for large flake graphite https://www.oilcapital.com/companies/stocktube/11196/triton-minerals-positioning-to-fulfil-growing-global-demand-for-large-flake-graphite-11196.html 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.

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https://www.oilcapital.com/companies/stocktube/11200/touchstone-declare-solid-quarter-production-in-q3-results-11200.html Touchstone declare 'solid quarter production' in Q3 results. https://www.oilcapital.com/companies/stocktube/11200/touchstone-declare-solid-quarter-production-in-q3-results-11200.html 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.

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https://www.oilcapital.com/companies/news/209210/tag-oil-hails-another-successful-operating-quarter-as-it-looks-to-australian-opportunities-after-tamarind-sale-209210.html TAG Oil hails another successful operating quarter as it looks to Australian opportunities after Tamarind sale https://www.oilcapital.com/companies/news/209210/tag-oil-hails-another-successful-operating-quarter-as-it-looks-to-australian-opportunities-after-tamarind-sale-209210.html Wed, 14 Nov 2018 15:30:00 +0000 https://www.oilcapital.com/companies/news/209185/sse-investors-reassured-by-dividend-hike-but-rocky-road-continues-as-it-attempts-to-shelter-earnings-from-vagaries-of-regulator-and-weather-209185.html SSE investors reassured by dividend hike but rocky road continues as it attempts to shelter earnings from vagaries of regulator and weather https://www.oilcapital.com/companies/news/209185/sse-investors-reassured-by-dividend-hike-but-rocky-road-continues-as-it-attempts-to-shelter-earnings-from-vagaries-of-regulator-and-weather-209185.html Wed, 14 Nov 2018 12:34:00 +0000 https://www.oilcapital.com/companies/news/209159/touchstone-exploration-production-rises-thanks-to-successful-well-programme-209159.html Touchstone Exploration production rises thanks to successful well programme https://www.oilcapital.com/companies/news/209159/touchstone-exploration-production-rises-thanks-to-successful-well-programme-209159.html Wed, 14 Nov 2018 11:40:00 +0000 https://www.oilcapital.com/columns/the-pay-zone/30278/oil-price-faroe-petroleum-jersey-oil-gas-and-finally-30278.html Oil price, Faroe Petroleum, Jersey Oil & Gas And finally… https://www.oilcapital.com/columns/the-pay-zone/30278/oil-price-faroe-petroleum-jersey-oil-gas-and-finally-30278.html 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.

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https://www.oilcapital.com/companies/news/209161/sse-looking-to-spin-off-renewable-energy-assets-in-uk-and-ireland-as-it-confirms-big-drop-in-first-half-profit-209161.html SSE looking to spin-off renewable energy assets in UK and Ireland as it confirms big drop in first-half profit https://www.oilcapital.com/companies/news/209161/sse-looking-to-spin-off-renewable-energy-assets-in-uk-and-ireland-as-it-confirms-big-drop-in-first-half-profit-209161.html Wed, 14 Nov 2018 08:23:00 +0000 https://www.oilcapital.com/companies/news/209155/jersey-oil-gas-appoints-vicary-gibbs-as-new-chief-financial-officer-209155.html Jersey Oil & Gas appoints Vicary Gibbs as new chief financial officer https://www.oilcapital.com/companies/news/209155/jersey-oil-gas-appoints-vicary-gibbs-as-new-chief-financial-officer-209155.html Wed, 14 Nov 2018 07:31:00 +0000 https://www.oilcapital.com/companies/stocktube/11195/far-ltd-still-has-high-hopes-for-gambian-blocks-with-several-prospects-identified-11195.html FAR Ltd still has high hopes for Gambian blocks with several prospects identified https://www.oilcapital.com/companies/stocktube/11195/far-ltd-still-has-high-hopes-for-gambian-blocks-with-several-prospects-identified-11195.html 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.

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https://www.oilcapital.com/companies/stocktube/11194/peninsula-energy-will-be-testing-new-lixiviant-on-field-scale-basis-before-end-of-year-11194.html Peninsula Energy will be testing new lixiviant on field-scale basis before end of year https://www.oilcapital.com/companies/stocktube/11194/peninsula-energy-will-be-testing-new-lixiviant-on-field-scale-basis-before-end-of-year-11194.html Wed, 14 Nov 2018 03:01:00 +0000 Peninsula Energy Ltd (ASX:PEN) managing director and CEO Wayne Heili speaks to Proactive Investors about the significance of receiving approval from the Wyoming Department of Environmental Quality (WDEQ) to perform field trials for the uranium mining company's new low pH lixiviant initiative.

"The field-scale testing will allow us to understand the technical parameters, the costs, and really the entire outcome of the proposed new lixiviant; far better than we can understand it thorough laboratory-scale testing," explains Heili.

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https://www.oilcapital.com/companies/stocktube/11193/lithium-australia-adding-to-its-circular-economy-with-new-anode-material-program-11193.html Lithium Australia adding to its circular economy with new anode material program https://www.oilcapital.com/companies/stocktube/11193/lithium-australia-adding-to-its-circular-economy-with-new-anode-material-program-11193.html Wed, 14 Nov 2018 02:15:00 +0000 Adrian Griffin, managing director of Lithium Australia NL (ASX:LIT), speaks to Proactive Investors ahead of presenting at the Technology and Low Emission Minerals Conference in Perth, Western Australia.

Griffin updates on the integrated lithium company's operations, in the context of market movements and opportunities.

Lithium Australia announced today that it is embarking on a program to produce advanced anode materials, to complement the   lithium-ion phosphate cathode powder it already produces through its subsidiary VSPC Ltd.

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https://www.oilcapital.com/companies/news/209071/dunquin-south-exploration-to-move-forward-after-budget-approved-says-providence-resources-209071.html Dunquin South exploration to move forward after budget approved, says Providence Resources https://www.oilcapital.com/companies/news/209071/dunquin-south-exploration-to-move-forward-after-budget-approved-says-providence-resources-209071.html Tue, 13 Nov 2018 12:55:00 +0000 https://www.oilcapital.com/companies/stocktube/11184/greenfields-petroleum-corp-looks-to-list-on-the-aim-to-attract-european-investors-11184.html Greenfields Petroleum Corp looks to list on the AIM to attract European investors https://www.oilcapital.com/companies/stocktube/11184/greenfields-petroleum-corp-looks-to-list-on-the-aim-to-attract-european-investors-11184.html 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.

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https://www.oilcapital.com/companies/news/209093/deutsche-bank-pulls-plug-on-pennon-shares-downgrading-rating-to-hold-from-buy-209093.html Deutsche Bank pulls plug on Pennon shares, downgrading rating to ‘hold’ from ‘buy’ https://www.oilcapital.com/companies/news/209093/deutsche-bank-pulls-plug-on-pennon-shares-downgrading-rating-to-hold-from-buy-209093.html Tue, 13 Nov 2018 11:20:00 +0000 https://www.oilcapital.com/columns/the-pay-zone/30275/oil-price-president-hurricane-reabolduplandunited-providence-velocys-and-finally-30275.html Oil price, President, Hurricane, Reabold/Upland/United, Providence, Velocys And finally… https://www.oilcapital.com/columns/the-pay-zone/30275/oil-price-president-hurricane-reabolduplandunited-providence-velocys-and-finally-30275.html 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’.

Link

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…

 

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https://www.oilcapital.com/companies/news/209086/mosman-og-says-stanley-1-well-tests-shows-potential-for-higher-flow-rates-once-current-gas-constraints-removed-209086.html Mosman O&G says Stanley-1 well tests shows potential for higher flow rates once current gas constraints removed https://www.oilcapital.com/companies/news/209086/mosman-og-says-stanley-1-well-tests-shows-potential-for-higher-flow-rates-once-current-gas-constraints-removed-209086.html Tue, 13 Nov 2018 09:55:00 +0000 https://www.oilcapital.com/companies/news/209072/uk-regulator-gives-green-light-to-drill-well-in-which-united-oil-gas-has-10-stake-209072.html UK regulator gives green light to drill well in which United Oil & Gas has 10% stake https://www.oilcapital.com/companies/news/209072/uk-regulator-gives-green-light-to-drill-well-in-which-united-oil-gas-has-10-stake-209072.html Tue, 13 Nov 2018 08:28:00 +0000 https://www.oilcapital.com/companies/news/209062/hurricane-energy-aoka-mizu-fpso-makes-scheduled-stop-in-algeciras-en-route-to-lancaster-209062.html Hurricane Energy: Aoka Mizu FPSO makes scheduled stop in Algeciras en route to Lancaster https://www.oilcapital.com/companies/news/209062/hurricane-energy-aoka-mizu-fpso-makes-scheduled-stop-in-algeciras-en-route-to-lancaster-209062.html Tue, 13 Nov 2018 07:25:00 +0000 https://www.oilcapital.com/companies/news/209059/whitebark-energy-names-albertan-oil-prospects-as-it-focuses-on-canadian-portfolio-209059.html Whitebark Energy names Albertan oil prospects as it focuses on Canadian portfolio https://www.oilcapital.com/companies/news/209059/whitebark-energy-names-albertan-oil-prospects-as-it-focuses-on-canadian-portfolio-209059.html Tue, 13 Nov 2018 06:30:00 +0000 https://www.oilcapital.com/companies/news/209053/far-ltd-director-takes-opportunity-to-buy-shares-on-market-209053.html FAR Ltd director takes opportunity to buy shares on market https://www.oilcapital.com/companies/news/209053/far-ltd-director-takes-opportunity-to-buy-shares-on-market-209053.html Tue, 13 Nov 2018 02:02:00 +0000 https://www.oilcapital.com/companies/news/209045/carnarvon-petroleum-focusing-on-four-key-areas-209045.html Carnarvon Petroleum focusing on four key areas https://www.oilcapital.com/companies/news/209045/carnarvon-petroleum-focusing-on-four-key-areas-209045.html Mon, 12 Nov 2018 22:04:00 +0000 https://www.oilcapital.com/companies/stocktube/11162/archer-exploration-s-ceo-discusses-advanced-materials-in-reliable-energy-11162.html Archer Exploration's CEO discusses advanced materials in reliable energy https://www.oilcapital.com/companies/stocktube/11162/archer-exploration-s-ceo-discusses-advanced-materials-in-reliable-energy-11162.html Mon, 12 Nov 2018 22:00:00 +0000 Archer Exploration Ltd (ASX:AXE) has a fresh strategic focus on advanced materials, deployed through the three verticals of quantum computing, human health and reliable energy. Supply of the mineral resources necessary is secured through the company's existing portfolio of exploration projects.

In the second video of a three-part series on each of the business channels, CEO Mohammad Choucair speaks to Proactive Investors about reliable energy.

"At Archer we see materials as being the core of reliable energy. The materials that we want to focus on are those that are able to both manage and harness heat, light and electricity; and doing that in a way where we can prepare for future economies that move away from polluting fossil fuels," says Choucair.

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https://www.oilcapital.com/companies/news/209034/columbus-energy-resources-shares-tipped-to-soar-thanks-to-stronger-growth-platform--209034.html Columbus Energy Resources shares tipped to soar thanks to ‘stronger growth platform' https://www.oilcapital.com/companies/news/209034/columbus-energy-resources-shares-tipped-to-soar-thanks-to-stronger-growth-platform--209034.html Mon, 12 Nov 2018 15:01:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30266/vsa-capital-market-movers-columbus-energy-resources-building-the-foundations-30266.html VSA Capital Market Movers - Columbus Energy Resources: Building the Foundations https://www.oilcapital.com/columns/vsa-capital-market-movers/30266/vsa-capital-market-movers-columbus-energy-resources-building-the-foundations-30266.html 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.

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https://www.oilcapital.com/companies/news/209017/cadogan-petroleum-set-for-us175mln-injection-as-it-exits-shale-venture-209017.html Cadogan Petroleum set for US$1.75mln injection as it exits shale venture https://www.oilcapital.com/companies/news/209017/cadogan-petroleum-set-for-us175mln-injection-as-it-exits-shale-venture-209017.html Mon, 12 Nov 2018 11:49:00 +0000 https://www.oilcapital.com/companies/news/208730/jersey-oil-gas-poised-for-exciting-start-to-2019-with-new-verbier-well-208730.html Jersey Oil & Gas poised for exciting start to 2019 with new Verbier well https://www.oilcapital.com/companies/news/208730/jersey-oil-gas-poised-for-exciting-start-to-2019-with-new-verbier-well-208730.html Mon, 12 Nov 2018 10:50:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30262/vsa-capital-market-movers-carr-s-group-30262.html VSA Capital Market Movers - Carr's Group https://www.oilcapital.com/columns/vsa-capital-market-movers/30262/vsa-capital-market-movers-carr-s-group-30262.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Carr's Group

142.59

156.00

7.75

+5.2%

Eden Research

25.90

12.50

0.25

+2.0%

REA Holdings

106.95

264.00

5.00

+1.9%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

DekelOil

11.38

3.80

(0.28)

-6.7%

MP Evans

372.44

680.00

(30.00)

-4.2%

Anglo-Eastern Plantations

214.83

542.00

(17.00)

-3.0%

 


 

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https://www.oilcapital.com/companies/news/209009/wood-group-lands-us53mln-of-new-business-in-abu-dhabi-209009.html Wood Group lands US$53mln of new business in Abu Dhabi https://www.oilcapital.com/companies/news/209009/wood-group-lands-us53mln-of-new-business-in-abu-dhabi-209009.html Mon, 12 Nov 2018 10:13:00 +0000 https://www.oilcapital.com/companies/news/209004/rockhopper-exploration-boosted-by-egypt-asset-update-209004.html Rockhopper Exploration boosted by Egypt asset update https://www.oilcapital.com/companies/news/209004/rockhopper-exploration-boosted-by-egypt-asset-update-209004.html Mon, 12 Nov 2018 09:21:00 +0000 https://www.oilcapital.com/companies/news/208995/highlands-natural-trims-permit-applications-at-west-denver-208995.html Highlands Natural trims permit applications at West Denver https://www.oilcapital.com/companies/news/208995/highlands-natural-trims-permit-applications-at-west-denver-208995.html Mon, 12 Nov 2018 08:20:00 +0000 https://www.oilcapital.com/companies/news/208991/eland-oil-gas-lands-20-year-extension-for-oml-40-and-opuama-field-208991.html Eland Oil & Gas lands 20 year extension for OML 40 and Opuama field https://www.oilcapital.com/companies/news/208991/eland-oil-gas-lands-20-year-extension-for-oml-40-and-opuama-field-208991.html Mon, 12 Nov 2018 08:08:00 +0000 https://www.oilcapital.com/companies/news/208986/jersey-oil-and-gass-verbier-appraisal-well-now-anticipated-in-q1-2019-208986.html Jersey Oil and Gas’s Verbier appraisal well now anticipated in Q1 2019 https://www.oilcapital.com/companies/news/208986/jersey-oil-and-gass-verbier-appraisal-well-now-anticipated-in-q1-2019-208986.html Mon, 12 Nov 2018 07:51:00 +0000 https://www.oilcapital.com/companies/stocktube/11160/duxton-water-only-pure-water-business-on-asx-and-yet-to-find-a-counterpart-globally--11160.html Duxton Water 'only pure water business on ASX' and 'yet to find a counterpart globally' https://www.oilcapital.com/companies/stocktube/11160/duxton-water-only-pure-water-business-on-asx-and-yet-to-find-a-counterpart-globally--11160.html 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.

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https://www.oilcapital.com/companies/news/208904/empyrean-energy-reveals-estimate-upgrade-for-china-prospects-208904.html Empyrean Energy reveals estimate upgrade for China prospects https://www.oilcapital.com/companies/news/208904/empyrean-energy-reveals-estimate-upgrade-for-china-prospects-208904.html Fri, 09 Nov 2018 12:54:00 +0000 https://www.oilcapital.com/companies/news/208919/88-energy-successfully-completes-placing-ahead-of-new-alaska-well-208919.html 88 Energy successfully completes placing ahead of new Alaska well https://www.oilcapital.com/companies/news/208919/88-energy-successfully-completes-placing-ahead-of-new-alaska-well-208919.html Fri, 09 Nov 2018 12:22:00 +0000 https://www.oilcapital.com/companies/news/208913/gore-street-energy-storage-fund-is-putting-its-money-to-work-208913.html Gore Street Energy Storage Fund is putting its money to work https://www.oilcapital.com/companies/news/208913/gore-street-energy-storage-fund-is-putting-its-money-to-work-208913.html Fri, 09 Nov 2018 09:36:00 +0000 https://www.oilcapital.com/companies/news/208912/mosman-oil-and-gas-unveils-plans-to-drill-five-new-wells-208912.html Mosman Oil and Gas unveils plans to drill five new wells https://www.oilcapital.com/companies/news/208912/mosman-oil-and-gas-unveils-plans-to-drill-five-new-wells-208912.html Fri, 09 Nov 2018 09:27:00 +0000 https://www.oilcapital.com/companies/news/208906/sse-merger-with-npower-hangs-in-the-balance-as-parties-renegotiate-terms-208906.html SSE merger with Npower hangs in the balance as parties renegotiate terms https://www.oilcapital.com/companies/news/208906/sse-merger-with-npower-hangs-in-the-balance-as-parties-renegotiate-terms-208906.html Fri, 09 Nov 2018 08:25:00 +0000 https://www.oilcapital.com/companies/news/208896/canadian-overseas-petroleum-in-talks-with-large-oil-service-provider-208896.html Canadian Overseas Petroleum in talks with large oil service provider https://www.oilcapital.com/companies/news/208896/canadian-overseas-petroleum-in-talks-with-large-oil-service-provider-208896.html Fri, 09 Nov 2018 07:27:00 +0000 https://www.oilcapital.com/companies/news/208886/far-ltd-remains-upbeat-after-completing-samo-1-well-208886.html FAR Ltd remains upbeat after completing Samo-1 well https://www.oilcapital.com/companies/news/208886/far-ltd-remains-upbeat-after-completing-samo-1-well-208886.html Fri, 09 Nov 2018 01:40:00 +0000 https://www.oilcapital.com/companies/stocktube/11139/powerhouse-gets-green-light-for-green-technology-11139.html PowerHouse gets Green Light for Green Technology!” https://www.oilcapital.com/companies/stocktube/11139/powerhouse-gets-green-light-for-green-technology-11139.html 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.

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https://www.oilcapital.com/companies/news/208857/canadas-us13bn-oil-exploration-boost-bodes-well-for-irelands-nascent-oil-frontier-208857.html Canada’s US$1.3bn oil exploration boost bodes well for Ireland’s nascent oil frontier https://www.oilcapital.com/companies/news/208857/canadas-us13bn-oil-exploration-boost-bodes-well-for-irelands-nascent-oil-frontier-208857.html Thu, 08 Nov 2018 14:17:00 +0000 https://www.oilcapital.com/companies/news/208854/exxonmobils-plans-in-georgia-bode-well-for-junior-block-energy-208854.html ExxonMobil’s plans in Georgia bode well for junior Block Energy https://www.oilcapital.com/companies/news/208854/exxonmobils-plans-in-georgia-bode-well-for-junior-block-energy-208854.html Thu, 08 Nov 2018 13:46:00 +0000 https://www.oilcapital.com/companies/news/208849/plug-power-beats-wall-street-s-3q-revenue-target-thanks-to-fuel-cell-sales-208849.html Plug Power beats Wall Street's 3Q revenue target thanks to fuel cell sales https://www.oilcapital.com/companies/news/208849/plug-power-beats-wall-street-s-3q-revenue-target-thanks-to-fuel-cell-sales-208849.html Thu, 08 Nov 2018 13:08:00 +0000 https://www.oilcapital.com/companies/news/208832/cadogan-petroleum-shares-rise-as-vovche-2-well-encounters-oil-208832.html Cadogan Petroleum shares rise as Vovche-2 well encounters oil https://www.oilcapital.com/companies/news/208832/cadogan-petroleum-shares-rise-as-vovche-2-well-encounters-oil-208832.html Thu, 08 Nov 2018 11:21:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30251/vsa-capital-market-movers-nulegacy-gold-30251.html VSA CAPITAL MARKET MOVERS - NuLegacy Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30251/vsa-capital-market-movers-nulegacy-gold-30251.html 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.  

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https://www.oilcapital.com/companies/news/208819/petroneft-resources-shares-boosted-by-latest-well-results-208819.html PetroNeft Resources shares boosted by latest well results https://www.oilcapital.com/companies/news/208819/petroneft-resources-shares-boosted-by-latest-well-results-208819.html Thu, 08 Nov 2018 09:11:00 +0000 https://www.oilcapital.com/companies/news/208811/plexus-holdings-results-cheer-considerable-progress-208811.html Plexus Holdings results cheer “considerable progress” https://www.oilcapital.com/companies/news/208811/plexus-holdings-results-cheer-considerable-progress-208811.html Thu, 08 Nov 2018 08:23:00 +0000 https://www.oilcapital.com/companies/news/208805/anglo-african-oil-gas-plays-it-safe-at-tilapia-drilling-pauses-for-rig-maintenance-208805.html Anglo African Oil & Gas plays it safe at Tilapia, drilling pauses for rig maintenance https://www.oilcapital.com/companies/news/208805/anglo-african-oil-gas-plays-it-safe-at-tilapia-drilling-pauses-for-rig-maintenance-208805.html Thu, 08 Nov 2018 07:46:00 +0000 https://www.oilcapital.com/companies/news/208797/88-energy-ltd-launches-59mln-share-placing-to-fund-alaska-exploration-208797.html 88 Energy Ltd launches £5.9mln share placing to fund Alaska exploration https://www.oilcapital.com/companies/news/208797/88-energy-ltd-launches-59mln-share-placing-to-fund-alaska-exploration-208797.html Thu, 08 Nov 2018 07:21:00 +0000 https://www.oilcapital.com/companies/news/208742/tag-oil-agrees-to-sale-of-new-zealand-assets-to-australia-based-tamarind-resources-208742.html TAG Oil agrees to sale of New Zealand assets to Australia-based Tamarind Resources https://www.oilcapital.com/companies/news/208742/tag-oil-agrees-to-sale-of-new-zealand-assets-to-australia-based-tamarind-resources-208742.html Wed, 07 Nov 2018 13:44:00 +0000 https://www.oilcapital.com/companies/news/208741/bristol-channel-can-be-next-uk-oil-address-believes-sonorex-oil-gas-ltd-208741.html Bristol Channel can be next UK oil address, believes Sonorex Oil & Gas Ltd https://www.oilcapital.com/companies/news/208741/bristol-channel-can-be-next-uk-oil-address-believes-sonorex-oil-gas-ltd-208741.html Wed, 07 Nov 2018 13:00:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30245/vsa-capital-market-movers-lake-resources-30245.html VSA Capital Market Movers - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30245/vsa-capital-market-movers-lake-resources-30245.html 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. 

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https://www.oilcapital.com/companies/news/208711/highlands-natural-resources-shares-rise-ahead-of-fracking-restart-208711.html Highlands Natural Resources shares rise ahead of fracking restart https://www.oilcapital.com/companies/news/208711/highlands-natural-resources-shares-rise-ahead-of-fracking-restart-208711.html Wed, 07 Nov 2018 08:26:00 +0000 https://www.oilcapital.com/companies/news/208705/tower-resources-secures-new-exciting-exploration-acreage-offshore-namibia-208705.html Tower Resources secures new “exciting” exploration acreage offshore Namibia https://www.oilcapital.com/companies/news/208705/tower-resources-secures-new-exciting-exploration-acreage-offshore-namibia-208705.html Wed, 07 Nov 2018 07:54:00 +0000 https://www.oilcapital.com/companies/news/208699/88-energy-continues-to-be-encouraged-as-it-advances-conventional-exploration-assets-towards-key-milestones-208699.html 88 Energy continues to be encouraged as it advances conventional exploration assets towards key milestones https://www.oilcapital.com/companies/news/208699/88-energy-continues-to-be-encouraged-as-it-advances-conventional-exploration-assets-towards-key-milestones-208699.html Wed, 07 Nov 2018 07:31:00 +0000 https://www.oilcapital.com/companies/news/208678/global-energy-ventures-banks-1-million-rd-tax-rebate-for-cng-optimum-ship-development-work-208678.html Global Energy Ventures banks $1 million R&D tax rebate for CNG Optimum Ship development work https://www.oilcapital.com/companies/news/208678/global-energy-ventures-banks-1-million-rd-tax-rebate-for-cng-optimum-ship-development-work-208678.html Tue, 06 Nov 2018 22:30:00 +0000 https://www.oilcapital.com/companies/news/208644/irelands-great-oil-opportunity-is-now-closer-than-ever-as-new-drilling-comes-into-view-208644.html Ireland’s great oil opportunity is now closer than ever as new drilling comes into view https://www.oilcapital.com/companies/news/208644/irelands-great-oil-opportunity-is-now-closer-than-ever-as-new-drilling-comes-into-view-208644.html Tue, 06 Nov 2018 15:00:00 +0000 https://www.oilcapital.com/companies/news/208588/cabot-energy-reveals-upgrade-to-reserves-and-resources-208588.html Cabot Energy reveals upgrade to reserves and resources https://www.oilcapital.com/companies/news/208588/cabot-energy-reveals-upgrade-to-reserves-and-resources-208588.html Tue, 06 Nov 2018 13:28:00 +0000 https://www.oilcapital.com/companies/news/208584/simec-atlantis-awards-feed-contract-for-uskmouth-conversion-project-208584.html SIMEC Atlantis awards FEED contract for Uskmouth conversion project https://www.oilcapital.com/companies/news/208584/simec-atlantis-awards-feed-contract-for-uskmouth-conversion-project-208584.html Tue, 06 Nov 2018 07:36:00 +0000 https://www.oilcapital.com/companies/news/208580/curzon-energy-names-scott-kaintz-as-new-ceo-amid-management-streamlining-208580.html Curzon Energy names Scott Kaintz as new CEO amid management streamlining https://www.oilcapital.com/companies/news/208580/curzon-energy-names-scott-kaintz-as-new-ceo-amid-management-streamlining-208580.html Tue, 06 Nov 2018 07:33:00 +0000 https://www.oilcapital.com/companies/news/208578/tlou-energy-advances-second-new-lesedi-cbm-well-208578.html TLOU Energy advances second new Lesedi CBM well https://www.oilcapital.com/companies/news/208578/tlou-energy-advances-second-new-lesedi-cbm-well-208578.html Tue, 06 Nov 2018 07:22:00 +0000 https://www.oilcapital.com/companies/stocktube/11113/w-resources-ceo-michael-masterman-updates-on-tungsten-projects-and-markets-11113.html W Resources CEO Michael Masterman updates on tungsten projects and markets https://www.oilcapital.com/companies/stocktube/11113/w-resources-ceo-michael-masterman-updates-on-tungsten-projects-and-markets-11113.html 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."

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https://www.oilcapital.com/companies/stocktube/11112/base-resources-unique-in-sector-with-defined-earnings-engine-and-future-growth--11112.html Base Resources 'unique in sector' with 'defined earnings engine and future growth' https://www.oilcapital.com/companies/stocktube/11112/base-resources-unique-in-sector-with-defined-earnings-engine-and-future-growth--11112.html 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.

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https://www.oilcapital.com/companies/news/208574/carnarvon-petroleum-director-increases-shareholding-through-on-market-trades-208574.html Carnarvon Petroleum director increases shareholding through on-market trades https://www.oilcapital.com/companies/news/208574/carnarvon-petroleum-director-increases-shareholding-through-on-market-trades-208574.html Tue, 06 Nov 2018 02:42:00 +0000 https://www.oilcapital.com/companies/news/208557/mackie-repeats-buy-on-point-loma-ahead-of-first-high-impact-well-spud-208557.html Mackie repeats 'buy' on Point Loma ahead of first high impact well spud https://www.oilcapital.com/companies/news/208557/mackie-repeats-buy-on-point-loma-ahead-of-first-high-impact-well-spud-208557.html Mon, 05 Nov 2018 19:06:00 +0000 https://www.oilcapital.com/companies/stocktube/11102/tlou-energy-team-update-on-pilot-production-well-drilling-at-lesedi-11102.html Tlou Energy team update on pilot production well drilling at Lesedi https://www.oilcapital.com/companies/stocktube/11102/tlou-energy-team-update-on-pilot-production-well-drilling-at-lesedi-11102.html 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.

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https://www.oilcapital.com/companies/stocktube/11100/-christmas-comes-early-for-tower-resources-as-reserves-report-beats-expectations-11100.html 'Christmas comes early' for Tower Resources as reserves report beats expectations https://www.oilcapital.com/companies/stocktube/11100/-christmas-comes-early-for-tower-resources-as-reserves-report-beats-expectations-11100.html 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.

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https://www.oilcapital.com/companies/stocktube/11099/west-newton-farm-in-has-all-the-right-ingredients-union-jack-oil-s-david-bramhill-11099.html West Newton farm-in has 'all the right ingredients' - Union Jack Oil's David Bramhill https://www.oilcapital.com/companies/stocktube/11099/west-newton-farm-in-has-all-the-right-ingredients-union-jack-oil-s-david-bramhill-11099.html 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.

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https://www.oilcapital.com/companies/news/208493/caspian-sea-focused-greenfields-petroleum-to-list-on-aim-and-raise-us60mln-208493.html Caspian Sea-focused Greenfields Petroleum to list on AIM and raise US$60mln https://www.oilcapital.com/companies/news/208493/caspian-sea-focused-greenfields-petroleum-to-list-on-aim-and-raise-us60mln-208493.html Mon, 05 Nov 2018 08:39:00 +0000 https://www.oilcapital.com/companies/news/208490/renewi-ceo-to-depart-next-year-for-new-role-as-coo-of-melrose-industries-208490.html Renewi CEO to depart next year for new role as COO of Melrose Industries https://www.oilcapital.com/companies/news/208490/renewi-ceo-to-depart-next-year-for-new-role-as-coo-of-melrose-industries-208490.html Mon, 05 Nov 2018 08:23:00 +0000 https://www.oilcapital.com/companies/news/208486/simec-atlantis-energy-surges-following-uskmouth-power-project-update-208486.html SIMEC Atlantis Energy surges following Uskmouth power project update https://www.oilcapital.com/companies/news/208486/simec-atlantis-energy-surges-following-uskmouth-power-project-update-208486.html Mon, 05 Nov 2018 08:12:00 +0000 https://www.oilcapital.com/companies/news/208485/columbus-energy-resources-to-decommission-spanish-field-208485.html Columbus Energy Resources to decommission Spanish field https://www.oilcapital.com/companies/news/208485/columbus-energy-resources-to-decommission-spanish-field-208485.html Mon, 05 Nov 2018 08:12:00 +0000 https://www.oilcapital.com/companies/news/208481/sound-energy-new-tendrara-well-nears-main-target-208481.html Sound Energy new Tendrara well nears main target https://www.oilcapital.com/companies/news/208481/sound-energy-new-tendrara-well-nears-main-target-208481.html Mon, 05 Nov 2018 07:52:00 +0000 https://www.oilcapital.com/companies/news/208474/union-jack-completes-acquisition-of-stake-in-west-newton-gas-project-in-yorkshire-208474.html Union Jack completes acquisition of stake in West Newton gas project in Yorkshire https://www.oilcapital.com/companies/news/208474/union-jack-completes-acquisition-of-stake-in-west-newton-gas-project-in-yorkshire-208474.html Mon, 05 Nov 2018 07:37:00 +0000 https://www.oilcapital.com/companies/news/208428/exxon-and-chevron-shares-rise-on-respective-third-quarter-earnings-208428.html Exxon and Chevron shares rise on respective third-quarter earnings https://www.oilcapital.com/companies/news/208428/exxon-and-chevron-shares-rise-on-respective-third-quarter-earnings-208428.html Fri, 02 Nov 2018 14:02:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30227/vsa-capital-market-movers-lake-resources-30227.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30227/vsa-capital-market-movers-lake-resources-30227.html 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.

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https://www.oilcapital.com/companies/news/208396/echo-energy-appoints-former-shell-vice-president-as-non-executive-director-208396.html Echo Energy appoints former Shell vice-president as non-executive director https://www.oilcapital.com/companies/news/208396/echo-energy-appoints-former-shell-vice-president-as-non-executive-director-208396.html Fri, 02 Nov 2018 08:58:00 +0000 https://www.oilcapital.com/companies/news/208398/trading-resumes-in-wentworth-resources-after-domicile-shift-208398.html Trading resumes in Wentworth Resources after domicile shift https://www.oilcapital.com/companies/news/208398/trading-resumes-in-wentworth-resources-after-domicile-shift-208398.html Fri, 02 Nov 2018 08:47:00 +0000 https://www.oilcapital.com/companies/news/208378/high-peak-royalties-will-outline-royalty-investment-strategy-at-ceo-session-in-melbourne-208378.html High Peak Royalties will outline royalty investment strategy at CEO Session in Melbourne https://www.oilcapital.com/companies/news/208378/high-peak-royalties-will-outline-royalty-investment-strategy-at-ceo-session-in-melbourne-208378.html Fri, 02 Nov 2018 04:26:00 +0000 https://www.oilcapital.com/companies/stocktube/11076/new-hazer-group-ceo-says-pilot-project-tripled-production-expectations-11076.html New Hazer Group CEO says pilot project tripled production expectations https://www.oilcapital.com/companies/stocktube/11076/new-hazer-group-ceo-says-pilot-project-tripled-production-expectations-11076.html 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.

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https://www.oilcapital.com/companies/news/208354/permex-petroleum-bolsters-board-with-oil-and-gas-sector-veteran-208354.html Permex Petroleum bolsters board with oil and gas sector veteran https://www.oilcapital.com/companies/news/208354/permex-petroleum-bolsters-board-with-oil-and-gas-sector-veteran-208354.html Thu, 01 Nov 2018 16:50:00 +0000 https://www.oilcapital.com/companies/news/208293/rose-petroleum-receives-final-permit-to-start-drilling-at-paradox-acreage-in-utah-208293.html Rose Petroleum receives final permit to start drilling at Paradox acreage in Utah https://www.oilcapital.com/companies/news/208293/rose-petroleum-receives-final-permit-to-start-drilling-at-paradox-acreage-in-utah-208293.html Thu, 01 Nov 2018 15:24:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30223/vsa-capital-market-movers-edgon-resources-fy-2018-results-30223.html VSA CAPITAL MARKET MOVERS - Edgon Resources: FY 2018 Results https://www.oilcapital.com/columns/vsa-capital-market-movers/30223/vsa-capital-market-movers-edgon-resources-fy-2018-results-30223.html 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: oodonnell@vsacapital.com

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

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https://www.oilcapital.com/companies/news/208339/canadian-natural-resources-shares-pop-after-seeing-profits-double-in-3q-208339.html Canadian Natural Resources shares pop after seeing profits double in 3Q https://www.oilcapital.com/companies/news/208339/canadian-natural-resources-shares-pop-after-seeing-profits-double-in-3q-208339.html Thu, 01 Nov 2018 13:37:00 +0000 https://www.oilcapital.com/companies/news/208321/ballard-power-systems-shares-slip-after-missing-street-s-3q-estimates-due-to-china-slowdown-208321.html Ballard Power Systems shares slip after missing Street's 3Q estimates due to China slowdown https://www.oilcapital.com/companies/news/208321/ballard-power-systems-shares-slip-after-missing-street-s-3q-estimates-due-to-china-slowdown-208321.html Thu, 01 Nov 2018 12:07:00 +0000 https://www.oilcapital.com/companies/stocktube/11081/cui-global-s-quarterly-results-will-reflect-a-great-deal-of-expansion-on-the-energy-side--11081.html CUI Global's quarterly results will reflect 'a great deal of expansion on the energy side' https://www.oilcapital.com/companies/stocktube/11081/cui-global-s-quarterly-results-will-reflect-a-great-deal-of-expansion-on-the-energy-side--11081.html 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."

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https://www.oilcapital.com/companies/news/208298/royal-dutch-shell-slips-on-lukewarm-reaction-to-third-quarter-earnings-jump-208298.html Royal Dutch Shell slips on lukewarm reaction to third-quarter earnings jump https://www.oilcapital.com/companies/news/208298/royal-dutch-shell-slips-on-lukewarm-reaction-to-third-quarter-earnings-jump-208298.html Thu, 01 Nov 2018 10:40:00 +0000 https://www.oilcapital.com/companies/news/208313/wentworth-resources-in-prime-spot-as-demand-for-gas-in-tanzania-takes-off-208313.html Wentworth Resources in prime spot as demand for gas in Tanzania takes off https://www.oilcapital.com/companies/news/208313/wentworth-resources-in-prime-spot-as-demand-for-gas-in-tanzania-takes-off-208313.html Thu, 01 Nov 2018 10:00:00 +0000 https://www.oilcapital.com/companies/news/208312/biome-technologies-jumps-as-year-to-date-revenues-surpass-those-for-whole-of-2017-208312.html Biome Technologies jumps as year-to-date revenues surpass those for whole of 2017 https://www.oilcapital.com/companies/news/208312/biome-technologies-jumps-as-year-to-date-revenues-surpass-those-for-whole-of-2017-208312.html Thu, 01 Nov 2018 09:57:00 +0000 https://www.oilcapital.com/companies/stocktube/11078/rose-petroleum-now-fully-permitted-for-its-first-well-in-the-paradox-basin-11078.html Rose Petroleum now fully permitted for its first well in the Paradox Basin https://www.oilcapital.com/companies/stocktube/11078/rose-petroleum-now-fully-permitted-for-its-first-well-in-the-paradox-basin-11078.html 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.

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https://www.oilcapital.com/companies/news/208310/tower-resources-surges-as-it-releases-reserves-report-for-thali-licence-208310.html Tower Resources surges as it releases reserves report for Thali licence https://www.oilcapital.com/companies/news/208310/tower-resources-surges-as-it-releases-reserves-report-for-thali-licence-208310.html Thu, 01 Nov 2018 09:15:00 +0000 https://www.oilcapital.com/companies/news/208300/afc-energy-updates-on-australian-order-208300.html AFC Energy updates on Australian order https://www.oilcapital.com/companies/news/208300/afc-energy-updates-on-australian-order-208300.html Thu, 01 Nov 2018 08:08:00 +0000 https://www.oilcapital.com/companies/news/208287/pancontinental-oil-gas-sells-interest-in-dempsey-gas-project-to-raven-energy-208287.html Pancontinental Oil & Gas sells interest in Dempsey Gas Project to Raven Energy https://www.oilcapital.com/companies/news/208287/pancontinental-oil-gas-sells-interest-in-dempsey-gas-project-to-raven-energy-208287.html Thu, 01 Nov 2018 05:44:00 +0000 https://www.oilcapital.com/companies/news/208283/bass-oil-begins-bunian-5-well-construction-at-tangai-sukananti-drilling-soon-to-follow-208283.html Bass Oil begins Bunian 5 well construction at Tangai-Sukananti, drilling soon to follow https://www.oilcapital.com/companies/news/208283/bass-oil-begins-bunian-5-well-construction-at-tangai-sukananti-drilling-soon-to-follow-208283.html Thu, 01 Nov 2018 03:54:00 +0000 https://www.oilcapital.com/companies/stocktube/11062/eco-atlantic-has-bagged-an-elephant-at-orinduik-offshore-guyana-believes-ceo-holzman-11062.html Eco (Atlantic) has bagged an 'elephant' at Orinduik, offshore Guyana, believes CEO Holzman https://www.oilcapital.com/companies/stocktube/11062/eco-atlantic-has-bagged-an-elephant-at-orinduik-offshore-guyana-believes-ceo-holzman-11062.html 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.

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https://www.oilcapital.com/companies/stocktube/11057/i3-energy-team-suspect-liberator-potential-much-bigger-than-current-estimates-11057.html i3 Energy team suspect Liberator potential much bigger than current estimates https://www.oilcapital.com/companies/stocktube/11057/i3-energy-team-suspect-liberator-potential-much-bigger-than-current-estimates-11057.html 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.

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https://www.oilcapital.com/companies/news/208224/centrica-appoints-chairman-designate-from-weir-group-208224.html Centrica appoints chairman-designate from Weir Group https://www.oilcapital.com/companies/news/208224/centrica-appoints-chairman-designate-from-weir-group-208224.html Wed, 31 Oct 2018 10:46:00 +0000 https://www.oilcapital.com/columns/vsa-capital-market-movers/30215/vsa-capital-market-movers-dekeloil-30215.html VSA CAPITAL MARKET MOVERS - DekelOil https://www.oilcapital.com/columns/vsa-capital-market-movers/30215/vsa-capital-market-movers-dekeloil-30215.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Obtala Limited

21.62

6.60

0.70

+11.9%

Carr's Group

138.25

151.25

4.25

+2.9%

Origin Enterprises

616.51

490.92

3.98

+0.8%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Anpario

92.64

400.00

(25.00)

-5.9%

Avon Rubber

363.68

1,200.00

(25.00)

-2.0%

NWF Group

82.88

170.00

(1.50)

-0.9%

 


 

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https://www.oilcapital.com/companies/news/208220/i3-energy-surges-as-it-confirms-it-has-no-plans-for-an-equity-financing-208220.html i3 Energy surges as it confirms it has no plans for an equity financing https://www.oilcapital.com/companies/news/208220/i3-energy-surges-as-it-confirms-it-has-no-plans-for-an-equity-financing-208220.html Wed, 31 Oct 2018 09:54:00 +0000 https://www.oilcapital.com/companies/stocktube/11047/sonorex-oil-gas-seeking-23mln-to-drill-highly-prospective-bristol-channel-basin-11047.html Sonorex Oil & Gas seeking £2.3mln to drill 'highly prospective' Bristol Channel Basin https://www.oilcapital.com/companies/stocktube/11047/sonorex-oil-gas-seeking-23mln-to-drill-highly-prospective-bristol-channel-basin-11047.html 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.

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https://www.oilcapital.com/companies/news/208093/simec-atlantis-eyeing-major-tidal-power-opportunity-off-the-coast-of-normandy-208093.html SIMEC Atlantis eyeing major tidal power opportunity off the coast of Normandy https://www.oilcapital.com/companies/news/208093/simec-atlantis-eyeing-major-tidal-power-opportunity-off-the-coast-of-normandy-208093.html Tue, 30 Oct 2018 14:30:00 +0000 https://www.oilcapital.com/companies/news/208144/drax-cut-to-hold-by-jefferies-over-uk-power-prices-acquisition-integration-concerns-208144.html Drax cut to 'hold' by Jefferies over UK power prices, acquisition integration concerns https://www.oilcapital.com/companies/news/208144/drax-cut-to-hold-by-jefferies-over-uk-power-prices-acquisition-integration-concerns-208144.html Tue, 30 Oct 2018 14:12:00 +0000 https://www.oilcapital.com/companies/news/208104/tlou-energy-believes-proposal-for-lesedi-is-compelling-208104.html Tlou Energy believes proposal for Lesedi is compelling https://www.oilcapital.com/companies/news/208104/tlou-energy-believes-proposal-for-lesedi-is-compelling-208104.html Tue, 30 Oct 2018 14:05:00 +0000 https://www.oilcapital.com/companies/news/208132/bp-demonstrates-its-renewed-financial-vigour-by-making-the-bhp-shale-acquisition-an-all-cash-affair-208132.html BP demonstrates its renewed financial vigour by making the BHP shale acquisition an all-cash affair https://www.oilcapital.com/companies/news/208132/bp-demonstrates-its-renewed-financial-vigour-by-making-the-bhp-shale-acquisition-an-all-cash-affair-208132.html Tue, 30 Oct 2018 12:52:00 +0000 https://www.oilcapital.com/companies/news/208141/simec-atlantis-energy-rebounds-sharply-on-revenue-and-uskmouth-potential-208141.html Simec Atlantis Energy rebounds sharply on revenue and Uskmouth potential https://www.oilcapital.com/companies/news/208141/simec-atlantis-energy-rebounds-sharply-on-revenue-and-uskmouth-potential-208141.html Tue, 30 Oct 2018 12:50:00 +0000 https://www.oilcapital.com/companies/news/208119/chesapeake-energy-set-to-buy-wildhorse-in-4b-deal-as-third-quarter-beats-analysts-expectations-208119.html Chesapeake Energy set to buy Wildhorse in $4B deal as third quarter beats analysts' expectations https://www.oilcapital.com/companies/news/208119/chesapeake-energy-set-to-buy-wildhorse-in-4b-deal-as-third-quarter-beats-analysts-expectations-208119.html Tue, 30 Oct 2018 11:53:00 +0000 https://www.oilcapital.com/companies/stocktube/11040/gresham-house-energy-storage-fund-leveraged-to-evolving-energy-markets-11040.html Gresham House Energy Storage Fund leveraged to evolving energy markets https://www.oilcapital.com/companies/stocktube/11040/gresham-house-energy-storage-fund-leveraged-to-evolving-energy-markets-11040.html 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.

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https://www.oilcapital.com/companies/stocktube/11039/simec-atlantis-eyes-48mln-annual-revenue-from-meygen-with-more-to-come-11039.html SIMEC Atlantis eyes £4.8mln annual revenue from Meygen with more to come https://www.oilcapital.com/companies/stocktube/11039/simec-atlantis-eyes-48mln-annual-revenue-from-meygen-with-more-to-come-11039.html 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.

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https://www.oilcapital.com/companies/news/208112/tern-ups-its-stake-in-virtual-reality-group-fundamentalvr-to-35-208112.html Tern ups its stake in virtual reality group FundamentalVR to 35% https://www.oilcapital.com/companies/news/208112/tern-ups-its-stake-in-virtual-reality-group-fundamentalvr-to-35-208112.html Tue, 30 Oct 2018 10:50:00 +0000 https://www.oilcapital.com/companies/news/208090/bp-doubles-quarterly-profits-more-than-forecast-as-crude-prices-and-production-rise-208090.html BP doubles quarterly profits more than forecast as crude prices and production rise https://www.oilcapital.com/companies/news/208090/bp-doubles-quarterly-profits-more-than-forecast-as-crude-prices-and-production-rise-208090.html Tue, 30 Oct 2018 08:46:00 +0000 https://www.oilcapital.com/companies/news/208101/egdon-resources-expects-fracking-to-start-at-east-midlands-prospect-next-year-208101.html Egdon Resources expects fracking to start at East Midlands prospect next year https://www.oilcapital.com/companies/news/208101/egdon-resources-expects-fracking-to-start-at-east-midlands-prospect-next-year-208101.html Tue, 30 Oct 2018 08:27:00 +0000 https://www.oilcapital.com/companies/stocktube/11044/predator-oil-gas-holdings-plc-presents-at-oil-capital-october-2018-11044.html Predator Oil & Gas Holdings Plc presents at Oil Capital - October 2018 https://www.oilcapital.com/companies/stocktube/11044/predator-oil-gas-holdings-plc-presents-at-oil-capital-october-2018-11044.html 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.

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https://www.oilcapital.com/companies/news/208079/greenland-minerals-works-toward-mine-licence-for-kvanefjeld-rare-earths-208079.html Greenland Minerals works toward mine licence for Kvanefjeld rare earths https://www.oilcapital.com/companies/news/208079/greenland-minerals-works-toward-mine-licence-for-kvanefjeld-rare-earths-208079.html Tue, 30 Oct 2018 04:30:00 +0000 https://www.oilcapital.com/companies/news/208039/oiler-denbury-resources-shares-slip-as-it-s-poised-to-acquire-penn-virginia-in-17b-deal-208039.html Oiler Denbury Resources shares slip as it's poised to acquire Penn Virginia in $1.7B deal https://www.oilcapital.com/companies/news/208039/oiler-denbury-resources-shares-slip-as-it-s-poised-to-acquire-penn-virginia-in-17b-deal-208039.html Mon, 29 Oct 2018 19:36:00 +0000 https://www.oilcapital.com/companies/stocktube/11018/wentworth-resources-restructure-allows-easier-execution-of-growth-opportunities--11018.html Wentworth Resources' restructure allows 'easier execution of growth opportunities' https://www.oilcapital.com/companies/stocktube/11018/wentworth-resources-restructure-allows-easier-execution-of-growth-opportunities--11018.html 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.

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https://www.oilcapital.com/companies/news/208032/mosman-s-texas-operations-flowing-again-after-heavy-rain-abates-208032.html Mosman's Texas operations flowing again after heavy rain abates https://www.oilcapital.com/companies/news/208032/mosman-s-texas-operations-flowing-again-after-heavy-rain-abates-208032.html Mon, 29 Oct 2018 12:30:00 +0000 https://www.oilcapital.com/companies/stocktube/11019/touchstone-exploration-looks-ahead-to-game-changing-2019-plans-11019.html Touchstone Exploration looks ahead to 'game-changing' 2019 plans https://www.oilcapital.com/companies/stocktube/11019/touchstone-exploration-looks-ahead-to-game-changing-2019-plans-11019.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30203/vsa-capital-market-movers-lake-resources-30203.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30203/vsa-capital-market-movers-lake-resources-30203.html 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. 

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https://www.oilcapital.com/companies/stocktube/11021/petsec-energy-ltd-presents-at-oil-capital-october-2018-11021.html Petsec Energy Ltd presents at Oil Capital - October 2018 https://www.oilcapital.com/companies/stocktube/11021/petsec-energy-ltd-presents-at-oil-capital-october-2018-11021.html 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.

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https://www.oilcapital.com/companies/news/208012/88-energy-pleased-with-the-response-to-its-rights-offer-208012.html 88 Energy pleased with the response to its rights offer https://www.oilcapital.com/companies/news/208012/88-energy-pleased-with-the-response-to-its-rights-offer-208012.html Mon, 29 Oct 2018 08:37:00 +0000 https://www.oilcapital.com/companies/stocktube/11020/providence-resources-presents-at-oil-capital-october-2018-11020.html Providence Resources presents at Oil Capital - October 2018 https://www.oilcapital.com/companies/stocktube/11020/providence-resources-presents-at-oil-capital-october-2018-11020.html 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.

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https://www.oilcapital.com/companies/stocktube/11024/wentworth-resources-presents-at-oil-capital-october-2018-11024.html Wentworth Resources presents at Oil Capital - October 2018 https://www.oilcapital.com/companies/stocktube/11024/wentworth-resources-presents-at-oil-capital-october-2018-11024.html 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.

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https://www.oilcapital.com/companies/stocktube/11022/sonorex-oil-gas-ltd-presents-at-oil-capital-october-2018-11022.html Sonorex Oil & Gas Ltd presents at Oil Capital - October 2018 https://www.oilcapital.com/companies/stocktube/11022/sonorex-oil-gas-ltd-presents-at-oil-capital-october-2018-11022.html 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.

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https://www.oilcapital.com/companies/stocktube/11005/united-oil-gas-plc-presents-at-oil-capital-october-2018-11005.html United Oil & Gas Plc presents at Oil Capital - October 2018 https://www.oilcapital.com/companies/stocktube/11005/united-oil-gas-plc-presents-at-oil-capital-october-2018-11005.html 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.

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https://www.oilcapital.com/companies/stocktube/11003/simec-atlantis-shares-set-for-almighty-rebound-on-meygen-and-uskmouth-potential-11003.html Simec Atlantis shares set for 'almighty rebound' on MeyGen and Uskmouth potential https://www.oilcapital.com/companies/stocktube/11003/simec-atlantis-shares-set-for-almighty-rebound-on-meygen-and-uskmouth-potential-11003.html 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.

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https://www.oilcapital.com/columns/the-pay-zone/30198/oil-price-president-savannah-sound-reabold-eco-atlantic-afren-and-finally-30198.html Oil price, President, Savannah, Sound, Reabold, Eco Atlantic, Afren And finally… https://www.oilcapital.com/columns/the-pay-zone/30198/oil-price-president-savannah-sound-reabold-eco-atlantic-afren-and-finally-30198.html 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…..

Afren
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

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https://www.oilcapital.com/companies/stocktube/10996/whitebark-energy-sells-xanadu-to-focus-on-canada-10996.html Whitebark Energy sells Xanadu to focus on Canada https://www.oilcapital.com/companies/stocktube/10996/whitebark-energy-sells-xanadu-to-focus-on-canada-10996.html 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.

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https://www.oilcapital.com/columns/the-pay-zone/30191/cairnfar-range-30191.html Cairn/Far, Range https://www.oilcapital.com/columns/the-pay-zone/30191/cairnfar-range-30191.html 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.

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https://www.oilcapital.com/companies/stocktube/10980/brookside-takes-on-property-investor-as-oklahoma-wells-come-online Brookside takes on property investor as Oklahoma wells come online https://www.oilcapital.com/companies/stocktube/10980/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.

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https://www.oilcapital.com/companies/stocktube/10962/bright-innovations-heads-for-asx-listing-with-investment-from-mayfair-101-10962.html Bright Innovations heads for ASX listing with investment from Mayfair 101 https://www.oilcapital.com/companies/stocktube/10962/bright-innovations-heads-for-asx-listing-with-investment-from-mayfair-101-10962.html 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.

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https://www.oilcapital.com/columns/the-pay-zone/30184/oil-price-far-limited-rockrose-energy-petro-matad-and-finally-30184.html Oil price, Far Limited, RockRose Energy, Petro Matad And finally… https://www.oilcapital.com/columns/the-pay-zone/30184/oil-price-far-limited-rockrose-energy-petro-matad-and-finally-30184.html 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.

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https://www.oilcapital.com/companies/stocktube/10942/fluence-corporation-on-track-for-80-growth-this-year-quarterly-ebita-profits-in-2019-10942.html Fluence Corporation 'on track' for 80% growth this year, quarterly EBITA profits in 2019 https://www.oilcapital.com/companies/stocktube/10942/fluence-corporation-on-track-for-80-growth-this-year-quarterly-ebita-profits-in-2019-10942.html 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.

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https://www.oilcapital.com/columns/the-pay-zone/30177/oil-price-president-echo-vog-zenith-and-finally-30177.html Oil price, President, Echo, VOG, Zenith, And finally… https://www.oilcapital.com/columns/the-pay-zone/30177/oil-price-president-echo-vog-zenith-and-finally-30177.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30175/vsa-capital-market-movers-lake-resources-30175.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30175/vsa-capital-market-movers-lake-resources-30175.html 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

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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.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30176/vsa-capital-market-movers-lake-resources-30176.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30176/vsa-capital-market-movers-lake-resources-30176.html 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

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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.

 

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https://www.oilcapital.com/companies/stocktube/10941/victoria-oil-gas-advancing-its-non-grid-solutions-as-gas-sales-rise-10941.html Victoria Oil & Gas advancing its non-grid solutions as gas sales rise https://www.oilcapital.com/companies/stocktube/10941/victoria-oil-gas-advancing-its-non-grid-solutions-as-gas-sales-rise-10941.html 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.

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https://www.oilcapital.com/companies/stocktube/10939/anglo-african-oil-gas-past-the-danger-zone-as-tlp-103c-drilling-progresses-10939.html Anglo African Oil & Gas 'past the danger zone' as TLP-103C drilling progresses https://www.oilcapital.com/companies/stocktube/10939/anglo-african-oil-gas-past-the-danger-zone-as-tlp-103c-drilling-progresses-10939.html Mon, 22 Oct 2018 11:30:00 +0100 David Sefton, executive chairman of Anglo African Oil & Gas plc (LON:AAOG), updates Proactive London's Andrew Scott on drilling at the TLP 103 well on the Tilapia field two weeks after it was spudded.

''We finished, at the end of last week, drilling the first section of the well, just over 300 metres down, that's now been cemented and cased''.

''Critically that takes us past the depths in which we encountered problems on the previous well'', Sefton says.

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https://www.oilcapital.com/columns/the-pay-zone/30161/sdx-energy-far-ltd-30161.html SDX Energy, Far Ltd https://www.oilcapital.com/columns/the-pay-zone/30161/sdx-energy-far-ltd-30161.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30156/vsa-capital-market-movers-m2-cobalt-30156.html VSA CAPITAL MARKET MOVERS - M2 Cobalt https://www.oilcapital.com/columns/vsa-capital-market-movers/30156/vsa-capital-market-movers-m2-cobalt-30156.html 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.


 

 

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https://www.oilcapital.com/companies/stocktube/10903/arafura-resources-leveraged-to-increasing-market-with-a-very-limited-supply-base--10903.html Arafura Resources leveraged to 'increasing market with a very limited supply base' https://www.oilcapital.com/companies/stocktube/10903/arafura-resources-leveraged-to-increasing-market-with-a-very-limited-supply-base--10903.html Thu, 18 Oct 2018 03:43:00 +0100 Arafura Resources Ltd (ASX:ARU) CEO Gavin Lockyer speaks to Proactive Investors about the memorandum of understanding signed with JingCi Material Science Co Ltd for the supply of neodymium-praseodymium (NdPr) oxide from the rare earths-focused company's Nolans Project in Australia's Northern Territory.

Lockyer says, "this offtake really plays in nicely with our development program at the moment. We're almost [completed with] our definitive feasibility study, the results of which are due to be released by the end of this year. Together with these offtake agreements that we're working hard to formalise, that will accumulate in project finance and project execution, and in investment decision by our board in the new year - which is extremely exciting for us."

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https://www.oilcapital.com/columns/the-pay-zone/30154/sound-trinity-amerisur--30154.html Sound, Trinity, Amerisur ............... https://www.oilcapital.com/columns/the-pay-zone/30154/sound-trinity-amerisur--30154.html 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.

Trinity

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.

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https://www.oilcapital.com/companies/stocktube/10884/powerhouse-energy-hails-seal-of-approval-for-its-waste-to-energy-technology-10884.html PowerHouse Energy hails 'seal of approval' for its waste-to-energy technology https://www.oilcapital.com/companies/stocktube/10884/powerhouse-energy-hails-seal-of-approval-for-its-waste-to-energy-technology-10884.html Wed, 17 Oct 2018 14:05:00 +0100 Keith Allaun, chairman of PowerHouse Energy Group PLC (LON:PHE), caught up with Proactive London's Andrew Scott as the firm received an independent endorsement of its technology. 

DNV GL, a global leader in technical assurance certification, conducted a review of PowerHouse’s proprietary full-scale commercial engineering design for the waste to power and waste to hydrogen technology processes known as DMG.

The end result was the issue of a “Statement of Feasibility” by DNV, which signifies that the consultant found no prohibitive obstacles under its technology qualification process.

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https://www.oilcapital.com/companies/stocktube/10883/caution-over-berkeley-energia-report-casting-doubt-over-spanish-government-approval-10883.html Caution over Berkeley Energia report casting doubt over Spanish government approval https://www.oilcapital.com/companies/stocktube/10883/caution-over-berkeley-energia-report-casting-doubt-over-spanish-government-approval-10883.html Wed, 17 Oct 2018 12:24:00 +0100 Numis Securities analyst Justin Chan chats to Proactive London's Andrew Scott following a Reuters report suggesting Spain’s government will not issue the required permits for construction of Berkeley Energia Ltd 's (LON:BKY) Salamanca mine to go-ahead, even though the project was granted preliminary approval.

In a statement, Berkeley said that it had received no official notice from the Nuclear Council nor any other government department to that effect.

BKY added it had contacted both the Council and Energy and Environment Ministry to clarify the position.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30148/vsa-capital-market-movers-m2-cobalt-30148.html VSA CAPITAL MARKET MOVERS - M2 Cobalt https://www.oilcapital.com/columns/vsa-capital-market-movers/30148/vsa-capital-market-movers-m2-cobalt-30148.html 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.

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https://www.oilcapital.com/companies/stocktube/10873/high-peak-royalties-chairman-discusses-acquisition-debt-facility-and-share-placement-10873.html High Peak Royalties chairman discusses acquisition, debt facility, and share placement https://www.oilcapital.com/companies/stocktube/10873/high-peak-royalties-chairman-discusses-acquisition-debt-facility-and-share-placement-10873.html Tue, 16 Oct 2018 23:17:00 +0100 High Peak Royalties Ltd (ASX:HPR) chairman Andrew Carroll speaks to Proactive Investors about recent news of a royalty acquisition, US$15 million debt facility with Macquarie Bank, and A$1.25 million share placement.

The oil & gas-focused company came out of a trading halt this morning.

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https://www.oilcapital.com/columns/the-pay-zone/30144/oil-price-sound-energy-podcasts-and-finally-30144.html Oil price, Sound Energy, Podcasts And finally... https://www.oilcapital.com/columns/the-pay-zone/30144/oil-price-sound-energy-podcasts-and-finally-30144.html 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

Links

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.

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https://www.oilcapital.com/columns/the-pay-zone/30139/oil-price-hurricane-echo-zenith-president-columbus-and-finally-30139.html Oil price, Hurricane, Echo, Zenith, President, Columbus And finally… https://www.oilcapital.com/columns/the-pay-zone/30139/oil-price-hurricane-echo-zenith-president-columbus-and-finally-30139.html 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…

Link

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…

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https://www.oilcapital.com/companies/stocktube/10849/columbus-energy-resources-to-raise-25mln-to-accelerate-growth-strategy--10849.html Columbus Energy Resources to raise £2.5mln to 'accelerate growth strategy' https://www.oilcapital.com/companies/stocktube/10849/columbus-energy-resources-to-raise-25mln-to-accelerate-growth-strategy--10849.html Mon, 15 Oct 2018 09:50:00 +0100 Leo Koot, chief executive of Columbus Energy Resources PLC (LON:CERP), discusses with Proactive London's Andrew Scott a decision to raise around £2.5mln to 'fund an accelerated growth strategy'

The raise has been backed by new and existing shareholders including Schroders, Michael Joseph and Burggraben.

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https://www.oilcapital.com/companies/stocktube/10848/block-energy-s-paul-haywood-chats-to-proactive-as-well-workover-program-begins-10848.html Block Energy's Paul Haywood chats to Proactive as well-workover program begins https://www.oilcapital.com/companies/stocktube/10848/block-energy-s-paul-haywood-chats-to-proactive-as-well-workover-program-begins-10848.html Mon, 15 Oct 2018 09:41:00 +0100 Paul Haywood, director at Block Energy Plc (LON:BLOE), skyped into the Proactive London studio as a programme of well work-overs at the Norio oil field, in the Republic of Georgia, got underway.

Block plans to carry out two work-over programmes, one through late 2018 and one in the first quarter of 2019.

The current programme begins with the preparation of four of eight existing wells, before new perforation technology will bypass any damage caused by historic heavy mud drilling.

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https://www.oilcapital.com/companies/stocktube/10833/real-energy-corporation-very-well-placed-to-sell-gas-into-the-grid-potentially-next-year--10833.html Real Energy Corporation 'very well placed to sell gas into the grid, potentially next year' https://www.oilcapital.com/companies/stocktube/10833/real-energy-corporation-very-well-placed-to-sell-gas-into-the-grid-potentially-next-year--10833.html Sun, 14 Oct 2018 22:01:00 +0100 Real Energy Corporation Ltd (ASX:RLE) CEO and executive director Scott Brown speaks to Proactive Investors about the oil and gas explorer's large-scale asset in the Cooper Basin, located onshore in Queensland, Australia, where gas supply is short and prices are high.

"We're very familiar with the Cooper Basin, it's got great geology and it's got excellent proximity to both pipeline infrastructure and gas plants. We've got an agreement with both Santos [Limited (ASX:STO)] and Beach [Energy (ASX:BPT)] for our gas processing there," says Brown.

He continues, "we've drilled four wells in our Windorah Gas Project; all four wells have discovered gas... the independent geological assessment is 13.7 trillion cubic feet of gas in place, which is a very large number."

The company is anticipating results from well stimulation on Tamarama 2 and Tamarama 3 which were drilled this year.

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https://www.oilcapital.com/companies/stocktube/10828/australian-mines-demonstration-plant-informs-future-sconi-development-10828.html Australian Mines’ demonstration plant informs future Sconi development https://www.oilcapital.com/companies/stocktube/10828/australian-mines-demonstration-plant-informs-future-sconi-development-10828.html Thu, 11 Oct 2018 23:02:00 +0100 Australian Mines Ltd (ASX:AUZ) chief operating officer Tim Maclean talks Proactive Investors through processing works at the company's demonstration plant, and provides updates on the Sconi Cobalt-Nickel-Scandium Project's bankable feasibility study (BFS).

The latest progress also bodes well for the Flemington Cobalt-Scandium-Nickel project, which has similar geology.

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https://www.oilcapital.com/companies/stocktube/10826/touchstone-exploration-hits-major-milestone-as-the-company-ramps-up-production-10826.html Touchstone Exploration hits major milestone as the company ramps up production https://www.oilcapital.com/companies/stocktube/10826/touchstone-exploration-hits-major-milestone-as-the-company-ramps-up-production-10826.html Thu, 11 Oct 2018 18:22:00 +0100 Touchstone Exploration (CVE:TXP) CEO Paul Baay checked in on Skype with Proactive Investor's Steve Darling on our London studio to provide an update on their oil production, which has hit a new milestone in Trinidad and Tobago.

Baay also provided details with on their drill program on the Ortoire project and what the company has planned for the rest of 2018 and in to 2019.

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https://www.oilcapital.com/companies/stocktube/10821/diversified-gas-oil-plc-s-latest-deal-fits-like-a-glove-with-appalachia-assets-10821.html Diversified Gas & Oil PLC's latest deal 'fits like a glove' with Appalachia assets https://www.oilcapital.com/companies/stocktube/10821/diversified-gas-oil-plc-s-latest-deal-fits-like-a-glove-with-appalachia-assets-10821.html Thu, 11 Oct 2018 14:46:00 +0100 Rusty Hutson, Diversified Gas's (LON:DGOC)  chief executive, tells Proactive that Core Appalachia fits perfectly with its recent purchases in the Appalachian Basin.

The deal also brings 4,100 miles of gas pipelines with associated transmission fees plus the opportunity to add revenue from non-gas liquids (NGLs).

DGOC is now a 70,000 boe per day producer, he says, which makes it among the top of those listed in London and the largest on AIM.

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https://www.oilcapital.com/companies/stocktube/10810/perseus-mining-can-now-very-confidently-move-forward-with-funding-yaour-gold-project-10810.html Perseus Mining 'can now very confidently move forward with funding' Yaouré Gold Project https://www.oilcapital.com/companies/stocktube/10810/perseus-mining-can-now-very-confidently-move-forward-with-funding-yaour-gold-project-10810.html Thu, 11 Oct 2018 04:46:00 +0100 Perseus Mining Limited (ASX:PRU) (TSX:PRU) chief executive Jeff Quartermaine speaks to Proactive Investors about the successful completion of a front-end engineering design (FEED) study for the Yaouré Gold Project, which is set to become the gold producer's third operating mine in West Africa.

Quartermaine also teases on the timing and content of the company's upcoming quarterly report.

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https://www.oilcapital.com/companies/stocktube/10805/permex-petroleum-using-waterflood-program-to-increase-production-at-bullard-project-10805.html Permex Petroleum using waterflood program to increase production at Bullard Project https://www.oilcapital.com/companies/stocktube/10805/permex-petroleum-using-waterflood-program-to-increase-production-at-bullard-project-10805.html Wed, 10 Oct 2018 18:04:00 +0100 Permex Petroleum (CSE:OIL) CEO Mehran Ehsan dropped in to the Vancouver studio of Proactive Investors to talk about a change at the companies Bullard Property. Ehsan says they are going to use a waterflood program to dramatically  increase the amount of oil they are bring to the surface.

Ehsan also talk about how this small project will have a major impact on Permex's overall portfolio. 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30120/vsa-capital-market-movers-dekeloil-30120.html VSA CAPITAL MARKET MOVERS - DekelOil https://www.oilcapital.com/columns/vsa-capital-market-movers/30120/vsa-capital-market-movers-dekeloil-30120.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Eden Research

23.31

11.25

0.25

+2.3%

Zambeef Products

33.82

11.25

0.20

+1.8%

Devro

341.28

204.50

1.00

+0.5%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Anpario

103.02

445.00

(25.00)

-5.3%

Sirius Minerals

1,196.14

25.44

(1.00)

-3.8%

Produce Investments

48.40

178.50

(6.50)

-3.5%

 

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https://www.oilcapital.com/companies/stocktube/10777/high-peak-royalties-unique-model-offers-low-risk-exposure-to-energy-sector-10777.html High Peak Royalties' unique model offers low-risk exposure to energy sector https://www.oilcapital.com/companies/stocktube/10777/high-peak-royalties-unique-model-offers-low-risk-exposure-to-energy-sector-10777.html Tue, 09 Oct 2018 03:20:00 +0100 High Peak Royalties Ltd (ASX:HPR) chairman Andrew Carroll introduces Proactive Investors to the oil & gas-focused company's business model and portfolio of royalties on producing properties around Australia and the US.
 
"One of the attractive aspects of royalties is they're very low risk, they're not exposed to the costs of the business, it simply generates revenue from production," explains Carroll.
 
High Peak's portfolio in Australia has a lot of exploration acreage but also includes income-producing royalties from operations in the USA.
 
The company has more than $1 million cash on hand and, having no employees, runs very low-cost overheads which are met by existing revenue. 
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https://www.oilcapital.com/companies/stocktube/10772/walkabout-resources-plans-capital-raising-to-expedite-development-of-lindi-jumbo-graphite-project-10772.html Walkabout Resources plans capital raising to expedite development of Lindi Jumbo Graphite Project https://www.oilcapital.com/companies/stocktube/10772/walkabout-resources-plans-capital-raising-to-expedite-development-of-lindi-jumbo-graphite-project-10772.html Mon, 08 Oct 2018 22:34:00 +0100 Walkabout Resources Ltd (ASX:WKT) chairman Trevor Benson updates Proactive Investors on the explorer’s underwritten $3-million share purchase plan (SPP) that will open next Friday, October 12.

Funds raised under the SPP will be used to progress development of the Lindi Jumbo Graphite Project in southeastern Tanzania where the company was recently granted a mining licence. With current cash reserves of circa $5 million, the company will have circa $8 million cash at bank upon completion of the SPP before costs.

“With our very strong cash position after this raising we’ll be able to look at alternatives in terms of quasi-debt, debt, soft loans … and we’re looking at a whole raft of different [funding] structures,” Benson says.

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https://www.oilcapital.com/companies/stocktube/10768/canada-forestry-opportunity-one-of-the-biggest-active-energys-spinks-has-ever-seen-10768.html Canada forestry opportunity ‘one of the biggest Active Energy’s Spinks has ever seen’ https://www.oilcapital.com/companies/stocktube/10768/canada-forestry-opportunity-one-of-the-biggest-active-energys-spinks-has-ever-seen-10768.html Mon, 08 Oct 2018 13:43:00 +0100 Active Energy Group PLC's (LON:AEG) executive director Richard Spinks updates Proactive Investors on its interests in Canada where it's now amending its application to the province of Newfoundland and Labrador, to focus exclusively on forestry opportunities and the development of one or more dedicated CoalSwitch plants.

Spinks says he's encouraged by the positive and supportive approach shown by government departments.

He adds that he's now decided to relinquish his board responsibilities and will, instead, focus solely on his role as managing director of the Timberlands subsidiary.

''It's one of the biggest opportunities I've seen in my career .. I'm getting to an age now where I've got to decide what's going to be my focus ... and this is certainly where it's going to be''.

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https://www.oilcapital.com/companies/stocktube/10757/power-clouds-makes-headway-into-the-european-market-as-revenue-jumps-by-50-10757.html Power Clouds makes headway into the European market, as revenue jumps by 50% https://www.oilcapital.com/companies/stocktube/10757/power-clouds-makes-headway-into-the-european-market-as-revenue-jumps-by-50-10757.html Fri, 05 Oct 2018 17:55:00 +0100 Power Clouds Inc (OTCMKTS:PWCL) CEO Vincent Browne tells Proactive Investors that the renewable energy company is making headway into the European market with its solar parks expansion.

Browne says the company reported a 50% increase in year-over-year revenue, primarily due to the acquisition of two solar parks in Italy last year.

The company next plans to expand within Germany "significantly."

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https://www.oilcapital.com/companies/stocktube/10753/g3-exploration-receives-final-approval-to-develop-chengzhuang-block-gcz-10753.html G3 Exploration receives final approval to develop Chengzhuang Block (GCZ) https://www.oilcapital.com/companies/stocktube/10753/g3-exploration-receives-final-approval-to-develop-chengzhuang-block-gcz-10753.html Fri, 05 Oct 2018 13:17:00 +0100 Randeep Grewal, chief executive of G3 Exploration PLC (LON:G3E), spoke to Proactive's Andrew Scott after receiving final approval from China’s National Development and Reform Commission (NDRC) to develop the Chengzhuang Block (GCZ).

The overall development plan approval covers 33 sq km of the 67sq km licence, which is situated in Shanxi Jincheng Qinshui county.

G3 has a 47% participating interest alongside state-controlled China National Petroleum Corporation (CNPC), which holds the remaining 53%.

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https://www.oilcapital.com/companies/stocktube/10749/greencoat-uk-wind-to-acquire-tom-nan-clach-wind-farm-in-scotland-10749.html Greencoat UK Wind to acquire Tom nan Clach wind farm in Scotland https://www.oilcapital.com/companies/stocktube/10749/greencoat-uk-wind-to-acquire-tom-nan-clach-wind-farm-in-scotland-10749.html Fri, 05 Oct 2018 11:33:00 +0100 Greencoat UK Wind PLC's (LON:UKW) Stephen Lilley caught up with Proactive Investors to discuss their decision to spend £126mln on a 13-turbine wind farm in northern Scotland.

It is acquiring Belltown Power’s 75% stake in Tom nan Clach, in Nairnshire.

Currently under development, the operation will be formally handed over to Greencoat next July, a month after its completion.

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https://www.oilcapital.com/companies/stocktube/10745/block-energy-plc-signs-mou-for-gas-offtake-from-west-rustavi-licence-10745.html Block Energy Plc signs MoU for gas offtake from West Rustavi Licence https://www.oilcapital.com/companies/stocktube/10745/block-energy-plc-signs-mou-for-gas-offtake-from-west-rustavi-licence-10745.html Fri, 05 Oct 2018 08:57:00 +0100 Paul Haywood, director of Block Energy Plc (LON:BLOE), tells Proactive's Andrew Scott they've  inked a new agreement for gas sales at the West Rustavi project in Georgia.

A memorandum of understanding with Bago Ltd, one of the largest private gas firms in Georgia, sets out the proposed terms for the sale of at least 1,000 cubic metres of gas per day

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https://www.oilcapital.com/companies/stocktube/10742/lake-wells-potash-project-sets-australian-potash-apart--10742.html Lake Wells Potash Project 'sets Australian Potash apart' https://www.oilcapital.com/companies/stocktube/10742/lake-wells-potash-project-sets-australian-potash-apart--10742.html Fri, 05 Oct 2018 02:10:00 +0100 Australian Potash Ltd (ASX:APC) executive chairman Matt Shackleton speaks to Proactive Investors about the company's formative and flagship Lake Wells Potash Project, located near Laverton in Western Australia, for which mining leases have recently been granted.

A Definitive Feasibility Study (DFS) on the project is well underway, with samples of Sulphate of Potash (SOP) due to be produced before the end of the year.

In addition to signing a Memorandum of Understanding (MOU) with neighbouring Salt Lake Potash Limited (ASX:SO4) (AIM:SO4) to study the benefits of cost sharing to develop the area, Australian Potash is set to benefit from A$35 million of Federal and State funding for the upgrade of a 100 kilometre section of the Great Central Road between Lake Wells and Laverton.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30106/vsa-capital-market-movers-central-asia-metals-30106.html VSA CAPITAL MARKET MOVERS - Central Asia Metals https://www.oilcapital.com/columns/vsa-capital-market-movers/30106/vsa-capital-market-movers-central-asia-metals-30106.html 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. 

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https://www.oilcapital.com/companies/stocktube/10730/mosman-oil-gas-reports-first-sales-from-stanley-1-well-10730.html Mosman Oil & Gas reports first sales from Stanley-1 well https://www.oilcapital.com/companies/stocktube/10730/mosman-oil-gas-reports-first-sales-from-stanley-1-well-10730.html Thu, 04 Oct 2018 10:31:00 +0100 John Barr, executive chairman of Mosman Oil And Gas Ltd (LON:MSMN), tells Proactive's Andrew Scott he's extremely pleased as first sales are confirmed from the Stanley-1 well.

The first tanker load amounted to 190 barrels and some 7mln cubic feet of gas was also sold.

Following on from this Barr says they're keen to move forward with the drilling of the Stanley-2 Well as quickly as possible.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30104/vsa-capital-market-movers-lake-resources-30104.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30104/vsa-capital-market-movers-lake-resources-30104.html 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.

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https://www.oilcapital.com/companies/stocktube/10725/hillcrest-petroleum-prepares-to-restart-production-at-west-hazel-oilfield-in-saskatchewan-10725.html Hillcrest Petroleum prepares to restart production at West Hazel oilfield in Saskatchewan https://www.oilcapital.com/companies/stocktube/10725/hillcrest-petroleum-prepares-to-restart-production-at-west-hazel-oilfield-in-saskatchewan-10725.html Wed, 03 Oct 2018 18:59:00 +0100 Hillcrest Petroleum Inc (CVE:HRH) CEO Don Currie came in to the Vancouver office of Proactive Investors with news the company is getting ready to restart production at the West Hazel oil field in Saskatchewan. 

Currie also talked about how much that will cost and what type of drilling program will begin in 2019.

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https://www.oilcapital.com/companies/stocktube/10715/west-newton-acquisition-a-cracking-deal-for-union-jack-oil-plc-10715.html West Newton acquisition 'a cracking deal' for Union Jack Oil Plc https://www.oilcapital.com/companies/stocktube/10715/west-newton-acquisition-a-cracking-deal-for-union-jack-oil-plc-10715.html Wed, 03 Oct 2018 12:27:00 +0100 David Bramhill, executive chairman of Union Jack Oil PLC (LON:UJO) discusses with Proactive's Andrew Scott their decision to acquire a 16.667% stake in the West Newton gas discovery in Yorkshire.

To support the transaction UJO's raising £2.25mln of new capital.

The transaction's been agreed with Rathlin Energy, a subsidiary of Canadian firm Connaught Oil & Gas, via a farm-out that commits UJO to cover 25% of the cost of an appraisal well in the first quarter of 2019.

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https://www.oilcapital.com/companies/stocktube/10713/reabold-resources-busy-in-california-looking-ahead-to-uk-drilling-10713.html Reabold Resources busy in California & looking ahead to UK drilling https://www.oilcapital.com/companies/stocktube/10713/reabold-resources-busy-in-california-looking-ahead-to-uk-drilling-10713.html Wed, 03 Oct 2018 08:54:00 +0100 Sachin Oza and Stephen Williams, co-chief executives of Reabold Resources Plc (LON:RBD) stopped by the Proactive London studio to update on progress across the company's portfolio of projects.

In California they've recently had a successful workover programme as well as drilling their first well at West Brentwood.

This week Reabold's also signed a contract for a jack-up rig to drill the Wick and Colter wells which is expected to get underway before the end of the year.

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https://www.oilcapital.com/companies/stocktube/10708/invictus-energy-advances-zimbabwe-gas-condensate-asset-amid-regulatory-reforms-10708.html Invictus Energy advances Zimbabwe gas-condensate asset amid regulatory reforms https://www.oilcapital.com/companies/stocktube/10708/invictus-energy-advances-zimbabwe-gas-condensate-asset-amid-regulatory-reforms-10708.html Wed, 03 Oct 2018 04:06:00 +0100 Invictus Energy Ltd (ASX:IVZ) managing director Scott Macmillan speaks to Proactive Investors about the oil and gas exploration company’s Cabora Bassa Project in northern Zimbabwe.
 
“It’s a fantastic asset that we’ve picked up – it was previously explored by Mobil over 30 years ago and it’s been sitting dormant, locked up for the past 25 years.
 
He continues, “the basin is very exciting and the portion of acreage that we’ve picked up contains the Mzarabani prospect.
 
“It’s the largest undrilled seismically-defined structure in onshore Africa that’s got multi-trillion cubic feet potential.”
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https://www.oilcapital.com/companies/stocktube/10704/keith-schaefer-from-oil-and-gas-investment-bulletin-weighs-in-on-lng-in-bc-10704.html Keith Schaefer from Oil and Gas Investment Bulletin weighs in on LNG in BC https://www.oilcapital.com/companies/stocktube/10704/keith-schaefer-from-oil-and-gas-investment-bulletin-weighs-in-on-lng-in-bc-10704.html Tue, 02 Oct 2018 21:02:00 +0100 Energy Market Analyst Keith Schaefer from the Oil and Gas Investment Bulletin gives us his thoughts on the new LNG deal announced in British Columbia, Canada.  A 40 billion dollar mega project, the largest in Canadian history.

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https://www.oilcapital.com/companies/stocktube/10690/aly-energy-services-ceo-says-its-strong-earnings-will-bolster-growth-10690.html Aly Energy Services CEO says its strong earnings will bolster growth https://www.oilcapital.com/companies/stocktube/10690/aly-energy-services-ceo-says-its-strong-earnings-will-bolster-growth-10690.html Tue, 02 Oct 2018 12:03:00 +0100 Aly Energy Services Inc. (OTCQB:ALYE) Interim CEO Micki Hidayatallah updated Proactive Investors at the MicroCap Conference in New York.

Aly Energy Services, Inc., together with its subsidiaries, is a provider of oilfield services to leading oil and gas exploration and production companies.

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https://www.oilcapital.com/companies/stocktube/10668/eqtec-plc-in-a-strong-position-to-return-to-profitability-ceo-ian-price-10668.html EQTEC Plc in a strong position to return to profitability - CEO Ian Price https://www.oilcapital.com/companies/stocktube/10668/eqtec-plc-in-a-strong-position-to-return-to-profitability-ceo-ian-price-10668.html Mon, 01 Oct 2018 12:22:00 +0100 Ian Price, chief executive of EQTEC Plc (LON:EQT), caught up with Proactive London's Andrew Scott following the release of their 2018 interim results.

After carrying out a strategic review of the business since taking over as CEO, Price says the focus for them going forward is delivering on its strong pipeline of projects.

Following the agreement of an increased loan facility, he adds that they're well capitalised and he doesn't see a need for a placing in the near future.

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https://www.oilcapital.com/companies/stocktube/10669/petrel-resources-riding-a-new-oil-rd-boom-10669.html Petrel Resources riding a new oil R&D boom https://www.oilcapital.com/companies/stocktube/10669/petrel-resources-riding-a-new-oil-rd-boom-10669.html Mon, 01 Oct 2018 07:14:00 +0100 "Politics changes, geology doesn't".. the company motto is repeated here by Petrel Resources (LON:PET) CEO David Horgan.

''Petrel's best known for its activities in Iraq ... we've been very active there since 1999 but we found from about the year 2010 it became too corrupt and too chaotic especially in the areas we were working in so we've kept a close eye on developments .... and now with the recent elections things are looking much better''.

''We're now quietly mobilising our teams and we're very optimistic we'll be back working in Iraq in the near future''.

Horgan spoke to Proactive shortly after the release of the firm's interim results - a period in which the focus of the company was mainly on the Irish Atlantic Porcupine Basin.

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https://www.oilcapital.com/companies/stocktube/10634/it-s-a-transformative-time-for-lithium-producing-tawana-resources-10634.html It's a transformative time for lithium-producing Tawana Resources https://www.oilcapital.com/companies/stocktube/10634/it-s-a-transformative-time-for-lithium-producing-tawana-resources-10634.html Thu, 27 Sep 2018 03:30:00 +0100 Tawana Resources NL (ASX:TAW) managing director Mark Calderwood speaks to Proactive Investors in detail about the ongoing merger process with Bald Hill Mine co-owner Alliance Mineral Assets (SGX:AMAL).

"The two companies are going to merge to make a larger, more streamlined company going forward... we fully intend to stay on the ASX... we will also be Singapore listed... it's a merger of equals," explains Calderwood.

He also provides updates on the development of and production from the Bald Hill Mine in Western Australia.

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https://www.oilcapital.com/companies/stocktube/10631/tinka-resources-to-update-resource-and-explore-new-discoveries-after-drilling-20000m-10631.html Tinka Resources to update resource and explore new discoveries after drilling 20,000m https://www.oilcapital.com/companies/stocktube/10631/tinka-resources-to-update-resource-and-explore-new-discoveries-after-drilling-20000m-10631.html Thu, 27 Sep 2018 03:00:00 +0100 Tinka Resources Ltd (CVE:TK) chief executive Dr Graham Carman updates Proactive Investors on drilling results flowing from the company's flagship Ayawilca zinc and tin project in Peru. This year alone Tinka has drilled around 20,000 metres across the project area, adding to 46,000 metres drilled since the initial discovery. As a result, new discoveries have been made.

"It's one of the largest zinc resources in the world, in a junior company, and we think it's going to be a mine," says Carman.

A resource update is slated to be announced in a matter of weeks, with a PEA planned for the start of next year.

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https://www.oilcapital.com/companies/stocktube/10630/melbana-energy-developing-a-game-changer-prospect-in-addition-to-other-assets-10630.html Melbana Energy developing a 'game changer' prospect, in addition to other assets https://www.oilcapital.com/companies/stocktube/10630/melbana-energy-developing-a-game-changer-prospect-in-addition-to-other-assets-10630.html Thu, 27 Sep 2018 02:20:00 +0100 Melbana Energy Ltd (ASX:MAY) CEO Robert Zammit speaks to Proactive Investors about the oil & gas exploration company's interesting and diverse portfolio of assets, spanning two projects in Cuba as well as the large-scale Beehive prospect, and methanol & LNG operations in Australia.

Zammit identifies seven key catalysts for the company moving into 2019, including some significant news that is expected to be announced imminently.

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https://www.oilcapital.com/companies/stocktube/10611/sacgascos-california-focus-holds-both-gas-potential-and-ready-made-markets-10611.html Sacgasco’s California focus holds both gas potential and ready-made markets https://www.oilcapital.com/companies/stocktube/10611/sacgascos-california-focus-holds-both-gas-potential-and-ready-made-markets-10611.html Wed, 26 Sep 2018 03:18:00 +0100 Sacgasco Ltd (ASX:SGC) managing director Gary Jeffery speaks to Proactive Investors about the Perth-based gas company’s Sacramento Basin operations in California. 
 
“We see lots of opportunity in that basin. The shallow part of the basin has produced close to 13 trillion cubic feet of gas and in excess of 11 trillion cubic feet,” Jeffery says.
 
He continues, “there are thousands of wells in the shallow part of the basin, yet the deeper part of the basin is very underexplored – and that’s our opportunity.
 
“Initially we’re focused on a million acres in the northern part of the basin which we think can be very prolific and hold a lot of world-class gas potential.”
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https://www.oilcapital.com/companies/stocktube/10604/alectra-utilities-running-pilot-project-with-mcloud-corporation-10604.html Alectra Utilities running pilot project with mCloud corporation. https://www.oilcapital.com/companies/stocktube/10604/alectra-utilities-running-pilot-project-with-mcloud-corporation-10604.html Tue, 25 Sep 2018 22:04:00 +0100 Alectra Utilities's Manager of Station Sustainment Vince Polsoni joined Steve Darling from Proactive Investors in Lav Vegas at the mCloud Connect 2018 conference to discuss the pilot project Alectra and mCloud are doing. 

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https://www.oilcapital.com/companies/stocktube/10589/arcimoto-is-catalyzing-the-shift-towards-a-sustainable-transportation-system--10589.html Arcimoto is 'catalyzing the shift towards a sustainable transportation system' https://www.oilcapital.com/companies/stocktube/10589/arcimoto-is-catalyzing-the-shift-towards-a-sustainable-transportation-system--10589.html Tue, 25 Sep 2018 16:33:00 +0100 Mark D. Frohnmayer, chief executive of Arcimoto Inc (NASDAQ:FUV), spoke to Proactive Investors at the LD Micro Conference in New York.

After 11 years in the computer games industry and a successful exit from his first start-up, GarageGames, Frohnmayer turned his entrepreneurial energy towards sustainable business development in Oregon. His new company Arcimoto brings affordable, sustainable vehicles to the masses and aims to be a major player in the new green transportation space. The company sells three-wheeled electric vehicles and was formerly known as WTP Inc and changed its name to Arcimoto in December 2011. The firm is based in Eugene, Oregon.

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https://www.oilcapital.com/companies/stocktube/10585/providence-resources-eyes-up-multi-billion-barrel-exploration-targets-10585.html Providence Resources eyes up multi-billion barrel exploration targets https://www.oilcapital.com/companies/stocktube/10585/providence-resources-eyes-up-multi-billion-barrel-exploration-targets-10585.html Tue, 25 Sep 2018 13:10:00 +0100 Providence Resources PLC's (LON:PVR) Tony O'Reilly tells Proactive that the company is eyeing up drilling targets that have multi-billion barrel potential.    

He adds that Providence is in a "great" cash position with over €12mln in cash and no debt as well as no working capital requirements for the next few years.

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https://www.oilcapital.com/companies/stocktube/10582/tekmar-already-attracting-big-investors-since-june-ipo-10582.html Tekmar already attracting big investors since June IPO https://www.oilcapital.com/companies/stocktube/10582/tekmar-already-attracting-big-investors-since-june-ipo-10582.html Tue, 25 Sep 2018 12:41:00 +0100 Tekmar Group PLC's (LON:TGP) James Ritchie tells Proactive that the company has seen a strong rise over 30 years, going from a family business all the way to its IPO in June this year.

Ritchie adds that the firm has a 70% global market share for its subsea cable protection product that is used to connect offshore wind farms around the world.

Tekmar has already attracted some big names, with Ritchie saying 70% of its shares are held by top 10 institutional investors.

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https://www.oilcapital.com/companies/stocktube/10581/rose-petroleum-on-track-to-spud-first-well-at-paradox-basin-in-utah-by-year-end-10581.html Rose Petroleum on track to spud first well at Paradox Basin in Utah by year-end https://www.oilcapital.com/companies/stocktube/10581/rose-petroleum-on-track-to-spud-first-well-at-paradox-basin-in-utah-by-year-end-10581.html Tue, 25 Sep 2018 10:03:00 +0100 Matthew Idiens, Rose Petroleum PLC's (LON:ROSE) chief executive, tells Proactive it has applied for three permits at Paradox, one of which will be the first well drilled on the property by the company.

Spudding is expected in the fourth quarter with the permitting process going well, he adds.

Paradox was given a value of US$86mln in a recent independent report and once drilling starts Idiens hopes this will start to be reflected in Rose's market value.

"Rose is in a really good place and I am really pleased about how the future looks," he told Proactive.

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https://www.oilcapital.com/companies/stocktube/10579/mosman-oil-and-gas-leveraging-strategic-alliance-for-project-development-10579.html Mosman Oil and Gas leveraging strategic alliance for project development https://www.oilcapital.com/companies/stocktube/10579/mosman-oil-and-gas-leveraging-strategic-alliance-for-project-development-10579.html Tue, 25 Sep 2018 07:29:00 +0100 Mosman Oil And Gas (LON:MNMN) technical director Andy Carroll updates Proactive Investors on the energy company’s strategic alliance with Baja Oil and Gas LLC and developments across the two projects that comprise the partnership, Champion and Challenger.

“One of the big positives on Champion is that Baja had 100% of this project so Mosman was able to increase the percentage we’ve acquired from Baja, so we’ve taken 60% on that project,” Carroll says.

He continues, “we really like it … there is existing infrastructure in the area, we can drill those wells in the near future and existing infrastructure means they can come on production very quickly.

“With Challenger, it’s the redevelopment of an existing oil field … there’s enough information to get a reserve estimate on that area and 3D seismic will show the sweet spots where we think development wells best be located.”

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https://www.oilcapital.com/companies/stocktube/10578/key-petroleum-addresses-downturn-with-contract-operations-while-developing-its-projects-10578.html Key Petroleum addresses downturn with contract operations while developing its projects https://www.oilcapital.com/companies/stocktube/10578/key-petroleum-addresses-downturn-with-contract-operations-while-developing-its-projects-10578.html Tue, 25 Sep 2018 06:58:00 +0100 Key Petroleum Ltd (ASX:KEY) managing director Kane Marshall speaks to Proactive Investors about the Perth-based oil and gas company’s projects across the Perth and Cooper Basins as well as its additional contract operator business.
 
“We’ve actually adapted to the downturn and identified that not only do you need a means to survive, we actually needed to address costs, not only for our own exploration and operation assets but also other operators’”, Marshall says.
 
He continues, “we have now got about 3 or 4 clients that we have provided services in terms of rehabilitation, remediation, civil earthworks, compliance, and that will fold into our own E&P business as a contract operator.
 
“We are sort of a vertically-integrated company … but that sets us aside from a lot of our other peers.”
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https://www.oilcapital.com/companies/stocktube/10571/block-energy-the-investment-case-10571.html Block Energy - The investment case https://www.oilcapital.com/companies/stocktube/10571/block-energy-the-investment-case-10571.html Mon, 24 Sep 2018 13:16:00 +0100 Chief executive Paul Haywood pitches the Block Energy investment case to investors at the Oil Capital Conference, which took place on 4 September in London.

See Paul's full presentation here

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https://www.oilcapital.com/companies/stocktube/10570/block-energy-three-value-creating-steps-to-oil-and-gas-success-in-georgia-10570.html Block Energy - Three value creating steps to oil and gas success in Georgia https://www.oilcapital.com/companies/stocktube/10570/block-energy-three-value-creating-steps-to-oil-and-gas-success-in-georgia-10570.html Mon, 24 Sep 2018 11:40:00 +0100 Block Energy chief executive Paul Hayward talks investors through the company’s opportunity to take ‘early mover advantage’ in Georgia, before giving a detailing insight into the timelines and catalysts that investors can look forward over the next years and beyond.

Oil Capital Conference, took place on 4 September in London

See Paul's full presentation here

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https://www.oilcapital.com/companies/stocktube/10569/block-energy-west-rustavi-is-the-jewel-in-the-crown-10569.html Block Energy - West Rustavi is the ‘jewel in the crown’ https://www.oilcapital.com/companies/stocktube/10569/block-energy-west-rustavi-is-the-jewel-in-the-crown-10569.html Mon, 24 Sep 2018 11:30:00 +0100 Block Energy chief executive Paul Haywood tells investors about the proven oil discovery, which is contiguous to Georgia’s largest field to date. Here the company intends to use horizontal drilling methods to unlock a low-risk, high production operation.

“We are taking a proven concept and applying it to a proven play in West Rustavi”

Oil Capital Conference, took place on 4 September in London

See Paul's full presentation here

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https://www.oilcapital.com/companies/stocktube/10567/block-energy-turning-unloved-norio-and-satskenisi-fields-into-high-impact-projects-10567.html Block Energy - Turning ‘unloved’ Norio and Satskenisi fields into high impact projects https://www.oilcapital.com/companies/stocktube/10567/block-energy-turning-unloved-norio-and-satskenisi-fields-into-high-impact-projects-10567.html Mon, 24 Sep 2018 10:56:00 +0100 Block Energy chief executive Paul Haywood tells investors about the Norio and Satskenisi fields which break even with low volumes and present 'high impact' potential.

Oil Capital Conference, on September 4 in London

See Paul's full presentation

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30082/vsa-capital-market-movers-central-asia-metals-30082.html VSA CAPITAL MARKET MOVERS - Central Asia Metals https://www.oilcapital.com/columns/vsa-capital-market-movers/30082/vsa-capital-market-movers-central-asia-metals-30082.html 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. 

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https://www.oilcapital.com/companies/stocktube/10558/iofina-reports-20-increase-in-revenue-as-iosorb-plant-io7-comes-online-10558.html Iofina reports 20% increase in revenue as IOsorb plant IO#7 comes online https://www.oilcapital.com/companies/stocktube/10558/iofina-reports-20-increase-in-revenue-as-iosorb-plant-io7-comes-online-10558.html Fri, 21 Sep 2018 10:42:00 +0100 Iofina plc (LON:IOF) chief executive Tom Becker caught up with Proactive's Andrew Scott to discuss its first half results revealed an increase in revenue and underlying earnings.

The period saw 264.1 tonnes of crystalline iodine produced, which was up 12% from 235.5 tonnes in the previous year while the top-line also benefited from improving iodine prices increased sales of crystallised iodine via the Group's chemicals business.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30075/vsa-capital-market-movers-nulegacy-gold-30075.html VSA CAPITAL MARKET MOVERS - NuLegacy Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30075/vsa-capital-market-movers-nulegacy-gold-30075.html 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.

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https://www.oilcapital.com/companies/stocktube/10536/po-valley-energy-streamlines-italian-exploration-assets-posts-strong-half-year-profits-10536.html Po Valley Energy streamlines Italian exploration assets, posts strong half-year profits https://www.oilcapital.com/companies/stocktube/10536/po-valley-energy-streamlines-italian-exploration-assets-posts-strong-half-year-profits-10536.html Thu, 20 Sep 2018 01:39:00 +0100 Po Valley Energy Ltd (ASX:PVE) chairman Michael Masterman updates Proactive Investors on developments at the energy exploration company’s three hydrocarbon assets in northern Italy.
 
“Key news flow from Selva is the preliminary award of the production concession that we’re expecting in the next couple of months and we’re going to run a 3D seismic program which would very substantially increase the size of the resource,” Masterman says.
 
In its recently announced half-yearly results Po Valley reported a profit of more than $3 million euros while it advances its Selva, Torre del Moro and Teodorico projects.
 
Masterman added, “the results highlight that we’re streamlined. We’re focused on three assets of substantial scale, there is substantial news flow on Selva, Torre del Moro and Teodorico and we’re going to deliver against a very substantial oil and gas portfolio.”
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https://www.oilcapital.com/companies/stocktube/10526/tlou-energy-to-spud-first-production-well-at-lesedi-next-month-10526.html Tlou Energy to spud first production well at Lesedi next month https://www.oilcapital.com/companies/stocktube/10526/tlou-energy-to-spud-first-production-well-at-lesedi-next-month-10526.html Wed, 19 Sep 2018 11:21:00 +0100 Tlou Energy Ltd (LON:TLOU) managing director Tony Gilby and general manager Solomon Rowland chat to Proactive's Andrew Scott following an update on  operations at the Lesedi coalbed methane project.

Gilby says the well locations have been agreed, scouted and inspected with site preparation now underway for what will be the first pilot production well.

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https://www.oilcapital.com/companies/stocktube/10509/anglo-african-oil-gas-close-to-re-spudding-tlp-103-from-new-location-10509.html Anglo African Oil & Gas close to re-spudding TLP 103 from new location https://www.oilcapital.com/companies/stocktube/10509/anglo-african-oil-gas-close-to-re-spudding-tlp-103-from-new-location-10509.html Tue, 18 Sep 2018 11:40:00 +0100 David Sefton, executive chairman of Anglo African Oil & Gas plc (LON:AAOG), updates on plans to re-spud the TLP 103 well on the Tilapia field after encountering a number of drilling challenges which meant the drill location had to be abandoned.

Sefton says following the re-spud it is expected that drilling will take around 64 days to complete.

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https://www.oilcapital.com/companies/stocktube/10507/eqtec-plc-s-new-ceo-says-improved-project-delivery-can-transform-gas-from-waste-specialist-10507.html EQTEC PLC's new CEO says improved project delivery can transform gas from waste specialist https://www.oilcapital.com/companies/stocktube/10507/eqtec-plc-s-new-ceo-says-improved-project-delivery-can-transform-gas-from-waste-specialist-10507.html Tue, 18 Sep 2018 08:59:00 +0100 Ian Price, EQTEC Plc’s (LON:EQT) new chief executive, explains the great thing about the business is that its technology combines waste destruction with energy generation.

A strategic review highlighted the need to move from having a great a pipeline to delivering on projects.

That has led to a consultant being appointed in Spain to provide the engineering design capability to move things forward.

EQTEC’s waste to gas projects can range up to €100mln in value and once these start to be delivered Price is convinced the business can produce real shareholder value.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30071/vsa-capital-market-movers-m2-cobalt-30071.html VSA CAPITAL MARKET MOVERS - M2 Cobalt https://www.oilcapital.com/columns/vsa-capital-market-movers/30071/vsa-capital-market-movers-m2-cobalt-30071.html 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.

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https://www.oilcapital.com/companies/stocktube/10502/w-resources-assay-results-point-to-a-very-substantial-extension-of-the-rgua-orebody--10502.html W Resources assay results 'point to a very substantial extension of the Régua orebody' https://www.oilcapital.com/companies/stocktube/10502/w-resources-assay-results-point-to-a-very-substantial-extension-of-the-rgua-orebody--10502.html Tue, 18 Sep 2018 07:00:00 +0100 W Resources PLC (LON:WRES) chairman Michael Masterman updates Proactive Investors on just-announced assay results from RC drilling at the Régua tungsten project in Portugal, and development at the flagship La Parrilla tungsten-tin project over the boarder in Spain, as well as key appointments to the management team and board.

"Our priority is very much La Parrilla, which is under full development at the moment. Régua in Northern Portugal is coming very closely behind. In terms of development, we're able to leverage a lot of the existing infrastructure... to allow us to move, at low cost, into tungsten production in Northern Portugal," Masterman says.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30069/vsa-capital-market-movers-novo-ltio-30069.html VSA CAPITAL MARKET MOVERS - Novo Lítio https://www.oilcapital.com/columns/vsa-capital-market-movers/30069/vsa-capital-market-movers-novo-ltio-30069.html 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.

Reccomendation

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.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30067/vsa-capital-market-movers-redt-energy-30067.html VSA CAPITAL MARKET MOVERS - redT Energy https://www.oilcapital.com/columns/vsa-capital-market-movers/30067/vsa-capital-market-movers-redt-energy-30067.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Biome Technologies plc

15.1

640

+60

+10.3%

Powerhouse Energy Group PLC

5.5

0.3

+0.02

+6.3%

Plutus PowerGen plc

8.1

1.1

0.05

+4.7%

 

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

SSE plc

10,969

1,084

-36

-3.2%

redT Energy PLC

61.1

8.5

-0.15

-1.7%

Good Energy Group PLC

19.3

120

-1.5

-1.2%

 

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https://www.oilcapital.com/companies/stocktube/10484/why-portfolio-guru-jim-collins-is-bullish-on-these-four-china-related-small-cap-stocks-10484.html Why 'Portfolio Guru' Jim Collins is bullish on these four China-related small-cap stocks https://www.oilcapital.com/companies/stocktube/10484/why-portfolio-guru-jim-collins-is-bullish-on-these-four-china-related-small-cap-stocks-10484.html Fri, 14 Sep 2018 19:59:00 +0100 Jim Collins, micro-cap investment writer and founder of 'The Portfolio Guru,' tells Proactive Investors he's interested in four small-caps that all share a common denominator: China.

Collins talks about on Nio Ltd (NYSE:NIO), Sanchez Energy Corp (NYSE:SN), Applied Minerals Inc (OTCMKTS:AMNL), and Navios Maritime Acquisition (NYSE:NNA).

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30062/dekeloil-public-limited-h1-2018-results-30062.html DekelOil Public Limited#: H1 2018 Results https://www.oilcapital.com/columns/vsa-capital-market-movers/30062/dekeloil-public-limited-h1-2018-results-30062.html 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

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https://www.oilcapital.com/companies/stocktube/10471/bulls-bears-brokers-alto-capital-s-tony-locantro-brings-an-oil-gas-sector-slant-10471.html Bulls, Bears & Brokers: Alto Capital's Tony Locantro brings an oil & gas sector slant https://www.oilcapital.com/companies/stocktube/10471/bulls-bears-brokers-alto-capital-s-tony-locantro-brings-an-oil-gas-sector-slant-10471.html Fri, 14 Sep 2018 04:00:00 +0100 Tony Locantro, stock market commentator and investment manager at Alto Capital, gives Proactive Investors a speculative market update, and speaks about his experience at the RIU Good Oil Conference 2018 held in Perth this week.

To hear Tony's Tips on what to buy and what to avoid, as well as how to tell the difference for yourself, watch our full video interview.

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https://www.oilcapital.com/companies/stocktube/10463/boost-for-eco-atlantic-oil-gas-as-total-moves-ahead-with-guyana-farm-out-10463.html Boost for Eco Atlantic Oil & Gas as Total moves ahead with Guyana farm-out https://www.oilcapital.com/companies/stocktube/10463/boost-for-eco-atlantic-oil-gas-as-total-moves-ahead-with-guyana-farm-out-10463.html Thu, 13 Sep 2018 10:54:00 +0100 Gil Holzman, chief executive of Eco Atlantic Oil & Gas Ltd (LON:ECO, CVE: EOG), tells Proactive's Andrew Scott Total has now exercised its option to acquire a 25% stake in the Orinduik Block, offshore Guyana.

Total joins the exploration venture alongside operator Tullow Oil plc (LON:TLW), owning 60%, and Eco which will retain a 15% interest.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30057/vsa-capital-market-movers-redt-energy-30057.html VSA CAPITAL MARKET MOVERS - redT energy https://www.oilcapital.com/columns/vsa-capital-market-movers/30057/vsa-capital-market-movers-redt-energy-30057.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Hydrodec

8.9

1.2

0.10

+9.1%

redT energy

66.2

9.2

0.35

+4.0%

Solid State

27.8

327.0

12.00

+3.8%

 

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

SSE

11,606.5

1,147.0

(103.50)

-8.3%

Centrica

8,145.3

144.4

(5.40)

-3.6%

AFC Energy

30.4

7.8

(0.260

-3.2%

 

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https://www.oilcapital.com/companies/stocktube/10460/brookside-energy-progressing-well-with-land-leasing-and-development-strategy-10460.html Brookside Energy progressing well with land leasing and development strategy https://www.oilcapital.com/companies/stocktube/10460/brookside-energy-progressing-well-with-land-leasing-and-development-strategy-10460.html Thu, 13 Sep 2018 03:30:00 +0100 Brookside Energy Ltd (ASX:BRK) managing director David Prentice speaks to Proactive Investors about achieving first payout in just 11 months from a well forming part of the company's STACK play in the Anadarko Basin area of Oklahoma, USA.

Prentice describes the milestone as, "a remarkable achievement in the current pricing environment... further endorsement of the quality of the oil and gas reservoirs in the Anadarko Basin."

He continues, "this is obviously going to lead to significantly more reserves per well, and then ultimately to higher valuations per acre, which is really what our business model is all about."

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https://www.oilcapital.com/companies/stocktube/10444/matador-mining-starts-maiden-drilling-at-flagship-cape-ray-gold-project-in-canada-10444.html Matador Mining starts maiden drilling at flagship Cape Ray Gold Project in Canada https://www.oilcapital.com/companies/stocktube/10444/matador-mining-starts-maiden-drilling-at-flagship-cape-ray-gold-project-in-canada-10444.html Wed, 12 Sep 2018 05:00:00 +0100 Matador Mining Ltd (ASX:MZZ) managing director Paul Criddle speaks to Proactive Investors about the gold exploration company’s flagship Cape Ray Gold Project in Newfoundland, Canada.

“When we acquired the Cape Ray project in July, we did that … at the same time as a capital raising here in Australia, where we raised $5 million. The proceeds of that were to complete the acquisition, and to also fund our current exploration activities,” Criddle says.

He continues, “our current work programs, one, focus on expansion of the existing resources, and two, delineating and enunciating the regional package. As of 2 weeks ago, we’ve commenced our maiden 8,000 metre drilling program and that’s principally designed to expand the existing resource base.”

The project holds 750,000 ounces of gold at 1.75 g/t within 6 deposits over roughly 10 kilometres of strike.

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https://www.oilcapital.com/companies/stocktube/10440/small-cap-snapshot-invuity-soars-after-agreeing-to-a-buyout-proposal-from-orthopedics-giant-stryker-10440.html Small-Cap Snapshot: Invuity soars after agreeing to a buyout proposal from orthopedics giant Stryker https://www.oilcapital.com/companies/stocktube/10440/small-cap-snapshot-invuity-soars-after-agreeing-to-a-buyout-proposal-from-orthopedics-giant-stryker-10440.html Tue, 11 Sep 2018 19:50:00 +0100 Small cap names on the move today are: Invuity (NASDAQ:IVTY), Sunrun (NASDAQ:RUN), USA Technologies Inc (NASDAQ:USAT), SandRidge Energy (NYSE:SD). 

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https://www.oilcapital.com/companies/stocktube/10437/dgoc-delivering-on-growth-strategy-as-production-exceeds-60000-barrels-10437.html DGOC delivering on growth strategy as production exceeds 60,000 barrels https://www.oilcapital.com/companies/stocktube/10437/dgoc-delivering-on-growth-strategy-as-production-exceeds-60000-barrels-10437.html Tue, 11 Sep 2018 11:58:00 +0100 Rusty Hutson, chief executive of Diversified Gas & Oil PLC (LON:DGOC), caught up with Proactive's Andrew Scott to discuss the first half of 2018 - what the group's described as “a period of transformative growth” following the Alliance and CNX acquisitions.

July’s deal to acquire US$575mln of assets from EQT Corporation came after the reporting period ended.

Daily production averaged 19,300 barrels of oil equivalent per day, and, the period’s ‘exit rate’ measured 27,000 boepd – whereas the EQT deal's expected to lift the daily rate above 60,000 boepd.

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https://www.oilcapital.com/companies/stocktube/10412/samo-1-well-offshore-the-gambia-gaining-attention-of-industry-experts-for-far-ltd-10412.html Samo-1 well offshore The Gambia gaining attention of industry experts for FAR Ltd https://www.oilcapital.com/companies/stocktube/10412/samo-1-well-offshore-the-gambia-gaining-attention-of-industry-experts-for-far-ltd-10412.html Tue, 11 Sep 2018 00:00:00 +0100 FAR Ltd (ASX:FAR) managing director Cath Norman speaks to Proactive Investors about the Samo-1 well offshore The Gambia, which is generating a lot of buzz amongst global oil & gas market experts. She also provides updates on the exploration company's Senegalese project.

Norman explains, "the Samo-1 well of course follows on from eleven successful wells that we've drilled in Senegal. The Samo-1 well is on the same geological trend as the big SNE field that we discovered to the north, and it's only 20 kilometres south of  the centre of the SNE fields. So that's part of the reason why it's creating a lot of buzz, but you've also got to put it into context... Samo being an 825 million barrel prospect must be one of the biggest prospects that's been drilled for some time. And of course FAR has 40% of it... we're the operator of the well."

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https://www.oilcapital.com/companies/stocktube/10423/farm-out-deal-with-spirit-puts-hurricane-energy-firmly-back-on-the-radar--10423.html Farm out deal with Spirit puts Hurricane Energy 'firmly back on the radar' https://www.oilcapital.com/companies/stocktube/10423/farm-out-deal-with-spirit-puts-hurricane-energy-firmly-back-on-the-radar--10423.html Mon, 10 Sep 2018 14:51:00 +0100 Proactive Investors oil & gas correspondent Jamie Ashcroft discusses Hurricane Energy Plc's (LON:HUR) recent partnership deal with Spirit Energy.

Funded by Spirit, Hurricane now expects to bring the Greater Warwick Area online in 2020 - a year after the early production system kicks in at the Lancaster field.

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https://www.oilcapital.com/companies/stocktube/10418/plexus-holdings-looking-at-ways-to-monetise-its-ip-as-oil-and-gas-sector-recovers-10418.html Plexus Holdings looking at ways to monetise its IP as oil and gas sector recovers https://www.oilcapital.com/companies/stocktube/10418/plexus-holdings-looking-at-ways-to-monetise-its-ip-as-oil-and-gas-sector-recovers-10418.html Mon, 10 Sep 2018 12:36:00 +0100 Ben van Bilderbeek, chief executive of Plexus Holdings PLC (LON:POS), spoke to Proactive's Andrew Scott after what's been a period of restructure for the group.

The wellhead valve specialist has had to be patient while the oil and gas sector recovers from the slump in crude prices.

Plexus has fundamentally restructured its business with the sale of its jack-up rig business to a subsidiary of TechnipFMC.

A collaboration deal for new and existing products based on the POS-GRIP technology was part of the agreement.

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https://www.oilcapital.com/companies/stocktube/10398/mosman-oil-gas-limited-oil-capital-conference-10398.html Mosman Oil & Gas Limited - Oil Capital Conference https://www.oilcapital.com/companies/stocktube/10398/mosman-oil-gas-limited-oil-capital-conference-10398.html Fri, 07 Sep 2018 09:46:00 +0100 Andy Carroll, technical director at Mosman Oil And Gas Limited (LON:MSMN), presents to investors at the Oil Capital Conference in London.

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https://www.oilcapital.com/companies/stocktube/10395/i3-energy-plc-oil-capital-conference-10395.html i3 Energy PLC - Oil Capital Conference https://www.oilcapital.com/companies/stocktube/10395/i3-energy-plc-oil-capital-conference-10395.html Fri, 07 Sep 2018 07:54:00 +0100 Neill Carson, chief executive of i3 Energy PLC (LON:I3E), presents at the Oil Capital Conference in London.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30043/vsa-capital-market-movers-genus-30043.html VSA CAPITAL MARKET MOVERS - Genus https://www.oilcapital.com/columns/vsa-capital-market-movers/30043/vsa-capital-market-movers-genus-30043.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Obtala Limited

22.25

6.75

0.35

+5.5%

Carr's Group

137.56

150.50

3.25

+2.2%

Plant Health Care

28.60

16.55

0.05

+0.3%

 

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Sirius Minerals

1,535.61

32.66

(1.92)

-5.6%

Genus

1,670.76

2,722.00

(110.00)

-3.9%

Anglo-Eastern Plantations

259.22

654.00

(18.00)

-2.7%

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30042/vsa-capital-market-movers-lake-resources-30042.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30042/vsa-capital-market-movers-lake-resources-30042.html 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. 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30039/vsa-capital-market-movers-lake-resources-30039.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30039/vsa-capital-market-movers-lake-resources-30039.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30033/vsa-capital-market-movers-m2-cobalt-30033.html VSA Capital Market Movers - M2 Cobalt https://www.oilcapital.com/columns/vsa-capital-market-movers/30033/vsa-capital-market-movers-m2-cobalt-30033.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30032/vsa-capital-market-movers-egdon-resources-30032.html VSA Capital Market Movers - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30032/vsa-capital-market-movers-egdon-resources-30032.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30029/vsa-capital-market-movers-altyn-shefa-yamim-30029.html VSA Capital Market Movers - Altyn, Shefa Yamim.. https://www.oilcapital.com/columns/vsa-capital-market-movers/30029/vsa-capital-market-movers-altyn-shefa-yamim-30029.html 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. 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30024/vsa-capital-market-movers-egdon-resources-30024.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30024/vsa-capital-market-movers-egdon-resources-30024.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30022/vsa-capital-market-movers-colombus-energy-resources-30022.html VSA CAPITAL MARKET MOVERS - Colombus Energy Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30022/vsa-capital-market-movers-colombus-energy-resources-30022.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30010/vsa-capital-market-movers-shefa-yamim-30010.html VSA CAPITAL MARKET MOVERS - Shefa Yamim https://www.oilcapital.com/columns/vsa-capital-market-movers/30010/vsa-capital-market-movers-shefa-yamim-30010.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30007/vsa-capital-market-movers-lithium-americas-lake-resources-sqm-30007.html VSA CAPITAL MARKET MOVERS - Lithium Americas, Lake Resources, SQM.. https://www.oilcapital.com/columns/vsa-capital-market-movers/30007/vsa-capital-market-movers-lithium-americas-lake-resources-sqm-30007.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30006/vsa-capital-market-movers-energy-storage-briefing-30006.html VSA CAPITAL MARKET MOVERS - Energy Storage Briefing https://www.oilcapital.com/columns/vsa-capital-market-movers/30006/vsa-capital-market-movers-energy-storage-briefing-30006.html 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

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30002/vsa-capital-market-movers-independent-oil-gas-30002.html VSA CAPITAL MARKET MOVERS - Independent Oil & Gas https://www.oilcapital.com/columns/vsa-capital-market-movers/30002/vsa-capital-market-movers-independent-oil-gas-30002.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29999/vsa-capital-market-movers-shefa-yamim-29999.html VSA CAPITAL MARKET MOVERS - Shefa Yamim https://www.oilcapital.com/columns/vsa-capital-market-movers/29999/vsa-capital-market-movers-shefa-yamim-29999.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29997/vsa-capital-market-movers-nulegacy-gold-29997.html VSA CAPITAL MARKET MOVERS - NuLegacy Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/29997/vsa-capital-market-movers-nulegacy-gold-29997.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29995/vsa-capital-market-movers-lake-resources-ganfeng-lithium-lithium-americas-29995.html VSA Capital Market Movers - Lake Resources, Ganfeng Lithium, Lithium Americas.. https://www.oilcapital.com/columns/vsa-capital-market-movers/29995/vsa-capital-market-movers-lake-resources-ganfeng-lithium-lithium-americas-29995.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29994/vsa-capital-market-movers-lake-resources-29994.html VSA Capital Market Movers - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/29994/vsa-capital-market-movers-lake-resources-29994.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29981/vsa-capital-market-movers-dekeloil-public-limited-29981.html VSA CAPITAL MARKET MOVERS - DekelOil Public Limited https://www.oilcapital.com/columns/vsa-capital-market-movers/29981/vsa-capital-market-movers-dekeloil-public-limited-29981.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29971/vsa-capital-market-movers-central-asia-metals-29971.html VSA CAPITAL MARKET MOVERS - CENTRAL ASIA METALS https://www.oilcapital.com/columns/vsa-capital-market-movers/29971/vsa-capital-market-movers-central-asia-metals-29971.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29968/vsa-capital-market-movers-nulegacy-gold-29968.html VSA CAPITAL MARKET MOVERS - NuLegacy Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/29968/vsa-capital-market-movers-nulegacy-gold-29968.html 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.  

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29967/vsa-capital-market-movers-egdon-resources-29967.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/29967/vsa-capital-market-movers-egdon-resources-29967.html 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.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29964/vsa-capital-market-movers-lake-resources-orocobre-advantage-lithium-29964.html VSA CAPITAL MARKET MOVERS - Lake Resources, Orocobre, Advantage Lithium.. https://www.oilcapital.com/columns/vsa-capital-market-movers/29964/vsa-capital-market-movers-lake-resources-orocobre-advantage-lithium-29964.html 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.  

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29956/vsa-capital-market-movers-egdon-resources-alkane-energy-29956.html VSA CAPITAL MARKET MOVERS - Egdon Resources, Alkane Energy https://www.oilcapital.com/columns/vsa-capital-market-movers/29956/vsa-capital-market-movers-egdon-resources-alkane-energy-29956.html 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. 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29945/vsa-capital-market-movers-redt-energy-29945.html VSA CAPITAL MARKET MOVERS - redT energy https://www.oilcapital.com/columns/vsa-capital-market-movers/29945/vsa-capital-market-movers-redt-energy-29945.html 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)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Advanced Power Components

9.6

7.1

0.50

+7.5%

Drax Group

1,390.9

345.0

4.20

+1.2%

Impax Environmental Markets

496.9

276.0

2.00

+0.7%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

China New Energy

5.2

1.2

(0.05)

-4.1%

CAP-XX

25.2

8.4

(0.35)

-4.0%

Ceres Power

165.4

16.3

(0.67)

-4.0%

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/29941/the-pay-zone-oil-price-savannah-petroleum-reabold-resources-cuadrillaigas-and-finally-29941.html The Pay Zone - Oil price, Savannah Petroleum, Reabold Resources, Cuadrilla/IGas And finally... https://www.oilcapital.com/columns/the-pay-zone/29941/the-pay-zone-oil-price-savannah-petroleum-reabold-resources-cuadrillaigas-and-finally-29941.html 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…

Cuadrilla/IGas

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…..?

 

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https://www.oilcapital.com/columns/the-pay-zone/29936/the-pay-zone-oil-price-sound-energy-jersey-oil-gas-amerisur-resources-and-finally-29936.html The Pay Zone - Oil price, Sound Energy, Jersey Oil & Gas, Amerisur Resources And finally... https://www.oilcapital.com/columns/the-pay-zone/29936/the-pay-zone-oil-price-sound-energy-jersey-oil-gas-amerisur-resources-and-finally-29936.html Tue, 24 Jul 2018 09:04:00 +0100

WTI $67.89 -37c, Brent $73.06 -1c, Diff -5.17 +$2.56, NG $2.72 -4c

Oil price

Yesterday saw a mixed market, after a rally when oil workers in both the UK and Norway either downed tools or threatened to, any disruption  was rightly perceived to be small beer. Of more substance is the rhetoric between Tehran and Washington, the latter threatening to close the Straits of Hormuz (20m b/d) the latter offering all sorts of high level violence. With Libya opening up another small field adding 50/- b/d or so to exports, oil ended down, by a whisker, what fun it is on the oil Bourse…

Sound Energy

Sound has announced that it has commenced civil works and signed a rig contract for TE-9 on the Tendrara licence onshore Morocco. This follows the announcement of the Environmental Impact Assessment on June 6th and with yesterday’s news about Schlumberger’s commitment reinforcing the partnership things are looking up.

Jersey Oil & Gas

As operator, Equinor has advised JOG that the Verbier appraisal well and possible side-track will now be the third in the sequence of drilling rather than the first. Practically it makes little difference, the well will now be drilled in late Q4 2018 rather than late Q3/early Q4, the change in process will not effect the costs of the well.  Unsurprisingly,the shares have been marked down slightly this morning as investors calculate the time value (of course!) but now offer even more value for those with longer term aspirations.

Amerisur Resources

An extra operational update from AMER this morning who have stated that Platanillo-22 now needs a workover in order to recover production capacity in ‘this important well’. This should permanently and cheaply resolve the production decline. Logs are now being run to check various parameters such as cement integrity.

Elsewhere all is good, all three high profile exploration wells are on target to spud this quarter which should provide the impetus for the shares which have inexplicably marked time recently. In Ecuador the news is also good, the Chiritza re-pumping station project is going well, tie in to the RODA line is expected shortly when increased transport minimum capacity grows to 9,000 b/d.

And finally…

With the Tour De France (never normally mentioned here) warming up it has rarely been so close between British riders who themselves might be pipped for the Yellow Jersey.

I see that Ryan Lochte, US swimmer with 12 Olympic medals has been banned for a doping violation, not the first ban for Mr Lochte but the first for drugs…

And the cricket County Championship is hotting up, particularly in the Roses match and at Trent Bridge…

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29931/vsa-capital-market-movers-egdon-resources-lonedr-29931.html VSA Capital Market Movers - Egdon Resources (LON:EDR) https://www.oilcapital.com/columns/vsa-capital-market-movers/29931/vsa-capital-market-movers-egdon-resources-lonedr-29931.html Tue, 24 Jul 2018 08:24:00 +0100 Egdon Resources (LON:EDR)

Egdon Resources’ (LON:EDR) operating partner, Europa Oil & Gas (EOG LN), has provided an update in relation to the Holmwood license, PEDL 143. EDR holds an 18.4% interest and is fully carried on its share of the exploration well costs up to a cap of £3.2m.

EOG intends to submit an application to Surrey County Council to extend the temporary permission for the well site by a further three years and to remove the requirement to include an identified HGV holding area. It has also applied for two other associated planning applications for the underground drilling corridor and the temporary well site security fence. The initial term of the license for PEDL 143 has been extended until 30 September 2020.

In addition, the Environment Agency has granted a permit allowing the drilling and testing of a single exploration well. This includes permits for storage of oil on site and in relation to the management of radioactive waste.

We reiterate our Buy recommendation and target price of 52p.

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https://www.oilcapital.com/columns/the-pay-zone/29929/the-pay-zone-oil-price-sound-energy-sdx-energy-trinity-exploration-production-cabot-and-finally-29929.html The Pay Zone - Oil price, Sound Energy, SDX Energy, Trinity Exploration & Production, Cabot And finally... https://www.oilcapital.com/columns/the-pay-zone/29929/the-pay-zone-oil-price-sound-energy-sdx-energy-trinity-exploration-production-cabot-and-finally-29929.html Mon, 23 Jul 2018 12:50:00 +0100

WTI $70.46 +$1.00, Brent $73.07 +49c, Diff -$2.61, NG $2.76 -1c

Oil price

It’s still the same old same old reasons for activity on the oil Bources, Libya recovering, US production arrives at 11m b/d and the Saudis cutting back by 100/- b/d next month.With further worries about trade wars between the USA and China, this time concerning whether the latter will be buying Iranian crude after November 4th, markets are jittery.

The Baker Hughes rig count on Friday showed a fall of 8 units overall to 1046 and by 5 units in oil to 858, talk remains that it is due to pipeline capacity constraints rather than a lack of ability to produce more.

Sound Energy

Sound has announced that it is ‘initiating the process of converting the Schlumberger existing synthetic 27.5% interest in the Tendrara and Lakbir permits’ into a JV licence participating interest of 27.5%. Sound will remain operator with its 47.5% operating interest but this is a very important demonstration of confidence by SLB in this project and bodes very well for the future. #Deliveringdreamsinthedesert

SDX Energy

SDX has announced yet another gas discovery at South Disouq in Egypt. Well SD-3X revealed 32.6 feet of net conventional gas pay in the Abu Madi and Kafr el Sheik horizons with average porosity of 21.7%. The company will initially complete the Abu Madi horizon before re-entering the well to complete and produce the Kafr el Sheik horizon. Assuming success this too will be ready to start-up production in the 4th quarter of this year.

The completion of the drilling programme at South Disouq has yet again showed that SDX has an outstanding operational record of success in its chosen parts of the portfolio. Here in Egypt this success will shortly be monetised as will drilling success be in Morocco where high margin production is already achieving significant commercial progress. With backing from the World Bank and revenues continuing to rise, SDX is trading at a huge discount to asset value and the shares are way too cheap.

Trinity Exploration & Production

A Q2 update from Trinity after a momentous few weeks in which the company completed its $20m fund-raise and  production commenced from 2 new infill wells, a ‘pivotal period’ indeed. The raise will accelerate onshore activity as well as repaying all outstanding debt making the company a very attractive prospect in the sector. The 2nd quarter saw a 4% rise in production, up an impressive 16% y/y.

An initial six new onshore infill wells are to commence 2H 2018 as the company get set to start increasing production even more. With a strong balance sheet and increasing production across a largely fixed operating cost base shareholders can expect a ‘step change’ in earnings in future.

Whilst it is understandable that there has been some post-raise indigestion it has to be realised that this was way the best way of sorting out the finances going forward and the company are now set fair for some time to come. With significant  cash flow and high margin production the shares look distinctly on the cheap side, my target price, adjusted after the raise is still above 30p per share making it one of the most attractive in the sector.

Cabot Energy

There are more warning signs in this RNS than on most British motorways, starting with the dreaded strategic review, suspension of drilling activity in Canada whilst ‘high-grading’ occurs and hiring of a British former army officer (educated at Sandhurst and Exeter University of course) called Hugo d’Apice as Business Development Director responsible for Italy.

New CEO Scott Aitken, has said that the company will ‘evaluate its ongoing capital requirements in Q4 2018’, enough to send shivers down the spine of investors. The CEO also states that ‘the critical first task is to upgrade the financial planning, reporting and controls procedures to the standard expected by shareholders of a publicly quoted company’ which must be pretty galling to the previous board whom I thought had been doing a pretty good job on that front. I hope that the company realise how things work in Italy and that Hugo has plenty of patience as this is a slow burning process, if you get my drift.

The announcement comes as no great surprise and after the sacking of the previous board only what was to be expected. There is little value in the company at the moment but expect things to get worse given this grim statement, the only question is probably how low will it go before the major shareholder loses patience and buys in the remainder? It is rare to see value destruction on such a large scale, the shares have halved since November, it could easily happen again.

And finally…

In a thrilling German Grand Prix with Vettel on pole and Lewis starting in 14th posi the Silverstone tables were turned when Lewis triumphed on German soil and Vettel had a dnf after visiting the tyre wall without an appointment.

The Open Championship ended with a brilliant display by Francesco Molinari who cleared the chasing pack on the 18th just when he virtually couldn’t get caught.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29925/vsa-capital-market-movers-shefa-yamim-lonsefa-29925.html VSA Capital Market Movers - Shefa Yamim (LON:SEFA) https://www.oilcapital.com/columns/vsa-capital-market-movers/29925/vsa-capital-market-movers-shefa-yamim-lonsefa-29925.html Mon, 23 Jul 2018 08:26:00 +0100 Shefa Yamim (LON:SEFA)

Shefa Yamim (LON:SEFA) has announced an operational update highlighting the progress made in H1 2018. Most recently, SEFA has appointed a South African project management group, Paradigm Project Management to carry out a Technical Economic Evaluation of its Kishon Mid reach project. The study will focus particularly on the project’s working and capital costs and is set to be completed in August 2018. SEFA has now set a target for trial mining in 2019 and commercial mining in 2020 and this study is a key milestone on the way to achieving that.

During H1 2018 SEFA also completed processing on 14 bulk samples from Zone 1 yielding 9,778ct from 6,384t of gravels from bulk sampling. 26 boreholes were completed in Zone 2 where exploration efforts are now focused. In addition, the company has also been cutting and polishing examples of the gemstones found to date in order to demonstrate the gem quality nature of the stones. This is an important step as SEFA looks to develop its mine to market strategy whereby the company will create gemstone jewellery. We believe that the region’s heritage and provenance of the stones will likely enhance SFEA’s unique brand value.

Over the balance of 2018 SEFA will apply for an additional exploration permit as well as upgrading to a Prospecting Lice sense for the Kishon Mid Reach Zone 1. SEFA is also targeting obtaining grade estimations along with preliminary valuations for the gem suite which will provide a key metric for benchmarking valuations for the shares.

 We reiterate our Speculative Buy recommendation.

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https://www.oilcapital.com/columns/the-pay-zone/29921/the-pay-zone-oil-price-genel-providence-and-finally-29921.html The Pay Zone - Oil price, Genel, Providence And finally... https://www.oilcapital.com/columns/the-pay-zone/29921/the-pay-zone-oil-price-genel-providence-and-finally-29921.html Fri, 20 Jul 2018 10:45:00 +0100

WTI $69.46 +70c, Brent $72.58 -32c, Diff -$3.12 -$1.02, NG $2.77 +5c

Oil price

More flip flopping around yesterday as a good start, prompted by the Saudi Opec Governor’s comments that exports may fall back by around 100/- next month, was swiftly punctured by the end of the Norwegian strike which affected only sentiment. So Brent eased off, while as reported here yesterday, WTI enjoyed more positive feedback from the inventory draw at Cushing, seen as way more important when imports rose as they did last week. At the moment it is all sorts of small pieces of information that are determining oil price moves in the absence of big news for example, Brent is 50 cents up this morning.

Genel Energy

Genel has announced that the Tawke partners have received $62.33m from the KRG as payment for April crude deliveries, this is $15.55m net to Genel. At Taq Taq the figures are $6.53m gross, $3.59m net and the company has also received an override payment of $8.12m as per the RSA. In total Genel has received $27.26m from the KRG for April exports.

Providence Resources

Providence shares with us new data this morning on Dunquin North and South. According to the new data it shows the significant chance for a major discovery in the Dunquin South prospect which the partners are hoping to drill in 2020. The data also shows that there was a major fluid escape at Dunquin North which explains the duster but ‘no such feature is evident at Dunquin South’. Obviously a long time to wait but shows that the potential is there when investors decide to revisit…

And finally…

It’s Day two of The Open Championship at Carnoustie where I notice that it is raining this morning. With 19 players under par on day one will the weather change things at all, I doubt it! Kevin Kisner leads with a magnificent display of putting yesterday and it’s all USA and RSA in top five overnight.

This weekend it is the German GP in F1 and with everything so close anything could genuinely happen. Having not won at Silverstone Lewis will be keen to make amends, particularly in Germany. He has signed a two year extension to his contract at Mercedes and Bottas a one year with another option year as well.

 

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https://www.oilcapital.com/columns/the-pay-zone/29916/the-pay-zone-oil-price-frontera-resources-dgo-echo-energy-link-and-finally-29916.html The Pay Zone - Oil price, Frontera Resources, DGO, Echo Energy Link And finally... https://www.oilcapital.com/columns/the-pay-zone/29916/the-pay-zone-oil-price-frontera-resources-dgo-echo-energy-link-and-finally-29916.html Thu, 19 Jul 2018 11:24:00 +0100

WTI $68.76 +68c, Brent $72.90 +74c, Diff -$4.14 +6c, NG $2.72 -2c

Oil price

Computers work fast and do not differentiate between news as proved yesterday when the EIA inventory stats came out. The initial build in crude stocks of 5.8m barrels sent the oil deck sprawling but soon enough the product stats came to the rescue with a draw of over 3.2m barrels in gasoline and a better than expected distillate number.

The causes were twofold, crude built because of a significant rise in imports, nullifying last week’s number and showing a net build of 7.6m bbls, looking at Cushing, there was a draw of 860/- bbls. In the product market, total product demand was up 1.4m b/d on the week which is pretty impressive even in the driving season.

Frontera Resources

An update on Block 12 in Georgia from Frontera this morning where the T-39 well has been side-tracked into the Eldari B formation. The well delivered 132m of total net pay in zones 9, 14, 15 and 19 which is a good sign and one the EWT confirmed. The EWT delivered between 250-529 b/d of 41.5° API and 350-600,000 scf/d of wet gas demonstrating ‘excellent well deliverability’ and that production rates from future development wells may be ‘significantly higher’. There is also much more potential as the Eldari B formation goes deeper as found at Niko-1 in the Miocene and of course the CPR has 3.2 TCF of recoverable gas in the Gareji formation below the Eldari.

News from Ud-2 is mixed, the well flowed dry natural gas but  poor casing cement (the well was drilled in 1981) prevented a frac job being done so only 150/- scf/d was flowed. The company are talking about ‘considering the option of a side-track’ something that they surely must consider seriously. The EWT’s on T-45 and Dino-2 continue and particularly in the former, where I visited early in the year, I am hoping for good news. I am confident that despite the relatively slow pace of activities that the outcome the very high CPR numbers and be good news for shareholders.

Diversified Gas & Oil

DGO has announced the completion of the EQT deal and has also closed a $1bn 5 year facility which increases three fold on its prior facility. With a well received $250m equity offer and a new war chest I don’t think we have seen the last of DGO on the acquisition trail…

Link

Yesterday I was delighted to interview Fiona MacAulay, CEO of Echo Energy for Core Finance TV. The link to the full interview is below and it is a most interesting discussion about this fast growing company.

Core Finance CEO Interview – Fiona MacAulay of Echo Energy

And finally…

One of the sporting greats starts today, The Open Golf Championship, this time to be held at Carnoustie in Scotland. With a long hot summer in the UK the course is brown and fast and will cause different challenges than normally offered by links courses.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29909/vsa-capital-market-movers-carrs-group-h2-trading-update-29909.html VSA Capital Market Movers - Carr’s Group#: H2 Trading Update https://www.oilcapital.com/columns/vsa-capital-market-movers/29909/vsa-capital-market-movers-carrs-group-h2-trading-update-29909.html Wed, 18 Jul 2018 09:07:00 +0100 Carr’s Group#: H2 Trading Update

Carr’s Group (LON:CARR)#, the agriculture and engineering group, has provided a trading update for the 17 week period ended 30 June 2018.

  • Trading slightly ahead of expectations and significantly ahead YoY across both agriculture and engineering
  • Second interim dividend of 1.075p declared, +13% YoY (2017: 0.95p)
  • Preliminary results to be released on 12 November

VSA Comment

 

In its interim results on 16 April, CARR had already confirmed that it was experiencing much better trading conditions this year, with a more than 20% YoY increase in PBT recorded for H1. This trading update confirms that, as we forecast, conditions have improved further into H2 across both divisions.

In agriculture, CARR has seen improvement in feed volumes, retail sales, machinery sales, fuel sales and feed block sales. UK milk prices remain high with the average DEFRA price recorded at c27p as of May (last available data) and many UK milk processors announcing price increases for August.

It looks positive for CARR going into this winter as well, as the recent hot weather will be impacting the quality and amount of silage cut for storage and use during the period. Therefore, farmers will need to purchase additional animal feed.

In our opinion, the recent increases in feed wheat pricing are likely to be maintained given the hot weather will now likely impact the size and quality of the 2018 harvest. These higher prices will be passed onto farmers and should result in higher revenues for the group in FY 2019.

Having highlighted an “excellent recovery” across its various engineering businesses in H1, it is encouraging to see this has carried through into the second half as well, with a strong recovery in UK manufacturing particularly notable. Acquired in August 2017, integration of US nuclear engineering business NuVision is progressing well and significantly strengthening the group’s order book in this area. The group has also highlighted potential new opportunities for the division in the US and China, which continue to be explored. 

Current FactSet consensus forecast for FY 2018 (Y/E 1 September 2018) is for revenue of £380.1m, EBITDA of £18.5m and a PBT of £15.7m.

 

Risers and Fallers (Last Close)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Carr's Group

150.81

165.00

15.50

+10.4%

Plant Health Care

26.79

15.50

0.70

+4.7%

Sirius Minerals

1,572.77

33.46

0.46

+1.4%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Agriterra

2.97

14.00

(1.00)

-6.7%

DekelOil

17.80

5.95

(0.20)

-3.3%

Camellia

321.08

11,625.00

(175.00)

-1.5%

 

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https://www.oilcapital.com/columns/the-pay-zone/29904/the-pay-zone-oil-price-genel-energy-independent-oil-gas-and-finally-29904.html The Pay Zone - Oil price, Genel Energy, Independent Oil & Gas And finally... https://www.oilcapital.com/columns/the-pay-zone/29904/the-pay-zone-oil-price-genel-energy-independent-oil-gas-and-finally-29904.html Tue, 17 Jul 2018 09:38:00 +0100 WTI $68.06 -$2.95, Brent $71.84 -$3.49, Diff -$3.78 -54c, NG $2.76 +1c

Oil price

Yesterday prices fell sharply with the usual combination of factors, mainly on supply this time weighing down on crude oil. Maybe it was the blog ‘wot did it’ as I read this morning that there are worries that the USA may start to release supplies from the SPR to keep a lid on prices as mentioned here yesterday…

It was probably more a combination of Chinese demand stats, small increases in production from Nigeria and Libya and words from Mr Mnuchin that really caused it. Whilst he did say that some special cases would be considered for waivers, I think what he actually said/meant was that the administration would temporarily help countries who needed to change their suppliers with a glance at India as a big customer of Iran.

Genel Energy

An update on the Tawke PSC this morning from Genel which states that there has been a 2/3 increase in production at the Peshkabir field to 25/- b/d following completion of the Peshkabir-4 well testing process. The well is producing at 10/- b/d through a 72/64″ choke with 790 psi wellhead pressure through capacity restrained test facilities. The well was drilled 4km west of the Peshkabir-3 well and 11 zones were tested which flowed between 1,500 and 7,000 per zone.

The next well, Peshkabir-5 has been drilled 7km west of Peshkabir-3 and has already successfully tested the westward extension of the field. It is undergoing trial testing and will be brought onstream in August making the operator DNO confident that it will ‘reach and surpass’ their summer target of 30/- b/d of production. With wells P-6 and P-7 drilling ahead confidence is high that yet further gains in production will be made.

The company say that the field ‘continues to exceed expectations’ in particular as the field is part of the Tawke PSC and accordingly will ‘bolster free cash flow’ currently exceeding $10m per month. Yesterday Genel went into the Bucket list and this is a welcome early boost for investors, I am expecting significantly more to come.

Independent Oil & Gas

IOG has updated on the Thames pipeline integrity confirmation, analysis shows that 60km of the offshore sector  indicates that the pipeline condition is ‘as new’. The company are now completing this integrity test by inspecting the Bacton end of the line in the coming weeks.

As a result of these tests the company are now not going to do the intelligent pigging until first gas although given that the last test was ‘inconclusive’ it will surely need to be done. I imagine that doing it all when the extra 7km has been added is where the cost savings lie given the nature of the process. Finally there has been a small delay in the FID which is now expected at the end of September. I am meeting with the team next week so will update more after that.

Reminder- Bucket list and London South East Investor Evening

Just in case you didn’t see it yesterday, or that two blogs in one day went under the radar, here is the interim bucket list update.

The 2018 Interim Bucket list

And I am very much looking forward to seeing a number of you at tonight’s LSE investor evening.

https://www.eventbrite.co.uk/e/oil-gas-investor-evening-with-malcolm-graham-wood-malcy-and-aim-listed-ceos-tickets-46763627268

And here is the interview I gave to LSE ahead of tonight’s show.

London Sout East interview: Rockhopper tops Malcy’s 2018 Interims Bucket List gains

And finally…

I have been reminded that I didn’t mention the England victory over India in the ODI at the weekend, very remiss of me as victories in white ball cricket are quite rare against India…

Ronaldo signs for Juve which should liven things up a bit, who will Real replace him with, Eden Hazard?

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29902/vsa-capital-market-movers-independent-oil-gas-loniog-29902.html VSA Capital Market Movers - Independent Oil & Gas (LON:IOG) https://www.oilcapital.com/columns/vsa-capital-market-movers/29902/vsa-capital-market-movers-independent-oil-gas-loniog-29902.html Tue, 17 Jul 2018 09:23:00 +0100 Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (LON:IOG) has provided an update on the integrity of the Thames Pipeline which demonstrates that further testwork and analysis of the existing data has demonstrated that the condition of the pipeline is “excellent”. Testwork on the cut section by Oilfield Testing Services demonstrated less than expected internal corrosion which shows the pipeline can be considered virtually new.

As a result, of these encouraging results IOG has updated its integrity confirmation plan. It will run a 24 hour hydrotest required under the Pipeline Code in July and August on the section of the pipeline most likely to have suffered from degradation since decommissioning in 2015 i.e. between the Bacton terminal to 1km offshore. However, further intelligent pigging is not now expected to be required until shortly ahead of first gas when the entire export route will be tested, including extensions.

The Thames Pipeline is a critical part of IOG’s project providing a 100% owned export route for its Southern North Sea gas project. These results confirm our view that the pipeline will save the company hundreds of millions in development capital overall, significantly enhancing the economics of the project. Furthermore, at peak production we anticipate c180mmcfd indicating a minimum 120mmcfd spare capacity on which IOG could benefit from exporting third party gas for additional tariff revenue which would further strengthen returns.

There will consequently be some expected cost savings in relation to the updated plan although Field Development Plan approval has now been pushed back to the end of September. With the project approaching FDP and following significant positive announcements regarding the pipeline and resource expansion the shares have rallied 87% since our initiation in March 2018. Although historically sharp rallies in the shares have eased back, with FDP now approaching we believe that further positive progress towards first gas is likely to result in stronger support for the stock.

 

We reiterate our Buy recommendation and target price of 96p.

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https://www.oilcapital.com/columns/the-pay-zone/29899/the-pay-zone-oil-price-sdx-energy-zenith-energy-pantheon-resources-and-finally-29899.html The Pay Zone - Oil price, SDX Energy, Zenith Energy, Pantheon Resources And finally... https://www.oilcapital.com/columns/the-pay-zone/29899/the-pay-zone-oil-price-sdx-energy-zenith-energy-pantheon-resources-and-finally-29899.html Mon, 16 Jul 2018 11:26:00 +0100

WTI $71.01 +68c, Brent $75.33 +88c, Diff -$4.32 +20c, NG $2.75 -4c

Oil price

With the rally of some sort at the end of the week, crude posted only modest falls after black thursday. WTI fell $2.79 and Brent $1.78, it could have been worse but conflicting pressures remain obstinate even confusing. For example, Libya was the primary reason for the Thursday fall as traders expected a swift return of a short 1m b/d onto the market, as it happened  two workers at the Sharara field were kidnapped and now we are back to square one.

Along with the Norwegian strike escalating and France being refused an Iran waiver the oil market is delicately balanced, with increased production primarily from Saudi Arabia and Russia as well as a modest amount elsewhere it will be fine but margins for error are strictly limited, it may come down to using the US SPR… And the rig count shows us little with overall units up 2 at 1054 and oil u/c at 863 last week.

SDX Energy

More good news from SDX as they announce a successful production test at the SD-4X well at South Disouq in Egypt. The well flowed at a maximum rate of 30.4 MMscfd during an 8 hour clean up period then was shut in for 8 hours with no pressure decline. Then by varying the choke sizes the well flowed for two successive 12 hour periods at average rates of 5.4 MMscfd and 8.6 MMscfd respectively and one extended flow period of 24 hours at 10.5 MMscfd. The well is now shut in for 120 hours then it will be suspended before being connected to local production facilities, in total 23.38 MMscf of gas was produced in the test.

The company has also announced that the acquisition of 240km² of 3D seismic has commenced in the Gharb Centre in Morocco, this should take between 45 and 60 days and will be processed and interpreted in the 4th quarter of this year.

This news from Egypt means that the company’s plan to achieve a plateau of 50 MMscfd of conventional natural gas looks like being easily met, ‘additional confidence’ is the phrase Paul Welch uses and with more drilling ongoing is likely to be exceeded, maybe by quite a bit. The share price, virtually unchanged this morning, does not do justice to what is the firing up of a key part of the company’s strategy.

Zenith Energy

Zenith has provided a detailed RNS this morning regarding its proposed acquisition in Indonesia and also with regard to operations in Azerbaijan. News that the company is not proceeding with the proposed acquisition does not come as a surprise after the due diligence process ‘evidenced negative discrepancies largely exceeding 5% of the book values declared in the financial statements dated February 28th 2018’. Zenith is not the only company that has experienced such difficulties in country and whilst this is disappointing it leaves the management clear to concentrate on Azerbaijan.

In Azerbaijan, the company report that Mr Mike Palmer has resigned and that they have appointed David Sadoway as Operations manager with effect from 1st September. Mr Sadoway has significant experience in workovers and completions in the country and elsewhere so should be able to hit the ground running. This should coincide with the arrival of the new rig and the autumn months will be crucial as Zenith starts to prove up the significant hydrocarbons in country.

Pantheon Resources

Following the sad death of Bobby Gray it seemed inevitable that Pantheon would have to shake up the relationship in the Tyler and Polk County project and today they announce that they hope to acquire Vision’s interests there. The challenge is substantial, the company say it is to be non cash, unsurprisingly, accretive to PANR shareholders and will be financed either by equity, warrants (premium priced of course), a success based royalty or some other non equity consideration. This would bring with it operatorship after which Pantheon are intending to enter a farm-out process to bring in partner(s) to ‘finance future drilling operations’.

Although it is a daunting task, with equally challenging chance of success, this scenario is probably the only one available to the company. It has to buy out Vision whilst maintaining their upside, take over operatorship and then sell down a good chunk of the project to finance the drilling campaign. And this with a notably tricky operational history but also still with potential upside.

And finally…

The World Cup ended with France beating Croatia 4-2 with two dodgy goals and poor reffing but VAR comes out of the process mainly with credit. England looked a touch dispirited and lost the 3rd place play-off to Belgium 2-0. Harry Kane however, has the Golden Boot award for his trophy cabinet.

At Wimbledon Djoko beat Anderson in straight sets after both had had extended semi finals, I know they want to change the rules but these long final sets are rare fun…

At the German MotoGP Jorge Lorenzo’s improving Ducati stormed away from the line, followed by his next years team mate Marquez on the Honda. Marquez hounded him for 12 laps before diving into the lead. Valentino Rossi, also passed Lorenzo who was struggling with deteriorating tyres, and tried hard to stay with Marquez until the Honda rider got the message and pulled away to his 9th successive Sachsenring win and a 46 point Championship lead. Rossi’s 2nd. place was his best result this year, followed by Yamaha team mate Maverick Vinales in 3rd. but Lorenzo’s tyre problems saw him slip back to finish 6th.
Cal Crutchlow slid out of a strong 6th position with 20 laps to go but KTM mounted Bradley Smith sporting his St. Georges flag helmet came a superb 10th showing that, along with Lorenzo, receiving their P45s was perhaps the wake up call they needed.

 

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https://www.oilcapital.com/columns/the-pay-zone/29893/oil-price-columbus-solo-bucket-list-alert-and-finally-29893.html Oil price, Columbus, Solo, *Bucket list alert* And finally... https://www.oilcapital.com/columns/the-pay-zone/29893/oil-price-columbus-solo-bucket-list-alert-and-finally-29893.html Fri, 13 Jul 2018 09:53:00 +0100

WTI $70.33 -5c, Brent $74.45 +$1.05, Diff -$4.12 +$1.10, NG $2.80 -3c

Oil price

Some recovery yesterday as the IEA report showed concern that with all participants now flat out the market is very vulnerable to serious price swings. Funny that, in 2016 when oil was collapsing and the majors were in panic mode, cutting capex to the bone only a few of us forecast exactly this situation…

But the gloom has returned this morning as Chinese oil consumption data has proved bad and oil is down again, ensuring a down week. The Libyan situation is roughly as expected, not a return to 1.2m b/d but according to tanker watchers already up to 720/- b/d.

Columbus Energy Resources

Columbus has announced the acquisition of Steeldrum Oil Company for £4.4m to be paid in 92.7m in shares plus add-ons. The acquisition, which seems to be a pretty good fit, bring with it 200-250 b/d (5.6m bbls) from the Innis-Trinity and South Erin fields plus a 83% WI in the Cory Moruga development (1.1m bbls). The sellers will hold around 18% of CERP shares in the enlarged company and have a lock-in period of only six months which should be noted.

Columbus are also raising £3.25m via a convertible with Lind AM excersisable at 8.1p as ‘the establishment of such a facility would, in effect, provide an appropriate “financial insurance policy” for the Company for the next six months whilst the new integrated organisation beds-in’.

All in all this is another sensible deal by Columbus which is synergistic and paid for with shares as per their ‘financial discipline’ regime. I think that Leo Koot wants to build the company and has very high ambitions and whilst this is relatively small, it is part of the grand scheme to expand. Keeping his new shareholders on board will be important as I’m sure there are plenty more deals down the road.

Solo Oil

Following the Aminex announcement earlier this week Solo has said that it is ‘reviewing’ its own position in the project although believes that the AEX move is a positive development. It also says that it is in discussions with potential financing partners and more interestingly ‘in parallel with the ongoing marketing process for Solo’s interest in the project’. This confirms, if confirmation was needed, that Solo cannot afford to finance the project and the current shake-up at the company is at last bringing with it a large dose of realism.

Also in the announcement the company say they are waiting for testing at Horse Hill and that there is a shake-up of the board which sees the departure of current Executive Chairman Neil Ritson. Recent moves at Solo indicate that at long last the company is being shaken up and given this morning’s share price move, much appreciated by its shareholders.

*Bucket list alert*

This week I have written the interim Bucket list which due to so much company news this week I intend to publish over the weekend so watch out for a blog then.

And finally…

The MotoGP circus moves to Sachsenring in Germany this weekend for possibly the final time following record losses in 2017. Marc Marquez is unbeaten here in all classes since 2010 so will be looking to add to that record whilst Brit Cal Crutchlow will be hoping to consolidate his Independent Rider lead despite viewing this track as “horrible”

England lost the first ODI to India in what is going to be a hard summer as the visitors are a very special side, at least in white ball cricket.

There is the small matter of two more World Cup games with the useless 3rd place play-off tomorrow with England playing Belgium and France play in the final on Sunday.

Wimbledon is now starting to become interesting, Rafa v Djoko will probably be worth watching…

Racing at Ascot and Newmarket tomorrow looks worth watching, not much else on in the afternoon…

 

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https://www.oilcapital.com/columns/the-pay-zone/29887/oil-price-premier-ophir-reabold-europa-and-finally-29887.html Oil price, Premier, Ophir, Reabold, Europa And finally... https://www.oilcapital.com/columns/the-pay-zone/29887/oil-price-premier-ophir-reabold-europa-and-finally-29887.html Thu, 12 Jul 2018 10:30:00 +0100

WTI $70.38 -$3.73, Brent $73.40 -$5.46, Diff -$3.02 -$1.73, NG $2.83 +4c

Oil price

Oil prices crashed yesterday amidst a welter of news, ironically not all bad which left traders to be frank, a bit shocked. Primarily it was the news that export ports in Libya were reopening but that was in the blog, the realisation that tankers were loading hit the market hard. Whether they get back up to over 1m b/d we don’t know but it was the sentiment. Also the extension of trade wars didn’t help as China retaliated by threatening US oil imports. Finally on the negative side there seemed to be some slippage of the hard line case on Iranian sanctions as Mike Pompeo seemed to suggest that there may be some special cases.

On the bullish side the Opec report indicated that 2H of this year would remain pretty tight whatever the supply situation is, an argument with which I concur, it’s next year when supply potentially becomes a problem. Finally the EIA reported a huge stock draw of  12.6m barrels, way in excess of forecasts and primarily due to higher than expected imports. This morning WTI has rallied by 66c and Brent by $1.43 after more contemplation of the news.

Premier Oil

A trading and operations update from Prems this morning but little to get one’s heart beating much, production was in line with expectations, Catcher is going very well offset slightly by early summer maintenance work at Huntingdon and Solan. Guidance of 80-85/- boe/d is unchanged with more maintenance but recent run rates of 90/- boe/d keeping the number up. Tolmount has received approval by the Prems board and should be partner approved in Q3.

In Mexico the new Government appears to be transitioning quite smoothly with no sign of any reversal of policy and PMO has a team down there at the moment. Assuming no change, all is in train to progress with appraisal of Zama 4Q of this year and with regards to the new licences seismic work is also expected to start later this year.

Sea Lion progresses with much work being done, the recent appointment of Standard Chartered indicates that the process is very much under way as is formalising contractors LOI’s and Governmental contributions likely to take ‘most of the year’ as expected.

2018 forecast operating costs remain at $17-18 boe and all other expenditure remains at $380m in line with guidance. Debt reduced to $2.65bn in the period and is expected to fall by $300-400m by the year end and the covenant leverage ratio is forecast to fall to 2.5x EBITDA by end Q1 2019. All in all things going according to plan for Premier with an exciting line up of developments to look forward to this year and moving forward.

 

Ophir Energy

Things at Ophir would be going quite well if it wasn’t for Fortuna and the resultant departure of former CEO Nick Cooper. No replacement has been found although there is it seems a short list of ‘highly experienced and qualified external candidates’ has been identified. Given that the Fortuna licence expires at the end of this year and still no financing options have been concluded it is not surprising that the shares are stagnant although there is plenty of built in upside should this change.

I had become more optimistic about Ophir at the beginning of the year as I felt that the worst was behind it but absence of financing for Fortuna made my bullishness premature, this is the key to Ophir’s fortunes for the time being which is a shame as I think that the Santos deal is a very good one indeed.

Reabold Resources

Reabold announced yesterday that it had received the CPR for their Romanian assets which confirm previously announced contingent resource estimates and exceed previously announced prospective resources estimates. The company expect to spud later this year and consider the assets to have ‘extremely attractive economics’.

Europa Oil & Gas

EOG has updated its prospect inventory for the FEL 1/17 and 2/13 licences in the South Porcupine Basin offshore Ireland. It has also launched a farm-out process for three licences, FEL 1/17, 2/13  and 3/13 ‘which together are estimated to hold gross mean un-risked prospective resources of 4.3 billion barrels of oil equivalent’.

CEO Hugh Mackay said that the ‘PSDM reprocessing of our proprietary 3D seismic data sets over our South Porcupine licences has transformed the prospect inventory’ so with the farm-out process now underway the proof of the pudding, so to speak, will be in the eating…

 

And finally…

The excellent run by the English team in the World Cup ended last night as they visibly ran out of steam against an improving Croatian side. Still much credit must go to Gareth Southgate who has indeed restored some faith in football.

On the subject of football I notice that the Boropa Cup is back and Rangers play tonight at Ibrox in the Qualifying preliminary round, first leg against Shkupi who finished fourth in the Macedonian First Football League last season, never an easy game, Shkupi….

Nor was it for Roger Federer who thought he was coasting to an easy victory against Kevin Anderson yesterday before realising that he was chasing the game.

 

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https://www.oilcapital.com/columns/the-pay-zone/29881/oil-price-savannah-petroleum-sound-energy-providence-aminex-and-finally-29881.html Oil price, Savannah Petroleum, Sound Energy, Providence, Aminex And finally... https://www.oilcapital.com/columns/the-pay-zone/29881/oil-price-savannah-petroleum-sound-energy-providence-aminex-and-finally-29881.html Wed, 11 Jul 2018 11:00:00 +0100

WTI $74.11 +26c, Brent $78.86 +79c, Diff -$4.75 +53c, NG $2.79 -4c

Oil price

Yesterday wasnt so bad for oil bulls, the Norway strike meant some shortage appearing and after the close the API stats showed a 6.8m draw in crude and  1.6m  in gasoline even if distillates did build by 2m barrels. Also the Iranian NOC conceded that they might lose ‘up to 500/- b/d’ due to sanctions, in your dreams matey…

This morning is a very different matter with Brent in particular easier ($1.61 as I write) mainly due to an indication from one of the Libyan NOC’s that production and exports are about to resume. And with trade wars sharpening up as Mr Trump arrives in Europe to see NATO, the UK and the Mr Putin politics isn’t getting any more relaxed.

Savannah Petroleum

Yet more good news from Savannah who have announced that  Kunama-1 is an oil discovery. This is the third consecutive discovery in the R3 portion of the R3/R4 area in the Agadem Rift Basin in S E Niger. Preliminary results indicate a total estimated 9m of net oil bearing sandstones in the E1 and E5 reservoir units within the primary Eocene Sokor Alternances objective.

Reservoir properties as indicated by wireline logs, show good quality, light oil, equivalent to that found at Amdigh-1 and consistent with offset wells along trend and the depth/API trend observed across the basin. The drilling of this well was incredibly efficient, only 14 days to TD against an estimated 22 and the whole well was completed in 23 days against an estimate of 30-35 days which clearly has a knock-on effect on budgets. Clearly delighted with this campaign so far, the company has elected to exercise the first of six individual options with Great Wall and the rig will move to drill Eridal-1 also in R3 of R3/R4 PSC only 6km from Amdigh.

These discoveries will now almost certainly mean that the company can seriously consider an early production system that can be put in place quite quickly as the three wells should underpin a commercial development in a short space of time.

This is not the only piece of good news for SAVP this week as yesterday the Group MD of NNPC detailed the seven critical projects, 5 by them and 2 by NPDC one of which includes ‘full utilisation of the Uquo Gas Plant to deliver 200 mmscfd through its Utapate gas in OML 13’. This is aimed at bridging the supply shortage in the domestic market and will be achieved by expanding the Uquo gas processing facilities owned by Accugas, currently being taken over by SAVP and AIIM as part of the Seven Energy deal. Under the Seven agreement SAVP are carried by AIIM for any expansion costs which would make Uquo of strategic value as a local infrastructure hub.

The market are clearly waiting for Seven to close but investors should be aware that the tide is turning very strongly in Savannah’s favour and the shares should be significantly higher.

Sound Energy

Sound has announced that J.J. Traynor, its CFO has joined the Board of the company, a continued beefing up of the team in recent months and with much work ahead of it in Morocco.

Providence Resources

The site survey for the Newgrange exploration well has been completed with ‘exciting’ new data now available. All this is to be shared with potential farminees who are being approached at present. Sealed pock marks are present at the site which could be seepage indicating a petroleum system or of course a risk to the seal.Overall I get the impression that the new data is much better than expected.

Aminex- Stop press…

Just going to press but as I write the long awaited deal from Aminex has been announced, more to follow after I’ve spoken to Jay. It seems that they have indeed signed a farm-out of Ruvuma to Zubair Group which will accelerate the development of the project whilst reducing costs to Aex. They will receive $5m in cash plus carry costs of $35m in respect of their remaining 25% interest. The new company will drill one new well and 200km² of 3D seismic which has never been done before. A fast track EPS should provide a minimum gross production rate of 40 MMcf/d. Finally, it is worth noting that the Zubair Corporation has existing businesses in Tanzania and enjoys a good relationship and has an excellent reputation, this will almost certainly lead to a flourishing development of Ruvuma in which Aex will maintain a stake.

More to follow but a great deal for Aminex as expected.

Link

Here is the link to this week’s Voxmarkets Podcast only slightly out of date with reference to SAVP!

VOX Markets podcast: Malcy on Echo Energy, Savannah Petroleum, Rockhopper, Premier Oil and Amersur Resources

And finally…

There is only one thing on sports fans minds today and that is England v Croatia in the World Cup Semi final tonight….They have been an inspirational group from coach downwards and it is for once good to be proud of such a squad…

 

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https://www.oilcapital.com/columns/the-pay-zone/29876/oil-price-petro-matad-iog-and-finally-29876.html Oil price, Petro Matad, IOG And finally... https://www.oilcapital.com/columns/the-pay-zone/29876/oil-price-petro-matad-iog-and-finally-29876.html Tue, 10 Jul 2018 08:59:00 +0100

WTI $73.85 +5c, Brent $78.07 +96c, Diff -$4.22 +91c, NG $2.83 -3c

Oil price

Yesterday it was Brent’s time to shine primarily as the Libyan NOC chairman stated that his country’s production was ‘falling every day’. With little signs of this impasse being settled it is another blow to world supply that will have to be filled by the KSA and Russia.

In North America whilst some of the Syncrude facility is returning it seems that most will not be back until September.

Petro Matad

So, for those with long memories MATD have returned to the scene of the crime and have announced the spud of Snow Leopard-1 in the Taats Basin of Block V in Mongolia. This 100% well for MATD is targeting 90 MMBO and is the first in a four well campaign this year.

When I met with CEO Mike Buck he was full of confidence although since then the selection of well sites has changed and the company has had an opportunistic fund raise that to be fair the shareholders lapped up. No pressure here then as the next 70 days will prove.

Independent Oil & Gas

Fiona MacAulay has been appointed to the Board of IOG as Independent Non-Executive Director with immediate effect. As if being CEO of Echo, on the Board of Coro Energy and serving as European President of the AAPG is not enough! I am sure that the Board of IOG will be seriously strengthened by her arrival and is a very good move for them.

And finally…

Today sees the first of the World Cup semi finals as Belgium take on France. This will be an opportunity for both squads to show that they have some of the best players in the world at their disposal and it will be a fascinating clash.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29872/vsa-capital-market-movers-shefa-yamim-lonsefa-29872.html VSA Capital Market Movers - Shefa Yamim (LON:SEFA) https://www.oilcapital.com/columns/vsa-capital-market-movers/29872/vsa-capital-market-movers-shefa-yamim-lonsefa-29872.html Tue, 10 Jul 2018 07:38:00 +0100 Shefa Yamim (LON:SEFA)

 

Shefa Yamim (LON:SEFA) has announced results from the first of five bulk samples from Zone 2 in the Kishon Mid Reach. The initial sample (BS-1230) consisted of 568.9t of largely basal gravels yielding a Gem Box grade of 242.59cpht; this covers all nine types of gemstone included in the Gem Box target mineral assemblage. This compares favourably to the overall grade of 154cpht in Zone 1 (6,384t). However, we highlight the variable grade distribution typically associated with alluvial type deposits and this applies to both the overall grade and that of the constituent types of gemstones.

Overall, 1,381ct of gemstones were discovered in BS-1230 and this was dominated by spinel (57%), followed by garnet (18%), ilmenite (15%), sapphire (5%) and Carmel Sapphire (3%). As with Zone 1, based on the updated data, spinel continued to have a dominant presence and in this bulk sample also produced the largest single gemstone at 6.20ct whilst a 3.61ct garnet was also found. The size distribution data indicates that 4.6% of the findings were above 1.2ct, with a further 5.2% between 0.66-1.19ct. We believe the continuing presence of Carmel Sapphire and sapphire is encouraging and look forward to the remaining results from Zone 2.

We reiterate our Speculative Buy recommendation. 

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https://www.oilcapital.com/columns/the-pay-zone/29868/oil-price-echo-energy-cairn-energy-and-finally-29868.html Oil price, Echo Energy, Cairn Energy And finally... https://www.oilcapital.com/columns/the-pay-zone/29868/oil-price-echo-energy-cairn-energy-and-finally-29868.html Mon, 09 Jul 2018 08:49:00 +0100

WTI $73.80 +86c, Brent $77.11 -28c, Diff -$3.31 -$1.56, NG $2.66 +2c

Oil price

Oil price diverged on Friday as Brent eased with a bit more crude on international markets but WTI strengthened as continued distribution difficulties and of course Syncrude not helping matters. The rig count moved back up a bit as overall units were up 5 at 1052 and oil up 5 also at 863 units.

Echo Energy

Echo has announced successful completion of its fourth well in Argentina in what looks like another very positive result. The well has interpreted a ‘notable’ gas column in the Tobifera indicating some 30m of potential net pay which suggests wet gas (with liquids) and at the upper end of the range in both contingent and prospective resource estimations. Targets of 19 bcf of gross best case contingent and 18.7 bcf prospective as per the CPR should be hit.

Echo seems to be in a good position now that the four well drilling campaign has completed and the Quintana-1 completion and testing rig rolls into town. ELM 1004 will be tested first and all the other potential discoveries will undoubtedly reveal exciting further news as work continues and thus giving a chance to make an early decision on monetisation options for Fracción D.

Cairn Energy

Cairn has announced that all written submissions have been made by them and the Indian Government and final arbitration will commence in The Hague on 2oth August and last for two weeks. With a result not due until next year Cairn shareholders will have to wait a while but as I have always said this is a bit of a side show given value created particularly in Senegal in the last few years. Having said that I find it galling that the Indian authorities have not only seized dividends from Vedanta but also sold off a stake in the company which must be against both the letter and the spirit of the law, as if that mattered….

And finally…

On Friday France beat Uruguay and Belgium knocked out Brazil in this mad crazy World Cup. On Saturday England beat Sweden 2-0 and Croatia beat Russia on penalties…

Over at Silverstone Kimi managed to force Lewis off and received only a 10 second penalty, imagine what if he had passed him and ended up in front….

India won the T20 series 2-1 and look very dangerous ahead of the ODI series which starts this week.

Wimbledon goes into the second week looking very much for specialist viewers only, few thrills and in the ladies draw few seeds also..

And I was reminded about the T de F which I have never covered even though I am aware that it is now clean….

 

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https://www.oilcapital.com/columns/the-pay-zone/29863/oil-price-hurricane-energy-echo-energy-links-and-finally-29863.html Oil price, Hurricane Energy, Echo Energy, Links And finally... https://www.oilcapital.com/columns/the-pay-zone/29863/oil-price-hurricane-energy-echo-energy-links-and-finally-29863.html Fri, 06 Jul 2018 10:34:00 +0100

WTI $73.19 -95c, Brent $78.06 -18c, Diff -$4.87 +77c, NG $2.85 +1c

Oil price

Oil drifted yesterday led by WTI after the EIA inventory figures disappointed (compared to API) although they were a bit mixed. Crude built 1.245m barrels as opposed to scribblers guesses of a draw of 5.2m but stocks at Cushing drew 2.1m b/d and gasoline stocks drew on a 0.4% fall in refinery utilisation.

The KSA announced that June production was 10.488m b/d so had jumped the gun a tad but it hasn’t worried money managers who are again increasing long positions.

Hurricane Energy

Hurricane has announced the completion of well operations at Lancaster and the rig has left the field. Both production wells for the development are now ready to be tied-in to the subsea infrastructure. This was the first of the three main elements of the installation campaign, in addition the mooring installation is underway to be followed by SURF installation. These are the key elements prior to the arrival of the FPSO and first oil remains on target for 1H 2019.

Just in case anyone was away at the time, I recently interviewed CEO Dr Robert Trice on Core Finance TV and the link is here.

Core Finance CEO Interview: Dr Robert Trice of Hurricane Energy

Echo Energy

Echo has announced that the mobilisation of the Quintana 01 testing/completion rig to FC, FD and LLC assets in Argentina is under way. Work is expected to commence the week beginning 8th July and will start at ELM 1004 for 2-3 weeks, after which the rest of the wells in the four well programme will be done in an order yet to be decided. This is because the design of the EMS-1001 is still to be finalised and its position in the order uncertain dependent on that design.

Echo has said that whilst they have the rig on contract they are considering a number of additional well interventions and workover in Estancia La Maggie, FC and FD to either restore or increase well productivity from existing wells. I put Echo in the bucket list in February as although I knew that quite a lot of the work was likely to be 2H of 2018 and beyond they might get an early wiggle on, thank goodness I did, the shares are up 32.4% since inclusion and are in 6th position as a result. (All being well the interim Bucket list will be in Monday’s blog)

Links

Yesterday I was delighted to interview Brian Mitchener, Exploration Director of Sound Energy who came in to talk about the huge amount of technical work that he and his team have been doing in Morocco. The link is here and it does give an interesting insight into the detailed studies that have been going on in this exciting basin.

Core Finance interview: Brian Mitchener, Exploration Director of Sound Energy

I was also in the Core Finance studios yesterday with myself and Tim Gregory, Chief Investment Officer of Vermeer Investment Management being interviewed by Core CEO Nick Batsford. We talked about oil in the context of Tim’s overall investment strategy within his portfolio.

Core Finance interview: Brent Oil up 19%, NASDAQ up 9%, Bitcoin down 58%p;

And finally…

What a weekend of sport is approaching, indeed this very afternoon we have Uruguay v France and this evening Brazil v Belgium. Tomorrow of course sees England play Sweden and Russia take on Croatia.

Not just that but the F1 British Grand Prix is on Sunday with Lewis and Mercedes trying to do better than last week’s disaster….

The cricket this weekend is two more ODI’s against the visiting and very good Indian team who are at the moment certainly better than us and out No 1 world ranking must be in jeopardy…

And at Sandown it is the Coral-eclipse Stakes with a small but quality field headed up by Derby winner Masar.

Wimbledon continues and situation normal for England as by the end of the first week only one player remains in the competition. Good luck to Kyle Edmund in the next round….

 

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https://www.oilcapital.com/columns/the-pay-zone/29858/rockhopper-amerisur-sdx-energy-29858.html Rockhopper, Amerisur, SDX Energy https://www.oilcapital.com/columns/the-pay-zone/29858/rockhopper-amerisur-sdx-energy-29858.html Thu, 05 Jul 2018 09:22:00 +0100

Rockhopper

The main news this morning fron RKH is the confirmation that Standard Chartered bank has been appointed to lead the work on the senior debt for Sea Lion. This is another welcome tick in the box as Premier and Rockhopper move towards sanctioning a project that as I said in my bucket list video yesterday must throw off huge money at these oil prices and project economics. The release also welcomes the imminent start of the drilling campaign at Abu Sennan which is to be welcomed as the ‘Greater Med’ area is an important part of the company’s funding.

Amerisur Resources

Amer has announced its monthly production numbers, 5,171 b/d with a peak of 5,400. The OBA did 4,332 b/d with a peak of 4,530. Plat-22 restarted at 650 b/d but dropped again to 350 b/d and is being monitored. This production is benefitting from continued work on upgrading well performance at the moment. Having said that the upside increasingly looks like being the upcoming drilling campaign which is pretty much on target despite dreadful weather conditions. Pintadillo-1, where the company is targeting the key ‘N’ sand anomaly, should spud in July. Elsewhere both the Miraparriba-1 and the Indico-1 wells are on schedule for Q3 spudding.

SDX Energy

SDX has announced the spud of appraisal well SD-3X at South Disouq in Egypt. If successful this will be connected to the SD-1X infrastructure. They have also announced that testing of the SD-4 discovery is expected in the next ten days.

 

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https://www.oilcapital.com/columns/the-pay-zone/29851/oil-price-bp-tullow-links-and-finally-29851.html Oil price, BP, Tullow, Links And finally... https://www.oilcapital.com/columns/the-pay-zone/29851/oil-price-bp-tullow-links-and-finally-29851.html Wed, 04 Jul 2018 09:36:00 +0100

WTI $74.14 +20c, Brent $77.76 +46c, Diff -$3.62 +26c, NG $2.87 +1c

Oil price

With the US markets closed for Independence Day today the chance for traders to have a mash up was too good an opportunity to miss and according to my spy, WTI in particular was all over the place. Up before a crash and followed by a very decent rally saw the bulls eventually win the day.

The Saudis said that they ‘will use spare capacity to deal with any future changes in oil supply and demand rates’ which translated says that they will do as they feel. Inventory stats are split by the holiday, the API came out last night with a 4.5m draw in crude and a 3m draw in gasoline and unless the EIA numbers, out on Thursday this week are much different then we will remain on the strong side.

BP

BP has announced that it has bought a 16.5% stake in the Clair field West of Shetland from ConocoPhillips and as part of the transaction sold it some Alaska production. BP now has 45.1% of the giant Clair complex and tenuous as it is just shows how hot the West of Shetlands is right now…

Tullow Oil

Tullow has announced that it has lost its case to Seadrill re the termination of a rig contract in December 2016 in which it declared Force Majeure.  Tullow retain the right to appeal but if it doesnt the sums are now relatively speaking quite small. The net amount Tullow will have to pay is $140m of which $128m was already provisioned in the end 2017 accounts. The Kosmos part of the litigation is expected to be handed down soon.

Links

It is time for the interim look at the bucket list and ahead of my speaking at the London South East Oil & Gas investor evening on July 17th here is at least a sneak preview as to how the numbers look and maybe a change or two…

London Sout East interview: Rockhopper tops Malcy’s 2018 Interims Bucket List gains

And details of the event are here…

https://www.eventbrite.com/e/oil-gas-investor-evening-with-malcolm-graham-wood-malcy-and-aim-listed-ceos-tickets-46763627268?aff=Malcy

And relegated to Tuesday again my VoxMarkets Podcast finally aired yesterday. For a look at one or two companies in the news here is the link.

VOX Markets podcast: Sound Energy, Echo Energy, Victoria Oil & Gas, Faroe Petroleum, Diversified Gas & Oil and Rockrose Energy

And finally…

Well I never, after the rather boring Sweden 1-0 v Switzerland the evening match was as about as full of drama as one could get with England finally prevailing 4-3 on penalties. We now have two footy free days, it will feel a bit strange and now til Saturday isnt long to prepare for a Q/F with Sweden.

England’s cricketers came up against quality opposition last night in the form of the Indian touring team who demolished the home side, fortunately everyone was watching the footy but I think the bowling machine in the nets has to be set to wrist spin for a while…

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29843/vsa-capital-market-movers-shefa-yamim-lonsefa-29843.html VSA Capital Market Movers - Shefa Yamim (LON:SEFA) https://www.oilcapital.com/columns/vsa-capital-market-movers/29843/vsa-capital-market-movers-shefa-yamim-lonsefa-29843.html Tue, 03 Jul 2018 08:52:00 +0100 Shefa Yamim (LON:SEFA) has announced that it has updated its target mineral assemblage of gemstones to better reflect the make-up of its Kishon Mid Reach Deposit. Previously the gemstone focus was on Diamond, Moissanite, Corundum and Hibonite (DMCH) although now spinel is being added along with garnet and ilmenite to this target group which will be renamed the “Gem Box”. This has been retroactively applied to Zone 1 and will be applied to the bulk sampling for Zone 2. The overall grade from Zone 1 bulk sampling has therefore increased from 45cpht to 154cpht.

In Zone 1 a total of 2,177ct of garnets were recovered and subsequent polishing and cutting has demonstrated gemstone quality of the garnets having previously been conservatively classified as industrial quality. The overall garnet grade for Zone 1 was 34.09cpht.

Spinel is now considered the most abundant mineral within the Gem Box suite with a total Zone 1 recovery of 3,953ct (69.91cpht). The largest of which was 6.2ct and SEFA have indicated that much of the recovered spinel is of gem quality. Spinel data and stones have been stored through the bulk sampling process since it is a kimberlitic indicator mineral although given its potential as a gemstone is now being included in the gem box suite.

We reiterate our Speculative Buy recommendation.

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https://www.oilcapital.com/columns/the-pay-zone/29841/the-pay-zone-oil-price-savannah-petroleum-echo-energy-and-finally-29841.html The Pay Zone - Oil price, Savannah Petroleum, Echo Energy And finally... https://www.oilcapital.com/columns/the-pay-zone/29841/the-pay-zone-oil-price-savannah-petroleum-echo-energy-and-finally-29841.html Tue, 03 Jul 2018 08:36:00 +0100 WTI $73.94 -21c, Brent $77.30 -$2.14, Diff -$3.36 -$1.93, NG $2.86 -6c

Oil price

There was little change in the market fundamentals although the differential closed up with August Brent expiring making all look worse than it was, both crudes are up this morning. The market could have been forgiven for being worse, Reuters suggested that the Saudis were already up to 10.7m b/d and Russia to 11.7m b/d which shouldn’t come as a surprise except to those bears with very little brains.

Savannah Petroleum

SAVP has updated the market today which is very wise as there are people out there who worry about the Seven Energy Transaction not completing. The company are completing formalities and whilst these cannot be taken for granted are expected to complete in the 3rd quarter of 2018. As a reminder the company has previously received a letter of authorisation to proceed from the authorities in Nigeria, and I note the quotes from both the Accugas banks and private equity partner AIIM in the release giving their support.

On the production front, average daily numbers from Jan-May were 18.8 kboepd of gross gas with sales down Q2/Q1 due to power plant maintenance which should be back to normal in H2. With the Accugas GSAs are subject to take or pay provisions higher than anticipated 2018 production volumes, and it’s reassuring to see Andrew Knott talking about the impact the World Bank payment guarantee is having on cash flows. Also they have applied to extend the Accugas pipeline network, which is part of the growth story to generate more, higher paying customers. Finally, the company are cancelling the share premium account which will provide the directors the flexibility to pay dividends and buy back shares.

SAVP might have been held back by length of time the completion has taken but with such success in Niger once these technicals have been seen to I consider that the shares should move materially higher.

 

Echo Energy

Echo has announced that drilling has started on CSo-2001(d) in Fracción D in Argentina. It is targeting a Tobifera high identified by 2D data and looking for 19 bcf of gross best case contingent resources plus a further 18.7 bcf gross best case of prospective resources all identified by Gaffney Cline in their CPR.

And finally…

Last night saw yet more exciting footy in this years World Cup as after Brazil despatched Mexico Belgium left it late to finally beat Japan 3-2 with 15 seconds left on the clock. This afternoon it is Sweden v Switzerland and this evening Colombia take on England….

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https://www.oilcapital.com/columns/the-pay-zone/29839/the-pay-zone-oil-price-sound-energy-zenith-energy-wentworth-resources-columbus-e-r-and-finally-29839.html The Pay Zone - Oil price, Sound Energy, Zenith Energy, Wentworth Resources, Columbus E R And finally... https://www.oilcapital.com/columns/the-pay-zone/29839/the-pay-zone-oil-price-sound-energy-zenith-energy-wentworth-resources-columbus-e-r-and-finally-29839.html Mon, 02 Jul 2018 10:53:00 +0100 WTI $74.15 +70c, Brent $79.44 +$1.59, Diff -$5.29 +89c, NG $2.92 -2c

Oil price

A good week for oil with WTI up $5.57 and Brent up $3.89 for all the reasons written about at the time. As we head into July some supply shortages remain, Venezuela of course but Libya is increasingly worrying with export terminals remaining blocked. Longer term buyers will have to decide whether or not to buy Iranian crude with the strongest of all sanctions if they do..

There is no doubt that, following the Opec+ meeting that some reasonable production increases will be made although quite how much and how soon are up for debate. President Trump Tweeted that he had spoken to his ‘good friend’ King Salman of Saudi Arabia who had promised an increase of 2m b/d to get the price of oil down. Mutual distrust of Iran aside, 2m b/d of extra production, especially during the summer is just not possible at short notice and it transpired that the President actually asked for an increase in capacity, not production.

I suspect that 1m b/d is doable quite soon, 1.5m by the 3rd quarter and 2m a bit further down the line, either way, with or without Mr Trump’s intervention, the KSA is fully able to manage the oil price on the upside or the downside on their own…

If the President really wants to get world oil production up he should facilitate more and faster pipeline expansion in the US onshore. Baker Hughes reported on Friday that oil wells actually decreased last week probably as a result of shortage of capacity, ‘the price of oil is too high’ as they say in the best Washington circles…

Sound Energy

Sound has announced that it has raised $15m at 37p (a 7.5% discount) to ‘strengthen the company’s cash position before initiation of the high impact 3 well exploration programme in Eastern Morocco’. This is contingency money so to speak which puts Sound in a strong position at the negotiating table at a later date as they have enough cash at this stage anyway and therefore a smart move I suspect.

Zenith Energy

Zenith has announced that its results have been posted and brings an update on their proposed acquisition in Indonesia. The due diligence has evidential negative discrepancies ‘exceeding 5% of the book values’ and ‘therefore Zenith intends to renegotiate the total consideration of $6.6m. I am aware that a number of companies are attempting to do asset deals in the country at the moment and this story is familiar to many of them.

It is also worth noting that there have been some interesting share purchases announced lately with Brian Clark, Mirabeau and most recently Miton adding to holdings…

Wentworth Resources

Wentworth has announced that June payments for Mnazi Bay in Tanzania total $3.1m net to the company. Payments from both TPDC and Tanesco were received for one months gas sales. The company also announces that June gross production was 87 MMscfd which is in line with expectations.

Columbus Energy Resources

Columbus has announced that it is rolling over the practice of paying Directors and senior management partially in shares which will now be done at 5.1p. I think that there is little doubt that CERP are doing the correct thing here although the market has trimmed the shares this morning. Later this month I am on a panel with Leo Koot amongst others, the link is here and the evening should  be most interesting…

https://www.eventbrite.co.uk/e/oil-gas-investor-evening-with-malcolm-graham-wood-malcy-and-aim-listed-ceos-tickets-46763627268

And finally…

At the Austrian GP at the Red Bull circuit Max Verstappen cruised home unaware of the carnage behind him. With tyres blistering and engines failing the Ferrari’s came in behind him and unusually both Mercs DNF’d.

The MotoGP at Assen became one of the best motorcycle Grand Prix races ever with six riders taking it in turn to lead.The resurgent Lorenzo stormed off the line from 10th place to 2nd and quickly took the lead from Marquez leading a train of eight riders all within a second.The close racing caused Vinales to collide with Marquez which temporarily upset his rhythm and Rossi to ram Lorenzo but all stayed onboard. Marquez’s Honda finally escaped the bunch to take the chequered flag followed by Alex Rins on the improving Suzuki and Vinales’ Yamaha took 3rd. meaning Spain dominated the podium, small compensation for events in Russia later on. Cal Crutchlow struggled with tyre wear at the end but managed to hold 6th place and be the top independent rider again.

Apologies, tiredness at the end of a  long blog promoted Poland and Senegal beyond their station! At the weekend France ko’d Argentina, Uruguay beat Portugal, Croatia got past Denmark on pens but most surprisingly Russia held Spain to a draw and went on to win also on pens.

Today sees Brazil play Mexico and Belgium take on Japan in what might have been England’s side of the draw…

Wimbledon starts today, usually the signal for torrential rain which particularly in the North West would be grateful for at the moment with many moors in the area burning and out of control.

Finally I notice that having gone out of contract, LeBron James has signed a massive contract with the LA Lakers, I wonder if that consecutive number of finals will be added to next year?

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https://www.oilcapital.com/columns/the-pay-zone/29823/rose-petroleum-savannah-petroleum-29823.html Rose Petroleum, Savannah Petroleum https://www.oilcapital.com/columns/the-pay-zone/29823/rose-petroleum-savannah-petroleum-29823.html Fri, 22 Jun 2018 07:42:00 +0100 Rose Petroleum

Am on the move already this morning but had to mention the Rose announcement regarding the updated CPR on the Paradox project in Utah. Bearing in mind that this was focused solely on the single reservoir, the Cane Creek reservoir one of the multiple prospective areas in the Paradox formation it is incredibly good news .

I couldn’t put it better than CEO Matt Idiens who says ‘ we are hugely encouraged by the reclassification of Contingent Resources within the 3D seismic area reporting net to Rose a 2C Contingent Resource of 9.25 million barrels of oil, 18.5 bscf of gas and an unrisked pre-tax NPV-10 of $122m’.

Patient investors will welcome this extremely good news bearing in mind the significant upside potential and thus prospectivity of the Paradox project. More next week when I’ve chatted to Matt Idiens whom I’m sure will be delighted by this news.

Savannah Petroleum

 

SAVP has announced that it has spudded Kunama-1 in the R3 portion of the R3/R4 Area in the Agadem Basin in Niger. Primary target is Eocene Sokor Alternances and secondary is Eocene upper Sokor which would be considered as upside.

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https://www.oilcapital.com/columns/the-pay-zone/29818/oil-price-genel-lamprell-empyrean-and-finally-29818.html Oil price, Genel, Lamprell, Empyrean And finally... https://www.oilcapital.com/columns/the-pay-zone/29818/oil-price-genel-lamprell-empyrean-and-finally-29818.html Wed, 20 Jun 2018 10:30:00 +0100

WTI $65.07 -78c, Brent $75.08 -26c, Diff -$10.01 +52c, NG $2.90 -5c

Oil price

What can I say that hasn’t already been said ahead of Friday, and possibly Saturday’s Opec meeting? For the first time in a while this will be an ‘unfriendly’ meeting as those who can’t increase production oppose increases suggested by those who can. The final reckoning in my view will still probably be an increase in allowances, but for all the reasons I have said this week, will be unlikely to be enough to push the oil price down, if at all. It might be a busy afternoon at Royal Ascot though……

Genel Energy

Genel has announced that the Tawke Partners have received $62.19m from the KRG for their March crude sales of which $15.51m is net to them. For Taq Taq the number is $6.2m gross and $3.41m net and there is also the override payment of $8.37m representing 4.5% of the Tawke gross licence revenues for March as per the terms of the RSA. In total the company has therefore received a total of $27.29m and with a good deal of exciting news to come will be almost certain of inclusion in the next bucket list changes.

Lamprell

Lamprell posted this week an update on Saudi Arabia which they now call ‘core’ to the Group’s growth strategy which must mean all is bedding down well with the JV with Saudi Aramco, Bahri and Hyundai on the maritime yard. Now the objective is to qualify as a contractor  for Aramco for EPC projects which means complying with the IKTVA process. This is the In Kingdom Value Add programme which is to ensure local investment and so LAM has partnered with Asyad Holdings which has had a double whammy as its owner also owns Blofeld which now has 10% of LAM equity.

Empyrean Energy

Tom Kelly has been saying there is more to come away from Dempsey and he has announced further positive news from China this week. His oil migration study on 29/11 its offshore China block has indicated that both Jade and Topaz are ‘potentially filled’ from at least two different pathways and the Pearl prospect is interpreted to be filled via a pathway from a large oil and gas field to the North. With news from Indonesia still due shortly I consider EME to be looking in a very good place just now.

Links

Two links today, the first is my Monday VoxMarkets Podcast which was aired late and thus only in today. The second is a highly informative CEO interview with Paul Welch of SDX Energy which I urge you to watch, it is one of the best, even though I say it myself…

VOX Markets podcast: Malcy on SDX Energy, Cabot Energy, President Energy, Diversified Gas & Oil, Echo Energy, Petro Matad, Reabold Resources, Block Oil

Core Finance CEO interview: Paul Welch of SDX Energy

And finally…

Yesterday Russia almost completed getting out of the group stages with an easy win over Egypt for whom Mo Salad was clearly still in recovery. Japan beat Colombia who had a player sent off after only three minutes and Senegal beat Poland. Today sees Portugal play Morocco, Uruguay v Saudi Arabia and Iran play Spain in that competitive group.

Yesterday England broke the world record for runs scored on an ODI posting 481-6 at Trent Bridge and won the game to go 3-0 up in the five match series.

At Royal Ascot John Gosden and Frankie Dettori had a great day  and might come back for more this afternoon especially with Cracksman up their sleeve but also with Stream of Stars and Tricorn ridden by James McDonald.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29814/vsa-capital-market-movers-wynnstay-group-h1-2018-results-29814.html VSA Capital Market Movers - Wynnstay Group: H1 2018 Results https://www.oilcapital.com/columns/vsa-capital-market-movers/29814/vsa-capital-market-movers-wynnstay-group-h1-2018-results-29814.html Wed, 20 Jun 2018 08:21:00 +0100 Wynnstay Group: H1 2018 Results

Wynnstay Group (LON:WYN), a UK manufacturer and supplier of agricultural inputs, has announced results for the six-month period ended 30 April 2018 (H1 2018).

  • Revenue: £218.5m, +10.3% YoY (H1 2017: £198.1m)
  • Adjusted Group PBT: £4.9m, +15.5% YoY (H1 2017: £4.3m)
  • Net debt of £6.9m at 30 April 2018 (30 April 2017: £8.3m).
  • Interim dividend: 4.41p, +5.0% YoY (H1 2017: 4.2p).
  • Agriculture Division: Revenues £160.1m, +9.9% YoY; operating profit £2.1m, +33.1% YoY (H1 2017: £145.8m, £1.5m).
  • Specialist Retail Division: Revenue £58.3m, +11.4% YoY; operating profit £3.1m, +6.2% YoY (H1 2017: £52.3m, £2.9m).

VSA Comment

WYN’s trading statement on 20 March confirmed that it had begun the year in an encouraging manner with increased demand for most of its products (feed, fertiliser, grain volumes, seeds, retail products). Although the onset of spring farm activities was delayed by weather, arable product volumes have now recovered to normal levels, with particularly strong demand reported in April and May.

In the fertiliser sector, although margin pressure remains, yesterday’s Q3 trading update from Origin Enterprises (LON:OGN), which reported higher like-for-like volumes in its Q3 (WYN’s Q2) as well as an expectation that volumes would continue to be favourable in Q4 (WYN’s Q3) may finally indicate the start of an improving market in this area.

Grain trading has continued to be a difficult place to make money as grain prices have shown little volatility and margins have therefore been hard to achieve. However since March, we have seen a bit more volatility enter the market with the benchmark UK feed price breaking out of its range and moving above £155/t earlier this month.

In animal feed, DEFRA data has continued to show good UK market demand. WYN has also reported the positive impact of the prolonged winter and subsequent wet weather, which has limited grass growth and led to increased animal feed demand as on-farm fodder stocks have depleted.

In retail, as previously announced on 30 April, WYN bought eight stores from the administration of Countrywide Farmers to expand significantly its retail presence into the South West of the UK. It also acquired two others stores during the period (in mid-Wales and Cornwall) to bring its total retail network to 60 stores.

 

These results are not surprising given the March trading update, the bullish trading update from NWF Group (LON:NWF) last week and well-publicised improvement in the underlying UK agriculture market. Despite these factors, WYN has been the only stock in the sector not to experience a significant share price increase. We think this is unjustified and is perhaps a hangover from the issues experienced with Just for Pets last year.

WYN looks well on track to meet or even exceed current consensus (revenue of £407.6m, +4.3% YoY, and an adjusted PBT of £8.2m, +2.5% YoY).

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https://www.oilcapital.com/columns/the-pay-zone/29813/rockhopper-29813.html Rockhopper https://www.oilcapital.com/columns/the-pay-zone/29813/rockhopper-29813.html Tue, 19 Jun 2018 09:57:00 +0100

Rockhopper

RKH has announced an Egypt update this morning and progress is certainly being made in the ‘Greater Med’. At Abu Sennan production is being maintained at 4/- boe/d gross, net 880 to RKH. They have also announced the drilling campaign for the summer which comprises exploration and development wells and a water injection programme.

The rig is mobilising and should spud the first of two development wells by the end of June. This will be followed by the second and then the exciting exploration well on ‘prospect S’ which is targeting the Roash reserves as at Al Jahraa. There is also water injection programme at the Al Jahraa field ongoing. This programme is planned to take around six months with total capex net to RKH of $3m.

At El Qa’a the Raya-1X spudded on 17/06 targeting the Nukhul Formation reservoir, here the net cost is less than $1m. The market’s eyes may be focused further south but the Greater Med is an important part of RKH’s strategy as it pays the G&A keeping the powder dry for Sea Lion

Financially the situation in Egypt is improving all the time, with EGPC making ‘a number of payments’, recoverables are falling and now only $2.2m. With the oil price steady enough here and the Sea Lion economics looking robust ali is looking good for RKH and patience should be rewarded.

And finally…

I don’t normally do an and finally in a flash blog but it’s not normally the day after an England win in the first match of a World Cup campaign and the start of Royal Ascot!

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29796/vsa-capital-market-movers-columbus-energy-resources-lncerp-29796.html VSA Capital Market Movers - Columbus Energy Resources (LN:CERP) https://www.oilcapital.com/columns/vsa-capital-market-movers/29796/vsa-capital-market-movers-columbus-energy-resources-lncerp-29796.html Tue, 12 Jun 2018 10:04:00 +0100 Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (LON:CERP) has announced full year results for the year ending December 2017. The new team, which took charge in May 2017, has recapitalised the company, which ended the year with a cash position of £4m, and began an ambitious operational overhaul seeking to realise the significant value potential of the underlying assets whilst instilling capital discipline.

Revenues were up 5% YoY, to £4.8m while the loss from operations widened to £4.3m from £4m, largely due to the costs associated with closing the Spanish assets. Due to a lower impact from impairments, the net loss narrowed from £11.9m to £5m YoY.

These results, however, largely reflect the last of the old regime and the turnaround being enacted is yet to show through fully. Operational improvements began to take effect from August and so the full year numbers reflect little of the positive working practices and low cost enhancements which took production from 365bopd in July 2017 to a peak of 562bopd by the end of the year.

Group production averaged 368bopd, down 21% YoY, primarily as a result of the reduced contribution from the Spanish assets which have been shuttered. This was modestly lower than our estimate based on management guidance of 399bopd for the full year and was largely due to the challenges of coarse sand impacting on pumps. CERP has now applied new techniques to alleviate this. Group revenues were, however, up 5% YoY at £4.8m driven by a recovery in oil prices and the increased production contribution from Goudron in the latter part of the year. We highlight that revenues from Trinidad increased 24% YoY to £4.5m while Spanish revenues declined 68% YoY to £0.3m and these have been discontinued for 2018.

Cost of sales were modestly higher, up 8% YoY to £3.6m reflecting CERP’s largely fixed operating cost base, however, as a result of a stronger top line CERP generated a small gross profit of £78k versus a loss of £148k in the prior year. The closure of the Spanish operations did, however, increase SG&A costs by around £700k and following the successful agreements in Q1 2018 in relation to the La Cora concession these can be considered a one off. Excluding Spain, CERP reduced SG&A by 11.5% YoY. However, as a consequence the loss from operations widened YoY to £4.2m from £4m.

Finance charges increased to £824k from a negligible net amount YoY owing to the use of the Lind facility which the new team successfully renegotiated during 2017 raising the conversion price to 4.5p. CERP reduced its outstanding debt through the year from £1.87m to £1.21m despite Lind exercising its right to lend a further US$0.75m during the year. The debtposition at the end of March was approximately £0.69m demonstrating continued further progress in this regard. Indeed, having raised £4.1m in October, CERP has considerably strengthened its balance sheet and is well placed to carry out its operational turnaround at Goudron as well as initial exploration on the South West Peninsula, now due in H1 2019.

Post year end, CERP completed a renegotiation of the license ownership in relation to the SWP which paves the way for the much anticipated exploration programme necessary to unlock the significant value potential we believe exists. In addition, the company announced the potential Icacos acquisition which we believe is attractive for both CERP and Touchstone (TXP CN) since its completion better aligns the interests of the relevant parties with their core strategies and will enable CERP to take advantage of potential synergies between Bonasse and Icacos.

Although the financial data for 2017 shows little of the initial benefits from production and operational enhancements managements’ impact on capital discipline is clearly demonstrated in these results. The improvements in production of around 50% during H2 have resulted from minimal capital spending of just £1.38m. Although this was significantly higher than the prior year (£310k), this lack of investment owed to the company’s constrained financial position and we believe that capital spending of £8m in 2015 and £10m in 2014 are more reflective of the prior management’s approach. We believe that this is the key takeaway from these results and is the most clear indication of the change of direction for the company.  

The full year 2017 results represent only a small part of the early impact that the new management team has had, in our view. We believe that the financial benefits of the operational turnaround will be more fully reflected in the coming periods and much of the first 12 months for the new team has been about building a robust platform on which to build; resolving legacy issues at the SWP with regard to the BOLT transaction and in Spain now mean that the company is well placed to fully reflect the financial turnaround at Goudron in 2018 and begin exploration on the SWP.
 

 

We reiterate our Buy recommendation and 26p target price.

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https://www.oilcapital.com/columns/the-pay-zone/29792/oil-price-echo-energy-block-energy-and-finally-29792.html Oil price, Echo Energy, Block Energy And finally... https://www.oilcapital.com/columns/the-pay-zone/29792/oil-price-echo-energy-block-energy-and-finally-29792.html Mon, 11 Jun 2018 12:40:00 +0100

WTI $65.74 -21c, Brent $76.46 -86c, Diff -$10.72 -65c, NG $2.89 -4c

Oil price

Oil was down modestly on Friday and pushed it into negative territory for the week, WTI lost just 7c and Brent 33c after the usual ups and downs. There are still opposing forces operating which will likely keep things range bound at least until the Opec meeting on 22nd of this month. With 11 days to go posturing is very much underway, at the weekend Iran, unsurprisingly, took offence at the US appeal to the Saudis to increase production to keep prices down.

What Opec/Non-Opec will do may well be decided on Thursday as I understand that senior Saudis have been invited to Moscow to watch the opening fixture of the World Cup which is between Russia and Saudi Arabia, who would have guessed at such a coincidence?

Some oil watchers are still pinning their hopes on a price fall led by ever increasing US production, last week it reached 10.8m b/d but still short of having any real impact of the market. The rig count showed a rise of 2 units overall, and up by only 1 in oil to 862 units which won’t rock the boat too much I would have thought, to put it into perspective Venezuelan production has fallen by more this year than the US has risen…

At this stage I still think the Opec meeting will decide to carefully monitor the situation and where necessary ensure that the market is supplied with crude oil as and when the situation demands, or something similar, certainly not a free-for-all which would delight Iran.

Echo Energy

Echo has announced that it has successfully completed its EWT on the CSo-85 well on their Fracción D acreage in Argentina. They report 16 days of stabilised gas production at a variety of choke sizes from 6-14mm achieving a maximum rate of 2.5 mmscf/d at tubing head pressure of 432 psi. After this the pressure gauges were left on for 19 days to monitor pressure build up, the results of which were very positive and indicate that the well is in direct communication with a volume of the 4 bcf in the Springhill reservoir.

Integration of this data indicates that it will be possible to convert some or all of the currently classified gross best case prospective resources of 15.3 bcf immediately into contingent resources. Also, the deeper Springhill C3 reservoir has some 11.6 bcf which may have a similar expectation of reclassification. The company, along with partner CGC are evaluating drilling an additional Tobifera gas well on the western flank of Cañadon Salto to target 18.8 bcf of total gross prospective resource of 18.8 bcf (best case) in addition to confirming existing contingent resources of 19 bcf (gross best case) in the current campaign. Success on this would support an early decision for a gas development at Fracción D and the companies are working on a fully costed development plan, including pipeline and associated gas processing facilities, upon which such a process could go ahead and on what timeline.

Echo have had remarkable success with amongst their first projects in the portfolio of Argentinian assets they purchased only last year already potentially going ahead. With a recent raise with high quality institutional investors made to take advantage of current low prices in oilfield service companies, and significant potential from the current drilling campaign it seems odd that the market has yet to take this onboard, a pick up in the share price must be on the cards before long.

Block Energy

First day of dealings today for Block Energy the latest Georgia based company to appear on the market. The company has raised £5m at 4p which I am led to believe is significantly more than they had originally expected and has some high quality institutional backing. I am meeting with the management tomorrow so will report back after that as there are some important questions to ask them.

Finally the arrival of another Georgian based company on the market can only be good news for Frontera Resources as it will surely highlight the huge potential in the country which up until now has been to a large extent missed by the market.

And finally…

In my haste to complete Friday’s blog I left out half of the important sporting events due at the weekend…

Although the F1 roadshow is providing us with a number of potential winners which is refreshing, the actual races are turning out to be remarkably boring. With extra wide cars and circuits that prohibit overtaking, qualifying now generally is way more fun than the race itself. Yesterday’s procession proved that and whilst the table is very close, the racing is not.

Talking of not close is the mismatch arranged for Tyson Fury who fought an Albanian five stones lighter and a foot shorter than himself. Woefully out of touch it took him four rounds to despatch someone he should have done in four seconds…

The Scotland v England cricket match yesterday was close and with England treating it like a warm-up match for the series against the Aussies this week they deserved what they got. Very poor bowling on a pocket handkerchief of a pitch deservedly got despatched and when it came to cruising to victory the middle order folded in a typically cavalier fashion reminiscent of ye old England.

The rugby was also interesting and close, notably England just losing in South Africa and Ireland shaded in Australia, whilst Wales won in Argentina and Scotland in Canada. Round two next weekend should provide more good games. France provided interest by going in at half time against the All Blacks 8-11 ahead and promptly lost 48-11….

 

 

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https://www.oilcapital.com/columns/the-pay-zone/29787/oil-price-amerisur-sound-ascent-zenith-empyrean-and-finally-29787.html Oil price, Amerisur, Sound, Ascent, Zenith, Empyrean And finally... https://www.oilcapital.com/columns/the-pay-zone/29787/oil-price-amerisur-sound-ascent-zenith-empyrean-and-finally-29787.html Fri, 08 Jun 2018 12:21:00 +0100

WTI $65.95 +$1.22, Brent $77.32 +$1.96, Diff -$11.37 +74c, NG $2.93 +3c

Oil price

Oil prices got back down to $65 and $75 so it was time to rally and apart from the strong greenback most of the news was positive. Firstly, news gets worse in Venezuela where PDVSA are apparently not meeting their contractual obligations leading to empty tankers queuing around the block and no sign of anything getting any better. The two Chevron workers have been released from jail but i’m sure that their tales will hardly inspire anyone to work there.

In the discussion about whether to increase production or not two countries yesterday helped the price spike by suggesting that there should be no increase in production. The Algerian Oil Minister wants to keep the market tight but balanced whilst the Iraqi minister went further by saying that no production increase is to be discussed at the June 22nd meeting. As I said earlier in the week, positions being taken for the meeting even earlier than ever and it also looks like $75 is the price to defend.

Amerisur Resources

Sometimes there is just too much data around which can obfuscate the longer term message, in this case seeing monthly data from each well from AMER is fine but can create unnecessary panic. Today’s news from the company is a case in point, we knew that there was a rolling programme of treatment and maintenance ongoing and also that it was being successful, that didnt stop the market from banging the shares as the raw data was assessed.

May production of 4,807 b/d was indeed down and a peak of 5,344 b/d didn’t seem to help offset the gloom however well it was explained by the good Doctor. The 6 well had seen some increase in water cut which is being investigated but the treatment on both the 11 and 20 wells was effective. The 21, 22 and 24 wells are now being reviewed for intervention but this should come as no surprise, in his latest presentation JW stated that ‘some sleeve erosion’ is inevitable but also treatable.

The excitement for AMER in coming months is the drilling campaign across three or more important areas of the acreage. There is a modest delay to the Pintadillo-1 well due to appalling weather conditions but a July spud date is expected, both the other wells at Indico-1 and Miraparriba-1 are still on schedule for Q3 2018.

Whilst I can understand that these monthly figures look disappointing, a 14% fall in the share price from an already remarkably low number is difficult to reconcile. If you combine this years substantial revenue with the ongoing and largely successful work on the wells, with the potential for one or all of the big prospect wells to come in then AMER looks like very attractive option money to me at this level.

Sound Energy

If there is a y in the day it must mean an RNS from Sound who have now completed the full house of announcements this week. Today they announce that their application for a development concession relating to the Tendrara gas discovery has gone into the Moroccan Ministry of Energy in the hope of a successful result later this year. The company say that this will be a ‘significant step to both de-risk and commercialise this gas discovery’ and also say that they are advancing discussions with regard to a GSA, not a bad week all round I would suggest.

Ascent Resources

Life has been tough for Ascent Resources, the highs of 2.75p last August have been forgotten as troubles pile up in all corners. News today is mixed but overall should bring some, modest comfort. The Pg-11A update is that it is up and running again after kit was brought in to stem the water production problem. Regarding the IPPC permit application I detect some infuriation from Colin Hutchinson with the seemingly never ending delay in a process that the Slovenian authorities should be fast tracking to enable further in-country investment. It is still a watch this space situation but a combination of an acceptable flow rate at Pg-11A and a decision re the permit should ameliorate things somewhat, and that’s about the best of it…

Zenith Energy

Following the announcement earlier in the week regarding the new, bigger rig for the Zardab and Muradkhanli which I wrote up briefly on Wednesday I managed to spend some time with the CEO who talked me through the situation in the field. I have visited the operations within the last year and whilst the challenges have been significant there is little doubt that they are being met head on.

With the bringing in of a much bigger rig, which will in all likelihood start to clear up the most important wells at Z-21, Z-28, Z-3 and then at MOC-1,  the chances of opening up even one of these wells would be transformational. The share price seems to reflect only the chance of operational failure whereas should any success occur it must be, with a market cap of less than £10m, at a huge discount to what it should be remembered are 2P reserves of 31.7 mmbo in Azerbaijan and 16.4 bcf in Italy. The 1/- b/d target in Azerbaijan is not unreasonable and with costs of $19 a barrel would be highly profitable and the company is worth watching.

Empyrean Energy

As suggested in my report after recently chatting to Tom Kelly he snuck in some good news this week about his asset in China where the interpretation of the 3D seismic has now been completed. The Jade and Topaz prospects are both being described as ‘highly material opportunities’ with best estimate prospective un-risked resources of 625 MMbbl with further prospect Pearl also adding to the total figure of 774 MMbbl.

As Tom Kelly put it himself ‘put simply the potential size of the prize in China just got materially bigger’ and with Dempsey still offering substantial potential the portfolio is looking good. Indeed the prospects from Indonesia, which we havent heard from recently, may well also be looking interesting, all in all EME is beginning to look very attractive indeed…

And finally…

England played their last friendly before next week’s World Cup last night and the whole squad has had a few minutes to prepare themselves. Costa Rica weren’t quite the side they were the last time we played them but neither were we… Certainly Marcus Rashford looked sharp enough and may get a slot.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29774/vsa-capital-market-movers-independent-oil-gas-loniog-29774.html VSA Capital Market Movers - Independent Oil & Gas (LON:IOG) https://www.oilcapital.com/columns/vsa-capital-market-movers/29774/vsa-capital-market-movers-independent-oil-gas-loniog-29774.html Tue, 05 Jun 2018 09:39:00 +0100 Independent Oil & Gas (IOG LN)#

 

Independent Oil & Gas (IOG LN) has announced a significant operational update demonstrating initial positive results from the pigging programme undertaken to determine the integrity of the Thames Pipeline. The pipeline is a crucial part of the Southern North Sea gas hub strategy which enables IOG to save hundreds of millions in development capital and maximise the returns from extraction of gas. Therefore, initial confirmation indicating the pipeline is in “extremely good condition” is a major positive step towards the Final Investment Decision (FID) due in H2 2018 and further confirmation of the viability of IOG’s development strategy.

Three 12m sections of the pipeline were cut out 60km offshore and retrieved to surface which showed little signs of degradation or corrosion. This is slightly further out than where the Southwark field will be tied back in to the pipeline. Subsequent pressure testing by elevating water pressure in the pipeline for 24 hours yielded positive results further confirming the integrity of the pipeline and over a greater extent than the short sections cut-outs.

Due to a malfunction with the pigging device insufficient data was collected during the 60km run to clean and assess roundness and thickness in the pipeline. Although the other tests provide a clear indication of the pipeline’s integrity, IOG will run this latter stage of the pigging programme again as it is important to fully complete the surveys to provide contractors and investors with full confidence. We expect this to be completed within the coming weeks. This does potentially delay the remainder of the process ahead of FID which may now be delayed by a short period beyond the planned August 2018 target.

In addition to the intelligent pigging programme, IOG has also been conducting offshore survey programmes via its contractor Fugro MV Galaxy. The programmes, which included geophysical surveys, shallow seismic of the four platform and five drill sites as well as other environmental and geotechnical surveys, have provided important additional data required ahead of FID.

The announcement today provides strong confirmation of the progress IOG is making in its development programme. The Thames Pipeline is a fundamental part of the development and one of the major factors in determining the significant upside potential we believe exists. Confirmation of its integrity is therefore a major positive step for IOG. 

We reiterate our Buy recommendation and 96p target price.

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https://www.oilcapital.com/columns/the-pay-zone/29772/oil-price-sound-energy-iog-europa-oil-gas-and-finally-29772.html Oil price, Sound Energy, IOG, Europa Oil & Gas And finally... https://www.oilcapital.com/columns/the-pay-zone/29772/oil-price-sound-energy-iog-europa-oil-gas-and-finally-29772.html Tue, 05 Jun 2018 09:34:00 +0100

WTI $64.75 -$1.06, Brent $75.29 -$1.50, Diff -$10.54 -44c, NG $2.93 -3c

Oil price

The run in to the Opec meeting on June 22nd has, as I mentioned recently started remarkably early but with 24 seats around the table now and ‘pre-meetings’ needed ’twas ever going to be so. The usual five dollar boiling over has happened again and will serve a useful reminder to the enlarged group of what might happen if discipline is lost although the fundamentals still show the market to be short if one assumes that Venezuela, Angola and ultimately Iran to be unable to deliver.

Sound Energy

It looks like the mention yesterday by Sound of ‘a period of intense newsflow’ was no joking matter as today the company announce Ministry approval for Sidi Moktar and following ‘significant inbound third party interest’ a potential farm-out of part of its 75% operated stake. The objective of any farm-out would be to achieve funding for the 2018 programme and Sound expects to retain operatorship.

The company has completed its remaining subsurface evaluation and is close to finalising the mapped portfolio and comprehensive Petroleum System Model over the entire area and in its study has mapped 28 Liassic, Triassic and Paleozoic leads and has a best case of 8.9 Tcf of gross unrisked gas originally in place. Also, Sidi Moktar has an existing gas discovery in the Lower Liassic at Kechoula which is close to local infrastructure and the gas hungry OCP phosphate plant.

By the nature of its time consuming work in the area it has been an unusually quiet time for Sound in Morocco but the mothership of the Holy Trinity rarely stays quiet for long and the news already this week gives grounds for optimism. Expect more news from these two announcements, and perhaps a hashtag, as this period of intense newsflow has surely not come to an end…

Independent Oil & Gas

An update on ‘intelligent pigging’ and offshore surveys programmes from IOG this morning as they progress on the Thames pipeline. Initial work shows that the pipeline is in good condition and two pipeline pressure tests have confirmed its integrity. Unfortunately the intelligent pigging run gathered ‘insufficient data’ so clearly wasn’t quite as intelligent as it was made out to be and will need a second run which might take another 6 weeks to complete.

This will have delayed the process but assuming the second run achieves its data satisfactorily all will continue with IOG’s plan to move ahead with the FDP plans for the Bythe and Vulcan hubs that I wrote about recently. Finalising the pipeline should ultimately connect Bacton to the company’s 303 BCF of 2P gas reserves with all the upside in the area.

Europa Oil & Gas

Much better news this morning from EOG as they announce a 93% increase in estimated combined gross mean un-risked prospective resources on FEL 3/13 to 2.9bn boe. This marked improvement comes following PSDM reprocessing of the 3D seismic acquired in 2013 and fully justifies its investment at the time. Next stop for EOG is to farm-out FEL 3/13 but not until work on licences FEL 2/13 and 1/17 have been brought up to the same level of evaluation as this one. Investing in EOG has always been for the long haul and today has moved that a small step in the right direction, there is still a long way to go but I assume that having got this far the management still see the sunlit uplands  in the distance.

Link

After the Bank Holiday break I was back with Vox Markets for my weekly Podcast yesterday. Here is the link and the slightly longer list of companies covered.

VOX Markets podcast: Malcy on Range Resources, Empyrean Energy, Coro Energy, Hurricane Energy, Ophir Energy, Sound Energy, Pantheon Resources, Victoria Oil & Gas, Echo Energy

And finally…

Very little to report this morning as the pre World Cup friendlies continue but Germany are already frightening as they can leave Sane out of the squad….

 

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https://www.oilcapital.com/columns/the-pay-zone/29769/oil-price-sound-energy-vog-sdx-reabold-pantheon-chariot-and-finally-29769.html Oil price, Sound Energy, VOG, SDX, Reabold, Pantheon, Chariot And finally... https://www.oilcapital.com/columns/the-pay-zone/29769/oil-price-sound-energy-vog-sdx-reabold-pantheon-chariot-and-finally-29769.html Mon, 04 Jun 2018 12:57:00 +0100 WTI $65.81 -$1.23, Brent $76.79 -77c, Diff -$10.98 +46c, NG $2.96 +1c

Oil price

The greenback was probably as much of an influence on the oil price on Friday as anything else as the economic data all provided ammunition for a rate rise soon and another before the year end. The CFTC data shows the professional punters trimming their length, so to speak, as they consider that $80 Brent has rung the bell somewhat. That level has certainly been of interest, Opec and friends would have taken note that worries about a demand hit are claimed here and the four dollar drop backed up the theory.

Rumours that Russia has already started producing a bit more to keep the market satisfied, how nice, were offset by the Saudis keeping the spigots turned off, at least until 22nd of June. The big discussion point of last month was that WTI actually fell, by $1.53 whilst Brent rose by $2.42 increasing the differential markedly, today it is nearly $11. With the Baker Hughes rig count showing a rise of 1 generally to 1060 and 2 in oil to 861 not giving any clues as to US production only pipeline capacity issues will matter here.

Sound Energy

Sound has released the final CPR for the A1 prospect on the Tendrara-Lakhbir permit in Eastern Morocco and whilst it shows no difference to the one published back in April (Gross prospective resources on a mid-case basis of 335bcf) it does signal the start of ‘a period of intensive news flow as we de-risk the development of our existing discovery and finalise preparations for the exploration drill programme’.

The first well, TE-9 will go for the TAGI as its primary target and aim for potentially similar scale volumes in the underlying Palaeozoic as a secondary target. CEO James Parsons suggests that success here could ‘unlock significant value for Sound and our partners, reduce the risk on nearby leads, and further our overall confidence in the broader TAGI Structural Play trend.

Sound is about to emerge from a relatively quiet year which it has spent shooting seismic (at Schlumberger’s expense) and preparing for the next exploration programme. For investors who want to revisit this potentially substantial Moroccan gas story as the newsflow starts again, now may be one of the last opportunities…

Victoria Oil & Gas

VOG has announced a Logbaba field reserves update of significant proportions. 1P reserves of 69 bcf is an increase of 29 bcf or 73%, field remaining 2P reserves are up to 309 bcf up 106 bcf or 52% and the reserves/production ratio is now 10 years at 90 mmscfd which supports growth in the Douala market as well as new long term gas contracts. This security of supply to long term buyers of gas will enable VOG to enter contractual negotiations with companies and generators safe in the knowledge that they will be able to deliver.

Whilst it has a been a difficult year following the ENEO problem VOG are getting themselves into a very strong position in Douala. Businesses, more eager than ever to have a reliable, long term contractual supply of gas will like this news and competitive power generators will thrive also. VOG is likely to end up with a bigger, stronger and higher margin business extremely well placed to satisfy the inevitable growing needs of Cameroon.

SDX Energy

SDX has spudded the SD-4X appraisal well at South Disouq the first of two planned appraisal wells on the permit. The well is expected to take up to 30 days to drill and if successful will be completed, flow tested and connected to the infrastructure being developed at the SD-1X discovery location.

Reabold Resources

RBD as 32.9% owner has published the Schlumberger CPR for Corallian’s 100% owned Outon project in the North Sea. The Schlumberger report attributes 2C contingent resources of 13.9 million barrels of oil and 4.4 BCF of gas.  The report attributes a best estimate prospective resource of 31 million barrels of oil and 26 BCF of gas. Along with Colter and Wick, RBD now has an enviable set of projects with near term potential within the Corallian portfolio.

Pantheon Resources

Some good news at last from Pantheon which has been in short supply for some time. It seems that the problems of excess water at VOBM#5 were caused by fraccing ‘communicating with a deeper water source’ below the perforations. This should be solved by perforating only the Eagle Ford sandstone in future, maybe not rocket science?

As for VOBM#1 they hope to spud ‘as early as late July’ the sidetrack to the well where the casing collapsed. Here the operator gives a ‘high probability of success’ as the previous problem was time related. Although these problems have been of an operational nature the market is still indicating that PANR is in the last chance saloon which is understandable, bucket list changes in July are not looking good for them I’m afraid but the shares have at least ticked up slightly this morning…

Chariot Oil & Gas

Chariot has contracted a rig for drilling one firm fully funded well and an optional second well depending on success on Prospect ‘S’ offshore Namibia in Q4 2018. The company describe Prospect S as ‘independently estimated as a gross mean prospective resource of 459 mmbbls and a probability of geologic success of 29% by Netherland Sewell Associated Inc., is one of five dip-closed structural traps, totalling 1,758mmbbls gross mean prospective resources, that have been identified in the Upper Cretaceous turbidite clastic play fairway’.

So that tells us then, they are hoping to farm-out this prospect and told me recently that there are a number of most exciting follow-on opportunities in these Central blocks which they hope to share if successful.

And finally…

In the Italian MotoGP Jorge Lorenzo scored his first win since joining Ducati. World championship leader Marc Marquez crashed out while trying to put pressure on the lead but Lorenzo never looked threatened and dominated the race from the start. Dovizioso made it a Ducati double in 2nd place and Valentino Rossi in 3rd made sure the Italian fans didn’t have to take their fireworks home with them. Cal Crutchlow was the first Honda home and the highest independent rider again in 6th place.

England won a test match which is a first for some time but several players actually showed grit and determination in a match which was a mirror image of the first in the series. Next test cricket in August and against India who will be no pushover…

The ‘boys in blue’ won the Derby with Masah and against an odds on favourite that just didn’t get the trip. With all the results at the weekend the major races during the summer are going to be most interesting.

And the Golden State Warriors beat the Cleveland Cavaliers to take a 2-0 lead in the series, that awful mistake by the Cavs in the first game may be looking worse every time you see it….

And with apologies from last week, I forgot to mention that Sarries won the Premiership beating the Exeter Chiefs in the final….

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29766/vsa-capital-market-movers-egdon-resources-29766.html VSA Capital Market Movers - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/29766/vsa-capital-market-movers-egdon-resources-29766.html Mon, 04 Jun 2018 08:40:00 +0100 Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced that it has increased its interest in PEDL 180 and PEDL 182 by 5% in each. The licenses contain Wressle and Broughton North respectively and the positions have been acquired from Celtique Energie Petroleum for a deferred cash consideration of £0.417m payable on first oil. Union Jack Oil (LON:UJO) and Humber Oil & Gas will each also acquire 12.50% in the same license areas on the same terms under separate deals from Celtique Energie.


This structure is attractive, in our view, given there is no immediate cash payment and the transaction is effectively contingent on successful planning application. EDR intends to submit a new planning application for the Wressle development following additional boreholes drilled on site. The information from these boreholes should provide information to directly address the matters highlighted in the prior application.


Following the announcement, our valuation is adjusted accordingly to reflect the higher interest. Although Wressle’s near term cash flow potential is of significant benefit to EDR, it forms only a small part of the valuation (1p/share) and the additional 5% interest takes our target price only modestly higher to 52p/share.


Therefore, despite a strong recent rally in the share price, we believe that with major catalysts coming up in the next few months for both EDR’s conventional and unconventional portfolio that there is significant further upside potential.

We reiterate our Buy recommendation and adjust our target price up to 52p.

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https://www.oilcapital.com/columns/the-pay-zone/29762/oil-price-hurricane-energy-ophir-energy-wentworth-resources-and-finally-29762.html Oil price, Hurricane Energy, Ophir Energy, Wentworth Resources And finally... https://www.oilcapital.com/columns/the-pay-zone/29762/oil-price-hurricane-energy-ophir-energy-wentworth-resources-and-finally-29762.html Fri, 01 Jun 2018 09:54:00 +0100

WTI $67.04 -$1.17, Brent $77.56 -16c, Diff -$10.52, NG $2.95 +7c

Oil price

With July Brent expiring and August closing at $77.56, down only 16 cents, the differential has now exceed ten bucks for the first time in three years. WTI is a mix-up, flat to the boards where it can but pipeline capacity almost fully utilised and with no sign of that changing much for the best part of a year trucks and trains will be transport option of choice.

Recent price strength has many parents, geopolitical concerns of course but genuine shortage of production are clear, in May Opec only produced 32m b/d, another fall with tightening in some Gulf countries and of course with Venezuela continuing to collapse. Yesterday’s delayed EIA inventory stats also helped, a draw of 3.6m barrels was way in excess of the scribblers +244/- b’s and with stocks drawing at Cushing even the gasoline add wasnt a concern. After all the driving season started officially on Monday and even in March good old vehicle miles increased to 268.7bn miles…………………..

Hurricane Energy

Hurricane has released an operational update this morning stating that the Lancaster EPS well re-entry and completion operations have started. The Lancaster EPS will use two currently suspended horizontal wells , 205/21a-6 and 205/21a-7Z which produced 9,800 stb/d and 15,375 stb/d constrained by surface equipment.

This is more good news from Hurricane who are demonstrating that so far the Lancaster EPS development is being carried out on time and budget and that first oil is still expected 1H 2019.

Ophir Energy

News yesterday that Schlumberger had ‘exited’ the Fortuna LNG project was pretty grim for Ophir but goes some way to explaining the recent departure of former CEO Nick Cooper. This means the dissolution of the One LNG venture SLB had with Golar LNG Partners and potentially the development falling over.

The RNS states that remaining partners Golar and Ophir remain ‘actively engaged’ in senior level discussions with ‘a number of counterparties’ over a financing solution for the project. The new CEO or maybe the temporary one will have their work cut out to revive this one, presumably SLB had found better projects to invest in but it leaves Ophir in a pretty sorry state. Having said that I actually liked the recent acquisition and maybe management can focus on this type of deal in the future especially if Fortuna doesn’t happen right now.

Wentworth Resources

Wentworth has updated the market on recent payments from Mnazi Bay. May saw $2.7m in which TPDC paid for one month and Tanesco for two months of gas sales. Gross production in May was 79 MMscf/d which is good and the long-awaited arrival of the new CEO will start with a positive situation and plenty of upside.

And finally…

A true summer’s weekend of sport is on the way and nothing sums that up more than the Epsom Derby tomorrow with the Oaks this afternoon.

Another sign of summer is the playing of test cricket at home and today sees the start of the second match against Pakistan at Headingly. We must hope that in the week England have reminded themselves of how to play the game but after a shameful performance at Lords we should expect nothing.

The MotoGP circus moves to Mugello in Italy this weekend where the fans will be preparing their fireworks for local hero Valentino Rossi. Championship leader, Marc Marquez might just upset their party.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29756/vsa-capital-market-movers-redt-energy-lonred-post-fy-2017-results-imminent-gen3-launch-29756.html VSA Capital Market Movers - redT energy (LON:RED) - Post FY 2017 Results - Imminent Gen3 Launch https://www.oilcapital.com/columns/vsa-capital-market-movers/29756/vsa-capital-market-movers-redt-energy-lonred-post-fy-2017-results-imminent-gen3-launch-29756.html Wed, 30 May 2018 10:07:00 +0100 On 17 May redT energy (LON:RED) reported FY 2017 results in-line with our expectations, recording revenues of €11.8m and an adjusted LBITDA of €6.7m. As in previous years, more than 90% of group revenues were delivered through its legacy Camco business, which has now been substantially divested.

FY 2017 Orders to Contribute to FY 2018 Results

The modest redT energy storage divisional revenues consisted of grant funding (€0.4m) and the release of 2016 licence fees (€0.5m). Although the company secured 43 tank unit sales during the year, financial contribution from these will be included in its FY 2018 results, when systems become operational at customer sites. RED reported €2.1m in deferred income on its year-end balance sheet in respect of these orders.

2018: Focus on Pipeline Conversion; Gen3 Launch

At the end of 2017 RED reported 330 tank units in the Final Stage of Customer Selection (40 of which were Gen3 orders), representing a total order value of €18.3m. Its broader Active Customer Pipeline increased more than 50% during the period and stood at €357m by the end of the year.

At the end of Q1 2018 RED announced an additional 155 Gen3 tank units were in the Final Stage of Customer Selection, meaning that the company had 485 units in the Final Stage of Customer Selection (Gen2 & Gen3) at that point, with potential combined revenues of more than €25m. We view the formal launch of RED’s Gen3 product in H2 2018 as an extremely important milestone for the company, representing the first time RED will be selling its commoditised product to generate a gross margin.

Recommendation and Target Price

 

We have made some changes to our forecasts (see page six) and rolled our DCF valuation on one year. We maintain our BUY recommendation and a 10-year DCF-derived target price of 22p. 

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https://www.oilcapital.com/columns/the-pay-zone/29751/oil-price-range-resources-echo-energy-erratum-and-finally-29751.html Oil price, Range Resources, Echo Energy, Erratum And finally... https://www.oilcapital.com/columns/the-pay-zone/29751/oil-price-range-resources-echo-energy-erratum-and-finally-29751.html Tue, 29 May 2018 08:47:00 +0100

WTI $67.88 -$2.83, Brent $76.44 -$2.35, Diff -$8.56 +48c, NG $2.94 n/c

Oil price

I suspect that seeing the oil price fall by $4 just on the rumours of a change in policy by the Opec/Non-Opec participants may make them think what would happen if they really did start to jack up production across the board. Maybe just take up the slack from any production lost from Venezuela and Iran and see what happens then.

It was not the best day for the rig count to pick up, generally up 13 units to 1059 and in oil up by 15 to 859 but with the delivery problems they have it’s not going to make much difference.

Range Resources

Range has announced that they are up and running in Indonesia with operations started in the last few days. The rig has been rigged up at the POG-D location and reopening has already commenced, completion is expected by the end of the month and the same rig will conduct the workover. After that it moves to POG-E also reopening and performing a workover.

The ambitious programme comprises up to ten reopenings of previously producing wells, two workovers as well as performing geological, geophysical and integrity studies. The plan to swiftly initiate production and add up to 220 b/d of gross production will broaden the company’s international production, gives potential scope for increasing that in the not too long term and should pay back in a pretty short period of time. The renaissance of Range is under way and whilst some holders are still well under water it is difficult to complain about the way current management are setting about the job.

Echo Energy

The ELA-1 well on Laguna de Los Capones in Argentina spudded on Saturday, the second in the company’s four well campaign in the region where Echo has a 50% interest. The well is being drilled at the South Eastern extent of the licence and is targeting a structural four way closure at the Springhill and Tobifera levels with TD at approximately 1,800m.

Gross unrisked gas in place on the structure is on a Pmean basis is estimated at approximately 40 bcf in the recent CPR by Gaffney Cline. Further success here would add to the spectacular start that Echo has made in its South American journey and together with the smart raise last week, now shown to be in a very small window of opportunity. To be able to move on at Tapi Aike with a saving of such massive amounts in the programme costs will prove to be another smart decision on the part of the management.

Erratum

Having been to see the Frontera operations in Georgia (not Azerbaijan) and found it to be very promising indeed the last person to mess this one up should be me but on Friday I did so apologies to them and to Block which is on its way as another Georgian play. As my mother used to say, ‘more haste, less speed Malcolm’ and she was right, apologies again!

And finally…

The weekend provided some serious ups and downs for clubs and players, concentrating on the ups, congratulations to Fulham, Rotherham and the Sky Blues who all won their play-offs at the weekend. Best forgotten is a bad night for goalkeeping which probably unfairly won’t be forgotten in a hurry.

Staying on the sour note, English cricket and the farce that has become, zeroes to zeroes one might say. I’ve tried to remain loyal to Stoneman but he was just the worst of a bad bunch, not sure how that can change at Headingly on Friday…

Danny Ric won what really was a most boring Monaco GP, with him having engine bother and those behind with scraggy tyres and unable to overtake it was a slow procession. Canada in a fortnight should be a different matter…

I could hear the basketball being played downstairs in the early hours, the result was an amazing victory by the Golden State Warriors who came back from 15 points down against the Houston Rockets and will now play the Cavs -again- in the NBA finals.

 

 

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https://www.oilcapital.com/columns/the-pay-zone/29748/oil-price-echo-energy-frontera-resources-zenith-energy-president-energy-and-finally-29748.html Oil price, Echo Energy, Frontera Resources, Zenith Energy, President Energy And finally... https://www.oilcapital.com/columns/the-pay-zone/29748/oil-price-echo-energy-frontera-resources-zenith-energy-president-energy-and-finally-29748.html Fri, 25 May 2018 12:47:00 +0100 WTI $70.71 -$1.13, Brent $78.79 -$1.01, Diff -$8.08 +12c, NG $2.94 +3c

Oil price

The big question now is, have we reached a level at which most industry participants find acceptable? At $80 it seems that talks between producers are scheduled to see if they shouldn’t release a bit of crude into the market to avoid any panic from consumers, as evidenced by the Indian pleas last week. Certainly it seems that the KSA and Russia are talking with an idea of scaling back the cuts from the joint producers. Khalid Al-Falih said this morning that these were ‘on the table’ and that whilst no decision had been made yet ‘we will not overcorrect’ and that the two countries would meet at least twice before the full Opec/Non-Opec meeting next month.

It is a good time to be thinking about the effect $80 oil will have on the consumer particularly in the US where the Memorial Day Holiday on Monday signals the start of the driving season. For what it’s worth my guess is that if it does turn out to be that $80 is a level to be defended then it pretty much works for both sides, let’s see.

Geopolitics heated up a bit overnight with the news that the Trump/Kim summit is off, at least for the time being, no reason why it can’t be reinstated another time though although tensions are still high.

Echo Energy

Echo has announced that it has raised £8.5m through a placing and subscription at 12p with funds raised to accelerate their full seismic commitment over Tapi Aike at a really competitive price saving the company some $7-8m. It seems that the company needed to strike whilst the iron was hot, so to speak, and with the current offer for the seismic work being some 30% less than expected and about to expire this is a no-brainer. When you are looking at 2,000km² and that Tapi Aike is the blue chip asset waiting to be assessed this concentrates the mind and shareholders should rejoice.

As to the raise it also seems eminently sensible to me, getting institutions on board at a reasonable discount is very wise and that an open offer was impossible given the time needed to produce documentation. With the rate of progress on the Fracción C drilling programme, where the next well spud is imminent, finding the necessary ten clear days would be at best counter productive. As I understand it the quality of institutions is first class and balances the shareholder list well.

The share price has fallen 15% at time of writing which is technically understandable given the discount offered but definitely provides an opportunity for those who believe that this shows all the hallmarks of a really good play with significant upside.

Frontera Resources

Morr good news from Taribani today from Frontera where results have continued to please since I reported back from T-45 in February. News is that the T-39 sidetrack well has reached TD and the combined pay from zones 9, 14 and 15 is 102.5m with 14.2% porosity and some 12.3m of pay in zone 13. One certainly can’t accuse these wells of creating a surprise, all zones are performing at the highest of expectations.

The company has also announced that it has received a drilling permit for the Niko-1 well which is scheduled for November of this year, unsurprisingly the zones expected are as per previous successes. The company has been offered a $3m investment by an institutional investor to finance this well which makes life significantly easier. These drilling successes will before long feed through to a ‘strong revenue stream’ and the company are promising details shortly of the drilling campaign for 2019. FRR looks to be in increasingly good nick and with what I hear is promising news from Block the Azerbaijan is going to be increasingly in the news for all the right reasons.

Zenith Energy

Zenith has announced that it has signed a $2m non-convertible loan facility, it will be used to provide additional funding ‘for the Company’s operations when required’. It will be drawn down intranches when required and has no warrants attached. Zenith is quite rightly concentrating its fire power on current operations in Azerbaijan where recent investment is beginning to pay off, this will enable it to continue with this strategy.

President Energy

A brief mention of a reception held by President earlier in the week at which the Argentinian Ambassador to St James and the Energy Minister made presentations. Whilst there is a concern about short term economic conditions, acknowledged by the Ambassador, longer term advantages of investing in this country remain and i’m sure that the President share price will in due course rise accordingly.

And finally…

As we close in on the end of the winter sporting season it is a weekend where spring and summer collide. Football sees the Champions League final in Kiev with the HubCap Stealers taking on Real Madrid. If previous rounds are to be believed anyone could win and there could be many goals scored.

Earlier on in the afternoon the Championship play-off has Fulham taking in the Villa in what is being labelled the £100m game….That is followed on Sunday by Rotheram v Shrewsbury and on Monday Coventry v Exeter.

Rugby’s season closes with the Premiership final between the Exeter Chiefs  and Sarries, again if scores in the semis are any reflection it too could be a cricket score.

Talking of cricket England were wishing that the no toss rule was in place as it was a bad toss to win, as it was they batted and on day one of the series reminded us of the phrase England middle order batting collapse’…..

Last year I was in Monaco for the GP, this year i’m here wishing I was back but the early pace is being made by the Red Bulls with Mercedes saying that this is just not their track.

Finally thank you for helping with so many people obeying the GDPR and today is the first day of the new mailing list.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29740/vsa-capital-market-movers-independent-oil-gas-30th-uk-licensing-round-awards-29740.html VSA Capital Market Movers - Independent Oil & Gas#: 30th UK Licensing Round Awards https://www.oilcapital.com/columns/vsa-capital-market-movers/29740/vsa-capital-market-movers-independent-oil-gas-30th-uk-licensing-round-awards-29740.html Thu, 24 May 2018 09:37:00 +0100 Harvey Expanded, Broader Structure Captured

Independent Oil and Gas (IOG LN) has received four additional blocks in the 30th round of UK Licensing in the North Sea, with the shares up 8% on the news meaning the stock is up 38% YTD. The blocks could, in our view, strengthen the development of the Southern North Sea gas hub IOG is developing.

The first of these blocks (48/24a) completes IOG’s licensing of the Harvey structure increasing its attributable prospective resource from 90BCF to 114BCF on a best estimates basis. Although we had expected IOG to expand the license to the whole structure it was not included in our prior valuation which is adjusted up as a consequence.

Additional Goddard and Abbeydale Blocks

As well as the extension to Harvey, IOG received blocks in two additional areas. The first known as Goddard (48/11c & 48/12b) is now the single largest discovery within IOG’s portfolio with a management estimate of contingent resources at 1C/2C/3C, 45/189/396 BCF. Five wells were drilled between 1985 and 2019 proving the resource and IOG has committed to reprocessing 3D seismic and drilling one well within 3 years of license award.  The Abbeydale block 53/1b, to the West of Camelot Central South, contains a dormant gas discovery and management estimates contingent resources at 1C/2C/3C 5/11/24BCF. With only outdated existing seismic data, we expect a new 3D programme to expand on this estimate and demonstrate the broader potential.

Recommendation and Target Price

The additional blocks materially enhance IOG’s portfolio and we have revised our valuation to reflect the added total gas resources from 393BCF to 617BCF. In all cases the blocks could reasonably be tied back to the Thames Pipeline, in our view, further strengthening the gas hub strategy.

The intelligent pigging programme continues with results due soon. Confirmation of the Thames Pipeline’s expected good condition will be a major step towards the Final Investment Decision in August 2018. With a supportive backdrop of gas pricing and concerns over UK energy security we believe IOG is well placed to execute its strategy and realise the significant upside potential.

We reiterate our BUY recommendation although increase our target price by 33% to 96p.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/29717/vsa-capital-market-movers-egdon-resources-29717.html VSA Capital Market Movers - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/29717/vsa-capital-market-movers-egdon-resources-29717.html Fri, 18 May 2018 10:20:00 +0100 Egdon Resources (LON:EDR)

Yesterday the UK Government provided a Written Ministerial Statement on the UK shale gas industry. Despite backing from the Government in its election manifesto, progress has been slow in terms of project development although. However, with a number of key milestones coming up this summer this intervention is a timely and positive step, in our view.

The statement which reiterates the Government’s support for shale gas development and its national importance given rising UK energy imports must now be considered by planning committees when making decisions on applications. In addition the Government will publish revised planning practice guidance on shale development this summer and will launch two consultations; one to consider allowing wells to be drilled under permit rather than a full application and one to consider including shale production projects in the Nationally Significant Infrastructure Projects regime.

Given the complexity and technical nature of oil and gas permitting, the statement also indicates further support for Local Authorities to help them better understand the issues surrounding the development process.

Although the UK Government has previously indicated its support for shale gas development we believe this more direct approach is likely to be more effective and bodes well ahead of a key summer of testing by Cuadrilla, Egdon (LON:EDR) and IGas (LON:IGAS). As one of two companies listed in the UK offering exposure to shale gas development we believe that EDR offers attractive exposure to the industry. Currently trading at around 9p the shares reflect little of the upside potential and have been deeply discounted largely as a result of permitting risk, however, this announcement strongly indicates that the Government intends to support applications.

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